TORONTO, Dec. 16 /CNW/ - Xceed Mortgage Corporation (TSX:XMC) today made the following announcements:
Refinancing of Okanagan Funding Trust
Xceed has entered into a preliminary agreement with a Canadian financial institution to refinance approximately $75 million of residential mortgages currently serviced by Xceed and owned by Okanagan Funding Trust (OFT). Although this financing, if completed, will result in an estimated pre-tax accounting loss in the range of $5 million to $7 million for Xceed, it will also result in the eventual conversion into cash of a significant portion of Xceed's $25 million junior note investment in OFT.
Xceed has been working in conjunction with the senior note holder in OFT since August of 2010, with a view to refinancing both the junior and senior OFT notes, and is pleased to have reached this preliminary agreement. The transaction is subject to signing definitive documentation and other conditions. There can be no assurances that this transaction will be completed, or that, notwithstanding this preliminary agreement, the senior note holder will not then choose to exercise its rights to sell the underlying mortgage portfolio on terms that could be more disadvantageous to Xceed.
QSPE-XCD Trust Amortization Event
Xceed has also received notice from the administrator of QSPE-XCD trust, to which Xceed had in the past sold residential mortgages, that the trust had experienced an amortization event. The event is in itself not material for Xceed, although because it will change the timing of receipt of cash from the trust, it will result in a small accounting loss.
About Xceed Mortgage
Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of insured residential mortgages that it originates in Canada. The company had approximately $1.7 billion of mortgages and other assets under administration at the end of its fiscal 2010 third quarter. Xceed's shares are traded on the Toronto Stock Exchange (TSX: XMC). To find out more about Xceed Mortgage Corporation, visit our website at www.xceedmortgage.com.
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.
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