Timbercreek Senior Mortgage Investment Corporation October 2013 Dividend and Business Update
Toronto Stock Exchange: MTG
TORONTO, Oct. 17, 2013 /CNW/ - Timbercreek Senior Mortgage Investment Corporation (the "Company") (TSX: MTG) is pleased to announce that its board of directors (the "Board") has declared a monthly dividend of $0.050 per class A share ("Class A Shares"), $0.054 per class B share ("Class B Shares"), $0.054 per class I share ("Class I Shares"), and $0.052 per class J share ("Class J Shares") of the Company to be paid on November 15, 2013 to holders of Class A, Class B, Class I and Class J Shares of record on October 31, 2013.
Update on Corporate Transition
As a result of the favourable shareholder vote on September 12, 2013, the Company formally amended its articles of incorporation to effect the transition to a non-investment fund reporting issuer on September 13, 2013. This transition means, among other things, the Company is now subject to public company reporting requirements (the "Public Company Regime") including the requirement to publish quarterly financial statements and management discussion and analysis ("MD&A"). The Company anticipates filing its interim financial statements and MD&A for the period ending September 30th (the "Q3 Financials") on or about November 14, 2013.
There are two aspects of the corporate transition that remain outstanding:
| 1) | Special One-Time Redemption: As described in the management information circular distributed in connection with the transition, a special one-time redemption for shareholders will take place on October 31, 2013 (the "Redemption Date") with payment being made on or before November 30, 2013. The Company is currently assessing the total costs of the restructuring in order to determine the October 31, 2013 net redemption value per share (the "NRV Per Share") that will be used to calculate proceeds of the redemption. Those exercising their redemption rights will be eligible for the October distribution. |
| 2) | Exchange to Common Shares: On November 30, 2013 (the "Exchange Date"), all remaining Class A Shares, Class B Shares, Class I Shares and Class J Shares will be exchanged for new Common Shares at a conversion ratio of 1 to 1 for each Class A Share and for each of the Class B Shares, Class I Shares and Class J Shares at a ratio equal to the quotient obtained by dividing the NRV per share of that Class by the NRV per share of the Class A Shares on October 31, 2013. |
Business Update
Having completed its transition to the Public Company Regime, management and the Board are able to take a longer-term approach to creating value for investors. This approach will continue to focus on preserving capital while providing stable monthly distributions to investors of the cash flow (interest and fees) generated from its investments in a diversified portfolio of customized first mortgages secured primarily by income producing properties in urban areas of Canada. The Company intends to continue employing conservative loan selection and underwriting policies, effective portfolio diversification and risk mitigation measures, and strong governance and management strategies. The Company believes market fundamentals for those aspects of commercial real estate in Canada in which it invests remain strong and there continues to be healthy demand for customized, shorter-term loans from high-quality borrowers. A full update on the performance of the Company will be provided with the Q3 Financials that are expected to be filed on or about November 14, 2013.
Trading Conditions
The Company's Class A Shares are currently priced to yield approximately [7%] in the secondary market, which management feels does not accurately reflect the risk of the underlying portfolio. Therefore, the Company will continue to explore the benefits of utilizing its normal course issuer bid, which permits the company to purchase for cancelation up to 10% of the Company's public float (as of June 6, 2013) through until June 9, 2014 (the "NCIB") against other potential options for investing available cash. The NCIB is subject to a "blackout period" as provided for in the Company's insider trading policy adopted in connection with the corporate transition, for periods beginning on the last day of each fiscal quarter until two days following the release of the Company's quarterly and annual financial statements.
About Timbercreek Senior Mortgage Investment Corporation
The Company provides investors with an opportunity to receive attractive yields by investing indirectly, through holding shares of the Company, in mortgage loan investments selected and determined to be high quality by its manager, Timbercreek Asset Management Ltd. The investment objective of the Company is, with a primary focus on capital preservation, to acquire and maintain a diversified portfolio of first mortgage loan investments that generates attractive, stable returns in order to permit the Company to pay monthly distributions to its shareholders.
For more information about the Company, and its Manager, Timbercreek Asset Management, please visit www.timbercreek.com.
SOURCE: Timbercreek Senior Mortgage Investment Corporation
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