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UNITED STATES./
TORONTO, Nov. 10, 2014 /CNW/ - (TSX: PIC.A; PIC.PR.A)
– Premium Income Corporation (the "Fund") is pleased to announce
that it has completed a treasury offering of 900,000 class A shares
and 900,000 preferred shares for aggregate gross proceeds of
$22.1 million. The class A shares
were priced at $8.92 per share and
the preferred shares were priced at $15.60 per share. The pricing of the issue was
determined so as to be non-dilutive to the most recently calculated
net asset value per unit on the date of the pricing of the issue.
The class A shares and the preferred shares will continue to trade
on the Toronto Stock Exchange under the existing ticker symbols
PIC.A and PIC.PR.A respectively.
The Fund invests in a portfolio consisting principally of common
shares of Bank of Montreal, The
Bank of Nova Scotia, Canadian
Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank (the
"Banks"). To generate additional returns above the dividend income
earned on the Fund's portfolio, the Fund will selectively write
covered call options in respect of some or all of the common shares
in the Fund's portfolio. The Fund may also, from time to time,
write cash-covered put options in respect of securities in which
the Fund is permitted to invest. The manager and investment manager
of the Fund is Strathbridge Asset Management Inc.
The preferred shares pay fixed cumulative preferential quarterly
cash distributions in the amount of $0.215625 ($0.8625
per annum) per preferred share representing a yield of 5.75% on the
original issue price of $15.00. The
class A shares currently pay quarterly distributions in the amount
$0.20319 ($0.81276 per annum) per class A share.
The syndicate of agents for the offering was led by Scotiabank
and RBC Capital Markets and included BMO Capital Markets, CIBC,
National Bank Financial Inc., TD Securities Inc., Raymond James
Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Dundee
Securities Ltd. and Mackie Research Capital Corporation.
Commissions, trailing commissions, management fees and
expenses all may be associated with mutual fund investments. Please
read the prospectus before investing. Mutual funds are not
guaranteed, their values change frequently and past performance may
not be repeated.
The securities offered have not been registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent
registration or any applicable exemption from the registration
requirements. This news release does not constitute an offer to
sell or the solicitation of an offer to buy securities nor will
there be any sale of such securities in any state in which such
offer, solicitation or sale would be unlawful.
SOURCE Premium Income Corporation