/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
IN THE UNITED STATES./
TORONTO, Sept. 4 /CNW/ - Connor, Clark & Lunn Capital Markets Inc. (the
"Manager") is pleased to announce that a preliminary prospectus for North
American Financials Capital Securities Trust (the "Fund") has been filed with
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 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
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., 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.
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
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 such province or territory.
A copy of the preliminary prospectus may be obtained from any of the
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