Stock market symbolTSX: MKP
TORONTO, April 30, 2012 /CNW/ - MCAN Mortgage Corporation ("MCAN") today announced that it has provided $14 million of additional equity capital to MCAP Commercial LP ("MCLP") in order for MCAN to maintain its approximate 23% ownership interest in MCLP. MCLP will use these funds, together with additional equity capital contributed by one of the other partners of MCLP, to acquire the remaining 80% interest in MCAP Service Corporation ("MSC") that was not previously owned by MCLP. The transaction will allow MCLP to better integrate its service offerings with MSC given its 100% ownership. The transaction will also provide significant origination and servicing capabilities to MCAN.
Upon closing of the transaction, MCLP, on a consolidated basis, will have mortgage assets under administration in excess of $25 billion with annual production over $10 billion. The combination of MCLP and MSC (which will operate under the "MCAP" brand) is expected to strengthen the brand and market position of MCLP in the single family business, allow for better integration of MCLP's service offerings with MSC 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.
For further information:
MCAN Mortgage Corporation
e-mail: [email protected]
President and Chief Executive Officer
Vice President and Chief Financial Officer