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IN THE UNITED STATES./
TORONTO, Oct. 1 /CNW/ - Connor, Clark & Lunn Capital Markets Inc. (the "Manager") is pleased to announce that a final prospectus for North American Financials Capital Securities Trust (the "Fund") has been receipted by the securities regulatory authorities of all the Canadian provinces and territories for an initial public offering of Class A Units and Class F Units (the "Units") of the Fund. The maximum amount of the offerings is $150 million. The offerings are expected to close on or about October 23, 2009. The Toronto Stock Exchange ("TSX") has conditionally approved the listing of the Class A Units under the symbol NAF.UN, subject to the fulfillment of TSX requirements. Class F Units will not be listed on a stock exchange but may be converted into Class A Units on a weekly basis.
The Fund's investment objectives are to (i) provide Unitholders with attractive tax-advantaged quarterly cash distributions, and (ii) return to Unitholders at least the original issue price of the Units upon termination of the Fund on November 30, 2014. Distributions are initially targeted to be $1.50 per annum per Unit consisting primarily of returns of capital, representing a yield on the Unit issue price of 6.0% per annum.
The Fund will seek to achieve its investment objectives through exposure to an actively managed portfolio consisting primarily of Investment Grade capital securities of the six largest Canadian banks (e.g., TD "CaTS IV" and BMO "BoATS IV"), large Canadian insurance companies (e.g., Manulife "MaCS II") and U.S. financial institutions with a minimum issuer rating of ''A'' by S&P (e.g., Goldman Sachs and GE Capital Corp.). The Portfolio will be managed using an investment approach similar to the investment approach employed by Canadian Banc Capital Securities Trust (TSX: CSB.UN).
The Portfolio Manager believes that an attractive opportunity currently exists to invest in Capital Securities for the following reasons:
- Canadian banks have been recognized as well capitalized and
conservatively run financial institutions, and were recently ranked
No. 1 globally in the ''Soundness of Banks'' category by the World
Economic Forum in its Global Competitiveness Report 2008-2009.
- The recent volume of issuance by Canadian and U.S. financial
institutions of preferred shares and common shares to strengthen
their balance sheets has increased their respective regulatory
capital levels to levels approaching historical highs, and has
further enhanced the downside protection of Innovative Tier 1 Capital
Securities, subordinated and senior debt.
- Yields offered by Capital Securities remain elevated by historical
standards and offer attractive risk-return characteristics relative
to Government Bonds, non-financial corporate Bonds and to equities.
- The Portfolio Manager believes investors in Capital Securities of
certain large financial institutions will benefit from banks reducing
risk with less leveraged balance sheets.
- The Portfolio will invest primarily in large, diversified financial
firms with strong Tier 1 capital ratios. These institutions are
benefiting from steep yield curves and will be able to take advantage
of the significant business opportunities created by difficulties
faced by smaller financial institutions. The Portfolio Manager
believes that these stronger financial institutions are better
positioned to sustain any unexpected slowdowns or other problems in
the U.S. economy.
- The monetary and fiscal response to this cycle has been unprecedented
and very supportive for the financial sector.
- Capital Securities represent a class of securities generally
otherwise available only to institutional investors on issuance.
Connor, Clark & Lunn Investment Management Ltd. will act as Portfolio Manager to the Fund. The Portfolio Manager, part of the Connor, Clark & Lunn Financial Group, was established in March 1982 and has offices in Vancouver and Toronto. The Portfolio Manager managed assets worth approximately $17.3 billion as at June 30, 2009, approximately $6.3 billion of which is in fixed income securities.
The Units are being offered for sale by a syndicate of agents led by BMO Nesbitt Burns Inc. and Scotia Capital Inc. and includes CIBC World Markets Inc., RBC Dominion Securities Inc., National Bank Financial Inc., TD Securities Inc., HSBC Securities (Canada) Inc., Blackmont Capital Inc., Canaccord Capital Corporation, Dundee Securities Corporation, GMP Securities L.P, Raymond James Ltd., Desjardins Securities Inc., Research Capital Corporation and Wellington West Capital Markets Inc.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy. A copy of the final prospectus may be obtained from any agents forming part of the syndicate.
SOURCE Connor, Clark & Lunn Capital Markets Inc.
For further information: For further information: please visit www.cclcapitalmarkets.com or contact: Darren Cabral, Vice President, Connor, Clark & Lunn Capital Markets Inc., (416) 214-6182 or 1-888-276-2258, email@example.com