TORONTO, Aug. 14, 2017 /CNW/ - Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the "Company") today released its financial results for the quarter ended June 30, 2017.
On June 16, 2016 the shareholders of the Company approved the orderly wind-up of the Company. As such, the financial results will reflect the ongoing reduction in the size of the portfolio as capital is returned to shareholders.
For the three months ended June 30th
- Income from operations totaled $0.3 million, compared to a loss from operations of $0.8 million in Q2 of 2016
- Net income totaled $0.3 million, compared to a net loss of $0.8 million in Q2 of 2016
- Basic and diluted earnings per share were $0.04 and dividends declared were $0.81 per share
During the second quarter, income from operations and net income increased primarily as a result of reduced expenditure relating to incentive fees, management fees and general and administration costs associated with the shareholder action and Orderly Wind Up. This was partially offset by reduced interest revenue resulting from a reduction in the average size of the mortgage portfolio.
Investment Portfolio Highlights
- 100% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 62.7%
- Weighted average interest rate and term to maturity on mortgage investments was 6.47% and 14.8 months, respectively
- Geographical exposure: Ontario 41.9%, Alberta 53.4%, and Nova Scotia 4.7%
Subsequent to the quarter end, on July 20, 2017 the Board of Directors of the Company declared a special distribution of $1.34 per Class A share of the Company (the "Special Distribution"), the total amount of the declared special distribution is approximately $10.0 million. The Special Distribution, which constitutes a return of capital pursuant to the winding-up of the Company's business as approved by Shareholders on June 16, 2016, will be paid on August 28, 2017 to holders of Class A shares of record at the close of business on August 15, 2017. The Special Distribution is in addition to the Company's monthly distributions (also constituted as returns of capital), which the Company intends to continue until further notice. As of July 19, 2017, there were 7,437,067 Class A shares outstanding. The Special Distribution payment is not subject to any condition, will be made in cash and will be subject to the "Due Bill" trading requirements mandated by the TSX Exchange. Because the amount of the Special Distribution represents a distribution of greater than 25% of the market value of the Company on the declaration date, the TSX Exchange has required that the Class A shares will trade on a "Due Bill" basis during the period (the "Due Bill Period") from and including August 11, 2017 until the close of trading on August 28, 2017 (the "Payment Date").This means that buyers of Class A shares during the Due Bill Period will receive the Special Distribution payment, provided they continue to be holders of the applicable common shares on the Payment Date. The Class A shares will commence trading on an ex-distribution basis (i.e. without an attached "Due Bill" entitlement to the Special Distribution) commencing the opening of trading on August 29, 2017 (i.e. the next trading day after the Payment Date). The Due Bill redemption date will be August 31, 2017. As a result of the Class A shares trading on a Due Bill basis during the Due Bill Period, those entitled to be paid the Special Distribution owing on the Due Bills should expect to receive that payment by the Due Bill redemption date of August 31, 2017.
Since approval of the orderly wind-up in June 2016 the recently announced Special Distribution constitutes the fourth such declaration declared by the Board. On a cumulative basis, the three special distributions, plus the recently announced fourth distribution total $5.31 per Class A Share. With seven mortgages remaining in the portfolio with a weighted average term to maturity of 14.8 months, management is pleased with the progress that has been made winding down the Company.
Forward Looking Statements
Certain statements in this news release about Trez Capital Senior Mortgage Investment Corporation (the "Company"), and its business, operations, investments and strategies, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, "forward looking statements"). The forward-looking statements are stated as of the date of this news release and are based on estimates and assumptions made by Trez Capital Fund Management LP ("Trez") in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Trez believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Past performance is not an indication of future returns, and there can be no guarantee that targeted returns or yields can be achieved. Trez refers you to the Company's public disclosure for information regarding these forward-looking statements, including the assumptions made in preparing forward-looking statements and management's expectations, and the risk factors that could cause the Company's actual results, yield, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. Such public disclosure is available on SEDAR and at the request of Trez. This news release does not represent an offer or solicitation to sell securities of the Company.
About the Company
The Company holds a portfolio of mortgages in Canada. Trez Capital Fund Management Limited Partnership is the manager of and portfolio advisor to the Company. On June 16, 2016 the Shareholders of the Company approved the orderly wind-up of the Company. Under the orderly wind-up plan the Company will distribute the net proceeds through special distributions, the repurchase of shares pursuant to the normal course issuer bid, or otherwise.
SOURCE Trez Capital Senior Mortgage Investment Corporation
For further information: Karyn Phuong, Vice President, Investor Relations, Trez Capital, Tel: (647) 788-1788, E-mail: KarynP@trezcapital.com