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Press release from Marketwire

Front Street Strategic Yield Fund Ltd.-Announces Closing of Over-Allotment

Monday, December 19, 2011

Front Street Strategic Yield Fund Ltd.-Announces Closing of Over-Allotment11:19 EST Monday, December 19, 2011TORONTO, ONTARIO--(Marketwire - Dec. 19, 2011) -NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. WIRE SERVICESFront Street Strategic Yield Fund Ltd. (the "Fund) (TSX:FSS) is pleased to announce that it has completed the issuance of an additional 64,000 equity shares of the Fund (the "Equity Shares") at an offering price of $11.10 per Equity Share. This issuance was pursuant to the exercise of the over-allotment option granted to the agents in connection with the Fund's recently completed public offering. The Fund's investment objectives are (i) to provide holders of Equity Shares ("Shareholders") with quarterly tax-advantaged cash distributions, and (ii) to maximize risk adjusted returns to Shareholders, consisting primarily of tax-advantaged distributions, while preserving capital. The Fund obtains economic exposure to a portfolio which is focused primarily on convertible debentures and warrants of Canadian issuers and to a lesser extent on merger arbitrage. The portfolio is actively managed by Flatiron Capital Management Partners using interest yielding and market neutral trading strategies designed to maximize risk adjusted returns and preserve capital. Over the course of an economic cycle, the goal is to generate consistent tax advantaged absolute returns on a quarterly basis with low volatility. The Fund is managed by Front Street Capital 2004 and advised by Flatiron Capital Management Partners. The Equity Shares of the Fund are listed on the Toronto Stock Exchange under the symbol FSS. The syndicate of agents for the offering was co-led by RBC Capital Markets and CIBC and also included GMP Securities L.P., National Bank Financial Inc., TD Securities Inc., BMO Capital Markets, Canaccord Genuity Corp., Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Manulife Securities Incorporated, Sherbrooke Street Capital (SSC) Inc. and Tuscarora Capital Inc.FOR FURTHER INFORMATION PLEASE CONTACT: Investor RelationsFront Street Capital 20041-800-513-2832www.frontstreetcapital.com