C.A. Bancorp Inc.

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

September 12, 2008 14:59 ET

C.A. Bancorp Canadian Realty Finance Corporation Closes Offering Raising $27 Million

TORONTO, ONTARIO--(Marketwire - Sept. 12, 2008) - C.A. Bancorp Inc. ("C.A. Bancorp") (TSX:BKP) and C.A. Bancorp Canadian Realty Finance Corporation (the "Corporation") (TSX:RF.PR.A)(TSX:RF.UN) are pleased to announce that the Corporation has closed a public offering today (the "Offering"). The Corporation offered units (the "Units") at a price of $10.00 per Unit. Each Unit consists of one Class A Share and one warrant (a "Warrant") to purchase a Series 1, Preferred Share (a "Preferred Share").

Gross Proceeds

At the closing, the Corporation issued 2,700,000 Units for aggregate gross proceeds of $27,000,000. The gross proceeds consisted of $23,181,260 in cash and $3,818,740 in publicly listed Canadian common shares and investment grade securities received under the exchange option of the Offering.

The agents for the Offering have been granted an over-allotment option to purchase up to 405,500 Units at any time during the next 30 days.

Trading Information

The securities forming a Unit will trade together on the Toronto Stock Exchange ("TSX") under the symbol RF.UN as a Unit and cannot be transferred except as part of a Unit and the Warrants may not be exercised for the first 30 days after the date hereof. Thereafter, the Class A Shares and the Warrants will trade separately on the TSX under the symbols RF.A and RF.WT, respectively.

The Class A Shares

The Corporation's investment objectives with respect to the Class A Shares are to:

i. Pay quarterly cash distributions, initially expected to be $0.19 per quarter per Class A Share or 7.6% per annum, based on the original issue price of $10.00 per Unit; and

ii. To preserve the net asset value of the Class A Shares.

The Warrants

Each Warrant will entitle the holder to purchase one Preferred Share at a subscription price of $23.75 at any time on or before 4:00 p.m. (Toronto time) on September 30, 2011.

The Preferred Shares

The Corporation's investment objectives with respect to the Preferred Shares are to:

i. Pay 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 original issue price of $25.00 per Preferred Share; and

ii. Return the original issue price of the Preferred Shares ($25.00 per Share) on March 31, 2018.

Impact of the Offering on the Outstanding Preferred Shares

The Preferred Shares are listed on TSX and trade under the symbol RF.PR.A.

C.A. Bancorp Ltd. (the "Manager") views the Preferred Shares as a form of financial leverage to the Class A Shares as the Preferred Shares have a fixed term, fixed cash distributions and fixed maturity value.

The Manager uses the maturity value of the aggregate number of Preferred Shares issued and outstanding and compares that value to the tangible net book value of the aggregate number of Class A Shares issued and outstanding as a measure of the debt (the Preferred Shares) to equity (the Class A Shares) ratio of the Corporation (the "Leverage Ratio"). As at June 30, 2008, the Leverage Ratio was 8.8 to 1.

The Offering caused the debt to equity ratio or the Leverage Ratio of the Corporation to decrease. As at the date hereof, the Leverage Ratio is approximately 1.2 to 1.


The syndicate of agents was co-led by Canaccord Capital Corporation, CIBC World Markets Inc., and National Bank Financial Inc., and included TD Securities Inc., Blackmont Capital Inc., HSBC Securities (Canada) Inc., Raymond James Ltd., Wellington West Capital Inc., Dundee Securities Corporation, GMP Securities L.P., Industrial Alliance Securities Inc., Jory Capital Inc., Laurentian Bank Securities Inc., Manulife Securities Incorporated, Desjardins Securities Inc., Research Capital Corporation and Richardson Partners Financial Limited.

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.

C.A. Bancorp Inc.

C.A. Bancorp 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 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 manages the Corporation through its wholly-owned subsidiary C.A. Bancorp Ltd.

Certain statements included in this news release constitute forward-looking statements including those identified by the expressions, "will", "anticipate", "believe", "plan", "estimate", "expect", "intend" and similar expressions. The forward looking statements are not historical facts but represent C.A. Bancorp's, the Manager's or the Corporation's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties and are based on a number of assumptions that could cause actual results or events to differ materially from current expectations, including the matters discussed in the "Risk Factors" and other sections of the final prospectus of the Corporation dated August 27, 2008 (and the documents incorporated by reference therein) and including without limitation, interest rate fluctuations, the availability of investments, competition, levels of return earned on the underlying portfolio of investments, change in financial position of the Corporation or C.A. Bancorp, reliance on key personnel, ability of the Corporation to meet its investment objectives, the ability of the Corporation to pay quarterly distributions, utilization of the NCIB, leverage ratios, and the ability of C.A. Bancorp to subscribe for or obtain subscriptions for Class A Shares of the Corporation. Due to the many risks and uncertainties, C.A. Bancorp cannot assure that the forward-looking statements contained in this news release will be realized. C.A. Bancorp undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law. This Offering was made only by prospectus. A final prospectus dated August 27, 2008 relating to these securities has been filed with the securities regulatory authority in each of the provinces and territories of Canada. Important information concerning the Offering is contained in the prospectus. Obtain a copy from your financial advisor or on SEDAR at www.sedar.com and read the prospectus before investing.

C.A. Bancorp Inc.
The Exchange Tower
130 King Street West
Suite 2810, P.O. Box 104
Toronto, Ontario M5X 1A4
Telephone: (416) 214-5985
Fax: (416) 861-8166

Contact Information