TORONTO, ONTARIO -- (Marketwire) -- 08/18/11 -- NorRock Realty Finance Corporation ("NRFC" or the "Corporation") (TSX: RF.PR.A)(TSX: RF.A) announced today that it has filed its semi-annual financial statements and management report on fund performance for the period ended June 30, 2011. The Corporation had a net asset value ("NAV") per Class A Share of $9.01 as at June 30, 2011.
The Corporation announced the following highlights and performance update. As at June 30, 2011, the Corporation continued to hold approximately $6.725 million of excess cash in publicly traded securities including debentures and convertible debentures in real estate corporations and REITs and other preferred securities with an aggregate yield of 5.07% (calculated as yield divided by fair value) in accordance with the Corporation's investment objectives and restrictions. The Corporation also maintained a cash position of approximately $28.1 million. This cash is earning a nominal amount of interest but is available for other new loan opportunities on short-term notice.
The Corporation is assessing its strategic options to optimize performance of its current holdings which include an extensive review and strategic plan for its Mortgage Portfolio and an assessment of other opportunities available to the Corporation. NorRock Realty Management Services Ltd. (the "Manager") will continue to seek additional investment opportunities in publicly traded securities to optimize the return on invested capital while the Corporation has excess cash.
In August 2010, following C.A. Bancorp Inc.'s announcement that its interests would best be served through the realization of its assets including its interests in the Corporation (resulting in a sale of its interests in May 2011), the Manager and Corporation's collective focus in 2010 and throughout the first half of 2011 was to proactively manage and preserve the value of the existing Mortgage Portfolio. While certain mortgages have been repaid throughout the first half of 2011, a number of other mortgages in the Mortgage Portfolio have been extended by the Manager.
The previous Board of Directors of the Corporation suspended the quarterly distribution per Class A Share of $0.19 as at March 31, 2011. The distribution level on the Class A Shares will be reviewed depending on changes in the Mortgage Portfolio, real estate markets, the Corporation as a whole, and economic forecasts.
During the first six months of 2011, the Manager extended four loans in the aggregate amount of $8,236,888 with a current average effective yield of 11.46%. During the same period, ten loans in the aggregate amount of $11,135,572 were repaid. The repaid loans had an average effective yield of 11.49%. The Corporation has no non-performing loans as at June 30th 2011.
The fair value adjustment on the Mortgage Portfolio of $1.1 million or $0.38 per Class A Share is non-cash in nature and was determined by discounting the expected cash flows from the Mortgage Portfolio at an average discount rate of 12.6%, which resulted in an estimated fair value on the Mortgage Portfolio of $25.3 million, compared to the pre-adjusted carrying value of the Mortgage Portfolio of $26.4 million ($26,431,583 in principal owing less $16,821 in unamortized loan fees).
Below is a breakdown of the Mortgage Portfolio as at June 30, 2011:
Breakdown of the Mortgage Portfolio
Portfolio Effective
By Type Weighting Yield
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1st Mortgages 65.4%
2nd Mortgages 32.7%
Other Secured Loans 1.9%
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100.0% 10.5%
Portfolio Effective
By Geography Weighting Yield
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Ontario 76.7%
East 22.2%
West 1.1%
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100.0% 10.5%
Portfolio Effective
By Asset Type Weighting Yield
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Retail 35.6%
Land 19.2%
Apartment 16.3%
Golf Course 15.1%
Marina 7.0%
Hotel 5.7%
Residential (Lots/Construction) 1.1%
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100.0% 10.5%
For additional information, please see the Corporation's semi-annual financial statements and management report on fund performance for the period ended June 30, 2011 which will be available under the Corporation's profile on SEDAR at www.sedar.com.
The Corporation
The NRFC is a mutual fund corporation incorporated under the laws of the Province of Ontario. It Corporation was created to obtain exposure to the investment performance of an actively managed portfolio of mortgages and secured loans in the Canadian commercial real estate sector on a tax-efficient basis.
This news release contains forward-looking statements relating to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent the Corporation or the Manager'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", "believe" or similar words or the negative thereof, 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 future business, operations and performance of the Corporation discussed herein could differ materially from those expressed or implied by such statements. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Additional, important factors could cause actual results to differ materially from expectations. The Corporation cautions that risk factors discussed in applicable continuous disclosure filings 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. Unless otherwise stated, all forward-looking statements speak only as of the date of this press 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.
Contacts:
NorRock Realty Finance Corporation
Jacqueline Boddaert
Chief Executive Officer
1-855-305-9943
1-866-362-2469 (FAX)
info@norrock.ca
www.norrock.ca
