/NOT FOR DISTRIBUTION OR DISSEMINATION INTO
THE UNITED STATES OR THROUGH U.S.
TORONTO, Oct. 6, 2021 /CNW/ - MCAN Mortgage Corporation
("MCAN", the "Company" or "we") (TSX: MKP) today announced that it
has established an at-the-market equity program (the "ATM Program")
that allows the Company to issue up to $30,000,000 (the "Maximum Amount") of common
shares ("Common Shares") from treasury to the public from time to
time. The ATM Program is being established pursuant to a prospectus
supplement (the "Prospectus Supplement") dated the date hereof and
filed in each of the provinces and territories of Canada, to the Company's short form base shelf
prospectus dated August 20, 2021 (the
"Shelf Prospectus", and together with the Prospectus Supplement,
Sales of the Common Shares through the ATM Program will be made
pursuant and subject to the terms of an equity distribution
agreement dated the date hereof (the "Distribution Agreement") with
Canaccord Genuity Corp. The volume and timing of distributions
under the ATM Program, if any, will be determined at MCAN's sole
Sales of the Common Shares will be made through "at-the-market
distributions" as defined in National Instrument 44-102 - Shelf
Distributions. The Common Shares will be distributed under the
ATM Program at the market prices prevailing at the time of sale,
and therefore prices may vary as between purchasers and over time.
The ATM Program will end on the earlier of (i) September 20, 2023, and (ii) the date of
distribution of the Maximum Amount, unless terminated prior to such
date in accordance with the terms of the Distribution Agreement.
The Company plans to use the net proceeds, if any, from the ATM
Program to grow the Company's mortgage lending and investing
"We view the ATM Program as adding to our capital raising
capabilities and one element of our long-term sources of capital
that can be used to fund growth" said Karen
Weaver, President and Chief Executive Officer. "Under
this program, we can incrementally raise capital over a 2-year
period to deploy as we grow, at our discretion. MCAN's
business growth in the past year has been funded through our DRIP
and a successful equity raise through a shareholder rights
offering. We believe the establishment of this program
provides the Company with an attractive alternative source of
incremental capital and greater flexibility to raise equity.
As we look forward to funding future growth, we will continue to
evolve our capital markets and other funding strategies."
The Prospectus has been filed with the securities commissions in
all provinces and territories of Canada. The Prospectus contains important
detailed information about the securities being offered. Before you
invest, you should read the Prospectus and the other documents the
Company has filed for more complete information about the Company
and the ATM Program. Copies of the Distribution Agreement and the
Prospectus are available under the Company's profile at
This news release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
Common Shares in any jurisdiction in which such offer, solicitation
or sale would be unlawful. Further, this news release does not
constitute an offer to sell or the solicitation of an offer to buy
in the United States and the
Common Shares referred to in this news release may not be offered
or sold in the United States
absent registration under the U.S. Securities Act of 1933 or
pursuant to an applicable exemption from the registration
requirements under the U.S. Securities Act of 1933 and applicable
state securities laws.
MCAN is a public company listed on the Toronto Stock Exchange
under the symbol MKP and is a reporting issuer in all provinces and
territories in Canada. MCAN also
qualifies as a mortgage investment corporation ("MIC") under the
Income Tax Act (Canada) (the "Tax
The Company's primary objective is to generate a reliable stream of
income by investing in a diversified portfolio of Canadian
mortgages, including single family residential, residential
construction, non–residential construction and commercial loans, as
well as other types of securities, loans and real estate
investments. MCAN employs leverage by issuing term deposits that
are eligible for Canada Deposit Insurance Corporation deposit
insurance and are sourced through a network of independent
financial agents. We manage our capital and asset balances based on
the regulations and limits of both the Tax Act and the Office of
the Superintendent of Financial Institutions ("OSFI").
In order to take advantage of the tax benefits provided by
its MIC status, we typically pay out substantially all of MCAN's
nonconsolidated taxable income to shareholders through dividends.
As a MIC, we are entitled to deduct the dividends that we pay to
shareholders from our taxable income. Regular dividends are taxed
as interest income to shareholders. We are able to pay capital
gains dividends, which would be taxed as capital gains to
shareholders. Dividends paid to foreign investors may be subject to
withholding taxes. The Company has historically paid out dividends
in cash but has the option to pay out its dividends in the form of
cash or shares. In the event of a significant increase in taxable
income relative to accounting income, the Company may look to pay
out a combination of regular dividends in the form of cash and
special dividends in the form of shares, which would conform with
OSFI's current restriction on increasing cash dividends. This is
consistent with our dividend policy and our obligations as a MIC,
while at the same time providing a cost effective source of capital
for the Company to support future growth and business operations.
To meet the MIC criteria, 67% of our non–consolidated assets
measured on a tax basis are required to be held in cash or cash
equivalents and residential mortgages.
MCAN's wholly-owned subsidiary, XMC Mortgage Corporation, is
an originator of single family residential mortgage products across
A CAUTION ABOUT FORWARD–LOOKING INFORMATION AND STATEMENTS
This news release contains "forward–looking information" within
the meaning of applicable securities laws. Forward–looking
information can be identified by words such as: "expect", "intend,"
"plan," "seek," "believe," "estimate," "future," "likely," "may,"
"should," "will" and similar forward–looking language.
Forward-looking information contained in this news release includes
any stated or implied growth for the Company, the aggregate value
of Common Shares which may be issued pursuant to the ATM Program,
MCAN's expected use of the net proceeds of the ATM Program, if any,
and the anticipated benefits of the ATM Program. The
forward–looking information contained in this news release is based
on a number of assumptions which we believe to be reasonable
including, but not limited to, the aggregate net proceeds received
as a result of the ATM Program. Forward–looking information entails
various risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such
forward–looking information. Risks that could cause actual results
to differ materially from those expressed or implied in the
forward–looking information contained in this press release
include, but are not limited to, risks related to the price at
which Common Shares are sold under the ATM Program, the aggregate
net proceeds received by MCAN as a result of the ATM Program, and
the factors discussed under "Risk Factors" in the Shelf Prospectus.
In addition, general risks relating to capital markets, economic
conditions, regulatory changes, as well as the operations of our
business may also cause actual results to differ materially from
those expressed or implied in such forward–looking information.
Forward–looking information is not a guarantee of future
performance, and management's assumptions upon which such
forward–looking information is based may prove to be incorrect.
Investors are cautioned not to place undue reliance on any
forward–looking information contained herein. The Company disclaims
any obligation to update or revise any forward–looking information
contained in this news release, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
SOURCE MCAN Mortgage Corporation