TORONTO, Dec. 10 /CNW/ - Middlefield Group, on behalf of Pathfinder Convertible Debenture Fund ("Pathfinder" or the "Fund"), is pleased to announce that the Fund has completed the issuance of an additional 323,000 combined units at a price of $12.00 per combined unit for total gross proceeds of $3,876,000 pursuant to the over-allotment option granted to the agents in Pathfinder's recently completed initial public offering. Together with the $70,800,000 previously closed, the Fund has raised aggregate gross proceeds of $74,676,000.
Each Pathfinder combined unit consisted of one unit of the Fund and one unit purchase warrant. All outstanding combined units have automatically separated and the underlying units and warrants commenced trading on the TSX at the open on December 10, 2009 under the symbols PCD.UN and PCD.WT respectively. 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
Middlefield Group is also pleased to announce that a distribution of $0.065 per unit will be payable on January 15, 2010 to Pathfinder Unitholders of record on December 31, 2009. 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 is exposed 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
- 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 syndicate of agents was co-led by CIBC World Markets and RBC Capital Markets, and included BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., TD Securities 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.
The trust units trade on the Toronto Stock Exchange under the symbol PCD.UN.
This press release contains forward-looking information. The forward-looking information contained in this press release is based on historical information concerning the coupon payments, distributions and dividends paid on the securities of issuers to which the Fund is exposed. Actual future results, including the amount of distributions paid by the Fund, may differ from the monthly distribution amount. Specifically, the income from which distributions are paid may vary significantly due to: changes in portfolio composition; changes in coupon payments, distributions and dividends paid by issuers of securities to which the Fund is exposed from time to time; there being no assurance that those issuers will pay distributions or dividends on their securities; the declaration of distributions and dividends by issuers of securities to which the Fund is exposed will generally depend upon various factors, including the financial condition of each issuer and general economic and stock market conditions; the level of borrowing by the Fund; and the uncertainty of realizing capital gains. The risks, uncertainties and other factors that could influence actual results are described under "Risk Factors" in the Fund's prospectus dated October 28, 2009 and other documents filed by the Fund with the Canadian securities regulatory authorities. The forward-looking information contained in this press release constitutes the Fund's current estimate, as of the date of this press release, with respect to the matters covered hereby. Investors and others should not assume that any forward-looking statement contained in this press release represents the Fund's estimate as of any date other than the date of this press release.
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.