Newport Partners Income Fund

July 12, 2007 09:11 ET

Newport Partners Income Fund Announces Closing of $75 million Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - July 12, 2007) -


Newport Partners Income Fund ("Newport" or "the Fund")(TSX:NPF.UN) today announced that it has closed its previously announced convertible debenture financing, raising gross proceeds of $75 million. Newport issued $75 million principal amount of 7.00% unsecured, subordinated convertible subordinated debentures (the "Debentures"). The Debentures were offered on a bought deal basis through a syndicate of underwriters with RBC Capital Markets as bookrunner, and TD Securities Inc. as co-lead manager.

As reported earlier, the Fund will use the net proceeds of the offering to increase its capacity to fund additional investments that provide diversification and growth for the portfolio, including providing the funding for Newport's operating partner, NPC Integrity Energy Services Limited Partnership to complete its acquisition of an 80% interest in the Golosky Group of Companies ("Golosky"), which is expected to close in the third quarter. (See news release dated May 30, 2007.)

The Debentures will mature on December 31, 2012 and will bear interest at the rate of 7.00% per annum payable on a semi-annual basis. At the holder's option, the Debentures may be converted into units of Newport at any time up to the maturity date. The conversion price will be $6.90 per unit, subject to adjustments. The Debentures will be listed for trading on the Toronto Stock Exchange under the symbol NPF.DB.A.

Newport also announced that it has signed a second amendment to its senior credit agreement with an affiliate of Fortress Credit Corp. The amendment includes consent for the Debenture financing, the investment in Golosky as well as a clarification of the definition of distributable cash to account for portfolio additions and dispositions in keeping with the Fund's activity as an asset manager.

"This transaction illustrates both our ability to attract quality investment opportunities, like Golosky, at fair prices, as well as our ability to fund those investments with efficiently priced capital that will deliver benefits to the Fund," said Mr. Peter Wallace, President & CEO of Newport.


Newport is an unincorporated, open-ended trust created to hold, through the Fund's investment in Newport Partners Commercial Trust, interests in Newport Private Yield LP ("NPY"), a limited partnership established under the laws of the Province of Ontario. Newport began trading on the TSX on August 8, 2005 under the symbol NPF.UN.

Newport provides a simple way for investors to own private equity investments. Through ownership of the Fund, investors gain access to a professionally-managed diversified portfolio of successful Canadian private businesses that offers income, growth, diversification and liquidity. Newport's core business is asset management. Its investment philosophy is to make long-term equity investments in leading or niche private businesses that have a track record of strong earnings, and potential for future growth. The Fund seeks to minimize risk through diversification, prudent use of leverage and investing in competent operating management who are known and trusted by Newport management. Newport's portfolio currently consists of 18 private company holdings representing a diverse cross-section of the Canadian economy. Newport's management has decades of investment experience and a significant ownership position in the Fund.

Forward-Looking Information

This news release contains certain forward-looking information, including, but not limited to, information relating to future events or future operating results and economic performance of Newport and reflects management's current expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of Newport. A number of factors, including risks and uncertainties, could cause actual events or results to differ materially from the events and results discussed in the forward-looking information. There can be no assurance that actual events or results will be consistent with this forward-looking information, and management's assumptions may prove to be incorrect. This forward-looking information is made as of the date of this news release, and Newport assumes no obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking information.

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