The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

U.S. Agency Mortgage-Backed REIT Advantaged Fund Announces Exercise of Over-Allotment Option

Wednesday, November 21, 2012

U.S. Agency Mortgage-Backed REIT Advantaged Fund Announces Exercise of Over-Allotment Option08:30 EST Wednesday, November 21, 2012/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./TORONTO, Nov. 21, 2012 /CNW/ - Connor, Clark & Lunn Capital Markets Inc. (the "Manager") is pleased to announce that the syndicate of agents for the initial public offering of U.S. Agency Mortgage-Backed REIT Advantaged Fund (the "Fund") has exercised its over-allotment option and acquired an additional 142,185 Class A Units of the Fund. The Fund raised total gross proceeds of $32,421,850 from the sale of 3,242,185 Class A Units and $1,679,100 from the sale of 167,910 Class F Units, each at a price of $10.00 per Unit. The Class A Units are listed on the Toronto Stock Exchange ("TSX") under the symbol USM.UN. Class F Units are not listed but may be converted into Class A Units on a weekly basis.The Fund's investment objectives are to (i) provide tax-advantaged quarterly cash distributions consisting primarily of returns of capital; and (ii) provide low-cost exposure to a notional portfolio (the "Portfolio") comprised of the 10 largest (by market capitalization) publically traded U.S. Agency Mortgage REITS through a forward purchase agreement (the "Forward Agreement"). The Fund does not have a fixed distribution policy, but intends to make quarterly distributions on the last day of the months of January, April, July and October based on the Manager's expected returns on the Portfolio for the period. Based on current estimates and assumptions, the Fund's initial distribution target is expected to be $0.20 per Unit per quarter, representing an initial yield on the Unit issue price of 8.0% per annum.The Fund seeks to achieve its investment objectives by obtaining exposure to the Portfolio through the Forward Agreement. U.S. Agency Mortgage REITS are real estate investment trusts which invest primarily in mortgage-backed securities that are issued or guaranteed by the U.S. government or a government sponsored enterprise thereby minimizing their credit risk associated with the underlying mortgages. U.S. Agency Mortgage REITs comprising the Portfolio are weighted based on their market capitalization, subject to a limit of 25% of the Portfolio being invested in any one Agency Mortgage REIT, at the time of investment or rebalancing. The Portfolio will be rebalanced at least semi-annually.Connor, Clark & Lunn Capital Markets Inc. acts as Manager of the Fund. The 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.The Units were offered for sale by a syndicate of agents led by BMO Capital Markets and which included CIBC, Scotia Capital Inc., Raymond James Ltd., Canaccord Genuity Corp., GMP Securities L.P., Macquarie Private Wealth Inc. and Mackie Research Capital Corporation.SOURCE: U.S. Agency Mortgage-Backed REIT Advantaged FundFor further information: For more information, please visit www.cclcapitalmarkets.com or contact: Darren Cabral Vice President & CFO Connor, Clark & Lunn Capital Markets Inc. (416) 214-6182 or 1 (888) 276-2258 cclcapitalmarkets@cclgroup.com