U.S. Housing Recovery Fund



U.S. Housing Recovery Fund

November 21, 2012 08:14 ET

U.S. Housing Recovery Fund Announces Closing of Over-Allotment Option

TORONTO, ONTARIO--(Marketwire - Nov. 21, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

U.S. Housing Recovery Fund (the "Fund") is pleased to announce that it has completed the issuance of an additional 131,430 Class A Units pursuant to the exercise of the over-allotment option granted to the Fund's agents in its recently completed initial public offering (the "Offering") which closed on November 5, 2012. Altogether, the Fund has issued 2,631,430 Class A Units and 202,220 Class F Units (collectively, "Units") at a price of $10.00 per Unit for aggregate gross proceeds of $28,336,500. The Class A Units are listed on the Toronto Stock Exchange under the symbol USH.UN. The Class F Units are not listed but may be converted into Class A Units on a monthly basis.

The Fund has been created to provide investors with an opportunity to gain exposure to the anticipated recovery in the U.S. housing sector.

The investment objectives of the Fund are to provide holders of Units ("Unitholders") with: (i) the opportunity for capital appreciation; (ii) monthly distributions; and (iii) lower overall volatility of portfolio returns than would be experienced by owning securities of Housing Issuers (defined below) directly.

The net proceeds of the Offering will be invested in a portfolio (the "Portfolio") of equity securities of 30 companies operating in sectors that have direct or indirect exposure to the U.S. housing sector, including homebuilders, building products, home improvement and houseware and appliances ("Housing Issuers"). The Portfolio will be equally weighted at the time of initial investment and rebalanced semi-annually.

In order to seek to earn income from option premiums to supplement the dividends and distributions generated by the Portfolio and to lower the overall volatility of returns associated with the securities held by the Portfolio, Connor, Clark & Lunn Capital Markets Inc. (the "Portfolio Manager") will write covered call options from time to time on up to 25% of the Portfolio as selected by the Portfolio Manager from time to time.

The Fund intends to pay monthly distributions to Unitholders commencing in December 2012. Distributions are initially targeted to be $0.05 per Unit per month ($0.60 per Unit per annum) representing a yield of 6.0% per annum based on the original issue price of $10.00 per Unit.

Connor, Clark & Lunn Capital Markets Inc. has been retained as the portfolio manager of the Fund and is responsible for implementing the Fund's investment strategies including executing and maintaining the Fund's option writing activities. The Portfolio Manager is part of the Connor, Clark & Lunn Financial Group, a multi-boutique asset management firm whose affiliated managers are collectively responsible for the investment of over $42 billion in assets as at September 30, 2012.

BMO Nesbitt Burns Inc. is the promoter of the Fund, one of the agents in connection with the Offering and is the administrator of the Fund.

The syndicate of agents for the Offering was led by BMO Capital Markets and included CIBC, National Bank Financial Inc., Scotiabank, TD Securities Inc., Canaccord Genuity Corp., GMP Securities L.P., Macquarie Private Wealth Inc., Raymond James Ltd., Desjardins Securities Inc. and Mackie Research Capital Corporation.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities of the Fund have not been registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States or to a U.S. person absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.

Contact Information

  • BMO Capital Markets
    1.866.864.7760