Income Streams III

Income Streams III

March 18, 2005 09:00 ET

Income STREAMS III: Monthly Distribution Declared for Equity Dividend Shares




MARCH 18, 2005 - 09:00 ET

Income STREAMS III: Monthly Distribution Declared for
Equity Dividend Shares

TORONTO, ONTARIO--(CCNMatthews - March 18, 2005) - The Board of
declares its regular monthly distribution of $0.0875 per Equity Dividend
Share (TSX: STQ.E). In accordance with the distribution program
described below, there will be no distribution to the Capital Yield
Shareholders for the month of March 2005. The Equity Dividend Share
distribution will be payable April 8, 2005 to shareholders of record as
of March 31, 2005.

Holders of Equity Dividend shares continue to receive their regular
cumulative monthly fixed distribution of $0.0875 per share. To date
Equity Dividend shareholders have received 45 monthly distributions for
a total of $3.91 per share inclusive of this distribution.

The Board of Directors implemented a variable distribution program in
July 2002 based on equity market conditions at that time in order to
preserve its asset base over the long term. As market conditions have
improved and stabilized, the Board, effective July 2003, expects to
declare distributions going forward based on the size of the mid-month
managed portfolio of the Corporation as follows:

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

Over $20.00 $ 2.50 $ 0.2083
$19.50 to $20.00 $ 2.00 $ 0.1667
$19.00 to $19.49 $ 1.50 $ 0.1250
$18.50 to $18.99 $ 1.25 $ 0.1042
$18.00 to $18.49 $ 1.00 $ 0.0833
Under $18 Nil Nil

The managed portfolio as of March 15, 2005 was $17.14 therefore the
March 31, 2005 distribution for the Capital Yield Share will be set at
nil per share. Elimination of the Capital Yield Share distribution when
the Managed Portfolio per unit declines below $18.00 (net of Capital
Yield share distribution) is compliant with the requirements of the
initial prospectus dated June 27, 2001. The Board believes this is a
prudent decision and in the best interest of both classes of
shareholders over the long term. Based on the current market conditions,
the Board expects the above distribution policy to continue. To date,
Capital Yield shares have received a total of 25 monthly distributions
for a total of $3.97 per share.

The Corporation's capital repayment forward agreement remains in force
with Merrill Lynch and TD Global Finance, a guaranteed subsidiary of TD
Bank. This will provide Capital Yield shareholders with a payment of $25
on December 1, 2013. Capital Yield shareholders are also entitled to an
additional payment equal to the value of the Managed Portfolio at
wind-up, if any, after payment to satisfy Equity Dividend Share
obligations of $15.00 per share.

The managed portfolio (the managed portion of the assets of IS STREAMS
not subject to the Capital Yield share repayment forward contract) is
invested primarily in a diversified portfolio of companies included in
the S&P 500 and the S&P/TSX 60. 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.

IS STREAMS top holdings include CIBC, Bank of America, Bank of Montreal,
Royal Bank of Canada, BCE, Citigroup, Toronto-Dominion Bank, Merrill
Lynch, FedEx and Morgan Stanley as of March 15, 2005. The economic
exposure will vary according to the level of option premiums written
against the underlying holdings. The list of holdings is subject to
change as the portfolio is actively managed.

Quadravest Capital Management Inc., the investment manager of IS
STREAMS, is focused on the creation and management of enhanced yield
products for retail investors.

Distribution Details:

Distribution per Capital Yield Share (STQ): $ Nil
Distribution per Equity Dividend Share (STQ.E) $ 0.0875
Ex-Dividend Date: March 29, 2005
Record Date: March 31, 2005
Payable Date: April 8, 2005


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