Australian Banc Income Fund Files Final Prospectus


TORONTO, Feb. 25 /CNW/ - Connor, Clark & Lunn Capital Markets Inc. (the "Manager") is pleased to announce that a final prospectus for Australian Banc Income Fund (the "Fund") has been filed with and 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 March 18, 2011. The Toronto Stock Exchange ("TSX") has conditionally approved the listing of the Class A Units under the symbol AUI.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 was created to invest in a Portfolio of common shares of the five largest Australian banks: Australia and New Zealand Banking Group, Commonwealth Bank of Australia, Macquarie Group Limited, National Australia Bank and Westpac Banking Corporation (the "Banks"). The Portfolio will initially be approximately equal weighted, and each month the Manager may write covered call options on approximately, and not more than, 25% of the common shares of each Bank held in the Portfolio, in order to seek to earn income from dividends and call option premiums, lower the overall volatility of returns associated with owning a portfolio of common shares of the Banks, and to generate capital appreciation for holders of Units of the Fund. This strategy does not involve managing the Portfolio to achieve a specific distribution target, but is intended to generate attractive option premiums to provide downside protection, lower overall volatility of returns and increase cash flow available for distribution.

The Fund's investment objectives are to (i) provide Unitholders with quarterly distributions; (ii) provide the opportunity for capital appreciation; and (iii) lower overall volatility of Portfolio returns than would be experienced by owning common shares of the Banks directly.  Based on the Manager's current estimates, the initial distribution target for the Fund is expected to be $0.1875 per quarter ($0.75 per annum to yield 7.5% on the subscription price of $10.00 per Unit).

Connor, Clark & Lunn Capital Markets Inc. will act as Manager of the Fund. The Manager also acts as the manager of Australian Banc Capital Securities Trust and has managed option strategies for mandates that have raised over $600 million.  The Manager is part of the Connor, Clark & Lunn Financial Group, which is responsible for the investment of approximately $39 billion in financial assets as at December 31, 2010.

The Units are being offered for sale by a syndicate of agents led by BMO Capital Markets, HSBC Securities (Canada) Inc. and CIBC, and includes RBC Capital Markets, National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc., GMP Securities L.P., Canaccord Genuity Corp., Raymond James Ltd., Macquarie Private Wealth Inc., Dundee Securities Corporation, Mackie Research Capital Corporation and Wellington West Capital Markets Inc.

This offering is only made by prospectus. The prospectus contains important detailed information about the securities being offered. Copies of the prospectus may be obtained from any of the agents listed above. Investors should read the prospectus before making an investment decision.

SOURCE Australian Banc Income Fund

For further information:

please visit or contact:

Darren Cabral
Vice President
Connor, Clark & Lunn Capital Markets Inc.
(416) 214-6182 or 1 (888) 276-2258

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Australian Banc Income Fund

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