Firm Capital Mortgage Investment Corporation (the “Corporation”)
(TSX: FC) is pleased to announce that it has entered into an
agreement to sell, on a bought deal basis, to a syndicate of
underwriters bookrun by TD Securities Inc., National Bank Financial
Inc., and CIBC Capital Markets, $40,000,000 aggregate principal
amount of 5.00% convertible unsecured subordinated debentures due
March 31, 2029 (the “Debentures”) at a price of $1,000 per
Debenture. The Corporation has granted the underwriters an
over-allotment option to purchase up to $6,000,000 additional
aggregate principal amount of Debentures at the same price,
exercisable, in whole or in part, at any time until 30 days
following the closing of the offering. If the over-allotment option
is exercised in full, the gross proceeds of the offering will total
$46,000,000.
The net proceeds of the offering will be used
for debt repayment and for general corporate purposes.
The offering of Debentures is expected to close
on or about January 27, 2022 and is subject to certain conditions
including, but not limited to, the receipt of all necessary
regulatory approvals.
The Debentures will bear interest at a rate of
5.00% per annum, payable semi-annually in arrears on the last day
of March and September in each year, commencing on September 30,
2022, and will mature on March 31, 2029 (the “Maturity Date”). The
Debentures will be convertible at the holder’s option into common
shares of the Corporation (the “Shares”) at any time prior to the
close of business on the earlier of the Maturity Date and the
business day immediately preceding the date fixed for redemption at
a conversion price of $17.00 per Share (the “Conversion Price”),
subject to adjustment in certain circumstances.
The Debentures will not be redeemable before
March 31, 2025. On and after March 31, 2025 and prior to March 31,
2027, the Debentures will be redeemable in whole or in part from
time to time at the Corporation’s option at par plus accrued and
unpaid interest, provided that the weighted average trading price
of the Shares on the Toronto Stock Exchange during the 20
consecutive trading days ending on the fifth trading day preceding
the date on which notice of redemption is given is not less than
125% of the Conversion Price. On and after March 31, 2027, the
Debentures will be redeemable, in whole or in part, from time to
time at the Corporation’s option at any time at par plus accrued
and unpaid interest.
The Debentures will be direct, unsecured
obligations of the Corporation, subordinated to senior indebtedness
of the Corporation, ranking pari-passu to the Corporation’s
existing convertible unsecured subordinated debentures.
Subject to specified conditions, the Corporation
will have the right to repay the outstanding principal amount of
the Debentures, on maturity or redemption, through the issuance of
Shares. The Corporation will also have the option to satisfy its
obligation to pay interest through the issuance and sale of
Shares.
The Debentures will be issued pursuant to a
prospectus supplement that will be filed by no later than January
20, 2022 with the securities regulatory authorities in all
provinces of Canada under the Corporation’s short form base shelf
prospectus dated December 30, 2020.
No securities regulatory authority has either
approved or disapproved of the contents of this news release. The
securities being offered have not been, and will not be, registered
under the United States Securities Act of 1933, as amended, or any
state securities laws, and may not be offered, sold or delivered,
directly or indirectly, in the United States, its possessions and
other areas subject to its jurisdiction or to, or for the account
or for the benefit of a U.S. person, unless an exemption from
registration is available. This news release is for information
purposes only and does not constitute an offer to sell or a
solicitation of an offer to buy any securities of the Corporation
in any jurisdiction.
About The Corporation
Where Mortgage Deals Get Done®
The Corporation, through its mortgage banker,
Firm Capital Corporation, is a non-bank lender providing
residential and commercial short-term bridge and conventional real
estate financing, including construction, mezzanine and equity
investments. The Corporation’s investment objective is the
preservation of shareholders’ equity, while providing shareholders
with a stable stream of monthly dividends from investments. The
Corporation achieves its investment objectives through investments
in selected niche markets that are under-serviced by large lending
institutions. Lending activities to date continue to develop a
diversified mortgage portfolio, producing a stable return to
shareholders. The Corporation is a mortgage investment corporation
(MIC) as defined in the Income Tax Act (Canada). Accordingly, the
Corporation is not taxed on income provided that its taxable income
is paid to its shareholders in the form of dividends within 90 days
after December 31 each year. Such dividends are generally treated
by shareholders as interest income, so that each shareholder is in
the same position as if the mortgage investments made by the
Corporation had been made directly by the shareholder. Full reports
of the financial results of the Corporation for the year are
outlined in the audited financial statements and the related
management’s discussion and analysis of the Corporation, available
on the SEDAR website at www.sedar.com. In addition, supplemental
information is available on the Corporation’s website at
www.firmcapital.com.
Forward-Looking Statements
This news release contains forward-looking
statements within the meaning of applicable securities laws
including, among others, statements associated with the ability to
satisfy regulatory, stock exchange and commercial closing
conditions of the offering, the expected use of proceeds of the
offering, the expected closing date of the offering, the
uncertainty associated with accessing capital markets and the
statements related to the Corporation’s business, including those
contained in the Corporation’s Annual Information Form for the year
ended December 31, 2020, as well as statements with respect to
management’s beliefs, estimates, and intentions, and similar
statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical
facts. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as “outlook”,
“objective”, “may”, “will”, “expect”, “intent”, “estimate”,
“anticipate”, “believe”, “should”, “plans” or “continue” or similar
expressions suggesting future outcomes or events. Such
forward-looking statements reflect management’s current beliefs and
are based on information currently available to management.
These statements are not guarantees and are
based on our estimates and assumptions that are subject to risks
and uncertainties, including those described in the Corporation’s
Annual Information Form for the year ended December 31, 2020 under
“Risk Factors” (a copy of which can be obtained at www.sedar.com).
Those risks and uncertainties include, among others, risks
associated with public health crises (including COVID-19) mortgage
lending, dependence on the Corporation’s manager and mortgage
banker, competition for mortgage lending, real estate values,
interest rate fluctuations, environmental matters, shareholder
liability and the introduction of new tax rules. Material factors
or assumptions that were applied in drawing a conclusion or making
an estimate set out in the forward-looking information include,
among others, that the Corporation is able to invest in mortgages
at rates consistent with rates historically achieved, adequate
mortgage investment opportunities are presented to the Corporation,
adequate bank indebtedness and bank loans are available to the
Corporation, and a non-material impact resulting from the COVID-19
pandemic. Although the forward-looking information continued in
this new release is based upon what management believes are
reasonable assumptions, there can be no assurance that actual
results and performance will be consistent with these
forward-looking statements.
All forward-looking statements in this news
release are qualified by these cautionary statements. Except as
required by applicable law, the Corporation undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
For further information, please contact:Firm
Capital Mortgage Investment CorporationEli DadouchPresident &
Chief Executive Officer(416) 635-0221
Boutique Mortgage Lenders®
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