On May 17, 2002, Skylon Capital Yield Trust completed an initial public offering in Canada of 5.4 million units of the trust, raising gross proceeds of $135.5 million. The Skylon Capital Yield Trust’s investment objectives are: (i) to provide unitholders with a stable stream of monthly distributions consisting of capital gains and return of capital of $0.1875 per unit ($2.25 per annum to yield 9 per cent on the subscription price of $25 per unit); and (ii) to return at least the original subscription price of the units ($25 per unit) to unitholders on or about April 30, 2007, by endeavouring to preserve and enhance the net asset value of the trust. Skylon Advisors Inc. (Skylon) is the manager of the trust.
To provide the Skylon Capital Yield Trust with the means to meet its investment objectives, the trust invested the net proceeds of the offering in a portfolio of common shares of Canadian public companies (the common share portfolio). The Skylon Capital Yield Trust then entered into forward purchase and sale agreements (collectively, the forward agreement) with TD Global Finance (TDGF), a member of the TD Bank Financial Group, and Royal Bank of Canada (RBC) (TDGF and RBC collectively referred to as the counterparties), pursuant to which the counterparties will agree to pay to the trust on or about April 30, 2007, 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 Skylon High Yield Trust (High Yield Trust).
The High Yield Trust is a special purpose investment trust that acquired an investment portfolio consisting primarily of high yield debt securities including corporate bonds and bank loans (the High Yield Portfolio). Marret Asset Management Inc. actively manages the High Yield Portfolio.
Skylon, the Skylon Capital Yield Trust and the High Yield Trust were represented by McMillan Binch, with a team that included Margaret McNee, Michael Burns, Michael Ward, Walter Lehman, Elana Lyons and Mark Young (securities), Mary-Ann Haney, Mark Lobsinger and David Wentzell (tax) and Tim Baron (derivatives).
Andrew Aziz and Alison Wilkie (securities) and Andrew McGuffin (tax) of Osler, Hoskin & Harcourt LLP represented the underwriting syndicate for the Syklon Capital Yield Trust, which was led by TD Securities Inc. and RBC Dominion Securities Inc.
To provide the Skylon Capital Yield Trust with the means to meet its investment objectives, the trust invested the net proceeds of the offering in a portfolio of common shares of Canadian public companies (the common share portfolio). The Skylon Capital Yield Trust then entered into forward purchase and sale agreements (collectively, the forward agreement) with TD Global Finance (TDGF), a member of the TD Bank Financial Group, and Royal Bank of Canada (RBC) (TDGF and RBC collectively referred to as the counterparties), pursuant to which the counterparties will agree to pay to the trust on or about April 30, 2007, 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 Skylon High Yield Trust (High Yield Trust).
The High Yield Trust is a special purpose investment trust that acquired an investment portfolio consisting primarily of high yield debt securities including corporate bonds and bank loans (the High Yield Portfolio). Marret Asset Management Inc. actively manages the High Yield Portfolio.
Skylon, the Skylon Capital Yield Trust and the High Yield Trust were represented by McMillan Binch, with a team that included Margaret McNee, Michael Burns, Michael Ward, Walter Lehman, Elana Lyons and Mark Young (securities), Mary-Ann Haney, Mark Lobsinger and David Wentzell (tax) and Tim Baron (derivatives).
Andrew Aziz and Alison Wilkie (securities) and Andrew McGuffin (tax) of Osler, Hoskin & Harcourt LLP represented the underwriting syndicate for the Syklon Capital Yield Trust, which was led by TD Securities Inc. and RBC Dominion Securities Inc.
