Xceed Mortgage Corporation announces formation of Special Committee

    




 TORONTO, March 29, 2012 /CNW/ - Xceed Mortgage Corporation [TSX: XMC]  (the "Company") announced today that Xceed's Board of Directors (the  Board) has created a Special Committee consisting of its independent  board members, to consider future opportunities for the Company. 

 Xceed Mortgage Corporation was established in its current form in 2002,  to originate, securitize and service, non-prime residential mortgages  in Canada. During the period 2002-2007, it met with considerable  success. Over that five year period, mortgages and other assets under  administration grew from $284 million to $2.7 billion, total revenues  grew at a compound rate of 41% per annum from $8.5 million in 2002 to  $55.9 million in 2007, return on equity averaged 17% (including the  year in which the Company went public and raised an additional $25  million of capital), and at its peak market capitalisation stood at  just under $300 million. 

 The collapse of the third party asset backed commercial paper market and  term securitization markets in 2007 destroyed the Company's primary  funding sources. Since that date, the Company has focused on two  primary objectives: 

  





        i.       Developing its prime lending operations.

                 Ensuring an orderly repayment and refinancing of the $2.7
                 billion dollar portfolio of non-prime mortgages, and the
        ii.      consequent repatriation of the $44.4 million of note and
                 other investments the Company made to facilitate the
                 securitization of the aforementioned mortgages in the
                 first place.






  

 As the Company nears the successful completion of these tasks, the risks  attendant to its position as an investor and servicer in and for the  various trusts involved has significantly diminished, and it is now  less than a year away from finally discharging all of its fiduciary  obligations in this regard. As a consequence, the Board has determined  that now would be an appropriate time to consider the Company's future. 

 Examples of options (without limitation) available for consideration are  as follows: 




      1. Recommence its application to the Office of The Superintendant of
         Financial Institutions to become a bank.
      2. Seek out a sale, merger or other transaction involving the Company
         and/or its assets.
      3. Return capital to its shareholders in a tax effective way.




 There is no a priori assumption the Board or the Special Committee has  made, as to which of these (or any other) options is the preferable  one. The objective of the Special Committee will be to consider all of  the strategic options that are available to the Company, with a view to  maximising shareholder value. There is also no guarantee as to the  timing of implementation of any decision. The Special Committee has  retained the services of Norton Rose Canada LLP to assist it in its  deliberations. 

 About Xceed Mortgage 

 Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of  residential mortgages that it originates in Canada.  The Company has  approximately $1.0 billion of mortgages and other assets under  administration.  The Company's shares are traded on the Toronto Stock  Exchange .  

   

Xceed Mortgage Corporation


CONTACT:  To find out more about Xceed Mortgage Corporation, visit ourwebsiteat www.xceedmortgage.com. 


    

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