First Asset Yield Opportunity Trust Completes IPO

On August 19, 2003, First Asset Yield Opportunity Trust completed an initial public offering in Canada of 1.8 million units, raising gross proceeds of $45 million. The agents for the offering exercised the over-allotment option on September 5, in respect of 136,847 units for additional gross proceeds of $3.4 million. The trust will provide unitholders with exposure to an investment portfolio of global high yield instruments managed by Goldman Sachs Asset Management, L.P. The trust’s investment objectives are to: (i) provide unitholders with a stable stream of tax efficient monthly distributions consisting of capital gains and returns of capital targeted to be $0.1458 per unit ($1.75 per annum to yield 7 per cent on the subscription price of $25 per unit); and (ii) preserve and enhance the net asset value of the trust in order to return at least the original subscription price of the units to unitholders on or about December 31, 2013. First Asset Funds Inc., the manager of the trust, and First Asset Investment Management Inc. (FAIMI), the investment advisor of the trust, are members of the First Asset group of investment management firms.

To meet its investment objectives, the trust invested the net proceeds of the offering in a portfolio of common shares of Canadian public companies (the common share portfolio). The trust then entered into a forward purchase and sale agreement with an affiliate of CIBC (the CIBC forward counterparty). Pursuant to the agreement, the CIBC forward counterparty will pay to the trust on or about December 31, 2013 as the purchase price for the common share portfolio an amount equal to 100 per cent of the redemption proceeds of a corresponding number of units of First Asset Global Bond Trust.

First Asset Global Bond Trust is a newly created Ontario investment trust. The investment portfolio of First Asset Global Bond Trust will consist primarily of global high yield instruments, including senior and subordinated corporate debt obligations (such as bonds, debentures, notes and commercial paper), convertible and non-convertible corporate debt obligations, loan participations, custodial receipts, municipal securities, preferred shares and other high yield instruments. First Asset is the manager and FAIMI is the investment advisor and Goldman Sachs is the investment sub-advisor of First Asset Global Bond Trust.

First Asset, FAIMI, the trust and First Asset Global Bond Trust were represented by McMillan Binch LLP, with a team that included Margaret McNee, Walter Lehman, Mark Adams, Cindy Wan and Tania Fecko (securities), Mark Lobsinger (tax and derivatives) and Tim Baron (derivatives).

The syndicate of agents, led by CIBC World Markets Inc. and TD Securities Inc., and the CIBC forward counterparty were represented by Blake, Cassels & Graydon LLP, with a team that included Jeff Glass and Anoop Dogra (securities), Kathleen Penny and Leslie Morgan (tax) and Sam Principi and Aaron Palmer (derivatives).