COVID-19 Important Announcements

COVID-19 Frequently Asked Questions

What is Frontenac’s rate of return currently? Is my $30 still $30?

As of March 31st 2020, Frontenac has reported an annualized year-to-date return of 5.20% and maintained a NAV per share of $30.

How is my investment in Frontenac protected?

As explained in our prospectus, investments in Frontenac are not guaranteed, so investors may experience a gain or a loss over time. Frontenac continues to pursue a conservative investment strategy, which includes lending at reasonable loan-to-value ratios capped at 80%, focusing almost exclusively on first mortgages and not using leverage. Thanks to this conservative approach, our stress-testing analysis suggests that we are in a strong position to avoid losses even in the event of a sharp decline in real estate values.

How diversified is my investment?

Frontenac invests in residential first mortgages in Ontario outside the GTA. Our portfolio currently includes approximately 500 mortgages spread across the province, with a higher concentration in Eastern Ontario.

Will Frontenac continue to issue monthly dividend cheques during the current crisis?

In general, Frontenac pays out all its net earnings every month as dividends to investors, and we expect to continue to do so. The amount of the monthly dividend depends on our performance, so it can go up or down depending on our earnings.

Can I access my money that’s invested in Frontenac if I need to?

As explained in the Frontenac prospectus, investors may redeem their Frontenac shares once per year on November 30th, except in cases of death, divorce or extreme financial hardship. Financial hardship applications are handled on a case-by-case basis. Please contact our office for more information.

Alternatively, if you require additional cash flow during the current COVID-19 period, you may elect to receive your monthly dividends from Frontenac as cash payments.

How is Frontenac affected by changing employment levels?

Generally, when employment levels fall, there is potential for mortgage defaults to increase. However, there are several factors that we believe will help minimize the negative impact on Frontenac at this time. The Canada Emergency Response Benefit is providing emergency funds to Canadians who have lost their source of income. For some people, this will help them continue to make full or partial mortgage payments.

Meanwhile, our team at Pillar Financial Services is working with borrowers on a case-by-case basis to help those who are struggling to make their payments. For some borrowers, either partial payments or short-term payment deferrals have been arranged. We believe these measured actions will help minimize defaults and limit any financial impact on our Frontenac fund and investor returns.

Lastly, while defaults are a natural part of the lending business, it is crucial to understand that defaults do not necessarily equate to losses as we have the ability to sell the underlying real estate assets to recoup our investment.

How is Frontenac affected by changes in real estate markets?

Frontenac invests in mortgages, with real estate used as collateral to secure the loan and protect the investment. If a borrower defaults on their mortgage obligation, Frontenac relies on the underlying value of the real estate to recover its investment. So far, in the current environment, the housing market has experienced a sharp decline in the number of housing sales, but not in housing values.

Frontenac has a conservative investment strategy, which includes focusing almost exclusively on first mortgages backed by residential real estate extended at loan-to-value ratios of 80% or less. Should the housing market begin to see a decline in housing values, this conservative approach provides Frontenac with a cushion to absorb those declines without incurring losses of capital for defaulted loans.

Are you offering deferred mortgage payments? How do they affect my investment?

The mortgage administration team with Pillar Financial Services is working with borrowers on a case-by-case basis. Currently, most borrowers are continuing with their normal payments, as this is the best option for them financially. For a minority of borrowers, Pillar has arranged either partial payments or short-term payment deferrals.

How is Frontenac impacted by changes in construction activity?

Frontenac invests in a range of different mortgage types, of which one is construction mortgages, typically for single-family residential and small multi-family residential properties. These projects usually advance over 6–12 months. As a result, Frontenac maintains a pool of construction mortgages that it has committed to finance over the next 6–12 months, but which it has only partially advanced funds to at this time.

In the current environment where construction activity has been temporarily slowed or stopped by government mandate, Frontenac has been able to continue financing its existing pool of committed mortgages. Should construction restrictions extend for a long period of time, Frontenac may experience an increase in its cash holdings as it becomes unable to close new construction loans.

How does a decrease in the Bank of Canada Overnight Rate affect Frontenac?

In the short term, a decrease in the Bank of Canada Overnight Rate will have little impact on Frontenac since the interest rates on the existing mortgage portfolio are fixed. Over the long term, Frontenac’s returns could fluctuate depending on a variety of market factors such as the Overnight Rate, lending market competition within the alternative mortgage market, traditional lender lending policies, and overall mortgage demand.

What happens if senior management personnel become ill and unable to operate W.A. Robinson Asset Management Ltd. or Pillar Financial Services Inc. (Pillar)?

We have a robust business continuity plan in place, which allows our teams at W.A. Robinson and Pillar to continue to work as normal – even if members of our senior leadership team fall ill. Operational integrity has been a primary focus of the management team for several years to ensure that fund performance is not reliant on any one person.

How can I receive updates and stay in touch?

We are committed to keeping our investors informed, including any significant developments related to the ongoing COVID-19 pandemic. There are several ways you can keep yourself updated:

  • Via our COVID-19 newsletter sign up on this page
  • Via our W.A. Robinson investor newsletters
  • By phone: please call us at: 1-877-279-2116
  • By email: please email us at: info@robinsonsgroup.com
What is Frontenac’s rate of return currently? Is my $30 still $30?

As of March 31st 2020, Frontenac has reported an annualized year-to-date return of 5.20% and maintained a NAV per share of $30.

Will Frontenac continue to issue monthly dividend cheques during the current crisis?

In general, Frontenac pays out all its net earnings every month as dividends to investors, and we expect to continue to do so. The amount of the monthly dividend depends on our performance, so it can go up or down depending on our earnings.

How is Frontenac affected by changing employment levels?

