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
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
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.
SOURCE Xceed Mortgage Corporation