STaRS Income Fund Completes IPO

STaRS Income Fund, a closed-end investment trust, completed its initial public offering of eight million units at a price of $10 per unit, generating aggregate gross proceeds of $80 million on December 12, 2001. STaRS’s objective is to provide unitholders with a stable monthly income stream of at least 9 per cent per annum, as well as capital preservation and appreciation. Pursuant to the exercise of an over-allotment option, STaRS raised an additional $5.3 million in December 2001 and January 2002. The majority of the net proceeds of the offering will be invested in a broadly diversified managed portfolio predominantly comprised of income trusts including REITs, oil and gas royalty trusts and income funds, supplemented by a small component of high-yield debt. The co-advisors to STaRS are Middlefield Securities Limited and Guardian Capital Advisors Inc., who will be responsible for providing investment advice to the trust’s managed portfolio. Subsequent to the offering’s closing, STaRS units commenced trading on the Toronto Stock Exchange.

CIBC World Markets Inc. and RBC Dominion Securities Inc. acted as co-lead agents of the offering. The other syndicate members were Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial, TD Securities Inc., HSBC Securities (Canada) Inc., Middlefield Securities Limited, Raymond James Financial, Ltd., Canaccord Capital Corporation, Desjardins Securities Inc., Dundee Securities Corporation, Wellington West Capital Inc. and Yorkton Securities Inc.

STaRS and Middlefield were represented by Fasken Martineau DuMoulin LLP, with a team comprised of Stephen Erlichman, Joel Binder, Tracy Hooey and John Sabetti (securities), Douglas Cannon and Nigel Johnston (tax), Jon Holmstrom (derivatives and banking) and Janne Duncan (derivatives) in Toronto.

The agents were represented by McCarthy Tétrault LLP, with a team comprised of Christopher Hoffmann, Jonathan Grant, Ronald Schwass and Andrew Armstrong (securities), James Morand and Jerald Wortsman (tax) in Toronto. CIBC, the counterparty to the forward agreements entered into by STaRS, was represented by Stephen Ashbourne and Chris Javornik of Blake, Cassels & Graydon LLP. The Bank of Nova Scotia, the lender to STaRS, was represented by Richard Higa of McMillan Binch.