TORONTO, Dec. 18 /CNW/ - O'Leary Funds Management LP is pleased to announce that the O'Leary Canadian Equity Income Fund (the "Fund") has completed today its initial public offering (the "Offering") of 9,400,000 Units at a price of $12.00 per Unit for aggregate gross proceeds of $112.8 million. The Fund has granted the agents an over-allotment option exercisable in whole or in part for a period of 30 days following the closing of the Offering to acquire up to an additional 466,270 Units.
The Fund is an investment trust governed by the laws of the Province of Ontario. Each Unit consists of one transferable trust unit ("Trust Unit") and one Trust Unit purchase warrant ("Warrant"). The Units will separate into Trust Units and Warrants upon the earlier of the closing of the Over-Allotment Option and the 30th day following the closing of the Offering.
Each Warrant entitles the holder to purchase one Trust Unit at a subscription price of $12.00 on or before 5:00 p.m. (Toronto time) on November 30, 2010 (the "Warrant Expiry Time"). Warrants not exercised by the Warrant Expiry Time will be void and of no value. Once separated, the Trust Units and the Warrants will trade on the Toronto Stock Exchange independently under the symbols: OCZ.un and OCZ.wt.
The Fund has been created to invest in an actively-managed portfolio comprised primarily of publicly-traded securities of issuers domiciled in Canada providing investors with both income and potential for capital appreciation. The Fund will initially invest primarily in income trust units and, to a lesser extent, dividend-paying equity securities, corporate bonds, convertible debt securities and preferred shares of such issuers.
Stanton Asset Management Inc. (the "Portfolio Advisor") believes that market conditions are attractive for investing in income-generating securities of issuers domiciled in Canada. The prices of many of these securities have declined due to global market and economic conditions and remain at price levels such that they offer historically high equity income yields. This decline has been amplified among income trusts by previous investor uncertainty concerning the impact of changes to the taxation of these entities in 2011. The Portfolio Advisor believes that an actively-managed portfolio of these securities can offer an attractive diversified source of income as well as attractive capital appreciation potential. The Portfolio Advisor expects to initially focus primarily on income trusts with potential to increase the portion of the Portfolio invested in dividend-paying equity securities, convertible debt securities, preferred shares and corporate bonds should market conditions for these securities become attractive.
The Fund's investment objectives are to:
(i) maximize total return for holders of Trust Units ("Unitholders"),
consisting of distributions, interest and dividend income and
capital appreciation; and
(ii) provide Unitholders with monthly distributions initially targeted
to be $0.08 per Trust Unit ($0.96 per annum representing an annual
cash distribution of 8% based on the $12.00 per Unit issue price).
The syndicate of agents is co-led by CIBC World Markets Inc. and RBC Capital Markets and includes BMO Capital Markets, Scotia Capital Inc., National Bank Financial Inc., Blackmont Capital Inc., Canaccord Financial Ltd., GMP Securities L.P., HSBC Securities (Canada) Inc., Wellington West Capital Markets Inc., Dundee Securities Corporation, MGI Securities Inc., Raymond James Ltd., Desjardins Securities Inc., Manulife Securities Incorporated and Research Capital Corporation.
Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Fund. The forward-looking statements are not historical facts but reflect O'Leary Funds Management LP's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although O'Leary Funds Management LP believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. O'Leary Funds Management LP undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
All capitalized terms noted herein but not defined are as per the prospectus dated November 25, 2009.
SOURCE O'LEARY CANADIAN EQUITY INCOME FUND
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