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TORONTO, Oct. 15, 2012 /CNW/ - Scotia Managed Companies Administration Inc., on behalf of Top 20 U.S. Dividend Trust (the "Fund"), is pleased to announce that the Fund has completed an initial public offering (the "Offering") of 9,200,000 Class A Units and 2,048,087 Class U Units (collectively the "Units") at a price of $10.00 per Class A Unit and US$10.00 per Class U Unit for gross proceeds of $92,000,000 and US$20,480,870, respectively. The Class A Units of the Fund are listed and posted for trading on the Toronto Stock Exchange under the symbol TUT.UN. The Class U Units will not be listed on a stock exchange but may be converted into Class A Units on a weekly basis for liquidity purposes.
The Fund's investment objectives are to provide unitholders with: (i) stable monthly tax-advantaged distributions; and (ii) the opportunity for capital appreciation. The Fund will obtain investment exposure to an equally-weighted portfolio (the "Portfolio") comprised of the 20 highest yielding equity securities included in the Dow Jones Industrial Average (the "Dow"). The Dow is a price-weighted average index consisting of 30 large and well-known U.S. "blue-chip" companies representing all industries with the exception of transportation and utilities.
The Portfolio will be reconstituted annually to include the then top 20 highest yielding constituents of the Dow on an equally-weighted basis. The Portfolio will also be rebalanced to an equal weight basis prior to the end of each calendar quarter. Highstreet Asset Management Inc. will write covered call options from time to time in respect of not more than 33% of the Portfolio in order to earn income from option premiums to supplement the dividends and distributions generated by the Portfolio. Scotia Managed Companies Administration Inc., a wholly-owned subsidiary of Scotia Capital Inc., will act as the manager of the Fund and will provide all administrative services required by the Fund.
The Fund intends to make monthly cash distributions to Unitholders of record on the last business day of each month. The Fund intends to pay equal monthly distributions initially expected to be $0.0417 per Class A Unit and US$0.0417 per Class U Unit ($0.50 and US$ 0.50 per annum, respectively) representing an annual yield of 5.00% on the issue price, consisting primarily of returns of capital which are not immediately taxable but which reduce a Unitholder's adjusted cost base of its Units.
The Units were offered for sale by a syndicate of agents led by Scotiabank and including BMO Capital Markets, National Bank Financial Inc., TD Securities Inc., Canaccord Genuity Corp., Desjardins Securities Inc., GMP Securities L.P., Raymond James Ltd., Dundee Securities Ltd., Mackie Research Capital Corporation, Macquarie Private Wealth Inc., Manulife Securities Incorporated and Union Securities Ltd.
The Dow Jones Industrial AverageSM are proprietary to and are calculated by Dow Jones Opco, a subsidiary of S&P Dow Jones Indices LLC, and have been licensed for use to S&P Opco, LLC and TTU Ltd. S&P is a registered trademark of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). TTU LTd's Top 20 U.S. Dividend Trust based on the Dow Jones Industrial AverageSM are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones S&P, or their respective affiliates, and S&P Dow Jones Indices LLC, Dow Jones, S&P, and their respective affiliates make no representation regarding the advisability of trading in such product(s).
Certain statements included in this news release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect 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 and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. Scotia Managed Companies Administration Inc. undertakes no obligation to update publicly or otherwise revise any forward looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law. Investment funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There is no assurance that the Fund will be able to achieve its distribution and capital preservation objectives or that the full amount of a unitholders investment in the Fund will be returned. 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. The press 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: Top 20 U.S. Dividend Trust
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