The Canadian Banc Capital Securities Trust has closed its initial public offering, Connor, Clark & Lunn Capital Markets Inc. said Tuesday.

The fund raised gross proceeds of $96,289,000 from the issuance of 3.6 million Class A units and 251,560 Class F units, at a price of $25 per unit.

The fund has granted to the agents of the offering an over-allotment option to acquire additional Class A units exercisable during the next 30 days in an amount up to 148,440 Class A units. If the over-allotment is exercised, the gross proceeds from the offering will be $100 million. The Class A units will be listed on the Toronto Stock Exchange under the symbol of CSB.UN. Class F units will not be listed on a stock exchange but may be converted into Class A units on a weekly basis.

The fund’s investment objectives are to provide unitholders with attractive tax-advantaged quarterly cash distributions, and return to unitholders the original issue price of the units upon termination of the fund on June 30, 2014. Distributions are initially targeted to be $1.50 per year unit consisting primarily of returns of capital, representing a yield on the unit issue price of 6.0% per year.

The fund is exposed to an actively managed portfolio consisting primarily of Innovative Tier 1 Capital Securities of the six largest Canadian banks, including such issues as TD Capital Trust IV Notes (TD CaTS IV), Scotiabank Capital Trust Securities (Scotia BaTS II) and BMO Capital Trust II Notes (BoATS VI). The fund has secured commitments to purchase a substantial amount of portfolio securities, the fund manager says.

The units were offered for sale by a syndicate of agents led by BMO Nesbitt Burns Inc., CIBC World Markets Inc. and RBC Dominion Securities Inc. and includes Scotia Capital Inc., National Bank Financial Inc., TD Securities Inc., HSBC Securities (Canada) Inc., Richardson Partners Financial Limited, Dundee Securities Corp., Wellington West Capital Markets Inc., Blackmont Capital Inc., Canaccord Capital Corp., Desjardins Securities Inc., GMP Securities L.P., Manulife Securities Incorporated, Raymond James Ltd., and Research Capital Corp.

IE