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UNITED STATES./
TORONTO, June 3, 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, June 4, 2019. The offering is expected
to close on or about June 11, 2019
and is subject to certain conditions including approval by the
Toronto Stock Exchange ("TSX"). The Preferred Shares will be
offered at a price of $14.75 per
Preferred Share to yield 5.94% and the Class A Shares will be
offered at an indicative price of $6.45 per Class A Share to yield 12.6%. The
trading price on the TSX for each of the Preferred Shares and Class
A Shares as at 2:30pm EST on
June 3, 2019 was $14.78 and $6.63,
respectively.
Since the inception of the Fund, the aggregate dividends
declared on the Preferred Shares have been $19.62 per share and the aggregate dividends
declared on the Class A Shares have been $25.01 per share, for a combined total of
$44.63 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 (the
"Banks"). 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 and also includes BMO Capital Markets, TD Securities
Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins
Securities Inc., Echelon Wealth Partners Inc., GMP Securities L.P.
and Industrial Alliance Securities Inc.
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 and territories 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 and
territories of Canada.
Commissions, trailing commissions, management fees and
expenses all may be associated with mutual fund investments. Please
read the short form base shelf prospectusbefore 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