Generally, when employment levels fall, there is potential for mortgage defaults to increase. However, there are several factors that we believe will help minimize the negative impact on Frontenac at this time. The Canada Emergency Response Benefit is providing emergency funds to Canadians who have lost their source of income. For some people, this will help them continue to make full or partial mortgage payments.

Meanwhile, our team at Pillar Financial Services is working with borrowers on a case-by-case basis to help those who are struggling to make their payments. For some borrowers, either partial payments or short-term payment deferrals have been arranged. We believe these measured actions will help minimize defaults and limit any financial impact on our Frontenac fund and investor returns.

Lastly, while defaults are a natural part of the lending business, it is crucial to understand that defaults do not necessarily equate to losses as we have the ability to sell the underlying real estate assets to recoup our investment.

How is Frontenac affected by changes in real estate markets?

Frontenac invests in mortgages, with real estate used as collateral to secure the loan and protect the investment. If a borrower defaults on their mortgage obligation, Frontenac relies on the underlying value of the real estate to recover its investment. So far, in the current environment, the housing market has experienced a sharp decline in the number of housing sales, but not in housing values.

Frontenac has a conservative investment strategy, which includes focusing almost exclusively on first mortgages backed by residential real estate extended at loan-to-value ratios of 80% or less. Should the housing market begin to see a decline in housing values, this conservative approach provides Frontenac with a cushion to absorb those declines without incurring losses of capital for defaulted loans.

Are you offering deferred mortgage payments? How do they affect my investment?

The mortgage administration team with Pillar Financial Services is working with borrowers on a case-by-case basis. Currently, most borrowers are continuing with their normal payments, as this is the best option for them financially. For a minority of borrowers, Pillar has arranged either partial payments or short-term payment deferrals.

How is Frontenac impacted by changes in construction activity?

Frontenac invests in a range of different mortgage types, of which one is construction mortgages, typically for single-family residential and small multi-family residential properties. These projects usually advance over 6–12 months. As a result, Frontenac maintains a pool of construction mortgages that it has committed to finance over the next 6–12 months, but which it has only partially advanced funds to at this time.

In the current environment where construction activity has been temporarily slowed or stopped by government mandate, Frontenac has been able to continue financing its existing pool of committed mortgages. Should construction restrictions extend for a long period of time, Frontenac may experience an increase in its cash holdings as it becomes unable to close new construction loans.

How does a decrease in the Bank of Canada Overnight Rate affect Frontenac?

In the short term, a decrease in the Bank of Canada Overnight Rate will have little impact on Frontenac since the interest rates on the existing mortgage portfolio are fixed. Over the long term, Frontenac’s returns could fluctuate depending on a variety of market factors such as the Overnight Rate, lending market competition within the alternative mortgage market, traditional lender lending policies, and overall mortgage demand.

What happens if senior management personnel become ill and unable to operate W.A. Robinson Asset Management Ltd. or Pillar Financial Services Inc. (Pillar)?

We have a robust business continuity plan in place, which allows our teams at W.A. Robinson and Pillar to continue to work as normal – even if members of our senior leadership team fall ill. Operational integrity has been a primary focus of the management team for several years to ensure that fund performance is not reliant on any one person.

How can I receive updates and stay in touch?

We are committed to keeping our investors informed, including any significant developments related to the ongoing COVID-19 pandemic. There are several ways you can keep yourself updated:

  • Via our COVID-19 newsletter sign up on this page
  • Via our W.A. Robinson investor newsletters
  • By phone: please call us at: 1-877-279-2116
  • By email: please email us at: info@robinsonsgroup.com
Are you offering deferred mortgage payments?

Our mortgage administration team at Pillar Financial Services is working with borrowers on a case-by-case basis. Currently, most borrowers are continuing with their normal payments, as this is the best option for them financially. For a minority of borrowers, Pillar is working with them to arrange either partial payments or short-term payment deferrals.

What happens if senior management personnel become ill and unable to operate W.A. Robinson Asset Management Ltd. or Pillar Financial Services Inc. (Pillar)?

We have a robust business continuity plan in place, which allows our teams at W.A. Robinson and Pillar to continue to work as normal – even if members of our senior leadership team fall ill. Operational integrity has been a primary focus of the management team for several years to ensure that fund performance is not reliant on any one person.

How can I receive updates and stay in touch?

We are committed to keeping our brokers and borrowers informed, including any significant developments related to the ongoing COVID-19 pandemic. There are several ways you can keep yourself updated:

  • Via our COVID-19 newsletter sign up on this page
  • Via our Pillar newsletter
  • By phone: please call us at 1-877-279-2116
  • By email: please email us at info@pillarfinancial.ca
Are you offering deferred mortgage payments?

Our mortgage administration team at Pillar Financial Services is working with borrowers on a case-by-case basis. Currently, most borrowers are continuing with their normal payments, as this is the best option for them financially. For a minority of borrowers, Pillar is working with them to arrange either partial payments or short-term payment deferrals.

What happens if senior management personnel become ill and unable to operate W.A. Robinson Asset Management Ltd. or Pillar Financial Services Inc. (Pillar)?

We have a robust business continuity plan in place, which allows our teams at W.A. Robinson and Pillar to continue to work as normal – even if members of our senior leadership team fall ill. Operational integrity has been a primary focus of the management team for several years to ensure that fund performance is not reliant on any one person.

How can I receive updates and stay in touch?

We are committed to keeping our brokers and borrowers informed, including any significant developments related to the ongoing COVID-19 pandemic. There are several ways you can keep yourself updated:

  • Via our COVID-19 newsletter sign up on this page
  • Via our Pillar newsletter
  • By phone: please call us at 1-877-279-2116
  • By email: please email us at info@pillarfinancial.ca