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Timbercreek Mortgage Investment Corporation Announces December 31, 2010 Operating Results

^{Published on 2011-03-01 15:05:22 - Market Wire}
 

TSX: TMC

TORONTO, March 1 /CNW/ - Timbercreek Mortgage Investment Corporation (the "Fund"), managed by Timbercreek Asset Management Ltd. (the "Fund Manager") is pleased to announce the release of its financial statements and management report of fund performance for the period ending December 31, 2010.

Some of the Fund's 2010 highlights include:

Targeted distributions met by the Fund

The Fund distributed in excess of its benchmark yield in 2010.  The average two year Government of Canada bond yield plus 550 basis points totaled 7.1% in comparison to the Fund's distribution yield of 8.2% and 9.0% for Class A and Class B shares, respectively, based on a $10 issue price. 

Focus on portfolio diversification

The Fund continued to diversify its portfolio across Canada in order to meet the requirements of its compulsory asset allocation model ("AAM"). There were no modifications to the AAM in 2010. The Fund Manager and the Mortgage Advisory Committee continued to place emphasis on mortgage investments secured by cash-flowing assets, a geographically diversified portfolio and a larger average mortgage investment secured by high-quality, institutional quality assets. The strategy is expected to continue through 2011 and beyond as the Fund looks to grow to its optimal portfolio size of $300 million. At December 31, 2010, 95% of the Fund's portfolio was diversified in five provinces across Canada compared to December 31, 2009 where 89% of the portfolio was concentrated over 4 provinces.

No mortgage impairments

In the annual audited financial statements for the year ended December 31, 2010, there were no impairments or loan provisions realized on the mortgage investment portfolio.

Total Revenue

Total revenue earned by the Fund for the year ended December 31, 2010 (the "Year") increased to $11,497,173 from $5,762,590 for the year ending December 31, 2009.  The increase in revenue was due to the Fund increasing its net assets available for investment

INCREASE IN NET ASSETS:

For the year the Fund's net assets increased by $91,000,000 to $160,000,000. This is mainly due to two successful Class A offering totaling approximately $72,000,000 and multiple Class B offerings totaling $21,000,000.

GROWTH OF THE FUND:

In January 2011, the Fund completed a private placement of 750,000 Class shares for net proceeds of approximately $7.5 million and completed a public issuance of 4,887,500 Class A shares for net proceeds of approximately $46 million.

DISTRIBUTIONS:

In 2010, total distribution of per Class A Share were $0.816 and total distributions per Class B Share was $0.9. Based on the distributions received in the year and performance of the Net Redemption Value ("NRV") per Class A and Class B share, the total annual return of the Fund was 8.6% for Class A shares and 10.4% for Class B shares in 2010.

MORTGAGE PORTFOLIO HIGHLIGHTS:

Key highlights of the Fund's mortgage investment portfolio as at December 31, 2010 are as follows:

• Total mortgage investments are $173,000,000 compared to $66,000,000 in 2009 at year end
• Mortgages secured by cash-flowing, multi-family and retirement residences equate to 50% of the total mortgage portfolio.
• The weighted average interest rate of the mortgage portfolio is 10.23%
• 87% of the mortgage portfolio was allocated across Canada's four largest provinces (Ontario - 49%; Alberta - 7%; B.C. - 11%; Quebec - 20%) This is in comparison to December 31, 2008 where 89% of the mortgage portfolio was allocated across Canada's four largest provinces (Ontario - 32%; B.C. - 22%; Alberta - 19%; Quebec - 16%).   
• Approximately 68% of the mortgage portfolio has a loan-to-value less than 75%

ABOUT THE FUND:
The Fund provides investors with an opportunity to receive attractive yields by investing indirectly, through holding shares of the Fund, in mortgage loan investments selected and determined to be high quality by its manager, Timbercreek Asset Management Ltd. The investment objective of the Fund is, with a primary focus on capital preservation, to acquire and maintain a diversified portfolio of mortgage loan investments that generates attractive, stable returns in order to permit the Fund to pay monthly distributions to its shareholders.  

Full reports and financial results for the Fund for the year are outlined in the audited financial statements and management report of fund performance is available at [ www.sedar.com ].  In addition supplemental information is available at the Fund's website at [ www.timbercreekfunds.com ].

Forward-Looking Statements

This document may contain forward-looking statements relating to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent our beliefs regarding future events.  These statements are typically identified expressions like "believe", "expects", "anticipates", "would", "will", "intends", "projected", "in our opinion", "confident" and similar expressions.  By their nature, forward-looking statements require us to make assumptions which include, among other things, that (i) the Fund will have sufficient capital under management to effect its investment strategies and pay its targeted distributions, (ii) the investment strategies will produce the results intended by the Fund Manager, (iii) the markets will react and perform in a manner consistent with the investment strategies and (iv) the Fund is able to acquire mortgages of a quality that will generate returns that meet and or exceed the Fund's targeted mortgage investment returns.  Forward-looking statements are subject to inherent risks and uncertainties.  There is significant risk that predictions and other forward-looking statements will prove not to be accurate.  We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed or implied in the forward-looking statements.  Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including but not limited to, general market conditions, interest rates, regulatory and statutory developments, the effects of competition in areas that the Fund may invest in and the risks detailed from time to time in the Fund's prospectus.

We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to investing in the Fund, investors and others should carefully consider these factors, as well as other uncertainties and potential events and the inherent uncertainty of forward-looking statements.  Due to the potential impact of these factors, the Fund and the Fund Manager do not undertake, and specifically disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.