Financial Services Income Streams

Financial Services Income Streams

March 18, 2005 09:00 ET

Financial Services Income STREAMS Monthly Distribution for Equity Dividend Share


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FINANCIAL SERVICES INCOME STREAMS

TSX SYMBOL: STR
TSX SYMBOL: STR.E

MARCH 18, 2005 - 09:00 ET

Financial Services Income STREAMS Monthly Distribution
for Equity Dividend Share

TORONTO, ONTARIO--(CCNMatthews - March 18, 2005) - The Board of
Directors of Financial Services Income STREAMS (TSX:STR)(TSX:STR.E)("FSI
STREAMS") declares its regular monthly distribution of $0.1458 per
Equity Dividend share (TSX:STR.E). Distributions are payable April 8,
2005 to shareholders on record as of March 31, 2005. A distribution for
FSI STREAMS Capital Yield shares (TSX:STR) will not be declared for the
month of March, as per the variable distribution program outlined below.

FSI STREAMS, which commenced operations in October 2000, is a split
share corporation consisting of an Equity Dividend share and a Capital
Yield share. The split share structure was created to provide an
appropriate balance between capital protection and distribution
objectives.

The original investment objectives for Equity Dividend shares are:

a) to provide fixed, cumulative monthly cash dividends in the amount of
$0.1458 per Equity Dividend share to yield 7.0% per annum; and

b) to return the original investment amount of $25 per share on
termination on February 1, 2011.

The original investment objectives for Capital Yield shares are:

a) to provide monthly cash dividends targeted to yield a minimum of 10%
per annum; and

b) to return the original investment amount of $25 per share (through a
capital repayment forward agreement) and a pro rata share of any
residual balance left in the active or "managed" portfolio after paying
holders of Equity Dividend Shares their original investment amount of
$25 per share.

The managed portfolio (the managed portion of the assets of FSI STREAMS
not subject to the repayment forward contract) is invested in a
diversified portfolio of North American financial services stocks
selected from the three major North American Financial services indices.
The three indices are the TSX Financial Services Index, the S&P
Financials Index and the S&P Midcap Financial Index. The managed
portfolio can also invest up to 20% in non financial service companies
selected from the TSX 300 Index and the S&P 500 Index. To provide
additional returns above the dividend and interest income earned on the
managed portfolio, a covered call writing program generates option
premium income on stocks held in the portfolio.

The Capital Yield share variable distribution program, effective July
2003, is based on the size of the mid-month managed portfolio as follows:



Managed Portfolio per unit Capital Yield
Mid month (net of Share Distribution Capital Yield Share
distributions) Payment Annual Rate Monthly Payment

Over $29 $2.50 $ 0.2083
$28 to $29 $2.00 $ 0.1667
$27 to $28 $1.50 $ 0.1250
$26 to $27 $1.00 $ 0.0833
Under $26 Nil Nil


The managed portfolio as of March 15, 2004 was $23.45. Based on the
above targeted variable distribution program there will not be a regular
distribution to Capital Yield (TSX:STR) shareholders for the month of
March 2005. To date, Capital Yield shareholders have received 21 monthly
distributions for a total of $4.25 per share.

The share conditions for the Capital Yield shares include a provision
that the regular distribution on that class of shares may not be
declared if the managed portfolio per unit (excluding the value of any
forward agreements entered into for the benefit of Equity Dividend
shares) declines to a level below 120% of the original issue price of an
Equity Dividend share, less any amounts to be received upon termination
from forward agreements entered into for the benefit of Equity Dividend
shares.

Other important key related components of FSI STREAMS include the
following:

a) The capital repayment forward agreement with TD Bank remains in force
and will provide Capital Yield shareholders with a payment of $25.00 per
share on February 1, 2011.

b) Holders of Equity Dividend shares will continue to receive their
regular monthly fixed distribution of $0.1458 per share.

To date, Equity Dividend shareholders have received 53 monthly
distributions for a total of $7.82 per share, inclusive of this
distribution. These fixed, cumulative monthly distribution levels remain
intact for the Equity Dividend shares. Steps have been taken to further
enhance and strengthen the position of Equity Dividend shareholders. An
Equity Dividend share repayment forward agreement has been purchased
that will provide for a payment of $8.25 per Equity Dividend share
outstanding on the February 1, 2011 termination date.



Distribution Details:

Distribution per Equity Dividend Share (STR.E) $ 0.1458
Ex-Dividend Date: March 29, 2005
Record Date: March 31, 2005
Payable Date: April 8, 2005


This news release contains certain forward-looking statements that
involve a number of known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in our forward-looking statements. Actual
outcomes and results may differ materially from those expressed in such
forward-looking statements. Further, a forward-looking statement speaks
only as of the date on which such statement is made.

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