Toronto Stock Exchange: TZZ
VANCOUVER, Oct. 15, 2013 /CNW/ - Trez Capital Fund Management Limited
Partnership (the "Manager"), the manager of Trez Capital Mortgage
Investment Corporation (the "Corporation"), announced today that it
will seek approval from the shareholders of the Corporation to
implement changes in connection with changing the status of the
Corporation for purposes of Canadian securities regulations from that
of an investment fund to that of reporting issuer that is a public
corporation (the "Proposed Transition"). To that end, the Board of
Directors of the Corporation has authorized the calling of a special
meeting (the "Special Meeting") of its shareholders to be held on
November 29, 2013. The record date for determining shareholders
entitled to receive notice of the Special Meeting will be October 29,
2013, with the location to be determined.
This decision is a pro-active response by the Manager to the proposed
regulatory changes (the "Proposed Regulatory Changes") announced by
the Canadian Securities Administrators' ("CSA") earlier this year
which, if and when implemented, would (among other matters) prohibit
the Corporation from continuing to invest in non-government guaranteed
mortgages.
Since its inception in 2012, the Corporation has consistently paid out
monthly distributions at its targeted levels and net asset value has
increased from the net asset value at the time of the initial public
offering, as a result of investing in a diversified portfolio of
mortgages originated by the Manager and compatible with the investment
mandate of the Corporation. Accordingly, the Manager believes that it
is in the best interest of the shareholders of the Corporation that it
continues to have the ability to pursue its current objectives and
mandate by transitioning to the public company regime. Such a
transition was expressly contemplated by the CSA in the Proposed
Regulatory Changes.
Following the Proposed Transition, the Corporation will continue to
qualify as a mortgage investment corporation under the Income Tax Act
(Canada) and will continue to pursue its current investment objectives
and strategies. Some key changes to the Corporation will occur as part
of the Proposed Transition, including the following:
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|
Current
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After Proposed Transition
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Continuous Disclosure by Trez
Junior MIC
|
Semi-annual financial statements
for investment funds,
accompanied by management
reports of fund performance
Publication of net asset value on a weekly basis
Quarterly portfolio disclosure
|
Quarterly financial statements
for public companies,
accompanied by management
discussion and analysis
Book value disclosed in quarterly
financial statements
|
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Basis of Accounting
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Canadian GAAP (Part V)
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International Financial Reporting
Standards (IFRS)
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Class Structure
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One class of publicly traded
shares
|
One class of publicly traded
shares, with the ability to issue
other classes of shares
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Shareholder Voting
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Class A Shares are non-voting
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Class A Shares are fully voting
|
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Liquidity
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Redeemable annually at net
asset value per share, subject to
a 15% cap
|
Redemption feature will cease to
exist
|
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Governance
|
Class A Shareholder approval
only required on special
resolutions as per CBCA or the
Articles (no annual shareholder
meetings)
Audit Committee and
Independent Review Committee
|
Class A Shareholders approve all
matters as per CBCA and articles
(annual meetings of Class A
Shareholders commence in
2014)
Audit and Nomination
Committees
|
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Annual Trailer Fees
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Annual Trailer Fee of 0.50%
|
No trailer fees paid
|
The Manager is of the view that the Proposed Transition will provide
shareholders of the Corporation with a number of benefits, including:
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the ability to continue pursuing its current mandate in accordance with
its current investment objectives and strategies;
-
the ability to raise additional capital, as needed;
-
the elimination of the trailer fees paid on Class A Shares will leave
more of the income generated by the Corporation available for
distribution to its shareholders;
-
the grant of full voting rights to Class A Shareholders;
-
increased frequency of financial reporting;
-
the potential for research analyst coverage which does not cover
investment funds; and
-
increased stability of capital resulting from the elimination of the
redemption feature.
If the Proposed Transition is approved, shareholders of the Corporation
will have one last opportunity to request that their Class A Shares be
redeemed at their net asset value on December 31, 2013. The deadline
for submitting such a redemption request will be extended from November
15, 2013 to December 13, 2013 in order to provide shareholders with an
opportunity to consider the outcome of the Special Meeting. The number
of Class A Shares of the Corporation which can be redeemed on December
31, 2013 will be limited to 15% of its currently outstanding number of
shares.
Shareholders will be asked at the Special Meeting to consider and, if
thought fit, approve the Proposed Transition and certain related
changes including the following:
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Class A Shares will become fully voting and all redemption rights will
be removed from the Class A Shares.
-
The Corporation will be permitted to issue additional classes of shares
in the future.
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Matters requiring shareholder approval will be removed from the
Corporation's articles.
-
The Management Agreement for the Corporation will be amended to provide
for a termination fee payable to the Manager in the event of
termination of the management agreement other than for cause.
A notice of meeting and management information circular of the
Corporation containing additional information regarding the Proposed
Transition is currently expected to be mailed to all shareholders by
November 6, 2013.
For information, please visit www.trezcapital.com.
SOURCE Trez Capital Mortgage Investment Corporation
