CHIP Mortgage Trust Issues $250 million of Medium Term Notes

TORONTO, Dec. 15, 2020 /CNW/ - CHIP Mortgage Trust ("CMT" or the "Trust") today announced that it has concluded the sale of $250 million of senior medium term notes (the "Notes").  The dealer syndicate for the sale was led by Scotia Capital and CIBC World Markets and included National Bank Financial, BMO Nesbitt Burns, RBC Dominion Securities and TD Securities. The Notes have a coupon of 1.738%, are rated AAA (sf) by DBRS Limited and have an expected final payment date of December 15, 2025.

CMT will use the proceeds of this issue to refinance outstanding indebtedness, fund mortgages originated by HomeEquity Bank, and fund ongoing operations.

"We have closed a landmark deal for the largest-ever issuance of Notes by CMT, priced at the lowest-ever coupon and with the broadest-ever investor distribution for any CMT offering," said Atul Chandra, Executive Vice President and Chief Financial Officer, HomeEquity Bank. "Despite the pandemic, HomeEquity Bank has been delivering exceptional operating and financial results, which have resonated well with investors, resulting in very strong demand for these Notes, including the addition of a number of new investors to the program. Medium term notes are, and will continue to be, a key source of funding for our rapidly growing reverse mortgage business."

Forward-Looking Statements

CMT from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular, forecasted mortgage origination growth, as well as the likelihood of its success in developing and expanding its business. Forward–looking statements are typically identified by words such as "will", "should", "believe", "expect", "forecast", "anticipate", "intend", "estimate", "plan", "may" and "could".  These statements may be included in CMT's annual and quarterly reports, regulatory filings, press releases, presentations and other communications.  These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of CMT. The uncertainties and contingencies include, but are not limited to, risks related to capital markets and additional funding requirements, credit and underwriting risk, fluctuating interest rates, asset quality and rates of default, legal and regulatory risk, derivative related risk and reliance on relationships with financial institutions, as well as those factors discussed in the documents filed on SEDAR. Actual results may differ materially from those expressed or implied by such forward-looking statements.  CMT does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time, except as required under applicable securities legislation.

About CHIP Mortgage Trust

CMT is a wholly-owned subsidiary of HomeEquity Bank (the "Bank"). The Bank is a Schedule 1 Canadian Bank offering the CHIP Reverse Mortgage and CHIP Open solutions. The company was founded more than 30 years ago as an annuity-based solution addressing the financial needs of Canadians who wanted to access the equity of their top asset – their home. The Bank is committed to empowering Canadians age 55 plus to live the retirement they deserve, in the home they love. HomeEquity Bank is a portfolio company of Birch Hill Equity Partners Management Inc., a mid-market private equity firm based in Toronto with more than $3 billion in capital under management. For more information, visit www.chip.ca.

CMT, a special-purpose entity, finances a portion of its mortgage portfolio with medium term notes. The most recent appraised value of the CMT mortgage portfolio is approximately $1.4B. Using loan values as at September 30, 2020 the mortgage portfolio has an average loan to appraised value of approximately 37.8%.

SOURCE CHIP Mortgage Trust

Morgan McLellan, Provident Communications, email: [email protected] or cell: 647-802-4825