Our Team
Who we are & our underwriting process
Eagles Edge Capital Corporation has been a construction lender in Central Alberta with over 50 years combined experience of its principles. The company focuses on short term, new housing construction lending, that results in occupancy in central Alberta communities in and around Red Deer, AB.
The company follows the Office of the Superintendent of Financial Institutions Canada (OFSI) guidelines for prudent mortgage underwriting. The Company focuses on the residential mortgage credit decision and the underwriting process, specifically the assessment of:
1. The borrower’s identity, background and demonstrated willingness to service their debt obligations on a timely basis
2. The borrower’s capacity to service their debt obligations on a timely basis
3. The underlying property value/collateral and management process.
These three principles are evaluated by the company using a holistic, risk-based approach. The loans of the company are not guaranteed and involve risk. The rate of return on these investments is based upon the amount of risk that the company has determined in this underwriting process.
What is a syndicated construction mortgage?
Eagles Edge Capital Corporation is a private mortgage construction lender who raises capital in the Exempt Market. Our borrowers use the mortgages for short term, construction projects of new housing in the Central Alberta market. After completion of construction, the home builders sell the new housing unit and repay the mortgage debt and pay interest along the way.
Our investors view these syndication's as short term, fixed investments. The terms of these loans are typically 12 or 18 months with interest payments made monthly. This provides fixed income and at the conclusion of the mortgage, a return of principle. The interest payments are defined as “interest from Canadian sources” and are taxed at the marginal rate. Eagles Edge Capital does not calculate or withhold this payment to CRA.
This capital raising process is called the Exempt Market and is regulated by the Alberta Securities Commission. The exempt market refers to the sale of securities under prospectus exemptions and the term is often used to include the parties participating in that market, both issuers and dealers. To participate in mortgage syndication's administered by the company, an investor must meet the definition of an Accredited Investor.
Eagles Edge Capital is registered as a mortgage broker in the province of Alberta to be a mortgage underwriter and administrator. Eagles Edge Capital was registered as an Exempt Market Dealer (EMD) with the Alberta Securities Commission from June 2011 until September 2021. At that time, Eagles Edge Capital deregistered and the principles of the company registered with Axcess Capital Advisors Inc. in Calgary, AB.
Axcess Capital Advisors acts as the EMD for the syndicated mortgages of the company today.
Axcess Capital Advisors Inc. is registered as an Investment Fund Manager and Restricted Portfolio Manager in Alberta and as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario. Exempt market products (Syndicated Mortgages such as Eagles Edge Capital's offerings) are made available through Axcess Capital Advisors Inc.
This information does not constitute a solicitation for sale or purchase of securities. This is not an offering of securities. Offerings are made pursuant to a Term Sheet and only available to Accredited investors in jurisdictions the firm is registered in.
Eagles Edge Capital underwrites and administers mortgages throughout the year and as part of an investor’s due diligence process, provides its investors with a term sheet to gauge investor interest in a particular syndication. To receive these update emails, please register your email address by sending your request to mpollitt@eagles-edge.ca.
What defines an Accredited investor?
To invest in the syndicated mortgages that the company administers and underwrites, an investor must be an Accredited Investor. An investor does not need to meet all three criteria, just one of them. An individual meets the definition of an accredited investor in three typical ways:
1. An individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realisable value that before taxes, but net of any related liabilities, exceeds $1,000,000,
2. An individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year, or
3. An individual who, either alone or with a spouse, has net assets of at least $5,000,000.
Two common corporate exemptions used are:
4. A person (company), other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements,
5. A person (Company) in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors. If an investor uses this exemption, Axcess Capital Advisors must confirm how the shareholders are accredited in which of the first three ways.
Trade characteristics of the exempt market
In the suitability assessment process completed by Axcess Capital Advisors, an investor and their situation are evaluated on several aspects to determine whether the Exempt Market is suitable. Prospective investors are evaluated on Investment Knowledge, Time Horizon, Account Objective, Risk Tolerance and Concentration.
Prior experience in the Exempt Market is not a prerequisite to investing. It is important that you know the Exempt Market does not have an exchange to buy or sell securities on, they can only be redeemed when the issuer is able. In this case, when the borrower completes construction and sells the unit. Due to this fact, Exempt Market investments are seen as illiquid until the end of the business cycle they are based upon.
The fact that the Exempt Market does not have an exchange to buy and sell securities, and the fact this makes them illiquid compared to the public markets that do, the Exempt Market is considered high risk. An investor may have the tolerance for high risk, but they may not have the capacity for it. Axcess Capital Advisors considers both in determining trade suitability; to be considered to have the capacity for a high risk tolerance, a measure of concentration is completed.
When measuring concentration in trade assessments, the proposed investment is measured against Net Financial Assets (NFA) for individuals. To be considered suitable, and have the capacity for the high-risk profile, the investment cannot measure more than 10% of NFA.
All these factors are taken into consideration when evaluating a prospective trade. Axcess Capital Advisors has a Know your Client (KYC) survey that must be completed by all investors. From the data collected on this survey, the firm can determine suitability for each investor.
The principles of the company work in two capacities for each investor, a conflict-of-interest disclosure form is included that defines which activity is completed by Axcess Capital Advisors or Eagles Edge Capital.
