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INVESTOR_PressReleases_FNMortgage-Fund

First National returns to Commercial Mortgage Backed Securities Market in response to resurgent demand

Dec 10, 2014

For Immediate Release

Toronto, Ontario, December 10, 2014 – First National Financial Corporation (TSX: FN, TSX:FN.PR.A), Canada’s largest non-bank originator and underwriter of mortgages, today marked its return to the Commercial Mortgage Backed Securities (CMBS) market with a successful securitization and a pledge to continue to meet investor demand for these attractive products.

In its return to the market this month, First National Financial LP contributed $105 million to a $283.7 million CMBS pool. This included commercial real estate mortgages originated by First National with 10-year terms on properties from coast to coast.

First National’s re-entry into the market – it became a CMBS Master, Primary and Special Servicer and originator into CMBS conduits a decade ago – provides investors with access to pools of Canadian commercial mortgages originated by one of the strongest national distribution networks in the industry.

“Our decision to again contribute commercial mortgages to CMBS pools was driven by resurgent investor demand which had been dormant for several years following the global financial crisis,” said Moray Tawse, Executive Vice President of First National. “What we see now is a strong appetite for good commercial product, which we are uniquely positioned to serve as a leader in the sector.”

Today, First National’s commercial business segment serves more than 5,000 borrowers, administers an $18 billion portfolio and has a strong track record of both originations ($3.1 billion in 2013) and renewals ($1.3 billion in 2013).

“First National has what it takes to be a leader in the CMBS market,” said Jeremy H. Wedgbury Senior Vice President, Commercial Mortgages. “We have a strong national distribution network with a dedicated team of mortgage origination professionals in Canada’s major cities, many long-standing relationships and access to high-quality borrowers. Given our long history of performance – including steady originations, high renewals and low defaults – in a Canadian commercial real estate market that is broadly recognized for its investment-grade characteristics, we are able to meet the risk-return objectives of CMBS investors.”

From 2003 to 2007, First National participated in 12 CMBS transactions, contributing 189 loans totaling more than $1 billion. No losses were incurred on any of the mortgages sold into the pools.

“We are pleased to act as a conduit to a market that was once a significant source of commercial mortgage funding and can be again,” said Mr. Tawse. “CMBS has proven to address the competitive funding needs of our borrowers and the demands of investors who value access to a diversified portfolio of well-selected, well-managed commercial mortgages producing solid and stable cash flow.”

As a large lender, First National has access to its internal balance sheet funds, institutional placements and several securitization programs, once again including CMBS. The diversity of its funding sources enables the Company to obtain cost-effective mortgage financing which is available over a wide-range of capital market conditions.

Based on its past and current experience, First National believes that commercial mortgage backed securities provide an attractive financing option for all commercial real estate asset classes including multi-unit residential, retirement home, hotel, retail, office, industrial and self-storage.

About First National Financial Corporation

First National Financial Corporation (TSX: FN, TSX:FN.PR.A) is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With over $83 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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For further information:
Robert Inglis
Chief Financial Officer
First National Financial Corporation
Tel: 416-593-1100
Email: rob.inglis@firstnational.ca
Ernie Stapleton
President
Fundamental Creative Inc.
Tel: 905-648-9354
Email: ernie@fundamental.ca