Brascan Adjustable Rate Trust I

Brascan Adjustable Rate Trust I

September 01, 2005 17:25 ET

Brascan Adjustable Rate Trust I Exercise of Over-Allotment Option

TORONTO, ONTARIO--(CCNMatthews - Sept. 1, 2005) - Brascan Adjustable Rate Trust I (TSX:BAO.UN) today announced that it has completed the issuance of an additional 105,000 units, at a price of C$25.00, for gross proceeds of C$2,625,000 pursuant to the over-allotment option granted to the agents in the Fund's recently completed initial public offering. Together with C$75 million previously closed, the Fund has raised total gross proceeds of C$77,625,000.

The Fund's trust units commenced trading on the Toronto Stock Exchange on August 16, 2005 under the symbol BAO.UN. Standard and Poor's has assigned the Units a rating of "AAf " on its global credit quality scale and "P-1(High) f" on its Canadian credit quality scale.

The Fund is intended to provide investors with a tax-efficient stream of monthly cash distributions and to preserve the net asset value of the Fund. The Fund will obtain exposure, through a forward agreement with a Canadian chartered bank, to the performance of an actively managed portfolio (the "Portfolio") comprised of at least 80% adjustable rate and hybrid mortgage backed securities (MBS) with an implied AAA rating issued or guaranteed by the U.S. government sponsored enterprises commonly known as Ginnie Mae, Fannie Mae and Freddie Mac and AAA-rated MBS issued by other entities. Up to 20% of the Portfolio may be invested in investment grade residential and commercial MBS, as well as other investment grade ABS.

Distributions are variable, but are targeted over the term of the Fund to approximate the average 10-year U.S. Treasury Note yield plus approximately 2.75%. The 10-year U.S. Treasury Note yield was 4.27% as of July 27, 2005, which would result in a current target yield for the Fund of approximately 7.02% per annum.

Hyperion Capital Management, Inc., a wholly owned subsidiary of Brascan, will be responsible for making all investment decisions relating to the Portfolio.

The offering was made through a syndicate of agents co-led by RBC Capital Markets and CIBC World Markets Inc. and includes investment dealers BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc., HSBC Securities (Canada) Inc., Desjardin Securities Inc., Raymond James Ltd., Canaccord Capital Corporation, Dundee Securities Corporation, First Associates Investments Inc., Trilon Securities Corporation, Wellington West Capital Inc.

Hyperion is a specialized U.S. manager in real estate fixed income securities and relative value driven fixed income investment strategies to institutional investors, including insurance companies, pension funds, financial institutions, mutual funds and foundations as well as three closed-end NYSE-listed investment funds listed on the New York Stock Exchange.

Brascan Adjustable Rate Management Ltd., an indirect wholly-owned subsidiary of Brascan Corporation, will be responsible for the management of the Fund.

Brascan Corporation is a specialist asset manager. Focused on property, power and infrastructure assets, the Company has approximately $40 billion of assets under management, including 70 premier office properties and 130 power generating plants. The company is inter-listed on the New York and Toronto stock exchanges. For more information, please visit our web site at

Note: This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forward in the forward looking statements include general economic conditions, interest rates, availability of equity and debt financing and other risks detailed from time to time in the company's 40-F filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Brascan Adjustable Rate Trust I
    Katherine C. Vyse
    Senior Vice-President Investor Relations and Communications
    (416) 369-8246