Front Street MLP Income Fund Ltd.

Front Street MLP Income Fund Ltd.
Front Street MLP Income Fund II Ltd.

Front Street MLP Income Fund II Ltd.

October 15, 2012 16:46 ET

Front Street MLP Income Fund Ltd. and Front Street MLP Income Fund II Ltd. Proposed Merger and Shareholder Meetings

TORONTO, ONTARIO--(Marketwire - Oct. 15, 2012) -


Front Street MLP Income Fund Ltd. ("FS MLP") (TSX:MLP) and Front Street MLP Income Fund II Ltd. ("FS MLP II") (TSX:MLQ) have each announced a special meeting of shareholders to be held on November 21, 2012. At the meetings, shareholders will be asked to consider the proposed merger of FS MLP and FS MLP II (together, the "Funds"). Under the proposed merger, the Funds would merge to form a new amalgamated corporation, which would be known as Front Street U.S. MLP Income Fund Ltd. ("New MLP Fund"). FS MLP II shareholders would receive one equity share of New MLP Fund for each FS MLP II equity share that they hold on the close of business prior to the effective date of the merger. FS MLP shareholders would receive the number of equity shares of New MLP Fund determined by multiplying the number of FS MLP equity shares they hold on the close of business prior to the effective date of the merger by the exchange ratio (which will be equal to the net asset value per FS MLP equity share on the business day prior to the merger date, divided by the net asset value per MLP II equity share, Series C on such date). New MLP Fund is expected to have investment objectives and strategies substantially similar to those of FS MLP II except that the anticipated distribution level will be increased to $0.15 per Equity Share, Series C per quarter and US$0.15 per Equity Share, Series U (the current distribution level for FS MLP). For purposes of applicable securities laws, it is expected that FS MLP II will be the "continuing investment fund" in the merger, and FS MLP will be the "terminating investment fund".

The manager of the Funds, Front Street Capital 2004, and the Funds believe that the merger will be beneficial to shareholders of each Fund as a result of the increased economies of scale resulting from the consolidation of sales, marketing and management activities that are expected to reduce fund expenses, and as a result of shareholders of the New MLP Fund holding shares of a fund with a larger combined market capitalization than either of the Funds, which is intended to result in increased liquidity.

Additional details regarding the proposed merger will be outlined in a joint information circular that will be sent in late October to shareholders of record on October 22, 2012. The information circular will also be available at Shareholders are encouraged to complete voting instruction forms in order that their equity shares can be voted at the meetings. If the proposed merger is approved by shareholders of each of FS MLP and FS MLP II, the merger is expected to occur on or about December 13, 2012.

Certain statements in this press release may be viewed as forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, intentions, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "plans", "estimates" or "intends" (or negative or grammatical variations thereof), or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Statements which may constitute forward-looking statements relate to: the proposed timing of the merger and expected completion thereof; the expected benefits of the merger; and the Funds that are proposed to be merged. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements including as a result of changes in the general economic and political environment, changes in applicable legislation, and the performance of each Fund. There are no assurances the Funds can fulfill such forward-looking statements and the Funds do not undertake any obligation to update such statements. Such forward-looking statements are only predictions; actual events or results may differ materially as a result of risks facing one or more of the Funds, some of which are beyond the control of the Funds.

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