TORONTO, June 3, 2014 /CNW/ - First National Mortgage Investment Fund (TSX: FNM.UN) (the "Fund") today announced that Class A unitholders tendered 931,543 units amounting to 19.04% of the 4,890,000 outstanding Class A units under the annual redemption privilege. As more than the maximum of 15% of the outstanding units have been tendered, the Fund has prorated redemptions received using a factor of 78.74% resulting in the acceptance of 733,500 Class A units. 198,503 Class A units will be returned to tendering unitholders.
The tendered units accepted will be priced at the net asset value (NAV) per unit as at the close of business June 30, 2014 and payments are payable on or about July 15, 2014. The Fund has also accepted 138,000 Class H units tendered for annual redemption, representing 15% of the aggregate outstanding Class H units. First National Financial Corporation ("FNFC"), the holder of the Class H units, redeemed a portion of Class H units to maintain its respective share of the overall Fund. Following redemption, FNFC will continue to own 16% of the Fund.
FNFC and First National Financial LP ("FNLP"), the Mortgage Investment Advisor and Promoter, are pleased with Fund performance. The Fund, through a forward agreement, obtains economic exposure to a diversified portfolio of mortgages which have continued to perform with no delinquencies or defaults. The Fund has continued monthly distributions of $0.05 per unit in 2014 or $0.60 per annum as set out in the original offering. The distribution represents a pre-tax yield of approximately 6.50%, on a net asset value per unit of $9.2327 as at May 30, 2014 and 6.90% based on a closing TSX price of $8.70. The portfolio reports a weighted loan to value ratio of approximately 72%.
The Fund's tax advantaged forward structure allows distributions to be treated for tax purposes on account of capital, either as a return of capital or as a capital gain.
About First National Mortgage Investment Fund
The Fund was created to obtain economic exposure to a diversified portfolio of mortgages originated by FNLP, a wholly owned subsidiary of First National Financial Corporation. The Fund's daily net asset value can be found at:
About Stone Asset Management Limited
Stone Asset Management Limited ("SAM") is the manager and portfolio manager of the Fund. SAM manages a family of open-ended mutual funds, a series of flow-through limited partnerships and a TSX-listed investment fund. SAM specializes in structuring and managing high quality investment products and currently has approximately $740 million in assets under management.
About First National Financial Corporation
First National Financial Corporation (TSX: FN) is the parent company of FNLP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With over $77 billion in mortgages under administration, First National is Canada's largest non-bank originator and underwriter of mortgages and is among the top three in market share in the mortgage broker distribution channel. For more information, please visit www.firstnational.ca.
Certain information included in this news release may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will, "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. This forward-looking information should not be read as providing guarantees of future performance or results, and will not necessarily be an accurate indication of whether or not, or the times by which, those results will be achieved. While management considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties. This forward-looking information is as of the date of this update, and is subject to change after such date. However, management and First National Mortgage Investment Fund disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
SOURCE: First National Mortgage Investment Fund
For further information: Robert Inglis, Chief Financial Officer, First National Financial Corporation, Tel: 416-593-1100, Email: [email protected]; Ernie Stapleton, Fundamental, 905 648 9354, Email: [email protected]