Thursday, October 9, 2025

Latest

Romspen Stops Redemptions Altogether As Liquidity Problems Mount

Canadian real estate firm Romspen Investment Corp. has frozen redemptions on its largest fund after a number of borrowers ceased making payments.

In a letter to investors, the firm said the temporary stop gap measure “run-off pool did not dampen redemption activity, and loan payoff activity remains suppressed.”

“In light of these circumstances, the Trustees have determined that the prudent and responsible course of action is to temporarily defer payment of unit redemptions requests,” the company said in a statement.

The firm added that the halt will continue until there’s more clarity on the status of repayments which are dependent on “the receipt of proceeds of collateral and asset monetization’s.”

In October, Romspen halted redemptions from its Mortgage Investment Fund, then created a separate pool for unitholders who wish to cash out as the firm faces liquidity problems. This will supposedly allocate a proportionate percentage of assets to that fund and redeeming investors will receive payments as cash becomes available through loan repayments or asset sales.

READ: Romspen Halting Redemptions May Be Sign Of Investor Drawback On Private Mortgage Lending

The firm was betting on “a reduction in redemption demand to manageable levels [that] would provide some leeway” for the firm, citing the current volatile economic conditions that affected the real estate industry. But the redemption level did not temper and the firm continues to feel liquidity pressures.

While the real estate lender tried to assure investors that they “are working diligently to expedite a number of these portfolio transactions and remain confident in the underlying value of the fund’s assets,” the firm warned that if redemption level continues to be high, “the Trustees may be compelled to institute other temporary liquidity management measures.”

The company also relayed that its principals and employees have over $100 million invested in the fund so “interests continue to be fully aligned with those of long-term unitholders.”

Investor funds are used to provide mortgages to higher-risk commercial developers who do not typically qualify for bank loans. However, rising mortgage rates have increased the cost and availability of refinancing in commercial real estate markets in the United States and Canada.

Back in October, more than $700 million had been returned to Romspen’s investors. The redemption queue adds approximately another $325 million – nearly 12% of the fund’s assets.


Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Fortune Bay: The Potential Billion Dollar Project

Japan Gold Enters New Chapter as Barrick Alliance Concludes – John Proust

Barrick Mining’s “Company Defining [Gold] Discovery”

Recommended

Nord Precious Metals Produces High Grade Silver Concentrate From Tailings

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Related News

Investment in Building Construction Hits Another Record High in February

Investment in Canada’s building construction topped a record high in February for the second month...

Monday, April 12, 2021, 11:47:00 AM

Canadian Homeowners May Be Facing Downsizing Pressure Amid Housing Affordability Crisis

A recent Wahi survey reveals a concerning trend in the Canadian housing market, with downsizing...

Monday, June 24, 2024, 01:50:00 PM

Federal Government’s CERCA Program Not As Successful As Anticipated, Quebec And Ontario Step In

As a means of helping Canadian small businesses overcome financial obstacles during the coronavirus pandemic,...

Wednesday, June 10, 2020, 05:45:00 PM

Shopify Will Keep its Employees Working From Home Permanently

When the coronavirus pandemic first devastated the country, many non-essential businesses were forced to close...

Friday, May 22, 2020, 04:29:00 PM

Stock Prices May Still Be Elevated Given Current Mortgage Rates And Home Prices

Rising mortgage interest rates and worsening home affordability are buffeting home prices and pressuring equity...

Sunday, October 9, 2022, 03:26:00 PM