Input Capital Corp. Signs Two Term Sheets for Mortgage Stream Financing
REGINA, April 12, 2018 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) is pleased to announce that it has signed term sheets with two Canadian financial institutions.
The term sheets both provide for five-year term debt facilities (collectively, the "Mortgage Margin Facilities" or the "Facilities") which will be secured against the underlying conventional farmland first lien mortgages entered into by Input in conjunction with its mortgage stream program. These Facilities will allow Input to margin mortgage streams, reducing the net capital required by Input to originate them. The term sheets are not yet legally binding credit agreements, but they provide a framework for final formal credit agreements to be signed between Input and the financial institutions in the near future.
Since launching mortgage streams in January, Input has seen rapid acceptance in the marketplace and approved in excess of $20 million in new mortgage streams with twenty nine high quality farmers. In addition, Input has a very strong pipeline of potential new mortgage streams currently in the underwriting and due diligence phase. The Company also continues to sign up new clients to its established capital and marketing stream contracts.
Doug Emsley, President & CEO of Input, commented by saying: "We are very encouraged by the speed at which we have been able to find financing partners for mortgage streams. This success mirrors the rapid uptake of mortgage streams by farmers, and is due in no small part of the simplicity of the product, the value proposition that it offers to farmers, and the low risk nature of high quality farmland first lien mortgages.
"The stability of western Canadian farmland values means that farmland mortgages are low risk, providing an opportunity to Input to secure external financing without undue risk to Input. By matching the duration of our mortgage assets with our debt obligations, the Mortgage Margin Facility improves profitability and portfolio returns to Input in a sustainable fashion. It is precisely because of stable and sustainable returns in farmland mortgages that mortgages are the largest category of financing provided to farmers by Canadian banks. Now, with Input's mortgage stream, there is an exciting new and innovative alternative for farmers to consider.
"When completed, these Mortgage Margin Facilities will enable Input to deploy significantly more capital into mortgage, capital and marketing streams than just the equity on its balance sheet, building a larger streaming book more quickly while increasing Input's Return on Equity (ROE) and earnings per share."
Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. The Company has developed several flexible and competitive forms of financing which help western Canadian canola farmers solve working capital, mortgage finance and canola marketing challenges and improve the financial position of their farms. Under a streaming contract, Input provides capital in exchange for a stream of canola via multi-year fixed-volume canola purchase contracts. To a farmer, Input is like a virtual grain company, buying canola and providing financial solutions. To canola buyers, Input is like a large virtual farm which produces and sells canola over a large geographically diverse footprint, but does not own the land, or equipment or operate the farm. In production terms, Input is the largest canola farm in the world.
Input plans to continue to grow and diversify its low cost canola production profile by entering into streaming contracts with canola farmers across western Canada. Input is focused on farmers with quality production profiles, excellent upside yield potential, and strong management teams.
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SOURCE Input Capital Corp.
INPUT CAPITAL CORP.
300 – 1914 Hamilton Street
Phone (306) 347-3006
Fax (306) 352-4110