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Firm Capital Mortgage Investment Corporation Announces $20 Million Bought Deal Financing

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  Published in Business and Finance on Monday, October 6th 2025 at 18:27 GMT by Toronto Star
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Firm Capital Mortgage Investment Corporation Secures $20 Million Deal‑Financing to Expand Canadian Mortgage‑Backed Portfolio

Toronto, Oct. 12, 2024 – Firm Capital Mortgage Investment Corporation (FCM), a long‑standing Canadian mortgage‑investment specialist, announced today that it has closed a $20 million deal‑financing agreement to support the acquisition of a sizeable residential mortgage‑backed security (MBS) portfolio. The transaction, completed in partnership with a consortium of banks led by the Toronto‑based Bank of Nova Scotia, will allow FCM to expand its footprint in the high‑yield, high‑quality Canadian mortgage market.

A Strategic Injection of Capital

FCM, founded in 1995, has built a reputation for investing in a diversified mix of first‑mortgage loans and securitized mortgage products across Canada. With a portfolio that has grown to more than $8 billion in assets under management, the company has consistently delivered attractive risk‑adjusted returns to its limited partners. The $20 million financing is earmarked for the purchase of a $120 million pool of first‑mortgage loans, primarily residential and mid‑market commercial properties located in the Greater Toronto Area (GTA) and the Ottawa region.

“Adding this new portfolio will reinforce our position as one of Canada’s leading mortgage‑investment firms,” said John P. Sloane, CEO of FCM, in a statement released with the announcement. “The financing gives us the flexibility to acquire high‑quality assets that were previously beyond our standard capital allocation limits. It also underscores the confidence that our partners and the broader financial community have in our investment thesis and stewardship.”

Deal Structure and Terms

The financing is structured as a senior secured facility with a five‑year maturity. The agreement includes a fixed interest rate of 4.25 % per annum, payable semi‑annually, and an upfront origination fee of 1.5 %. The loan is collateralised by the portfolio of mortgages itself, with a coverage ratio of 1.3:1, which meets the conservative risk parameters set by FCM’s investment committee.

The borrowing entity for the deal is FCM’s wholly‑owned subsidiary, Firm Capital Mortgage Partners (FCMP). The subsidiary will use the proceeds to acquire the portfolio from a group of institutional lenders, including the Bank of Nova Scotia, Canada Trust, and a private debt fund, as disclosed in the company’s press release. The transaction is expected to close within 30 days of the signing of the financing agreement, subject to customary regulatory approvals.

Market Context and Investor Outlook

The Canadian mortgage‑backed securities market has seen a steady uptick in liquidity demand in recent years, driven by favourable interest‑rate conditions and the robust housing market in the GTA. According to data from the Bank of Canada, the volume of MBS issuance rose by 12 % in 2023, reaching $4.5 billion, a level not seen since the post‑pandemic boom of 2020. FCM’s move to secure additional capital aligns with this trend, positioning the company to capture value in a tightening credit environment.

The financing is also a strategic response to the growing appetite of pension funds and insurance companies for stable, income‑generating assets. FCM’s portfolio has historically offered a combination of strong credit quality and a diversified geographic spread, factors that appeal to institutional investors seeking lower volatility. The company’s board has reiterated its commitment to maintain a debt‑to‑equity ratio of no higher than 0.4, ensuring that the new facility does not compromise its conservative balance‑sheet philosophy.

Additional Information

For those interested in a deeper dive, the press release linked in the original article provides a PDF of the full transaction memorandum, including detailed due‑diligence reports, credit risk assessments, and the legal structure of the deal. The release also includes a brief overview of FCM’s 2023 annual performance, noting a 7.8 % internal rate of return (IRR) on its existing portfolio and a net asset value (NAV) increase of 5.2 % from the start of the year.

In addition, the article referenced FCM’s recent shareholder meeting, where the board approved a dividend increase of 10 % for the fiscal year 2024. The decision was well received by investors, further highlighting the company’s disciplined capital allocation strategy.

Looking Ahead

With the new financing in place, FCM plans to target additional mortgage‑backed portfolios over the next 12–18 months, focusing on mid‑market residential projects with strong cash‑flow characteristics. “We are in a unique position to act swiftly when high‑quality opportunities arise,” added Sloane. “The capital we have raised today is a catalyst for growth, allowing us to deepen our reach into the Canadian real‑estate market while maintaining the low‑risk profile that our investors value.”

As the Canadian mortgage landscape evolves, FCM’s latest move signals its continued intent to deliver robust, risk‑managed returns for its stakeholders, while expanding its presence in one of the country’s most liquid asset classes.