Canadian Closed-End Funds Monitor

Transcription

1 Canadian Closed-End Funds Monitor January 2012 Troy Killick, CFA Senior Fund Analyst Inside This Issue 3. Canadian Closed-End Fund Updates ACTIVEnergy Income Fund Aston Hill VIP Income Fund Australian Banc Income Fund 4. Canadian General Investments, Ltd Compass Income Fund 5. Energy Income Fund First Asset Yield Opportunity Trust 6. First Asset REIT Income Fund & First Asset Canadian Dividend Opportunity Fund Flaherty & Crumrine Investment Grade Fixed Income Fund 7. Front Street Strategic Yield Fund Ltd. Global Diversified Investment Grade Income Trust II 9. HARVEST Canadian Income & Growth Fund Low Volatility Canadian Income Fund 10. Marret Multi-Strategy Income Fund 11. O'Leary Canadian Diversified Income Fund Pathfinder Convertible Debenture Fund 12. Preferred Share Investment Trust Propel Multi-Strategy Fund Ridgewood Canadian Investment Grade Bond Fund 13. SCITI Trust Skylon International Advantage Yield Trust Timbercreek Senior Mortgage Investment Corp 14. Trident Performance Corp. II 15. Canadian Split Share Updates 5Banc Split Inc. 16. Big 8 Split Inc. NB Split Corp. Utility Split Trust 19. Exhibits 28. Disclosures and Disclaimers Canadian Closed-End Funds Monitor highlights the key news items released during the previous month for the various Canadian closed-end funds and split share corporations we monitor. Highlights in the closed-end fund and split share markets contained in this edition include: Closed-End Funds Australian Banc Income Fund announced that a special distribution of $0.39 per unit will be paid to holders of record as at the close of business on December 31, Canadian General Investments Ltd. declared a special cash capital gains dividend of $0.56 per common share. This dividend is payable on December 28, 2011 to shareholders of record on December 22, Middlefield Group announced the successful completion, effective December 22, 2011, of the previously announced merger of Compass Income Fund and GMIncome & Growth Fund with Compass being the continuing fund. Each GMI unit held by GMI unitholders was automatically exchanged for units of Compass, the continuing fund. Energy Income Fund provided an update on the Energy Income Fund warrants issued to unitholders of record on October 7, Since December 2, 2011 the fund's unit closing market price has been higher than the warrant subscription price of $5.00. Flaherty & Crumrine Investment Grade Fixed Income Fund announced a special cash distribution of $0.04 per unit payable on January 16, 2012 to unitholders of record at the close of business on December 30, Front Street Strategic Yield Fund Ltd. announced the closing of the additional offering of 1,250,000 equity shares of the fund at an offering price of $11.10 per equity share. Agents were granted with an over-allotment option to acquire up to an additional 65,000 equity shares. Global Diversified Investment Grade Income Trust II provided disclosure on the settlement of credit events and impact on further distributions. Harvest Portfolios Group Inc. announced that the HARVEST Canadian Income & Growth Fund issued an additional 1,060,886 trust units of the fund at the close of business on November 30, Through the warrant exercise the fund raised additional proceeds of $12,730,632. Connor, Clark & Lunn Capital Markets Inc. announced that the closing of the offering of units of the Low Volatility Canadian Income Fund is expected to take place in mid to late January of Marret Asset Management Inc. announced that it proposed to change the rebalancing policy of Marret Multi-Strategy Income Fund. O'Leary Funds Management LP, the trustee and manager of O'Leary Canadian Diversified Income Fund, announced that O'Leary Canadian Diversified Income Fund is expected to close on January 10, Preferred Share Investment Trust announced that an additional 721,000 units of the fund have been issued through the exercise of its over-allotment option. In total, the fund issued 5,571,000 units pursuant to the offering, yielding gross proceeds of approximately $63.6 million. CIBC Wood Gundy is a division of CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Toronto, Canada M5J 2S8 (416)

2 Ridgewood Capital Asset Management Inc. announced the closing of the previously announced public offering of units of Ridgewood Canadian Investment Grade Bond Fund, issuing 1,335,914 units at $11.47 per unit for gross proceeds of approximately $15.3 million. SCITI Trust filed a short form prospectus with respect to a follow-on offering of a maximum of 5,911,000 units of the trust at a price of $12.69 per unit. Agents were granted an over-allotment option to purchase an additional 886,650 units at a price of $12.69 per unit. Skylon International Advantage Yield Trust announced a special distribution on its series B units for the year ending December 31, 2011 of US$0.06 per unit, payable on January 13, 2012 to unitholders of record as at December 30, Timbercreek Senior Mortgage Investment Corporation announced that it has filed a preliminary prospectus that qualifies the distribution of class A shares and class B shares of the company at a price of $10 per class A share and per class B share. Class B shares are designed for institutional investors or feebased accounts with a registered dealer and will not be listed on a stock exchange, but are convertible into class A shares. Trident Performance Corp. II announced a special distribution on its class A shares for the year ending December 31, 2011 of $0.08 per share payable on January 13, 2012 to shareholders of record as at December 30, Split Share Corporations 5Banc Split Inc. announced that it has completed an offering of 2,580,135 class C preferred shares, series 1 at a price of $10.00 per class C preferred share, raising gross proceeds of approximately $25.8 million. Big 8 Split Inc. announced that it has called a total of 368,040 preferred shares comprised of 174,186 class B preferred shares and 193,854 class C preferred shares, for cash redemption on December 15, 2011, representing approximately 20.0% of all outstanding preferred shares as a result of holders of 368,040 capital shares exercising their special annual retraction rights. Utility Split Trust announced that it has completed its offering of class B preferred securities. The fund issued 1,203,576 class B preferred securities for gross proceeds of approximately $12 million. The date shown in advance of each item in this report is the date that the news was announced. All funds are listed on the Toronto Stock Exchange (TSX), and are priced as of December 30, January 2012

