Goldman Sachs U.S. Income Builder Trust
TSX : GSB.UN

November 01, 2017 17:11 ET

Brompton Proposes Merger of Goldman Sachs U.S. Income Builder Trust with Symphony Floating Rate Senior Loan Fund

TORONTO, ONTARIO--(Marketwired - Nov. 1, 2017) - Brompton Funds Limited ("Brompton" or the "Manager"), the Manager of Goldman Sachs U.S. Income Builder Trust (TSX:GSB.UN) (the "Fund") announces that it is calling a special meeting of holders (the "Unitholders") of class A units (the "Class A Units") and class U units (the "Class U Units") of the Fund to consider the merger of the Fund with Symphony Floating Rate Senior Loan Fund ("SSF"), with SSF being the continuing fund (the "Merger"). SSF is focused on earning U.S. income by predominantly investing in U.S. senior loans and, to a lesser extent, high-yield bonds. Senior loans offer income that "floats" with U.S. short-term interest rates and the Manager believes that this asset class is well positioned to take advantage of a rising interest rate environment in the U.S., potentially allowing for income to build over time if U.S. LIBOR rates rise. All costs of the Merger, including with respect to the special meeting of Unitholders of the Fund, will be borne by the Manager.

Given the small size of the Fund, it is becoming increasingly difficult to efficiently execute the Fund's investment strategy and maintain portfolio diversification on a cost effective basis.

The Manager believes that the Merger, if approved by the Fund's Unitholders, provides Unitholders with the following benefits:

Higher Monthly Distribution: SSF's annual distribution rate is approximately 6.7% (based on the net asset value ("NAV") per class A unit of SSF) which represents an increase over the Fund's annual distribution rate of 6.2% (as at October 31, 2017).

Lower Management Fee for Unitholders: The management fee rate for SSF is 1.25% of net assets as compared to the Fund's effective management fee rate of approximately 1.55% of net assets of the Fund.

Lower Management Expense Ratio: The management expense ratios (excluding interest expense) for class A units and class U units of SSF are expected to be approximately 1.17% and 1.22% lower, respectively, than the Fund's Class A Units and Class U Units. In addition, fixed annual operating costs of SSF will be spread across a larger base of assets, which is expected to reduce operating costs on a per-unit basis and, correspondingly, should improve returns.

Enhanced Liquidity: Both the Class A Units of the Fund and the class A units of SSF are listed for trading on the TSX under the symbols "GSB.UN" and "SSF.UN", respectively. Throughout 2017 to October 31, 2017, class A units of SSF had a significantly higher daily average trading volume compared to the Fund's Class A Units. Following the Merger, SSF, as the continuing fund, will have a larger market capitalization and a greater number of units and unitholders, which is expected to further improve liquidity for unitholders of both the Fund and SSF.

Better Trading Price Relative to NAV per Unit: The Manager anticipates that an improvement in the trading price of the Fund's Class A Units (relative to NAV per Class A Unit) will provide a meaningful increase in value for Unitholders. For the nine-month period ended September 30, 2017, the Fund had an average daily trading discount of 2.6% in comparison to 0.8% for SSF.

Maintain Exposure to Hedging: Both the Fund and SSF offer their respective unitholders the option to hold their units in class A units, or for those wishing to hold their investment in U.S. dollars, class U units. The Merger will allow Unitholders invested in Class A Units or Class U Units to similarly hold class A units or class U units of SSF, and maintain exposure to hedged or unhedged investments.

The Merger proposal will not affect the annual redemption feature that is currently available to Unitholders of the Fund in January 2018.

The Fund will hold a special meeting of Unitholders on December 13, 2017 to consider and vote on the proposed Merger. Unitholders of record at the close of business on November 13, 2017 will be entitled to vote at the meeting. The proposed Merger will be subject to any required regulatory approvals and the Manager expects the effective date of the Merger to take place in the first quarter of 2018. Details of the proposed Merger will be further outlined in the Fund's notice of meeting and management information circular that will be prepared and delivered to Unitholders in connection with the special meeting and will be available on www.sedar.com.

About Brompton Funds

Brompton Funds, a division of Brompton Group which was founded in 2000, is an experienced investment fund manager with approximately $2 billion in assets under management. Brompton's investment solutions include TSX traded funds, mutual funds and flow-through limited partnerships. For further information, please contact your investment advisor, call Brompton's investor relations line at 416-642-6000 (toll-free at 1-866-642-6001), email info@bromptongroup.com or visit our website at www.bromptongroup.com.

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Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to matters disclosed in this press release and to other matters identified in public filings relating to the Fund, to the future outlook of the Fund and anticipated events or results and may include statements regarding the future financial performance of the Fund. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances.

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