TORONTO, Nov. 6 /CNW/ - Premier Canadian Income Fund (the "Fund") (TSX: GIP.UN), an investment trust designed to generate attractive returns for investors by investing in a high quality portfolio of common shares of large-capitalization Canadian issuers selected from the S&P/TSX 60 Index, is pleased to announce that it has filed and received a receipt for its preliminary prospectus from the securities regulatory authority in each province of Canada. The Fund's offering of Combined Units (each Combined Unit consisting of one Unit of the Fund and one Warrant for one Unit) is expected to close in mid-December 2009.
The Fund will invest primarily in common shares of issuers in the energy, materials and financials sectors, with approximately one-third of the Fund's net assets initially invested in each of these sectors. Mulvihill Capital Management Inc. ("MCM"), the Fund's investment manager, believes that Canada has world-leading companies in these sectors. The Fund has been structured to provide holders ("Unitholders") of its Units with attractive, tax-efficient, monthly distributions.
The Fund's investment objectives are:
(i) to maximize total returns for Unitholders including both long-
term appreciation in net asset value ("NAV") per Unit and
(ii) to pay Unitholders monthly, tax-efficient distributions in an
amount targeted to be 6.5% per annum on the NAV of the Fund.
Based upon existing capital loss carryforwards of approximately $29.5 million available to the Fund, the Fund expects that all or substantially all of the monthly distributions paid by it over its five-year life will be return of capital distributions that are generally not subject to tax (returns of capital reduce the adjusted cost base of Units). Accordingly, these distributions should be tax-efficient when compared with those made on units of an investment trust that depends solely on capital gains, interest, dividends and/or other sources of investment income (net of expenses, losses and loss carryforwards) to pay distributions.
To generate additional returns above the distributions earned on its securities, the Fund may, from time to time, write covered call options in respect of some or all of the securities in its portfolio. The securities that may be subject to call options and the terms of such options will vary from time to time based on MCM's assessment of market conditions.
Prospective purchasers may purchase Combined Units either by: (i) a cash payment; or (ii) an exchange (the "Exchange Option") of freely-tradeable listed securities ("Exchange Eligible Securities") of issuers in the S&P/TSX 60 Index. To utilize the Exchange Option, a prospective purchaser must deposit (in the form of a book-entry deposit) Exchange Eligible Securities with the Fund's agent for the Exchange Option through CDS Clearing and Depository Services Inc. prior to 5:00 p.m. (Toronto time) on November 25, 2009.
The offering is being made through a syndicate of investment dealers co-led by RBC Capital Markets and CIBC that includes Scotia Capital Inc., BMO Capital Markets, National Bank Financial Inc., HSBC Securities (Canada) Inc., Raymond James Ltd., Canaccord Adams, Dundee Securities Corporation, Manulife Securities Incorporated and Wellington West Capital Markets Inc.
SOURCE PREMIER CANADIAN INCOME FUND
For further information: For further information: John Mulvihill, President and CEO; John Germain, Senior Vice-President; Sheila Szela, Vice-President, Finance and CFO, Mulvihill Structured Products, A member of the Mulvihill Capital Management Inc. Group of Funds, 121 King Street West, Suite 2600, Toronto, Ontario, M5H 3T9, (416) 681-3900, (800) 725-7172, www.mulvihill.com, firstname.lastname@example.org