3 Canadian Closed-End Fund Updates ACTIVEnergy Income Fund AEU.UN - $8.02 December 08, Normal Course Issuer Bid ACTIVEnergy Income Fund announced its intention to make a normal course issuer bid (NCIB) for its units through the facilities of the Toronto Stock Exchange (TSX). This normal course issuer bid will commence on December 12, 2011 and will terminate on December 11, In accordance with the declaration of trust by which ACTIVEnergy is governed, market purchases pursuant to its NCIB may be affected by the fund. The fund had 20,492,768 units issued and outstanding as at December 8, ACTIVEnergy may, during the 12-month period commencing December 12, 2011, purchase on the TSX up to 2,048,772 units, being 10% of the public float of 20,487,725 units and may not, in any 30-day period, purchase more than 409,855 units, being 2% of the units issued and outstanding. ACTIVEnergy will hold in treasury for resale all units purchased pursuant to the bid. As at December 2, 2011 ACTIVEnergy had purchased 242,800 units at an average price of $8.49 per unit under its previously approved normal course issuer bid. ACTIVEnergy believes that its units represent good value for the fund and purchases under the NCIB may serve to enhance returns to unitholders. Aston Hill VIP Income Fund VIP.UN - $8.74 November 10, Renews Normal Course Issuer Bid Aston Hill VIP Income Fund has renewed its normal course issuer bid to purchase up to 3,627,200 units of the fund, representing approximately 10% of the public float of 36,272,452 units. The fund may purchase up to 725,449 units in any 30-day period, which is 2% of the 36,272,452 issued and outstanding units as at November 2, As of November 2, 2011, the fund had purchased 262,100 units under its current bid at an average price of $9.19 per unit. The units may be purchased for cancellation from November 10, 2011 to November 9, 2012 through the facilities of the TSX or other eligible alternative markets and may only be purchased at a price per unit not exceeding the last published net asset value per unit. The manager of the fund believes that such purchases are in the best interest of the fund and are a desirable use of its available funds. Australian Banc Income Fund AUI.UN - $8.37 December 16, Special Unit Distribution And Subsequent Consolidation Of Units Connor, Clark & Lunn Capital Markets Inc., on behalf of Australian Banc Income Fund, announced that a special distribution will be paid to holders of record as at the close of business on December 31, This special distribution will be paid by way of additional units, based on the net asset value per unit on December 30, Subject to a final review of the fund's taxable income for the period from inception of the fund on March 18, 2011 to December 31, 2011, it is expected that the special distribution amount will be $0.39 per unit and will be treated primarily as a capital gain for tax purposes. Immediately after the issuance of the additional units, the outstanding units of the fund will be consolidated such that the number of units will remain unchanged from the number outstanding immediately prior to the special distribution. 3 January 2012

4 During the year, quarterly distributions were paid to unitholders at an annualized rate of 7.5% per annum based on the original issue price of $10.00 per unit. The fund's investment activities generated more taxable income than was distributed during the year. Accordingly, a special distribution to unitholders is required. A unitholder will be required to include the amount of the special distribution in income, which will be primarily in the form of capital gains and this same amount also will be added to the adjusted cost base of the units held by such unitholder, thereby reducing taxable capital gains that may be realized on future dispositions of the units held by such unitholder. Canadian General Investments, Limited CGI - $16.00 CGI.PR.B - $25.75 CGI.PR.C - $25.51 December 7, Special Year-End Capital Gains Dividend Canadian General Investments, Limited declared a special cash capital gains dividend of $0.56 per common share. This dividend is payable on December 28, 2011 to shareholders of record on December 22, Including the quarterly income dividends of $0.06 per common share, total cash dividend payments of $0.80 per common share in 2011 represent a yield to investors of 5.0% based on the December 6, 2011 closing market price of $ Canadian General Investments, Limited, established in 1930, is one of Canada's largest closed-end investment companies with total portfolio assets in excess of $590 million as at December 6, Compass Income Fund CMZ.UN - $12.31 December 22, Completed Merger With GMIncome & Growth Fund Middlefield Group announced the successful completion, effective December 22, 2011, of the previously announced merger of Compass Income Fund and GMIncome & Growth Fund (GMI) with Compass being the continuing fund. Pursuant to the merger, each GMI unit held was automatically exchanged for units of Compass, the continuing fund. This exchange ratio was based on the relative net asset values, on an unrounded basis, of Compass and GMI as at the close of trading on the TSX on December 21, 2011, which were approximately $12.72 per unit and approximately $11.04 per unit, respectively. The merger was effected on a taxdeferred "rollover" basis. Unitholders of GMI are not required to take any action in order to be recognized as a unitholder of Compass and to be in a position to trade units of Compass on the TSX. Former unitholders of GMI who wish to participate in the distribution reinvestment plan of Compass will need to enrol in the Compass DRIP. Unitholders of Compass are not required to take any action as they will automatically continue as unitholders of the continuing fund with each unit of Compass equal to one unit of the continuing fund. 4 January 2012

