First Asset CanBanc Split Corp.

First Asset CanBanc Split Corp.
First Asset

First Asset

November 27, 2008 17:21 ET

First Asset CanBanc Split Corp. Announces That it has Completed Investing

TORONTO, ONTARIO--(Marketwire - Nov. 27, 2008) - First Asset CanBanc Split Corp. (the "Company") (TSX:CBU.PR.A)(TSX:CBU) announces that it has completed investing the proceeds from the initial public offering which closed November 12, 2008. The Preferred Shares and the Class A Shares are listed on the Toronto Stock Exchange ("TSX") under the symbols CBU.PR.A and CBU, respectively.

The Company now holds, on an approximately equally weighted basis, a portfolio (the "Portfolio") of common shares of the six largest Canadian banks by market capitalization.

Bank Average Cost(i) Yield(i)
Bank of Montreal $37.42 7.40%
Canadian Imperial Bank of Commerce $47.36 7.35%
National Bank of Canada $41.18 6.02%
Royal Bank of Canada $40.85 4.90%
The Bank of Nova Scotia $34.93 5.61%
The Toronto-Dominion Bank $47.86 5.10%

(i) Average Cost means the average cost to the Company of the securities of the Banks comprising the Portfolio including brokerage commissions. Yield is calculated by annualizing the most recent dividend and dividing by the Average Cost of the securities of such Bank.

When the preliminary prospectus was filed on September 10, 2008, the approximate dividend yield on the Portfolio would have been approximately 4.74% with the Preferred Shares having initial dividend coverage of 172%. As a result of the sell off prior to and during the investing period, the yield of the acquired Portfolio is 6.06% with dividend coverage of the Preferred Shares of 218% with approximately $0.25/Unit per annum of initial excess cash flow after deducting expenses. Any such excess cash flow will contribute to the growth of the Net Asset Value of the Company.

The Company's investment objectives with respect to the Preferred Shares are:

a. 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

b. 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 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:

a. to participate in the performance of the Portfolio on a leveraged basis; and

b. to benefit from any increase in the dividends from the securities in the Portfolio.

The Manager has issued a note ("Note") to the Company in an amount equal to the agents' fees and expenses associated with the Offering. The Note bears interest at the prime rate and will be paid in quarterly payments equal to one quarter of 1.00% of NAV. The current NAV per Unit is $23.37.

Contact Information

  • First Asset
    Rob MacNiven
    Investor Relations
    (416) 642-1289 or 1-877-642-1289