How an investment in Magenta works
Magenta Participating Class “A” Shares
Investors may currently subscribe for Magenta Participating Class “A” Shares possessing these attractive features:
(I) DIVIDEND YIELD
The shares are intended to achieve an annual return at least equivalent to the Government of Canada 2 Year Bond Yield at the beginning of each fiscal year (June 1st) plus 5.50%. Please refer to Investment Performance and FAQ: How and when are Magenta’s profits distributed to shareholders?
(ii) Dividend Payment
Dividends are remitted monthly. Dividends are payable in cash or may be re-invested in additional shares through the Company’s Dividend Re-Investment Plan (DRIP).
Shareholders may retract their shares at any time at a price equivalent to the issue price plus any unpaid dividends. Payment is effected by the end of the month following the month in which the retraction notice is received by the Company. Please refer to FAQ: How and when can I liquidate my investment?
The Subscription Agreement executed at time of any investment details complete share terms and conditions and is available on request in order to facilitate any investment decision.
Canadian residents and non-residents may subscribe for Magenta Class “A” shares .
Canadian residents are governed by rules prescribed by Provincial securities regulators. In Ontario, these rules effectively restrict investment to Accredited Investors and Eligible Investors.
Accredited investors must satisfy only one of the following criteria.
- Net financial assets owned by investor and spouse (excluding real estate) of >$1 million;
- Annual income of >$200,000 ($300,000 including spousal income);
- Net worth (including real estate) of >$5 million.
Accredited investors may subscribe for Magenta Class “A” Participating Shares in amounts >$25,000.
Shares purchased directly or within a registered plan may be combined for the purpose of satisfying the minimum subscription requirement. For example, an investor’s initial $150,000 subscription could conceivably be comprised of$75,000 in RSP shares, $55,000 in directly held shares and $20,000 in Tax Free Savings Account (TFSA) shares.
Accredited investors may make subsequent investments in amounts >$5,000.
Shares may be held directly, or in an RRSP, RRIF or TFSA.
Directly held shares may be held individually, jointly, in trust, or by a corporation.
Eligible Investors and “Others” may invest if the issuer of securities provides an OM in advance of the investment.
An investor is deemed to be an Eligible Investor if any one of the following criteria are satisfied:
- Annual income >$75,000; >$125,000 including spousal annual income;
- Net Worth >$400,000 (includes all financial and non-financial (eg. real estate) assets, less any debts).
- An Eligible Investor may invest < $30,000 annually without restriction;
- If the dealer opines that the investment is suitable, then an Eligible Investor may invest more than $30K annually, subject to an annual maximum of $100K;
- The securities commissions take the view that any investment in a private company (not listed on a stock exchange) constituting >10% of the investor’s financial assets raises questions and concerns re. suitability, regardless of the nature of the private company investment;
- If investor doesn’t satisfy any of the Eligible Investor criteria then their investment would be capped at $10K annually.
I. Direct Cash Investment
Minimum initial share subscription is $25,000.
The shares have a constant par value of $10.00 each, and may be issued in any multiple of $10.00.
Please contact us to obtain a Subscription Agreement.
II. RRSP/RRIF INVESTMENT
Mortgage Investment Corporation (MIC) shares are qualified RRSP and RRIF investments, as prescribed within the Income Tax Act.
A Self-Directed RRSP or RRIF is required to hold the shares.
Investors should contact their RRSP or RRIF trustee to ascertain their policies and procedures with respect to the inclusion of MIC shares within their plans. Alternatively, Magenta can assist investors in establishing a Self-Directed RRSP or RRIF with the trustees it normally deals with.
A registered plan share transaction may take a variety of forms, as follows:
(1) RRSP Contribution
Contribution In Kind
An investor may wish to utilize some or all of their current year’s RSP contribution room, to make a new investment in Magenta. The shares would be purchased directly from Magenta, but registered in the name of the RSP trustee. The duly registered share certificate would be delivered directly to the RSP trustee as a “contribution in kind”. For example, 2,297 Magenta Class “A” Participating Shares, worth $10.00 each, contributed in kind to an RSP, would represent a contribution of $22,970.00 and the trustee would issue a contribution receipt in this amount.
Alternatively, the investor could make a cash contribution directly to their RSP, and then utilize the cash, conceivably supplemented by cash already in the plan, to purchase shares. In this instance, a share certificate registered in the name of the RSP trustee, would be delivered to the trustee. Upon receipt, the Trustee would forward payment directly to Magenta.
The “contribution in kind” method ensures that the shares are eligible for dividend payment for the maximum period possible. For dividend calculation purposes, the shares are not considered issued until payment in full is received.
RRSP Contribution Loans
Investors may arrange loans from their trustees, wherein the proceeds are credited directly to their plans as a new RSP contribution. The resulting cash in the plan can then be used to fund any qualified RSP investment.
Investors may also elect to utilize other types of loans or mortgages to fund RSP contributions.
(2) RRSP/RRIF Purchase From Cash on Hand
Investors may use existing RRSP and RRIF assets to purchase shares. In this instance, the trustee would be directed to liquidate existing investments so as to generate the requisite amount of cash required to complete the share purchase.
Magenta would deliver the share certificate, registered in the name of the RRSP/RRIF Trustee, to the Trustee, and the Trustee would in turn effect payment directly to Magenta.
Investors may elect to utilize both new RSP contributions, and existing assets within their RRSPs, to fund Magenta share purchases. Investors should be mindful of the minimum share subscription amounts, specified above.
III. TFSA Investment
Mortgage Investment Corporation (MIC) shares are qualified TFSA investments, as prescribed within the Income Tax Act.
Magenta can assist investors in establishing a low fee TFSA with the trustee it routinely deals with.
Please contact us concerning any aspect of either Direct Cash or RRSP/RRIF/TFSA share issuance, or to obtain a Subscription Agreement and a comprehensive investor information package including financial statements and detailed mortgage portfolio composition data.>> Request Information Package