Australian Banc Capital Securities Trust Files Prospectus

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

TORONTO, Nov. 4 /CNW/ - Connor, Clark & Lunn Capital Markets Inc. (the "Manager") is pleased to announce that an amended and restated preliminary prospectus for Australian Banc Capital Securities Trust (the "Fund") has been filed with 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.  Prospective purchasers may purchase Units either by (i) cash payment or (ii) an exchange of securities of any Exchange Eligible Issuer listed in the prospectus.

The Fund's investment objectives are to (i) provide Unitholders with quarterly, tax-advantaged distributions consisting primarily of returns of capital and (ii) provide exposure to a portfolio consisting primarily of Capital Securities issued by the Big Four Australian Banks (Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Corporation). Based on current estimates, the Fund's initial distribution target is expected to be approximately $0.15 per Unit per quarter, consisting primarily of returns of capital, representing an initial yield on the Unit issue price of 6.0% per annum.

The Manager believes that Australian banks are strongly positioned and that the Capital Securities issued by the Big Four Australian Banks offer an attractive investment opportunity for the following reasons:

• Australia's banking system is similar to Canada's banking system - Australia's banking system is dominated by the Big Four Australian Banks, which together control approximately 75% of the Australian domestic banking market. S&P considers the closest international peers of the Big Four Australian Banks to be the five major Canadian banks, which share important characteristics in terms of their balance sheet size, dominant positions in their respective domestic banking markets and low credit loss levels. Similar to Canadian banks, Australian banks are highly regulated, strongly capitalized, and recognized for their conservative banking practices.
• Strong credit quality, with higher ratings than Canadian banks - The Big Four Australian Banks are each rated "AA" by S&P, with a stable outlook based on expectations of sound macroeconomic conditions, strong earnings and conservative lending standards. In comparison, the five major Canadian banks are rated "AA-" or "A+". On the strength of these credit ratings, the Big Four Australian Banks all rank in the top 20 safest banks in the world, above the majority of Canadian banks, as determined by Global Finance magazine in October 2010.
• Strength of the Australian economy - The Australian economy continues to enjoy strong growth and only experienced a relatively mild downturn during the recent global financial crisis, benefitting from its significant exposure to higher growth Asian regions and Australia's abundance of natural resources. Australia's unemployment rate of approximately 5.1% is among the lowest in the developed world. Australia has also led the G20 nations in increasing interest rates to ensure that inflation remains within its target range. As a result, the Australian dollar has appreciated versus other major currencies where economic and employment growth lag behind Australia.
• Strong capital position, with increased dividends - The Australian banking system is well-capitalized and Australian banks are well positioned to meet new Basel III capital standards. The Big Four Australian Banks have each increased dividends to shareholders during the second and third quarters of 2010.
• Compelling yields - Capital Securities of Australian banks offer compelling yields, particularly in comparison to Capital Securities issued by Canadian banks with similar credit ratings and features.
• High credit ratings of the Capital Securities - The Capital Securities of the Big Four Australian Banks are rated "A+" by S&P compared to "A" or "A-" for the majority of comparable Capital Securities of Canadian banks.
• Potential for rising distributions - The majority of Australian dollar-denominated Capital Securities of Australian banks pay floating rate distributions that vary with short-term benchmark interest rates in Australia. To the extent that short-term interest rates continue to rise, issuers of these securities are obligated to pay higher distributions.
• Strong Australian Dollar - Exposure to the Australian dollar offers diversification benefits and is attractive because of the comparatively high interest rates in Australia, the general stability of the economy and political system, and Australia's greater exposure to both high-growth Asian economies and commodities. Given the strength of the economy and the potential for higher inflation, the Manager believes that interest rates are likely to continue to rise at a faster pace in Australia, resulting in continued strong performance of the Australian dollar versus other major currencies.

The Fund will not have a fixed distribution, but intends to make quarterly distributions based on the actual and expected distributions on the Capital Securities less the Fund's estimated expenses. Given that a portion of the Portfolio will be invested in floating rate Capital Securities, distributions will vary with changes in short term interest rates in Australia.

The Capital Securities are denominated primarily in Australian dollars and U.S. dollars. Although the Manager does not expect to initially hedge any amounts in respect of Australian dollars, the Manager may utilize a hedging strategy from time to time in respect of Australian dollars when it considers it appropriate to do so. The Manager expects to hedge back to the Canadian dollar substantially all of the value of the Capital Securities that is denominated in U.S. dollars or pounds sterling.

Connor, Clark & Lunn Capital Markets Inc. will act as Manager of the Fund. The Manager also acts as the manager of Canadian Banc Capital Securities Trust, North American Financials Capital Securities Trust and HBanc Capital Securities Trust, and is part of the Connor, Clark & Lunn Financial Group, which is responsible for the investment of approximately $37 billion in financial assets as at September 30, 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., Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Dundee Securities Corporation, Mackie Research Capital Corporation and Wellington West Capital Markets Inc.

An amended and restated preliminary prospectus relating to these securities has been filed with securities commissions or similar authorities in each of the provinces and territories of Canada but has not yet become final for the purpose of distribution to the public. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any province or territory of Canada prior to the time a receipt for the final prospectus or other authorization is obtained from the securities commission or similar authority in such province or territory.

A copy of the amended and restated prospectus may be obtained from any of the above-mentioned agents.

For further information:

For more information, please visit www.cclcapitalmarkets.com or contact:

Darren Cabral
Vice President
Connor, Clark & Lunn Capital Markets Inc.
[phone] or 1 [phone]
[email protected]