On February 25, 2003, Investment Grade Trust (IGT) completed an initial public offering of units in Canada raising gross proceeds of $72 million. IGT’s investment objectives are: (i) to pay to unitholders, on or about December 31, 2012, an amount per unit equal to the original subscription price of $10 per unit; and (ii) to provide unitholders with a stable stream of tax-efficient semi-annual distributions consisting primarily of capital gains and return of capital. Hollister Capital Corporation is manager and trustee of IGT. Kensington Investment Management Inc. will provide investment advisory and portfolio management services to IGT.
To meet its investment objectives, IGT invested the net proceeds of the offering in a portfolio of common shares of Canadian public companies. IGT then entered into a forward purchase and sale agreement with a major global financial institution (the counterparty), pursuant to which it has agreed to pay to IGT, as the purchase price for the common share portfolio, an amount equal to 100 per cent of the redemption proceeds of a corresponding number of units of bond trust, an investment trust that holds two portfolios of debt securities. The first bond trust portfolio, structured to provide capital repayment, consists primarily of debt securities issued or guaranteed by provinces of Canada and by global financial institutions. The second bond trust portfolio, structured to pay regular distributions, will consist of or provide exposure to investment grade debt securities issued by North American corporations. Bond trust has the authority to enter into derivatives transactions for hedging purposes and to meet its investment objectives.
IGT and bond trust were represented by McMillan Binch LLP, with a team that included Margaret McNee, Michael Campbell, Elana Lyons and Cindy Wan (public markets), Mark Lobsinger and David Wentzell (tax) and Gary Ostoich and Shahen Mirakian (derivatives). Andrew Aziz and Sonya Reiss (securities) and Andrew McGuffin (tax) of Osler, Hoskin & Harcourt LLP represented the underwriting syndicate led by RBC Dominion Secuirities Inc. and CIBC World Markets Inc. Philip Henderson and Jason Wilson (derivatives) and John Lorito (tax) of Stikeman Elliott LLP represented the counterparty.
To meet its investment objectives, IGT invested the net proceeds of the offering in a portfolio of common shares of Canadian public companies. IGT then entered into a forward purchase and sale agreement with a major global financial institution (the counterparty), pursuant to which it has agreed to pay to IGT, as the purchase price for the common share portfolio, an amount equal to 100 per cent of the redemption proceeds of a corresponding number of units of bond trust, an investment trust that holds two portfolios of debt securities. The first bond trust portfolio, structured to provide capital repayment, consists primarily of debt securities issued or guaranteed by provinces of Canada and by global financial institutions. The second bond trust portfolio, structured to pay regular distributions, will consist of or provide exposure to investment grade debt securities issued by North American corporations. Bond trust has the authority to enter into derivatives transactions for hedging purposes and to meet its investment objectives.
IGT and bond trust were represented by McMillan Binch LLP, with a team that included Margaret McNee, Michael Campbell, Elana Lyons and Cindy Wan (public markets), Mark Lobsinger and David Wentzell (tax) and Gary Ostoich and Shahen Mirakian (derivatives). Andrew Aziz and Sonya Reiss (securities) and Andrew McGuffin (tax) of Osler, Hoskin & Harcourt LLP represented the underwriting syndicate led by RBC Dominion Secuirities Inc. and CIBC World Markets Inc. Philip Henderson and Jason Wilson (derivatives) and John Lorito (tax) of Stikeman Elliott LLP represented the counterparty.
