C.A. Bancorp Inc.

C.A. Bancorp Inc.
C.A. Bancorp Canadian Realty Finance Corporation

April 25, 2008 09:54 ET

C.A. Bancorp Canadian Realty Finance Corporation (TSX: RF.PR.A) Provides Investment Update

TORONTO, ONTARIO--(Marketwire - April 25, 2008) - C.A. Bancorp Canadian Realty Finance Corporation (the "Corporation") is pleased to provide an investment update to its shareholders. The class A shares of the Corporation are 100% owned by C.A. Bancorp Inc. (TSX:BKP).

The Corporation was created to obtain exposure to an investment portfolio of mortgages and loans in the Canadian commercial real estate sector held by C.A.B. Realty Finance L.P. (the "Partnership"). The Corporation, through the Partnership, had approximately $43 million of capital to invest in commercial real estate mortgages and loans.

To date, the Partnership has funded approximately $23 million, with another approximately $9 million committed but not yet funded for a total of approximately $32 million or 74% of the capital available to invest. The average effective rate of interest including fees is 11.2% on the funded loans and 11.4% on the funded and committed loans.

The Corporation is pleased to report that it is fulfilling its investment mandate ahead of schedule and expects to be fully invested by July or August of 2008. Management is satisfied with the credit quality of the loans funded and committed to date. All loans, with the exception of one, contain personal guarantees of the principal shareholders and/or supporting corporate guarantees. As of today's date, all mortgages and loans are in good standing and all payments are current.

The following table provides a breakdown by loan type and geography of the Partnership's portfolio of funded and committed loans:

By Loan Type Weighting Yield
1st Mortgages 80% 11.3%
2nd Mortgages 17% 11.7%
Other Secured Loans 3% 12.5%
100% 11.4%

By Geography Weighting Yield
Ontario 54% 11.1%
Eastern Canada 24% 12.7%
Alberta 22% 10.6%
100% 11.4%

Weighted Average Loan-to-Value Ratio 66.7%

Average Loan Size $ 1,592,644

The Corporation's Preferred Shares, Series I

The Corporation's investment objectives with respect to the preferred shares, series I (the "Preferred Shares") are to:

(i) provide fixed, cumulative preferential quarterly cash distributions in the amount of $0.4219 per Preferred Share, representing a yield of 6.75% per annum on the issue price of $25.00; and

(ii) return the original issue price of the Preferred Shares after 10 years.

Distributions on the Preferred Shares are expected to comprise primarily returns of capital or capital gains dividends.

The Corporation believes the Preferred Shares are a good investment alternative for fixed income investors seeking a higher after-tax yield relative to traditional Government of Canada bonds and guaranteed investment certificates ("GICs").

Tax Before Tax Marginal After Tax
Treatment Yield Tax Rate Yield
C.A. Bancorp Canadian Realty Capital
Finance Corporation(2) Gains 6.75% 23.2% 5.18%
S&P/TSX Preferred Share Dividend
Index(3) Income 5.40% 24.7% 4.07%
TD Canada Trust 5 year GIC(3) Income 3.00% 46.4% 1.61%
10 Year Government of Canada Interest
Bond(3) Income 3.66% 46.4% 1.96%

(1) Consider relative credit quality when comparing investments on a yield
(2) 9.67% pre-tax interest income less 46.4% tax (2007 Ontario top
marginal tax rate) equals 5.18% after tax yield
(3) As at April 24, 2008, Sources: www.tsx.com; www.tdcanadatrust.com;

Trading information

The Corporation's Preferred Shares trade on the Toronto Stock Exchange under the symbol RF.PR.A.

C.A. Bancorp Canadian Realty Finance Corporation

The Corporation is a mutual fund corporation incorporated under the laws of the Province of Ontario. The Corporation was created to obtain exposure to the investment performance of an actively managed portfolio of secured loans and investments in the Canadian commercial real estate sector on a tax efficient basis. The Corporation was funded through the issuance of $38.5 million of Preferred Shares and $7.85 million of subordinate Class A shares.

C.A. Bancorp Inc.

C.A. Bancorp Inc. (TSX:BKP) is a publicly traded Canadian merchant bank and alternative asset manager that provides investors with access to a range of private equity and other alternative asset class investment opportunities. C.A. Bancorp Inc. is focused on investments in small- and middle-capitalization public and private companies, with emphasis on the industrials, real estate, infrastructure and financial services sectors.

C.A Bancorp Inc. is the sole shareholder of Class A shares of the Corporation and manages the Corporation through its wholly-owned subsidiary C.A. Bancorp Ltd.

This news release contains forward-looking statements with respect to matters concerning the business, operations, commitments and strategy of the Corporation. These statements relate to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent the Corporation's beliefs regarding future events. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue", similar words or the negative thereof, or variations of such words and phrases that certain actions, events or anticipated outcomes "may", "would" or "might" be taken, occur or be achieved. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur.

The Corporation cautions that risk factors discussed in applicable continuous disclosure filings required by law that the Corporation has made and filed on SEDAR should also be considered carefully and that undue reliance not be placed on forward-looking statements as events and results could differ materially from those expressed or implied by forward-looking statements made by the Corporation due to factors including, but not limited to, the timing and completion of funding of committed loans and the time required for the Corporation to become fully invested. The cautionary statements qualify all forward-looking statements attributable to the Corporation and persons acting on its behalf. Readers are cautioned to assess both risk and return before making their investment decisions.

Unless otherwise stated, all forward-looking statements speak only as of the date of this news release. The Corporation does not undertake, and specifically disclaims, 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.

The Exchange Tower
130 King Street West
Suite 2850, P.O. Box 104
Toronto, Ontario M5X 1A4

Contact Information

  • C.A. Bancorp Inc.
    Michael Lovett
    Managing Director, Real Estate Capital
    (416) 214-5985 ext. 619
    Email: mlovett@cabancorp.com
    C.A. Bancorp Inc.
    Paolo De Luca
    Chief Financial Officer
    (416) 214-5985 ext. 510
    Email: pdeluca@cabancorp.com