5 Energy Income Fund ENI.UN - $5.07 December 07, Warrants Are "In-The-Money Energy Income Fund provided an update on the Energy Income Fund warrants issued to unitholders of record on October 7, Since December 2, 2011 the fund's unit closing market price has been higher than the warrant subscription price of $5.00. While there is no certainty that the fund's units will continue to trade above $5.00, warrantholders that exercise their warrants and receiving the fund's units prior to the December 30, 2011 distribution record date, will be entitled to receive the next monthly distribution of $0.03 per unit, to be paid on January 13, The fund's units offer a yield of approximately 7% based on current market prices and are trading at a discount to net asset value of approximately 21%. Warrantholders who wish to exercise their warrants must instruct their investment advisor and provide payment equal to the subscription price for each warrant exercised. First Asset Yield Opportunity Trust FAY.UN - $14.58 December 16, Normal Course Issuer Bid First Asset Yield Opportunity Trust announced acceptance by the TSX of the trust's notice of intention to make a normal course issuer bid to permit the trust to acquire its series A units and series B units. Pursuant to the NCIB, the trust proposes to purchase through the facilities of the TSX, from time to time if it is considered advisable, up to 228,778 series A units and up to 116,216 series B units of the trust, representing approximately 10% of the public float, being 2,287,781 series A units and 1,162,166 series B units as of the close of December 8, The trust will not purchase in any given 30-day period, in the aggregate, more than 52,999 series A units and 23,266 series B units, representing approximately 2% of the issued and outstanding units, being 2,649,966 series A units and 1,163,312 series B units as of the close of December 8, Purchases of units under the NCIB may commence on December 20, The board of directors of First Asset Investment Management Inc., the manager of the trust, believes that such purchases are in the best interests of the trust and are a desirable use of the trust's funds. All purchases will be made through the facilities of the TSX in accordance with its rules and policies. All units purchased by the trust pursuant to the NCIB will not be cancelled and will be held for resale. The NCIB will expire on December 19, On December 18, 2010, the trust announced that it was making a NCIB, which commenced December 20, 2010, to purchase up to 264,386 series A units and up to 95,146 series B units through the facilities of the TSX. The trust repurchased 100 series A units at an average price of $15.15 per unit and no series B units were repurchased under the bid, which expires on December 19, January 2012

6 First Asset REIT Income Fund & First Asset Canadian Dividend Opportunity Fund RIT.UN - $11.19 DOF.UN - $10.21 December 19, 2011 Estimated Special Distributions First Asset announced estimated special distributions on First Asset REIT Income Fund and First Asset Canadian Dividend Opportunity Fund. One quarter will be paid in cash, and the balance will be paid by the issuance of units of each fund and immediately thereafter the issued and outstanding capital of each fund will be consolidated such that the number of issued and outstanding units of each fund does not change. As a result, the net asset value per unit of each fund will decrease by an amount equal to the cash portion of the special distribution. The cash portion of the estimated special distributions is intended to cover the maximum tax liability for capital gains for unitholders in the highest marginal tax bracket (premised on the special distribution being comprised of capital gains). The First Asset REIT Income Fund special distribution is estimated to be $ in cash and $ in shares. The First Asset Canadian Dividend Opportunity Fund special distribution is estimated to be $ in cash and $ in shares. The special distributions will be payable on December 30, 2011, and will be paid (in cash or in securities as described above) on or before January 13, 2012 to holders of record on December 30, Flaherty & Crumrine Investment Grade Fixed Income Fund FFI.UN - $10.50 December 16, Special Year-End Distribution For the year ended December 31, 2011, Flaherty & Crumrine Investment Grade Fixed Income Fund estimates that it will generate approximately $0.04 per unit of income in excess of its previously announced distributions for the year. As a result, the fund announced a special cash distribution of $0.04 per unit payable on January 16, 2012 to unitholders of record at the close of business on December 30, In total, the fund will have distributed $1.00 per unit for the year ended December 31, December 22, Renews Normal Course Issuer Bid Flaherty & Crumrine Investment Grade Fixed Income Fund has renewed its normal course issuer bid to purchase up to 980,000 units of the fund, representing approximately 10% of the public float of 9,800,657 units. The fund may purchase up to 197,673 units in any 30-day period, which is 2% of the 9,883,673 issued and outstanding units at December 14, As of December 14, 2011, the fund had purchased 191,700 units under its current bid at an average price of $10.67 per unit. The units may be purchased for cancellation from December 28, 2011 to December 27, 2012 through the facilities of the TSX or other eligible alternative market and may only be purchased at a price per unit not exceeding the last net asset value per unit. The manager of the fund believes that such purchases are in the best interest of the fund and are a desirable use of its available funds. 6 January 2012

