Toronto, Ontario, June 2, 2017: First National Mortgage Investment Fund (TSX: FNM.UN) (the “Fund”) today announced that Class A unitholders tendered 716,612 units amounting to 23.9% of the 2,995,412 outstanding Class A units under the annual redemption privilege. As more than the maximum of 15% of the outstanding units have been tendered, the Fund has prorated redemptions received using a factor of 62.7% resulting in the acceptance of 449,310 Class A units. 267,302 Class A units will be returned to tendering unitholders.
The tendered units accepted will be priced at the net asset value (NAV) per unit as at the close of business June 30, 2017 and payments are payable on or about July 21, 2017. First National Financial Corporation ("FNFC"), the holder of the Class H units, did not tender any Class H for the annual redemption. As a result FNFC’s ownership will increase from 21% to approximately 23.5% of all units of the Fund after the redemption of the Class A units. FNFC continues to hold the Class H units for investment purposes.
FNFC and First National Financial LP (“FNLP”), the Mortgage Investment Advisor and Promoter, are pleased with the Fund’s performance. The Fund, through a forward agreement, obtains economic exposure to a diversified portfolio of mortgages which have continued to perform as expected. The Fund has continued monthly distributions of $0.05 per unit in 2017 or $0.60 per annum as set out in the original offering. The distribution represents an annualized pre-tax yield of approximately 6.4%, based upon a net asset value per Class A unit of $9.35 as at May 31, 2017 and 6.6% based on a closing TSX price of $9.06. The portfolio reports a weighted loan to value ratio of approximately 70%.
The Fund's tax advantaged forward structure allows distributions to be treated for tax purposes on account of capital, either as a return of capital or as a capital gain.
About First National Mortgage Investment Fund
The Fund was created to obtain economic exposure to a diversified portfolio of mortgages originated by FNLP, a wholly owned subsidiary of First National Financial Corporation. The Fund’s daily net asset value can be found at:
About Stone Asset Management Limited
Stone Asset Management Limited (“SAM”) is the manager and portfolio manager of the Fund. SAM manages a family of open-ended mutual funds, a series of flow-through limited partnerships and a TSX-listed investment fund. SAM specializes in structuring and managing high quality investment products and currently has approximately $600 million in assets under management.
About First National Financial Corporation
First National Financial Corporation (TSX: FN) is the parent company of FNLP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With almost $100 billion in mortgages under administration, First National is Canada’s largest non-bank originator and underwriter of mortgages and is among the top three in market share in the mortgage broker distribution channel. For more information, please visit www.firstnational.ca.
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First National Financial Corporation
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