MCAN Mortgage Corporation announces successful closing of rights offering
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TORONTO, Aug. 23, 2012 /CNW/ - MCAN Mortgage Corporation ("MCAN" or the "Company") announced today the successful completion of the fully subscribed rights offering (the "Offering") that expired on August 22, 2012. The Offering raised gross proceeds of $20,130,010 with 1,699,157 new Common Shares issued. Of the new Common Shares issued, 1,532,336 were subscribed for under the initial subscription privilege and 166,821 were subscribed for under the additional subscription privilege.
The net proceeds of this Offering (assuming all Common Shares are subscribed for and after payment of the estimated expenses of $160,000) will be approximately $20.0 million. MCAN has decided to increase its capital in light of the recently announced $14.0 million incremental investment in MCAP Commercial LP ("MCLP"). With closing of the Offering, MCAN's investment in MCLP, as a percentage of regulatory capital, will be in line with historical levels. The incremental capital will also be used to increase MCAN's mortgage lending operations in accordance with our existing business plan.
As a result of the closing of the MCAP Service Corporation ("MSC") transaction announced April 30, 2012 and the closing of the acquisition of the mortgage operations of ResMor Trust Company on June 1, 2012, MCLP, on a consolidated basis, has mortgage assets under administration in excess of $30 billion with annual production over $10 billion. The combination of MCLP and MSC (which will operate under the "MCAP" brand) and ResMor's mortgage operations is expected to strengthen the market position of MCLP in the single family business, allow for better integration of MCLP's service offerings with MSC and ResMor and allow MCLP to build upon its financial strength and institutional discipline as a mortgage originator and servicer in the Canadian market.
This press release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of MCAN and MCLP. These forward-looking statements can generally be identified as such because of the context of the statements and often include words such as MCAN "believes", "anticipates", "expects", "plans", "estimates" or words of a similar nature. These statements are based on current expectations, and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, technology change, global market activity, interest rates, changes in government and economic policy and general economic conditions in geographic areas where MCAN operates. Reference is made to the risk factors disclosed in MCAN's 2012 Annual Information Form, which are incorporated herein by reference. These and other factors should be considered carefully and undue reliance should not be placed on MCAN's forward-looking statements. Subject to applicable securities law requirements, MCAN does not undertake to update any forward-looking statements.
MCAN is a public company listed on the Toronto Stock Exchange 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) 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 also participates in the Canada Mortgage Bonds program, and other securitizations of insured mortgages.
SOURCE: MCAN Mortgage CorporationFor further information:
MCAN Mortgage Corporation
President and Chief Executive Officer
Vice President and Chief Financial Officer