7 Front Street Strategic Yield Fund Ltd. FSS - $11.00 December 02, Closing Of Offering Front Street Strategic Yield Fund Ltd. announced the closing of the additional offering of 1,250,000 equity shares of the fund at an offering price of $11.10 per equity share. The fund has granted the agents an over-allotment option exercisable in whole or in part for a period of 30 days following the closing of the offering, to acquire up to an additional 65,000 equity shares. The fund's investment objectives are: (i) to provide holders of equity shares with quarterly tax-advantaged cash distributions; and (ii) to maximize risk-adjusted returns to shareholders, consisting primarily of tax-advantaged distributions, while preserving capital. The fund obtains economic exposure to a portfolio which is focused primarily on convertible debentures and warrants of Canadian issuers and to a lesser extent on merger arbitrage. The portfolio is actively managed by Flatiron Capital Management Partners using interest-yielding and market-neutral trading strategies designed to maximize risk-adjusted returns and preserve capital. Over the course of an economic cycle, the goal is to generate consistent tax-advantaged absolute returns on a quarterly basis with low volatility. The fund is managed by Front Street Capital 2004 and advised by Flatiron Capital Management Partners. The equity shares of the fund are listed on the Toronto Stock Exchange under the symbol FSS. The syndicate of agents for the offering was co-led by RBC Capital Markets and CIBC and also included GMP Securities L.P., National Bank Financial Inc., TD Securities Inc., BMO Capital Markets, Canaccord Genuity Corp., Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Manulife Securities Incorporated, Sherbrooke Street Capital (SSC) Inc. and Tuscarora Capital Inc. December 19, Closing Of Over-Allotment Front Street Strategic Yield Fund Ltd. announced that it has completed the issuance of an additional 64,000 equity shares of the fund at an offering price of $11.10 per equity share. This issuance was pursuant to the exercise of the over-allotment option granted to the agents in connection with the fund's recently completed public offering. Global Diversified Investment Grade Income Trust II GII.UN - $0.65 December 12, Settlement Of Credit Events And Impact On Further Distributions Global Diversified Investment Grade Income Trust II had issued a press release on November 26, 2009 announcing the receipt from Deutsche Bank AG Canada Branch of credit event notices for the reference obligations of the issuers described below. Further disclosures of the credit events have been made in the continuous disclosure documents of Global DIGIT II such as the management report on fund performance and the financial statements. Global DIGIT announces that the 720-day valuation process has now ended and that it has received from Deutsche Bank a confirmation that the recovery level or final price was zero for the following reference obligations for which notices were received: 7 January 2012

8 Credit Exposure Issuer Series Type of Credit Event Weighting Exposure ($) (1) Exposure ($) on a per unit basis A Glacier Funding CDO A Failure to Pay 0.15% 3,822, A IXIS ABS CDO Ltd A Loss Event 0.20% 4,959, A STATIC RESIDENTIAL CDO (Start) 2006-B Ltd B Failure to Pay 0.87% 21,695, A Straits Global ABS CDO Failure to Pay 1.22% 23,634, B Ivy Lane CDO Failure to Pay 1.36% 31,976, B STATIC RESIDENTIAL CDO (Start) 2006-B Ltd B Failure to Pay 0.64% 16,278, C Duke Funding VII Ltd A Failure to Pay 0.46% 12,702, (1) Exposure means that the maximum loss that can be incurred on a single reference obligation. Pursuant to the financial contracts entered into between Global DIGIT II and DB on March 2, 2005, as modified on January 20, 2009, the total exposures of Global DIGIT II to credit exposures A, B and C are $23,634,614 ($2.27 per unit), $31,976,243 ($3.08 per unit) and $41,708,143 ($4.01 per unit), respectively. Based on the applicable weighting, any recovery further to the valuation process for an amount less than 61.1% of the aggregate notional amount of the affected reference obligations (being an amount of $2.27 per unit) means a total loss for credit exposure A; for an amount of less than 37.5% of the aggregate notional amount of the affected reference obligations (being an amount of $3.08 per unit) means a total loss of Credit exposure B; and for credit exposure C, a total loss on the affected reference obligation means a loss of $1.22 per unit. Further to these credit events, the losses in credit exposure A amount to $5.21 per unit but are limited pursuant to the financial contracts to $2.27. Thus, these losses represent a total loss for credit exposure A. The losses in credit exposure B amount to $4.65 per unit but are limited to $3.08 pursuant to the financial contracts. Accordingly, these losses represent a total loss for this credit exposure B. Finally, the loss in credit exposure C amounts to $1.22 per unit out of a maximum of $4.01 pursuant to the financial contracts. The aggregate losses to credit exposures A, B and C amount to $6.57 per unit pursuant to the financial contracts, thereby reducing the investment in the financial contracts from $9.36 per unit to $2.79 per unit ($ $6.57). The units of Global DIGIT II had been issued in March 2005 at a price of $10.00 per unit and a special distribution of approximately $0.64 occurred in March 2009, bringing the maximum amount which could be reimbursed at maturity to $9.36. To settle these credit events, Global DIGIT II will have to transfer to DB $68,312,427 out of the collateral held by DB to support the obligations of Global DIGIT II pursuant to the terms of the financial contracts. After this transfer, the nominal value of collateral held by DB will be $29,006,573. Since the receipt of the credit event notices in November 2009, DB has retained the premium payments on the defaulted reference obligations. These retentions will now be permanent and the interest payment earned by Global DIGIT II on the collateral will be reduced as such collateral will be transferred to DB as final settlement of the 2009 credit events. As a result of the loss of this interest revenue on the collateral transferred to settle the credit events, the future distributions will be reduced by approximately 50% to $ per month assuming no further credit events in credit exposure C. However, given the number of reference obligations rated "D" by Standard & Poor's in credit exposure C, new credit event notices may be received by Global DIGIT II. In such cases the financial contracts allow DB to withhold all or a portion of the premium payments corresponding to such defaulting reference obligations until the final loss is determined 8 January 2012

