HI PREFS Announces Intention to Suspend Distributions



    TORONTO, March 19 /CNW/ - The Board of Directors of High Income Preferred
Shares Corporation ("HI PREFS") today announced that given the erosion in the
value of the Managed Portfolio since inception, two recent ratings downgrades
by DBRS and based on advice received from the Manager, it believes it would be
prudent to revise the distribution policy. Consequently, distributions to
Series 1 (TSX: HPF.pr.a) and Series 2 (TSX: HPF.pr.b) Shareholders will be
suspended following the previously announced distribution that is payable on
March 31st, 2008.
    Maintenance of the current distribution policy without causing further
erosion to the Managed Portfolio requires HI PREFS to generate an annual
return in excess of 20%. As such, based on the advice of the Manager, the
Board believes the decision to suspend further distributions is in the best
interests of shareholders in the current market environment.
    The Board will continue to review the distribution policy on a regular
basis. Unpaid distributions to Series 1 and Series 2 Shareholders are
cumulative and will be paid on the scheduled termination of HI PREFS on June
29, 2012. On termination, unpaid distributions to Series 1 and Series 2
Shareholders will be paid out of available net assets after the principal
repayment to Series 1 Shareholders, but in priority to the principal repayment
to Series 2 Shareholders.
    Since inception, Series 1 Shareholders have received $8.33 per Series 1
Share in distributions and Series 2 Shareholders have received $6.07 per
Series 2 Share in distributions in accordance with their terms.
    HI PREFS Preferred Repayment Forward Agreement remains in place with
Canadian Imperial Bank of Commerce. This will provide Series 1 Shareholders
with a payment of $25.00 per share on June 29, 2012. HI PREFS Series 2
Shareholders will be entitled to the proceeds of the Managed Portfolio up to
$14.70, after making provisions for the Company's liabilities, if any, and
after payment of any cumulative unpaid distributions to both Series 1 and
Series 2 Shareholders on a pro rata basis. As of Friday, March 14, 2008, the
Managed Portfolio had a Net Asset Value of $17.30 per Unit and the Series 2
Shares had a Net Asset Value of $13.14 per share. The Equity Shares, which are
entirely held by the Manager and rank below the Series 2 Shares in priority
for capital repayment, will receive no proceeds of the Managed Portfolio on
termination unless Series 1 Shares are repaid their original investment amount
of $25.00 per Series 1 Share, Series 1 and Series 2 Shareholders receive all
cumulative unpaid distributions and the Series 2 Shareholders have been repaid
their original investment amount of $14.70 per Series 2 Share.
    The ability of HI PREFS to pay on termination all cumulative unpaid
distributions to the Series 1 and Series 2 Shareholders and to repay the
Series 2 Shareholders their original investment amount is not assured and will
depend upon the performance of the Managed Portfolio from now until the
termination of the fund.
    The Managed Portfolio is a diversified portfolio invested primarily in
securities listed on the S&P/TSX 60 Index, S&P500 Index and income trusts. HI
PREFS may write covered call options in respect of all or part of the
securities in the Managed Portfolio. In addition, HI PREFS may write cash
covered put options in respect of securities in which the Fund is permitted to
invest.

    %SEDAR: 00017798E




For further information:

For further information: Investor Relations, Catherine Stretch, (416)
362-6283, info@lawvest.com

Organization Profile

HIGH INCOME PREFERRED SHARES CORPORATION

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