TORONTO, ONTARIO--(CCNMatthews - April 11, 2007) - First Asset Diversified Convertible Debenture Fund (the "Fund") (TSX:DCD.UN) announces that that it has completed a follow-on offering of 3,750,000 units of the Fund at a price of $20 per unit, yielding gross proceeds of $75 million. The Fund has granted the agents for the offering an over-allotment option to acquire additional units exercisable at any time during the next 30 days.
The Fund's investment objectives are to provide Unitholders with quarterly cash distributions, and the opportunity for capital appreciation, by investing, on an actively mansaged basis, in a diversified portfolio comprised primarily of convertible debentures of Canadian and US issuers. The Fund will utilize existing losses to provide tax-efficient distributions, initially anticipated to be approximately $0.30 per Unit per quarter, commencing with the quarter-ended June 30, 2007, representing a yield of approximately 6.0% per annum based on the offering price. As at December 31, 2006, the Fund had approximately $29.8 million of capital loss carry forwards and $10.9 million of non-capital loss carry forwards. The Fund anticipates that all distributions will be returns of capital, which are generally not subject to tax (but which reduce the adjusted cost base of a Unitholder's Units), until all the non-capital loss carry forwards and other available expenses of the Fund are fully utilized or expire. In addition, to the extent of the Fund's capital loss carry forwards, realized capital gains of the Fund will be offset to facilitate tax free growth.
The syndicate of agents for this offering was co-led by CIBC World Markets Inc., National Bank Financial Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., and TD Securities Inc., and included HSBC Securities (Canada) Inc., Dundee Securities Corporation, Canaccord Capital Corporation, Raymond James Ltd., Wellington West Capital Inc., Blackmont Capital Inc., Berkshire Securities Inc., Desjardins Securities Inc., Research Capital Corporation and Richardson Financial Partners Limited.
For further information, please contact Rob MacNiven, Investor Relations, First Asset Funds Inc. at 416-642-1289 or 1-877-642-1289, or visit www.firstassetfunds.com.