9 if DB, acting in good faith and in a commercially reasonable manner, determines that losses on such defaulted reference obligations would amount to a partial or total loss. As indicated in prior press releases and continuous disclosure documents, the percentage of reference obligations rated "D" by Standard & Poor's amounted to approximately 9.7% in credit exposure C as at September 30, If further credit event notices are received by Global DIGIT II and assuming a loss determination by DB, distributions could be further reduced. HARVEST Canadian Income & Growth Fund HCF.UN - $12.09 December 01, 2011 Completion Of Warrant Exercise, Raising An Additional $12,730,632 Harvest Portfolios Group Inc. announced that the HARVEST Canadian Income & Growth Fund issued an additional 1,060,886 trust units of the fund at the close of business November 30, Through the warrant exercise the fund raised additional proceeds of $12,730,632. The fund was established to provide unitholders with attractive monthly distributions and to maximize long-term total returns while reducing volatility by investing in an actively managed portfolio comprised primarily of dividend-paying securities of publicly traded utilities, industrials, communications, real estate and retail issuers domiciled in Canada. The HARVEST Canadian Income & Growth Fund is a core Canadian Equity Income Fund that provides investors with access to solid and stable sectors. The fund will continue to invest in these sectors to provide our unitholders with quality, transparency and steady income for the long term," said Michael Kovacs, President & CEO of HARVEST Portfolios Group. Low Volatility Canadian Income Fund December 19, Expected To Close In January 2012 Connor, Clark & Lunn Capital Markets Inc. announced that the closing of the offering of units of the Low Volatility Canadian Income Fund is expected to take place in mid to late January of 2012, subject to certain conditions being met, including regulatory approval. Securities of exchange eligible issuers deposited pursuant to the fund's exchange option will not be acquired by the fund until the closing date at which time the exchange will be a taxable disposition, and not as of the deposit date in The fund has been created to invest in an equally-weighted portfolio comprised of the 30 equity securities which have the lowest volatility of those securities included in the S&P/TSX Composite Index that have a minimum specified current yield at the time of investment. The manager will write covered call options from time to time on up to 25% of the portfolio in order to seek to earn income from option premiums to supplement the dividends and distributions generated by the portfolio and to further decrease the overall volatility of returns associated with the portfolio securities. The fund's investment objectives are to provide unitholders with: (i) stable monthly distributions; (ii) the opportunity for capital appreciation; and (iii) an investment in a portfolio of Canadian equity securities that exhibit low volatility of returns. The units are being offered for sale by a syndicate of agents co-led by BMO Capital Markets, CIBC and RBC Capital Markets, and including TD Securities Inc., GMP Securities L.P., National Bank Financial Inc., Scotia Capital Inc., HSBC Securities (Canada) Inc., Macquarie Private Wealth Inc., Raymond James Ltd., Canaccord Genuity Corp. and Mackie Research Capital Corporation. 9 January 2012

10 Marret Multi-Strategy Income Fund MMF - $10.20 December 13, Amendment To Rebalancing Policy Marret Multi-Strategy Income Fund is a closed-end investment trust that was created to provide investors with attractive risk-adjusted returns and tax-advantaged distributions through exposure to five diversified, actively managed investment portfolios consisting primarily of income-generating securities. The fund's manager, Marret Asset Management Inc., announced that it proposes to change the rebalancing policy of Marret MSIF Trust. The fund obtains exposure to the underlying portfolios of the trust through a forward agreement. Currently, the allocation of the trust's assets to the underlying portfolios is actively rebalanced by Marret at least annually to ensure that the underlying portfolios are approximately equally weighted. Marret has determined that, in the current market environment - one characterized by high volatility and high correlations among investment strategies - a more flexible and dynamic approach to allocating the trust's assets among the underlying portfolios should better position the fund to achieve its investment objectives. At a special meeting of unitholders to be held in early 2012, the fund will seek unitholder approval of a resolution to allow Marret, in its capacity as fund manager with responsibility to provide ongoing oversight and monitoring of the underlying portfolios on a daily basis, to rebalance the trust's exposure to the underlying portfolios from time to time to ensure that the fund is optimally positioned, in its opinion, to achieve the fund's investment objectives. Equal weighting to each underlying portfolio will no longer be required. Subject to the receipt of unitholder approval, Marret intends initially to rebalance the trust's portfolio as soon as possible after the receipt of such approval and to reallocate the assets of the trust between the underlying portfolios as follows: Underlying Portfolio Allocated Percentage Marret High Yield Hedge Portfolio 33% Marret Investment Grade Hedge Portfolio 33% East Coast Performance Portfolio 15% WARATAH Income Portfolio 10% RCM Special Situations Portfolio 10% Total 100% The distinguishing feature of the proposed rebalancing is a shift from the more equityoriented underlying portfolios, namely WARATAH Income Portfolio and RCM Special Situations Portfolio, in favour of the fixed income-oriented portfolios, namely Marret High Yield Hedge Portfolio and Marret Investment Grade Hedge Portfolio. In Marret's view, equity markets have become more volatile, resulting in a higher correlation between otherwise different strategies and the broader equity market. In this environment, Marret believes that the proposed rebalancing of the trust's portfolio is called for to reduce its overall volatility and the correlation of the portfolio returns with those of the broader equity market. The proposed rebalancing is unrelated to the performance of the underlying portfolios to date but is based solely on Marret's view of the best way to position the trust's portfolio in the current environment. In fact, both equity-oriented strategies have outperformed the S&P/TSX Index with lower volatility since the inception of the fund. Marret intends to adjust the allocation going forward as appropriate, which could mean a shift back to equity-oriented underlying portfolios as Marret's view of market conditions dictate. 10 January 2012

