- Decision reflects change in bank's strategies
- Xceed expects to arrange additional funding sources
TORONTO, May 19 /CNW/ - Xceed Mortgage Corporation (TSX: XMC), a Canadian provider of insured mortgages, today announced that it has received notice from the banking conduit to which it sells insured mortgages that are destined for sale to the Canada Mortgage Bond Program (CMBP) stating that the conduit will no longer purchase mortgages from Xceed either through its XAT warehouse or CMBP facility beyond the current CMBP quarterly cycle that ends in June 2010.
The company understands that the decision is the result of a change in the bank's strategies and it is not the result in any way of the conduit's views of Xceed's mortgage business. In fact, the bank has stated that it will continue to buy mortgages from Xceed to support the conduit's requirements to replace assets.
"We expect that we will be able to arrange sufficient financing to replace the funding currently provided by the conduit and to meet our ongoing financing requirements at current mortgage volumes. Assuming these arrangements are put into place, we do not expect that the notice or changes to our mortgage offerings will materially impact Xceed's mortgage origination volume or profitability" said Ivan Wahl, Chairman and Chief Executive Officer of Xceed.
On March 29, 2010, Xceed announced that it had established a new $50 million warehouse facility with Maple Bank, the Canadian Foreign Bank Branch of Maple Bank GmbH. This new warehouse facility continues to provide Xceed with warehouse funding at competitive rates for its origination of insured mortgages.
Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of insured residential mortgages that it originates in Canada. The company has approximately $1.9 billion of mortgages and other assets under administration. Xceed's shares are traded on the Toronto Stock Exchange. 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. Specifically, there can be no assurance that the company will be successful in making new arrangements for the funding of mortgages or that further changes to Xceed's mortgage offering will not be required as a result. 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.
SOURCE XCEED Mortgage Corporation
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