MCAN Mortgage Corporation Announces Earnings Guidance

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Stock market symbol
TSX: MKP

TORONTO, July 23, 2012 /CNW/ - In connection with the announcement on July 10, 2012 of a rights offering (the "Offering") and for the purposes of allowing shareholders to make an informed decision about the Offering, MCAN Mortgage Corporation ("MCAN" or the "Company") provides the following guidance in respect of its financial results for the second quarter ended June 30, 2012:

  • Earnings per share for the quarter are expected to be in the range of $0.32 - $0.42 ($0.58 - $0.68 for the six months ended June 30, 2012).
  • Corporate assets are expected to be in the range of $890 million to $900 million as at June 30, 2012.
  • Remaining asset capacity is approximately $30 million as at June 30, 2012.

These figures are based on actual results for April and May with an estimate for June results and actual results for the quarter are expected to be released on or about August 9, 2012.

Recently announced regulatory changes that impact the Canadian mortgage market and potential interpretations being sought under existing guidance in respect of the capital treatment of securitization of mortgages, may impact the extent of MCAN's participation in the securitization of mortgages and its earnings from that business. The Company will continue to identify and assess alternatives and opportunities in this line of business in order to maximize returns for our shareholders.

Although this information is intended to allow MCAN shareholders to make an informed decision about the Offering, undue reliance should not be placed on such information and such information may not be appropriate for other purposes.

Forward-Looking Information

This press release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of MCAN.  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", "guidance" or words of a similar nature.  These statements are based on current expectations, on assumptions that June results in MCAN's core mortgage portfolio will be consistent with the results in April and May.  However, some variability may occur in the results for MCAP Commercial LP ("MCLP") as they fully integrate the results of MCAP Service Corporation ("MSC") and are required to convert MSC results to International Financial Reporting Standards for consolidation with MCLP.  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.

About MCAN

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 Corporation

For further information:

MCAN Mortgage Corporation  

Website:  www.mcanmortgage.com

e-mail:  mcanexecutive@mcanmortgage.com

William Jandrisits
President and Chief Executive Officer
(416) 591-2726

Tammy Oldenburg
Vice President and Chief Financial Officer
(416) 847-3542


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