11 O'Leary Canadian Diversified Income Fund December 16, O'Leary Canadian Diversified Income Fund Is Expected To Close On January 10, 2012 O'Leary Funds Management LP, the trustee and manager of O'Leary Canadian Diversified Income Fund, announced that, subject to certain conditions being met, including regulatory approval, January 10, 2012 is the expected closing date of the offering. Accordingly, securities of exchange eligible issuers deposited pursuant to the exchange option that are acquired by the fund will not be acquired until the closing date. Such exchange will be a taxable disposition for investors on the closing date (and not as of the deposit date in 2011). The fund has been created to invest in investment-grade and high-yield corporate bonds and dividend-paying equity securities primarily of large- and mid-cap Canadian issuers and to a lesser extent of dividend-paying equity securities of large-cap U.S. issuers. The fund is an investment trust governed by the laws of the province of Ontario which proposes to issue transferable units of the fund at a price of $12.00 per unit. The fund's investment objectives are: (i) to provide holders of units with monthly distributions; and (ii) to preserve capital. The syndicate of agents is led by CIBC, co-led by RBC Capital Markets and includes National Bank Financial Inc., BMO Capital Markets, Scotia Capital Inc., TD Securities Inc., Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Canaccord Genuity Corp., GMP Securities L.P., Desjardins Securities Inc., Dundee Securities Ltd., Mackie Research Capital Corporation, Manulife Securities Incorporated and MGI Securities Inc. Pathfinder Convertible Debenture Fund PCD.UN - $11.18 December 12, Normal Course Issuer Bid Pathfinder Convertible Debenture Fund announced its intention to make a normal course issuer bid for its units through the facilities of the TSX. This normal course issuer bid will commence on December 14, 2011 and will terminate on December 13, In accordance with the declaration of trust by which Pathfinder is governed, market purchases pursuant to its normal course issuer bid may be effected by the fund. The fund had 6,428,113 units issued and outstanding as at December 6, Pathfinder may, during the 12-month period commencing December 14, 2011, purchase on the TSX up to 642,811 units, being 10% of the public float of 6,428,113 units, and may not in any 30-day period purchase more than 128,562 units, being 2% of the units issued and outstanding. Pathfinder will hold in treasury for resale all units purchased pursuant to the bid. As at December 6, 2011 Pathfinder had purchased 100,900 units at an average price of $11.79 per unit under its previously approved normal course issuer bid. Pathfinder believes that its units represent good value for the fund and purchases under the normal course issuer bid may serve to enhance returns to unitholders. 11 January 2012

12 Preferred Share Investment Trust PSF.UN - $11.41 December 05, Exercise Of Over-Allotment Option Preferred Share Investment Trust announced that the fund's syndicate of agents for its follow-on offering has exercised its over-allotment option and acquired an additional 721,000 units of the fund. In total, the fund issued 5,571,000 units pursuant to the offering, yielding gross proceeds of approximately $63.6 million. The syndicate of agents for this offering was led by CIBC, co-led by BMO Capital Markets, National Bank Financial Inc. and RBC Capital Markets and included Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., GMP Securities L.P., Raymond James Ltd., Dundee Securities Ltd., Macquarie Private Wealth Inc. and Manulife Securities Incorporated. Propel Multi-Strategy Fund PPF.UN - $7.39 December 22, Revised Management Reports Of Fund Performance For Propel Multi-Strategy Fund Propel Capital Corporation, the manager of the Propel Multi-Strategy Fund, announced that it has filed revised versions of the management reports of fund performance of the fund for the periods ended June 30, 2010 and December 31, The revisions relate to certain issues identified by the OSC in the course of its continuous disclosure review. In the manager's opinion, the deficiencies that were corrected did not reflect the omission of a material fact in any of the continuous disclosure filings. Ridgewood Canadian Investment Grade Bond Fund RIB.UN - $11.60 December 09, Filing Of Final Prospectus Ridgewood Capital Asset Management Inc. announced that it has filed a final short form prospectus in each of the provinces of Canada with respect to its previously announced additional offering of units of Ridgewood Canadian Investment Grade Bond Fund. The offering is scheduled to close on December 15, The fund seeks to achieve the following investment objectives: (i) to provide unitholders with monthly cash distributions, initially targeted to be 5.25% per annum on the original issue price of $12.00 per unit; and (ii) to maximize total returns for unitholders while preserving capital in the long term. The syndicate of agents for the offering is being co-led by TD Securities Inc., CIBC and RBC Capital Markets and includes BMO Capital Markets, GMP Securities L.P., National Bank Financial Inc., Scotia Capital Inc., Raymond James Ltd., Canaccord Genuity Corp., Macquarie Group and Manulife Securities Incorporated. December 15, 2011 Closure Of Public Offering Ridgewood Capital Asset Management Inc. announced the closing of the previously announced public offering of units of Ridgewood Canadian Investment Grade Bond Fund. The offering consists of 1,335,914 units at $11.47 per unit for gross proceeds of approximately $15.3 million. The units are listed on the Toronto Stock Exchange under the symbol RIB.UN. The fund has granted the agents an over-allotment option to acquire additional units exercisable at any time during the next 30 days. 12 January 2012

