OSFI releases Draft Advisory regarding the impact of IFRS on regulatory
capital ratios

TORONTO, Oct. 22 /CNW/ - MCAN Mortgage Corporation ("MCAN" or the "Company") announced today that the Office of the Superintendent of Financial Institutions ("OSFI") has released a draft Advisory (the "Draft Advisory") regarding, among other things, the calculation of the regulatory capital ratios of OSFI-regulated entities resulting from the on-balance sheet treatment of assets and liabilities subject to securitization, as currently required by International Financial Reporting Standards ("IFRS"). The Draft Advisory is open for comment until December 31, 2009.

Under Canadian generally accepted accounting principles currently followed by MCAN in the preparation of its financial statements, assets and liabilities that are subject to securitization are treated generally as off-balance sheet items. Under these principles, MCAN has not been required to reflect such assets or liabilities on its balance sheet, or include them in the calculation of its regulatory capital ratios. MCAN will begin using IFRS in the preparation of its financial statements for the financial year commencing January 1, 2011. If the IFRS rules regarding securitization are implemented in their proposed form, MCAN's assets and liabilities that are subject to securitization will be considered on-balance sheet items. The Draft Advisory contemplates that any assets and liabilities that are accounted for as on-balance sheet exposures under IFRS that are sold through securitization transactions (including insured mortgages that are securitized through the Canada Mortgage Bonds ("CMB") Program) undertaken after December 31, 2009 will be required to be included in the calculation of a regulated financial institution's regulatory capital ratios. Accordingly, pursuant to the measures contemplated by the Draft Advisory, if the IFRS rules regarding securitization are implemented in their proposed form, beginning with the fiscal year commencing on January 1, 2011, MCAN will be required to include any assets and liabilities that were subject to securitization transactions undertaken as of January 1, 2010 in the calculation of its regulatory capital ratios.

MCAN is continuing to identify and assess the impact of the transition to IFRS on its consolidated financial statements and is working to develop a plan to minimize the effect of the transition on MCAN's business. However, if the IFRS rules regarding securitization are implemented in the form currently proposed and if the Draft Advisory is applied in the form proposed by OSFI, then MCAN's participation in securitization transactions, namely through its participation in CMB Program, may need to be significantly reduced in order for MCAN to comply with its regulatory capital ratios. Although MCAN is reviewing potential alternative structures and arrangements that may permit its continued participation in the CMB Program, there can be no assurance that any such alternative structures or arrangements will be available on commercially reasonable terms, or can be implemented in a timely manner.

Forward Looking Statements and Information

This report may contain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These forward looking statements can generally be identified as such because of the context of the statements and often include words such as the Company "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 the Company operates. Reference is made to the risk factors disclosed in the Company's 2009 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 the Company's forward-looking statements. Subject to applicable securities law requirements, we do not undertake to update any forward-looking statements.

SOURCE MCAN Mortgage Corporation

For further information: For further information: Blaine Welch, President and Chief Executive Officer, (416) 591-2726; Tammy Oldenburg, Vice President and Chief Financial Officer, (416) 847-3542

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