Initial public offering

TORONTO, Oct. 6 /CNW/ - Middlefield Group, on behalf of Pathfinder Convertible Debenture Fund ("Pathfinder" or the "Fund"), is pleased to announce that it has filed a preliminary prospectus in relation to the initial public offering of Combined Units at a price of $12.00 per Combined Unit. Each Combined Unit consists of one Unit of the Fund and one Unit purchase Warrant. Each Warrant entitles the holder to purchase one Unit at a subscription price of $12.00 on or before 5:00 p.m. (Toronto time) on November 30, 2010 (the "Expiry Time"). Warrants not exercised by the Expiry Time will be void and of no value.

    
    Pathfinder's investment objectives are to:

    -   pay monthly distributions to Unitholders on a tax-advantaged basis
        initially targeted to be 6.5% per annum on the original issue price
        of $12.00 per Combined Unit; and

    -   maximize total after-tax returns for Unitholders over the life of the
        Fund.
    

The monthly distributions equate to approximately 9.3% per annum on a pre-tax income equivalent basis, assuming Unitholders are subject to a 46.4% marginal tax rate. It is expected that monthly distributions received by Unitholders will consist primarily of returns of capital for Canadian federal income tax purposes.

The Fund will obtain exposure to an actively managed diversified portfolio comprised primarily of convertible debentures of Canadian issuers. Middlefield Capital Corporation, the Advisor, believes that convertible debentures represent an appealing investment opportunity, providing:

    
    -   high levels of stable current income and attractive yields to
        maturity;

    -   additional stability and safety of a senior security position
        relative to an investment in equities, income trust securities or
        preferred securities; and

    -   the potential for common equity-like returns.
    

The portfolio managers of Middlefield Capital Corporation who will be primarily responsible for managing the portfolio will be Dean Orrico and Robert Lauzon. Dean Orrico is an Executive Vice-President, Managing Director and Chief Investment Officer of Middlefield Capital Corporation. Mr. Orrico is responsible for overseeing the ongoing management of all of Middlefield's investment funds. Robert Lauzon is a Managing Director, Trading and a Senior Portfolio Manager of Middlefield Capital Corporation. Mr. Lauzon is a lead portfolio manager on a number of investment funds including Mint Income Fund and Middlefield Income Plus mutual fund.

The syndicate of agents is being co-led by CIBC World Markets and RBC Capital Markets, and includes BMO Nesbitt Burns Inc., Scotia Capital Inc., Canaccord Capital Corporation, GMP Securities L.P., HSBC Securities (Canada) Inc., Manulife Securities Incorporated, Middlefield Capital Corporation, Raymond James Ltd., Blackmont Capital Inc., Dundee Securities Corporation and Wellington West Capital Markets Inc.

A preliminary prospectus relating to these securities has been filed with securities commissions or similar authorities in each of the provinces and territories of Canada but has not yet become final for the purpose of a distribution to the public. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any province or territory of Canada prior to the time a receipt for the final prospectus or other authorization is obtained from the securities commission or similar authority in any such province or territory.

SOURCE Pathfinder Convertible Debenture Fund

For further information: For further information: please visit our website at www.middlefield.com or contact Nancy Tham, Senior Vice-President, at (416) 847-5349 or at 1-888-890-1868

Organization Profile

Pathfinder Convertible Debenture Fund

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