13 SCITI Trust SIN.UN - $12.81 December 07, Filing Of Short Form Prospectus SCITI Limited, in its capacity as trustee for SCITI Trust, announced that the trust has filed a short form prospectus in each of the provinces and territories of Canada with respect to a follow-on offering of a maximum of 5,911,000 units of the trust at a price of $12.69 per unit. Closing of the offering is expected to occur on December 14, The trust has also granted the agents an over-allotment option, exercisable in whole or in part at any time up to 30 days after closing, to purchase an additional 886,650 units at a price of $12.69 per unit. The trust is an investment trust whose investment portfolio consists of income funds, corporations and other entities that reflect the makeup of the 50 highest-yielding members of the Scotia Capital High Yielding Equity Index on an approximately equalweight basis in order to provide unitholders with a diversified and high-yielding portfolio. The units of the trust are listed for trading on the Toronto Stock Exchange under the symbol SIN.UN. The syndicate of agents for the offering is led by Scotia Capital Inc. and includes BMO Capital Markets, National Bank Financial Inc., TD Securities Inc., Canaccord Genuity Corp., GMP Securities L.P., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation, Macquarie Private Wealth Inc., Manulife Securities Incorporated, HSBC Securities (Canada) Inc., Industrial Alliance Securities Inc., Laurentian Bank Securities Inc., and Union Securities Ltd. Skylon International Advantage Yield Trust SIA.UN - $22.60 December 19, Special Distribution For Year Ending December 2011 Skylon International Advantage Yield Trust announced a special distribution on its series B units for the year ending December 31, 2011 of US$0.06 per unit payable on January 13, 2012 to unitholders of record as at December 30, Timbercreek Senior Mortgage Investment Corp. December 6, 2011 Filing Of Preliminary Prospectus For Initial Public Offering Timbercreek Senior Mortgage Investment Corporation announced that it has filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada, other than Quebec. A copy of the preliminary prospectus will be available on SEDAR. The preliminary prospectus qualifies the distribution of class A shares and class B shares of the company at a price of $10 per class A share and per class B share. Class B shares are designed for institutional investors or fee-based accounts with a registered dealer and will not be listed on a stock exchange, but are convertible into class A shares. A syndicate of agents co-led by Raymond James Ltd., BMO Nesbitt Burns Inc., TD Securities Inc., and including CIBC World Markets Inc., GMP Securities L.P., RBC Dominion Securities Inc., Manulife Securities Incorporated, Scotia Capital Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Macquarie Capital Markets Canada Ltd. and National Bank Financial Inc., will commence marketing of the offering. Prospective purchasers may subscribe for such shares through one of the agents. 13 January 2012

14 Net proceeds from the offering will be used to acquire and manage a diversified portfolio made up of first mortgages with customized terms that are secured by residential (including multi-residential) real estate as well as office, retail and industrial properties. The investment objectives of the company are, with a primary focus on capital preservation, to acquire and maintain a diversified portfolio of customized first mortgages that generates attractive, stable returns in order to permit the company to pay monthly distributions to its shareholders. The company will be managed by Timbercreek Asset Management Ltd. The manager will also act as the portfolio advisor for the company and is an investment management company. Trident Performance Corp. II TCZ - $8.40 December 19, Special Distribution For Year End Trident Performance Corp. II announced today a special distribution on its class A shares for the year ending December 31, 2011 of $0.08 per share, payable on January 13, 2012 to shareholders of record as at December 30, January 2012

15 Canadian Split Share Updates 5Banc Split Inc. BFS.B - $13.34 BFS.PR.B - $10.01 December 09, 2011 Filing Of Final Short Form Prospectus for Its Class C Preferred Share Offering 5Banc Split Inc. announced that it has filed a final short form prospectus in respect of a proposed public offering of a new series of class C preferred shares. 2,580,135 class C preferred shares will be offered at a price of $10.00 per class C preferred share. The class C preferred shares are being offered on a best efforts basis by a syndicate of agents led by TD Securities Inc. which includes Scotia Capital Inc., BMO Capital Markets and National Bank Financial Inc. The company holds a portfolio of publicly listed 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 in order to provide holders of the class C preferred shares with fixed cumulative preferential dividends and to provide holders of its class B capital shares with a leveraged investment and excess dividends, if any, subject to the prior rights of holders of class C preferred shares and after payment of the expenses of the company and dividends payable on the class C preferred shares. The capital shares and the class B preferred shares of the company are listed and posted for trading on the Toronto Stock Exchange under the symbols FBS.B and FBS.PR.B respectively. The class B preferred shares will be redeemed on December 15, 2011 in accordance with their terms. December 15, Closing Of Class C Preferred Share, Series 1 Offering 5Banc Split Inc. announced that it has completed an offering of 2,580,135 class C preferred shares, series 1 at a price of $10.00 per class C preferred share, raising gross proceeds of approximately $25.8 million. The class C preferred shares were offered on a best-efforts basis by a syndicate of agents led by TD Securities Inc. which included Scotia Capital Inc., BMO Capital Markets and National Bank Financial Inc. The company holds a portfolio of publicly listed 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 in order to provide holders of the class C preferred shares with fixed cumulative preferential dividends and to provide holders of its class B capital shares with a leveraged investment and excess dividends, if any, subject to the prior rights of holders of class C preferred shares and after payment of the expenses of the company and dividends payable on the class C preferred shares. The class C preferred shares and the capital shares are listed and posted for trading on the TSX under the symbols FBS.PR.C and FBS.B, respectively. The class C preferred shares are rated Pfd-2 (low by DBRS Limited. The class B preferred shares of the company have been redeemed today in accordance with their terms. 15 January 2012

