C.A. Bancorp Canadian Realty Finance Corporation (TSX: RF.PR.A) Provides Investment Update
Realty Finance is pleased to report that it is fulfilling its investment mandate ahead of schedule and expects to be fully invested by
Management is pleased with the credit quality of the Mortgage Portfolio to date. Each mortgage and loan is supported by personal guarantees of the principal shareholders and/or corporate guarantees, with the exception of one. As of
Realty Finance seeks exposure to a secure portfolio of mortgages and loans whereby it:
- Does not invest outside of
- Does not invest in mortgage backed securities,
- Does not invest in subprime single family residential owner-occupied real estate,
- Does not invest in any mortgage where its interest exceeds 90% of the lower of the cost or value of the underlying real property unless sufficient additional security against another asset is obtained.
The following table provides a breakdown of the Mortgage Portfolio Realty Finance has exposure to:
-------------------------------------------------------------------
-------------------------------------------------------------------
BREAKDOWN OF THE MORTGAGE PORTFOLIO
-------------------------------------------------------------------
Portfolio Effective
By Type Weighting Yield
-------------------------------------------------------------------
1st Mortgages 85% 11.6%
2nd Mortgages 13% 11.7%
Secured Loans 2% 12.5%
-------------------------------------------------------------------
100% 11.6%
By Geography
-------------------------------------------------------------------
Ontario 64% 11.5%
Eastern Canada 19% 13.1%
Western Canada 17% 10.5%
-------------------------------------------------------------------
100% 11.6%
Weighted Average Loan-to-Value Ratio 61.2%
-------------------------------------------------------------------
Average Mortgage Size $1,762,213
-------------------------------------------------------------------
-------------------------------------------------------------------
Realty Finance's Preferred Shares, Series I
Realty Finance's investment objectives with respect to the Preferred Shares, Series I (the "Preferred Shares") are to:
(i) Provide fixed, cumulative preferential quarterly cash distributions in the amount of
(ii) Return the original issue price of
Distributions on the Preferred Shares are expected to be comprised primarily of returns of capital or capital gains.
Realty Finance believes the Preferred Shares are a good investment alternative for fixed income investors seeking a higher after-tax yield relative to traditional Government of
---------------------------------------------------------------------------
COMPARISON OF AN INVESTMENT IN THE PREFERRED SHARES TO OTHER
FIXED INCOME ALTERNATIVES(1)
---------------------------------------------------------------------------
Before Marginal After
Tax Tax Tax Tax
Treatment Yield Rate(4) Yield
---------------------------------------------------------------------------
C.A. Bancorp Canadian Realty Capital
Finance Corporation(2) Gains 6.75% 23.2% 5.18%
---------------------------------------------------------------------------
Dividend
S&P/TSX Preferred Share Index(3) Income 5.61% 23.96% 4.27%
---------------------------------------------------------------------------
Interest
TD Canada Trust 5 year GIC(3) Income 3.20% 46.4% 1.71%
---------------------------------------------------------------------------
10 Year Government of Canada Interest
Bond(3) Income 3.70% 46.4% 1.98%
---------------------------------------------------------------------------
(1) Consider relative credit quality when comparing investments on a yield
basis
---------------------------------------------------------------------------
(2) Based on the issue price of $25.00
---------------------------------------------------------------------------
(3) As at June 30, 2008 ,
Sources: www.tsx.com;www.tdcanadatrust.com;www.bank-banque-canada.ca
---------------------------------------------------------------------------
(4) Highest marginal tax rates in Ontario , Source: www.ey.com
---------------------------------------------------------------------------
Trading information
Realty Finance's Preferred Shares trade on the
Realty Finance is a mutual fund corporation incorporated under the laws of the Province of
C.A. Bancorp Inc.
C.A. Bancorp is a publicly traded Canadian merchant bank and alternative asset manager that provides investors with access to a range of private equity and other alternative asset class investment opportunities. C.A. Bancorp is focused on investments in small- and middle-capitalization public and private companies, with emphasis on the industrials, real estate, infrastructure and financial services sectors.
C.A Bancorp Inc. is the sole shareholder of Class A shares of Realty Finance and manages Realty Finance through its wholly-owned subsidiary C.A. Bancorp Ltd.
This news release contains forward-looking statements with respect to matters concerning the business, operations, commitments and strategy of Realty Finance. These statements relate to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent the Realty Finance's beliefs regarding future events. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue", similar words or the negative thereof, or variations of such words and phrases that certain actions, events or anticipated outcomes "may", "would" or "might" be taken, occur or be achieved. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur.
Realty Finance cautions that risk factors discussed in applicable continuous disclosure filings required by law that Realty Finance has made and filed on SEDAR should also be considered carefully and that undue reliance not be placed on forward-looking statements as events and results could differ materially from those expressed or implied by forward-looking statements made by Realty Finance due to factors including, but not limited to, the timing and completion of funding of committed loans, the time required for Realty Finance to become fully invested, and the suitability of the Preferred Shares for any given investor. The cautionary statements qualify all forward-looking statements attributable to Realty Finance and persons acting on its behalf. Readers are cautioned to assess both risk and return before making their investment decisions.
Unless otherwise stated, all forward-looking statements speak only as of the date of this news release. Realty Finance does not undertake, and specifically disclaims, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.