First Asset Announces Merger of Preferred Securities Income Fund and Preferred Securities Limited Duration Fund Into First Asset Yield Opportunity Trust
TORONTO, ONTARIO--(Marketwire - Nov. 13, 2007) - First Asset Funds Inc. ("First Asset"), the Manager and Trustee of Preferred Securities Income Fund ("PFS") (TSX:PFS.UN), Preferred Securities Limited Duration Fund ("PLD") (TSX:PLD.UN)(TSX:PLD.U), and First Asset Yield Opportunity Trust (TSX:FAY.UN) ("FAY") announced today that it will merge PFS and PLD into FAY on a tax-deferred roll-over basis. The transaction, which is expected to be completed on or about December 17, 2007, is subject to receipt of all required third party approvals.
First Asset believes that combining PFS and PLD with FAY will create a single larger trust which will contribute to improved liquidity of the trust units, promote improved operational efficiencies and enhanced economies of scale for FAY and provide the former unitholders of PFS and PLD with access to the expertise of Goldman Sachs Asset Management, L.P. Administrative cost savings will also be realized through eliminating the duplication of certain third party costs associated with operating and administering three trusts.
In order to effect the transaction, the assets of PFS and PLD will be liquidated in an orderly manner such that at the time of the transaction, both portfolios will consist entirely of cash. This cash will be transferred to FAY in exchange for units of FAY at an exchange ratio based on the relative net asset values as at the close of trading on the TSX on the day prior to the effective date of the merger. First Asset will publicly announce the exchange ratios in a press release following the close of trading on the day prior to the effective date of the merger. Unitholders of PFS and PLD will automatically become unitholders of FAY and will not have to take any action in this regard.
As part of the transaction, all of the currently outstanding units of FAY will be designated as Class A Units and a new class of Class B Units will be created. The Class B Units will be identical to the Class A Units of FAY except that the units will be denominated in US dollars and distributions will be paid in US dollars. All unitholders of PFS and all Class A unitholders of PLD will receive Class A Units of FAY in connection with the transaction, and all Class B unitholders of PLD will receive Class B Units of FAY.
The transaction remains subject to receipt of all required third party approvals.
About First Asset Yield Opportunity Trust
FAY has two investment objectives: (a) to pay to unitholders, on a monthly basis, tax-efficient distributions consisting of capital gains and returns of capital, and (b) to preserve and enhance the net asset value of FAY in order to return at least the original subscription price of the units to unitholders on termination. The return to FAY and its unitholders depends upon the return of a portfolio of global high-yield instruments selected by Goldman Sachs Asset Management, L.P.
For more information, please contact Rob MacNiven, Investor Relations, First Asset at 416-642-1289 or 1-877-642-1289 or visit www.firstasset.com