16 Big 8 Split Inc. BIG.A - $14.68 BIG.PR.B - $10.01 BIG.PR.C - $10.31 December 02, Partial Call For Redemption Big 8 Split Inc. announced that it has called a total of 368,040 preferred shares, comprised of 174,186 class B preferred shares and 193,854 class C preferred shares, for cash redemption on December 15, 2011 representing approximately 20.0% of all outstanding preferred shares as a result of holders of 368,040 capital shares exercising their special annual retraction rights. The preferred shares shall be redeemed on a pro rata basis so that holders of record of preferred shares on the close of business on December 14, 2011 will have approximately 20.0% of their preferred shares redeemed. The redemption price for the preferred shares will be $12.00 per share. Holders of preferred shares that have been called for redemption will only be entitled to receive dividends on those which have been declared but remain unpaid up to and including December 15, As a result, a total of 368,040 preferred and capital shares, or approximately 20.0% of both classes of shares currently outstanding, will be redeemed. Payments and delivery of cash and common shares owing as a result of shareholders having exercised their retraction privilege and the above notice of call will be made by the company on December 15, Big 8 Split was established to generate dividend income for holders of the preferred shares while providing holders of the capital shares with a leveraged opportunity to participate in capital appreciation from a portfolio of common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Toronto-Dominion Bank, Great-West Lifeco Inc., Manulife Financial Corporation, and Sun Life Financial Inc. NB Split Corp. NBF - $22.00 December 15, Partial Redemption Of Preferred Shares NB Split Corp. announced that in accordance with the company's articles, it will redeem 242,400 preferred shares on December 29, 2011 at a price of $32.72 per preferred share for payment on December 30, 2011 as a result of the special annual retraction of capital shares by the holders thereof. The preferred shares shall be redeemed on a pro rata basis by CDS in accordance with its participants' policies and procedures. In aggregate, approximately 46.4% of the company's preferred shares will be redeemed. Utility Split Trust UST.UN - $13.45 UST.PR.B - $10.35 December 02, Public Offering Of Class B Preferred Securities Utility Split Trust announced that it has filed a preliminary short form prospectus with respect to a public offering of class B preferred securities. The fund was established to provide investors with exposure to a diversified investment in securities of utility issuers, utilizing the split security structure, on a lowcost basis while providing monthly tax-efficient distributions to holders of capital units of the fund. Utility issuers include, among others, corporations or income trusts that generate, transmit and/or distribute electricity, water and/or natural gas, including 16 January 2012

17 corporations or income trusts that supply the raw materials required for the generation of electricity. The class B preferred securities have been provisionally rated Pfd-2 (low by DBRS Limited. The issuance of the class B preferred securities will allow the fund to maintain the leveraged split security structure of the fund following the repayment of the fund's currently issued and outstanding preferred securities on or about December 31, 2011, and the retraction on December 15, 2011 of 1,375,194 capital units that were deposited for retraction pursuant to the special retraction right that expired on November 29, The offering is being made on a best-efforts agency basis in each of the provinces of Canada through a syndicate of investment dealers led by CIBC and including BMO Capital Markets, National Bank Financial Inc., RBC Capital Markets, Scotia Capital Inc. and TD Securities Inc. December 19, Completion Of Offering Of Class B Preferred Securities And A Distribution For Capital Units Utility Split Trust announced that it has completed its offering of class B preferred securities. The fund issued 1,203,576 class B preferred securities for gross proceeds of approximately $12 million. The class B Preferred Securities are listed on the Toronto Stock Exchange under the symbol UST.PR.B. The class B preferred securities have been rated Pfd-2 (low by DBRS Limited). The fund also announced that on December 16, 2011 it completed the special retraction of those capital units that were deposited for retraction pursuant to the special retraction right. Each retracted capital unit received $13.50 per capital unit retracted. The fund's original preferred securities will mature on December 31, 2011 and holders will be paid an amount equal to the repayment price, being the original subscription price of $10 per preferred security, plus any accrued interest and unpaid interest thereon. Payment is expected to be made on January 3, To facilitate the repayment of the preferred securities, the preferred securities are to be delisted as at the close of business on Friday, December 30, Finally, the fund also announced a distribution for the month ending December 30, 2011 of $0.05 per capital unit. The distribution is payable to holders of record on December 30, 2011, and will be paid on or before January 13, The initial interest payment in respect of the class B preferred securities will be paid on or about April 16, 2012 to unitholders of record on March 31, 2012, and will include a pro-rated amount for the period from today's date to March 31, December 20, Normal Course Issuer Bid For Class B Preferred Securities and Capital Units Utility Split Trust announced acceptance by the TSX of the trust's notice of intention to make a normal course issuer bid to permit the trust to acquire its class B preferred securities and capital units. Pursuant to the NCIB, the trust proposes to purchase through the facilities of the TSX, from time to time if it is considered advisable, up to 120,357 class B preferred securities and up to 120,357 capital units of the trust, representing approximately 10% of the public float, being 1,203,576 class B preferred securities and 1,203,576 capital units as of the close of business of December 19, The trust will not purchase in any given 30 -day period, in the aggregate, more than 24,072 class B preferred securities and 24,072 capital units, representing approximately 2% of the issued and outstanding class B preferred securities and capital units, being 1,203,576 class B preferred securities and 1,203,576 capital units as of the close of business of December 19, Purchases of 17 January 2012