/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES./
TORONTO, Aug. 20, 2019 /CNW/ - (TSX: PIC.A; PIC.PR.A) –
Premium Income Corporation (the "Fund") is pleased to announce that
it is undertaking an overnight treasury offering of Preferred
Shares and Class A Shares.
The sales period for the overnight offering will end at
9:00 am EST tomorrow, August 21, 2019. The offering is
expected to close on or about August 28,
2019 and is subject to certain conditions including approval
by the Toronto Stock Exchange ("TSX"). The Preferred Shares will be
offered at an indicative price of $14.70 per Preferred Share to yield 5.97% and the
Class A Shares will be offered at an indicative price of
$6.10 per Class A Share to yield
13.3%. The trading price on the TSX for the Preferred Shares and
Class A Shares as at 2:30 pm EST on
August 20, 2019 was $14.70 and $6.27, respectively.
Since the inception of the Fund, the aggregate dividends
declared on the Preferred Shares have been $19.83 per share and the aggregate dividends
declared on the Class A Shares have been $25.21 per share, for a combined total of
$45.04 per unit.
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, National Bank of Canada, Royal Bank of Canada and The Toronto-Dominion Bank. To
generate additional returns above the dividend income earned on the
Fund's portfolio, the Fund will selectively write covered call and
put options in respect of some or all of the common shares in the
Fund's portfolio. 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 is being co-led by RBC
Capital Markets, CIBC Capital Markets, National Bank Financial Inc.
and Scotiabank.
John Germain, Senior VP &
CFO
A short form base shelf prospectus containing important
detailed information about the securities being offered has been
filed with securities commissions or similar authorities in each of
the provinces of Canada. Copies of
the short form base shelf prospectus may be obtained from a member
of the syndicate. The Fund intends to file a supplement to the
short form base shelf prospectus and investors should read the
short form base shelf prospectus and the prospectus supplement
before making an investment decision. There will not be any sale or
any acceptance of an offer to buy the securities being offered
until the prospectus supplement has been filed with the securities
commissions or similar authorities in each of the provinces of
Canada.
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