Stock market symbol
TSX: MKP
TORONTO, July 13, 2015 /CNW/ - MCAN Mortgage Corporation
("MCAN", the "Company" or "we") today announced the successful
closing of the previously announced rights offering (the
"Offering"), which expired at 4:00 pm
on July 10, 2015. The Offering
raised gross proceeds of $15.3
million with 1,406,084 new Common Shares issued. Of the new
Common Shares issued, 1.2 million were subscribed for under the
initial subscription privilege and 0.2 million (out of total
additional subscription requests of 1.46 million) were subscribed
for under the additional subscription privilege. The Offering
was therefore oversubscribed by 1.9 times.
As detailed in the Rights Offering Circular dated June 3, 2015, the exercise price for each new
Common Share was $10.90. The
net proceeds of the Offering (after payment of the estimated
expenses of $125,000) will be used to
fund further growth of the Company's mortgage origination
opportunities, primarily in its single family residential product
lines.
"We are pleased with the response from shareholders on the
Offering," commented William
Jandrisits, MCAN's President and Chief Executive
Officer. "The majority of shareholders not only exercised
their rights but also elected under the additional subscription
privilege to apply for additional shares. We were
considerably oversubscribed - a great vote of confidence from our
investors as to the value of the Company's Common Shares and the
potential for its performance in the future."
"The additional capital is important for the growth we need to
attain our business objectives," Mr. Jandrisits added, "as it
qualifies as both regulatory and income tax capital.
Consistently, our core business activities of raising term deposits
and originating and investing in mortgages must be done with
prudent leverage and capital requirements in mind. The
successful closing of the Offering provides MCAN with the capital
support required to continue its in-house origination growth in
single family insured and uninsured mortgages and avail itself to
other investment opportunities that fit MCAN's risk appetite and
net spread requirements."
The Company would like to thank all shareholders who
participated in the Offering, which, as anticipated, included a
high level of participation from MCAN directors, officers and
staff.
Further Information: The Rights Circular
dated June 3, 2015 was filed on the
System for Electronic Document Analysis and Retrieval ("SEDAR") at
www.sedar.com and is also available on the Company's website at
www.mcanmortgage.com.
MCAN is a public company listed on the Toronto Stock Exchange
("TSX") under the symbol MKP and is a reporting issuer in all
provinces and territories in Canada. MCAN also qualifies as a
mortgage investment corporation ("MIC") under the Income Tax Act
(Canada) (the "Tax Act").
MCAN's primary objective is to generate a reliable stream of
income by investing its corporate funds in a portfolio of mortgages
(including single family residential, residential construction,
non-residential construction and commercial loans), as well as
other types of financial investments, loans and real estate
investments. MCAN employs leverage by issuing term deposits
eligible for Canada Deposit Insurance Corporation ("CDIC") deposit
insurance up to a maximum of five times capital (on a
non-consolidated tax basis in the MIC entity) as permitted by the
Tax Act. The term deposits are sourced through a network of
independent financial agents. As a MIC, MCAN is entitled to deduct
from income for tax purposes 100% of dividends, except for capital
gains dividends, which are deducted at 50%. Such dividends
are received by the shareholders as interest income and capital
gains dividends, respectively.
MCAN's wholly-owned subsidiary, Xceed, focuses on the
origination and sale to third party mortgage aggregators of
residential first-charge mortgage products across Canada. As
such, Xceed operates primarily in one industry segment through its
sales team and mortgage brokers.
MCAN also participates in the NHA MBS program.
A CAUTION ABOUT FORWARD-LOOKING INFORMATION AND
STATEMENTS
This press release contains "forward-looking statements" within
the meaning of applicable Canadian securities laws. The words
"may," "believe," "will," "anticipate," "expect," "planned,"
"estimate," "project," "future," and other expressions that are
predictions of or indicate future events and trends and that do not
relate to historical matters identify forward-looking statements.
Such statements reflect management's current beliefs and are based
on information currently available to management. The
forward-looking statements in this press release include, among
others, statements and assumptions with respect to:
- the current business environment and outlook;
- possible or assumed future results;
- ability to create shareholder value;
- business goals and strategy;
- the stability of home prices;
- effect of challenging conditions on us;
- factors affecting our competitive position within the housing
markets;
- sufficiency of our access to capital resources; and
- the timing of the effect of interest rate changes on our cash
flows.
The material factors or assumptions that were identified and
applied by us in drawing conclusions or making forecasts or
projections set out in the forward-looking statements include, but
are not limited to:
- the Company's ability to successfully implement and realize on
its business goals and strategy;
- factors and assumptions regarding interest rates;
- housing sales and residential mortgage borrowing
activities;
- the effect of competition;
- government regulation of the Company's business;
- computer failure or security breaches;
- future capital and funding requirements;
- the value of mortgage originations;
- the expected margin between interest earned on mortgage
portfolios and interest paid on deposits;
- the relative continued health of real estate markets;
- acceptance of the Company's products in the marketplace;
- availability of key personnel;
- the Company's operating cost structure; and
- the current tax regime.
Reliance should not be placed on forward-looking statements
because they involve known and unknown risks, uncertainties and
other factors, which may cause the actual results to differ
materially from the anticipated future results expressed or implied
by such forward-looking statements. Factors that could cause actual
results to differ materially from those set forth in the
forward-looking statements include, but are not limited to:
- global market activity;
- worldwide demand for and related impact on commodity
prices;
- changes in government and economic policy;
- changes in general economic, real estate and other
conditions;
- changes in interest rates;
- changes in MBS spreads and swap rates;
- MBS and mortgage prepayment rates;
- mortgage rate and availability changes;
- adverse legislation or regulation;
- availability of MBS issuer allocation;
- technology changes;
- confidence levels of consumers;
- ability to raise capital and term deposits on favourable
terms;
- our debt and leverage;
- competitive conditions in the homebuilding industry, including
product and pricing pressures;
- ability to retain our executive officers and other
employees;
- litigation risk;
- relationships with our mortgage originators;
- ability to realize anticipated benefits from the acquisition of
Xceed; and
- additional risks and uncertainties, many of which are beyond
our control, referred to in this press release and our other public
filings with the applicable Canadian regulatory authorities.
Subject to applicable securities law requirements, we undertake
no obligation to publicly update any forward-looking statements
whether as a result of new information, future events or
otherwise. However, any further disclosures made on related
subjects in subsequent reports should be consulted.
SOURCE MCAN Mortgage Corporation