Builders Capital Mortgage Corp. Class A · TSXV:BCF
Builders Capital Mortgage Corp. Class A — IPO Roadshow (October 2013)
19 slides from Builders Capital Mortgage Corp. Class A's IPO roadshow presentation, Oct 25, 2013
Slide 1: IPO Presentation
IPO Presentation October 25, 2013 A final prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. A copy of t
Slide 2: Cautionary Statements
Cautionary Statements There is currently no market through which the Subscription Receipts or Class A Non-Voting Shares issuable thereunder may be sold and purchasers may not be able to resell such securities acquired under this prospectus. The Toronto Stock Exchange (the “TSX”) has conditionally
Slide 3: Overview
Overview Mortgage Investment Corporation Specialized in short-term residential construction mortgages Maximum $40 million IPO Anticipated annual dividend of 8% Capital backed by tangible assets Proven track record 3 Like a bank, but completely different.
Slide 4: Underserviced Market
Underserviced Market Western Canada’s continued net in-migration and commodity- driven economy provides a stable demand for new and renovated housing Large financial institutions often lack the unique skillset required to manage construction mortgages Most financial institutions also prefer to
Slide 5: Unique Product
Unique Product Experience in both construction and finance Builders Capital started by a home builder Manager also controls a residential construction company In the unlikely event of a default, Manager steps in and completes project on a zero-profit basis Detailed understanding of the sec
Slide 6: Our Advantage
Our Advantage Unique Premium Underserviced Market + Product & Services = Loan Product Loans can be re-advanced Ready access to cash Inspectors have construction experience Flexible security structure 6 Like a bank, but completely different.
Slide 7: Proven Strategy
Proven Strategy Existing fund started in $2.2 million* 2003 with Funded over past 10 years (approx.at April 9, 2013) $250 million* Historic loan default rate (principal and interest) 1.2% * Historic returns of BCMIC 11.57% * 7 Like a bank, but completely different. * Unaudited
Slide 8: Management
Management Manager pays Corporation pays Administrative expenses Board/committee Salaries and wages Audit costs Office space Compliance & filing fees 8 Like a bank, but completely different.
Slide 9: Fees
Fees Management fee: 1% per year of share capital Lender fee: split between Corporation and Manager Typical Lender Fee = 3.5% 1% Corporation 2.5% Manager Lender fee potentially repayable Manager does not benefit from bad loans 9 Like a bank, but completely different.
Slide 10: Share Structure
Share Structure Class A Non-Voting Shares Anticipated 8% per annum, cash distribution paid quarterly Class A equity granted priority over Class B equity (income and capital) Potential additional distribution dependent on performance Class B Non-Voting Shares Not listed Invested capital
Slide 11: Rights of Shareholders
Rights of Shareholders Class A and B Non-Voting Shares retain certain voting rights: As provided by the Alberta Business Corporations Act including: Amendments to the Articles that affect the Shares Increasing the rights of any other shares having superior rights Fundamental changes includin
Slide 12: Distribution Illustration
Distribution Illustration Capitalization Scenario: Class A Non-Voting shares $30,000,000 Class B Non-Voting shares 10,000,000 * $40,000,000 6% scenario 8% scenario 10% scenario $40,000,000 $40,000,000 $40,000,000 Assumed net yield on portfolio x .06 x .08 x .10 Assumed annual net earnings $ 2,40
Slide 13: Risk Management
Risk Management Restricted use of leverage—borrow for cash flow purposes only Short-term loans reduce Corporation’s exposure to market fluctuations and systemic risk Class B equity at risk ahead of Class A equity Management with specialized skill set and hands-on approach to portfolio manage
Slide 14: MIC Structure
MIC Structure Mortgage Investment Corporation is a flow-through, tax-efficient investment vehicle: Typically pays out 100% of income each year and pays no corporate tax Dividends paid are taxed as interest Holds only cash or mortgages No individual permitted to hold more than 25% of any cl
Slide 15: Experienced Team
Experienced Team Director Highlights (President & CEO) BA Econ., background with design/build construction Sandy Loutitt company and lending John Strangway (Director, CFO) B.Comm., CA, background in public practice (Director) Recently retired lawyer, specializing in foreclosures with John Drummond e
Slide 16: Marketplace
Marketplace In accordance with Section 13.7(4) of National Instrument 41-101 – General Prospectus Requirements, all the information relating to the Corporation’s comparables and any disclosure relating to the comparables, which is contained in the presentation to be provided to potential investors,
Slide 17: Summary
Summary Offering: Min. $12,000,000, max. $40,000,000 Shares: Class A Non-Voting Shares Minimum purchase: $1,000 Issue Price: $10/Class A Non-Voting Share Dividends: Anticipated 8% fixed (based on issue price) Liquidity: Annual redemption, public market Over-allotment option: 15% of IPO Purchasing ex
Slide 18: Why Builders Capital
Why Builders Capital Long term proven business concept Operating in profitable niche market Anticipated 8% preferred return Proven Risk Mitigation Strategies Restricted use of leverage Short term highly liquid portfolio Class B Non-Voting Share equity provides protection for Class A sh
Slide 19: Thank You
Thank You Like a bank, but completely different. Builders Capital Mortgage Corp. 405-1210 8th Street SW Calgary, AB T2R 1L3 Phone: (403) 685-9888 Fax: (403) 225-9470 ir@builderscapital.ca www.builderscapital.ca 19
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