Firm Capital enters into $22.5m bought deal financing agreement

Firm Capital enters into $22.5m bought deal financing agreement

Firm Capital enters into $22.5m bought deal financing agreement

Firm Capital Mortgage Investment Corporation has announced that it has agreed to sell, on a bought deal basis, to a group of underwriters bookrun by TD Securities Inc., CIBC Capital Markets, and National Bank Financial Inc.

The agreement will involve the sale of 1.86 million common shares at the non-bank lender, with estimated gross proceeds of $22.5 million.

Firm Capital has also provided the three institutions an “over-allotment option” to purchase more shares at any time until 30 days following the closing of the offering on Nov. 30.

Should this option get exercised in full, estimated gross proceeds will reach $25.88 million.

“A preliminary short-form prospectus will be filed by no later than November 16, 2020 with the securities regulatory authorities in all provinces of Canada,” Firm Capital said in its news release.

The closing is “subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals,” the lender added.

The announcement came in the wake of Firm Capital’s latest results, which showed that its adjusted income for the three months ending September was $6.83 million, in line with the company's reported Q2 income of around $6.87 million.

Firm Capital also saw its portfolio grow by $25.7 million to reach $506.6 million during the third quarter, compared to the $480.9 million as of the end of Q4 2019. The lender attributed this increase to the $269.8 million in new investment funding during the first nine months of 2020, compared to the $167.4 million seen last year.

Correction: An earlier version of this article incorrectly referred to the deal as an "acquisition" of Firm Capital. We have revised the article to incorporate the accurate details of the transaction and the lender’s updated Q3 2020 figures. The writer sincerely regrets the error.