/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./
TORONTO, Nov. 10, 2014 /CNW/ - (TSX: PIC.A; PIC.PR.A) – Premium Income Corporation (the "Fund") is pleased to announce that it has completed a treasury offering of 900,000 class A shares and 900,000 preferred shares for aggregate gross proceeds of $22.1 million. The class A shares were priced at $8.92 per share and the preferred shares were priced at $15.60 per share. The pricing of the issue was determined so as to be non-dilutive to the most recently calculated net asset value per unit on the date of the pricing of the issue. The class A shares and the preferred shares will continue to trade on the Toronto Stock Exchange under the existing ticker symbols PIC.A and PIC.PR.A respectively.
The Fund invests in a portfolio consisting principally of common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank (the "Banks"). To generate additional returns above the dividend income earned on the Fund's portfolio, the Fund will selectively write covered call options in respect of some or all of the common shares in the Fund's portfolio. The Fund may also, from time to time, write cash-covered put options in respect of securities in which the Fund is permitted to invest. The manager and investment manager of the Fund is Strathbridge Asset Management Inc.
The preferred shares pay fixed cumulative preferential quarterly cash distributions in the amount of $0.215625 ($0.8625 per annum) per preferred share representing a yield of 5.75% on the original issue price of $15.00. The class A shares currently pay quarterly distributions in the amount $0.20319 ($0.81276 per annum) per class A share.
The syndicate of agents for the offering was led by Scotiabank and RBC Capital Markets and included BMO Capital Markets, CIBC, National Bank Financial Inc., TD Securities Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Dundee Securities Ltd. and Mackie Research Capital Corporation.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of an offer to buy securities nor will there be any sale of such securities in any state in which such offer, solicitation or sale would be unlawful.
SOURCE: Premium Income Corporation
For further information: please contact Investor Relations at 416.681.3966, toll free at 1.800.725.7172, email at [email protected] or visit www.strathbridge.com