TORONTO, Aug. 14, 2017 /CNW/ - Trez Capital Mortgage Investment
Corporation (TSX: TZZ) (the "Company") today released its financial results for the quarter ended June
30, 2017.
Financial Highlights
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 $0.4 million, compared to a loss from operations of
$3.8 million in Q2 of 2016
- Net income for the quarter totaled $0.3 million, compared to a net loss of $3.8 million in Q2 of 2016
- Basic and diluted earnings per share were $0.02 versus dividends declared of $0.175 per share
During the second quarter, as compared to the same period in 2016, income from operations and net income increased primarily
as a result of decreased fair value adjustments on mortgages and reduced expenditures relating to incentive fee, management fees
and general and administration costs associated with the shareholder action and Orderly Wind up. This was partially offset by
reduced interest and commitment fee revenue resulting from a reduction in the average size of the mortgage portfolio.
Investment Portfolio Highlights
- 86% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 89%
- Weighted average interest rate and term to maturity on mortgage investments was 5.25% and 14.5 months, respectively
- Geographically diversified portfolio across Canada: Ontario 57%, Alberta 6%, New Brunswick
11% and Nova Scotia 26%.
Business Update
Subsequent to Q2, on July 20, 2017 the Board of Directors declared a special distribution of
$2.46 per Class A share of the Company (the "Special Distribution"), the total amount of the
declared special distribution is approximately $30.0 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 12,202,841 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 Company has issued two substantial issuer
bids in addition to the current Special Distribution to return capital to shareholders. With 13 mortgages remaining in the
portfolio with a weighted average term to maturity of 14.5 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 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 diversified 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
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