Pathfinder Convertible Debenture Fund Files Final Prospectus

IPO Closing November 20, 2009

TORONTO, Oct. 30 /CNW/ - Middlefield Group, on behalf of Pathfinder Convertible Debenture Fund ("Pathfinder" or the "Fund"), is pleased to announce that it has filed a final prospectus in relation to the initial public offering of Combined Units at a price of $12.00 per Combined Unit. The maximum size of the offering will be $125 million. The closing is scheduled for November 20, 2009.

Each Pathfinder 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., National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Capital Corporation, GMP Securities Inc., HSBC Securities (Canada) Inc., Manulife Securities Inc., Middlefield Capital Corporation, Raymond James Ltd., Blackmont Capital Inc., Dundee Securities Corporation and Wellington West Capital Markets Inc.

Certain statements included in this press 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 the Fund'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 including, but not limited to, the proposed monthly distribution of the Fund. Although the Fund 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. The Fund 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. This press release is for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. This offering is made by prospectus only and copies thereof may be obtained from any of the dealers listed above as may lawfully offer these securities in such province or territory or by contacting Middlefield toll-free at 1.888.890.1868.

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

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Pathfinder Convertible Debenture Fund

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