Premium Income Corporation Announces Exchange Ratios
TORONTO, ONTARIO--(Marketwired - Oct. 30, 2014) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Premium Income Corporation (the "Fund") (TSX:PIC.A)(TSX:PIC.PR.A) is pleased to announce the exchange ratios for the Fund's exchange option with respect to its follow-on offering. Under the exchange option, investors could purchase Units of the Fund, consisting of one Class A share and one Preferred share by way of an exchange of freely tradable shares of the five banks included in the Fund's portfolio and of shares of the National Bank of Canada (the "Exchange Eligible Issuers"). For any purchase by way of exchange in excess of $1 million purchasers may elect to defer any accrued gains by completing a joint election with the Fund to achieve a tax-deferred rollover.
Under the exchange option, the number of Units issuable in exchange for shares of any Exchange Eligible Issuer was determined by dividing the adjusted weighted average trading price of the respective Exchange Eligible Issuer on the TSX for the three consecutive trading days ended October 28, 2014 by the Unit Offering price of $24.52 (consisting of one Class A Share at a price of $8.92 and one Preferred Share at a price of $15.60). Fractional Units will not be issued. The following table outlines the adjusted weighted average trading price and the exchange ratio for each respective Exchange Eligible Issuer. The Exchange Ratio indicates the number of Units of the Fund to be received for each share of an Exchange Eligible Issuer.
Exchange Eligible Issuer |
TSX Ticker Symbol |
Adjusted Weighted Average Trading Price |
Exchange Ratio |
Bank of Montreal | BMO | $81.04 | 3.3051 |
The Bank of Nova Scotia | BNS | $68.15 | 2.7794 |
Canadian Imperial Bank of Commerce | CM | $101.48 | 4.1387 |
National Bank of Canada | NA | $52.59 | 2.1448 |
Royal Bank of Canada | RY | $79.19 | 3.2296 |
The Toronto-Dominion Bank | TD | $54.47 | 2.2215 |
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.