Xceed Mortgage Corporation Announces Clean-up Call of Xceed Mortgage Trust (Series 2007-T2)
TORONTO, July 17, 2012 /CNW/ - Xceed Mortgage Corporation [TSX: XMC] (the "Company"), a Canadian provider of residential mortgages, today announced it had exercised an optional clean-up call for Xceed Mortgage Trust Tranche 2007-T2 (the "Trust"), a securitization trust established by the Company in 2007.
Under the terms of the clean-up call, the Company re-purchased remaining mortgages in the trust in the amount of $3.1 million (net of provisions). Additionally, D note holders of the Trust have been repaid $3.7 million approximately and E note holders have been repaid $10.7 million approximately using proceeds from the mortgages purchased by the Company and funds in the cash collateral account of the Trust. The Trust also returned to the Company remaining collateral deposits of $4.5 million, $3.1 million of which was used to purchase the mortgages noted above.
The Trust, having repaid all its note holders, as of July 17, 2012, will no longer have any outstanding public notes and therefore ceases activities as a public issuer.
The Trust is consolidated by the Company and this clean-up call results in a reversal of an estimated net deficit consolidated by the Company of approximately $8.2 million (inclusive of amounts recorded in the Trust up to and including July 17, 2012) now that the deficit amount has been deducted on settlement with the junior note holders. This reversal will be recorded as income through the Company's Consolidated Statement of Net Income for the quarter ending July 31, 2012 along with other amounts and negotiated fees settled as part of the transaction.
The Company is finalizing the accounting for the clean-up call in conjunction with the Company's auditors and therefore amounts noted above that are expected to impact the Company's July 31, 2012 results are preliminary estimates. Additional history regarding the Trust and its accounting treatment can also be found in prior financial statements issued by the Company.
About Xceed Mortgage
Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of insured residential mortgages that it originates in Canada. The company has approximately $0.9 billion of mortgages under administration. Xceed's shares are traded on the Toronto Stock Exchange [TSX: XMC]. To find out more about Xceed Mortgage Corporation, visit our website at www.xceedmortgage.com.
Forward-looking statements in this document are based on current expectations that are subject to significant risks and uncertainties. Actual results might differ materially due to various factors such as the competitive nature of the mortgage industry, the ability of Xceed to continue to execute its growth and development strategy, and the reliance of Xceed on key personnel. Xceed assumes no obligation to update these forward-looking statements, or to update the reasons why actual results could differ from those reflected in these. Additional information identifying risks and uncertainties is contained in Xceed's regulatory filings available on its website and at www.sedar.com.