TORONTO, October 7, 2008 - First Asset CanBanc Split Corp. (the "Company") announces that in order to mitigate single day price risk, the Portfolio to be acquired by the Company (as defined below) will be acquired over the 10 trading days after closing, rather than the 5 trading days as originally contemplated.
The Company, which filed its preliminary prospectus with the securities regulatory authorities dated September 8, 2008, was created to invest, on an approximately equally weighted basis, in a portfolio (the "Portfolio") of common shares of the six largest Canadian banks - Bank of Montreal; Canadian Imperial Bank of Commerce; National Bank of Canada; Royal Bank of Canada; The Bank of Nova Scotia; and The Toronto-Dominion Bank.
The Company's investment objectives with respect to the Preferred Shares are:
- to provide Preferred Shareholders with fixed cumulative preferential quarterly cash distributions in the amount of $0.1625 per Preferred Share ($0.65 per annum representing an annual yield of 6.5% based on the original $10 issue price of a Preferred Share); and
- to return the original issue price to Preferred Shareholders at the time of redemption of such shares on or about January 15, 2016.
The Preferred Shares have been provisionally rated Pfd-2 (low) by DBRS Limited.
The Company's investment objectives with respect to the Class A Shares are:
- to provide Class A Shareholders with the opportunity to participate in the performance of the Portfolio on a leveraged basis; and
- to benefit from any increase in the dividends from the securities in the Portfolio.
At closing the Manager will issue a note ("Note") to the Company in an amount equal to the fees and expenses associated with the Offering and accordingly, it is anticipated that the initial NAV per Unit will be $25. The Note will be used to reimburse the Company for the expenses of the Offering and will be repaid over seven years with interest being paid at the prime rate in an amount approximately equal to 1.00% of NAV per annum.
The syndicate of agents for this offering is being led by CIBC World Markets Inc. and RBC Dominion Securities Inc., and includes BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Capital Corporation, Dundee Securities Corporation, HSBC Securities (Canada) Inc., Raymond James Ltd., Blackmont Capital Inc., Manulife Securities Incorporated, Richardson Partners Financial Limited and Wellington West Capital Inc.
For further information, please call Rob MacNiven, Investor Relations, First Asset at 416-642-1289 or 1-877-642-1289 or visit www.firstasset.com.
A preliminary prospectus dated September 8, 2008 relating to these securities has been filed with the securities regulatory authority in each of the provinces of Canada but has not yet become final for the purpose of a distribution to the public. Important information concerning this offering is contained in the prospectus. Obtain a copy from your financial advisor or on SEDAR at www.sedar.com and read the prospectus before investing.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or an acceptance of an offer to buy the securities in any province of Canada prior to the time a receipt for the final prospectus or other authorization is obtained from the securities commission or other similar authority in such province.