Excel Latin America Bond Fund has completed its initial public offering for gross proceeds of approximately $34 million, Toronto-based Excel Funds Management Inc. said Tuesday.
The fund’s class F Units are designed for fee-based accounts and will be convertible into class A units on a monthly basis. The class A Units began trading Tuesday on the Toronto Stock Exchange (TSX:ELA.UN).
The fund’s investment objectives are to provide quarterly tax-advantaged distributions consisting primarily of returns of capital; and preserve and provide the opportunity to increase the net asset value of the fund.
The fund will invest in an actively managed, diversified portfolio consisting primarily of U.S. dollar denominated fixed income securities issued by companies located in Latin America, with an initial focus on Brazil.
The initial distribution target for the fund is expected to be $0.19375 per unit per quarter ($0.775 per year, to yield 7.75% on the subscription price of $10 per unit, consisting primarily of returns of capital.
Excel Investment Counsel Inc., the portfolio manager, intends to hedge substantially all of the value of the portfolio to the Canadian dollar.
BTG Pactual will act as sub-advisor for ELA Trust in connection with the selection, purchase and sale of portfolio securities and other assets of the portfolio. The sub-advisor is one of Latin America’s leading independent asset managers and had over U.S.$45 billion in assets under management as at Dec. 31, 2011.
The syndicate of agents for the offering was co-led by BMO Capital Markets, CIBC and RBC Capital Markets and includes TD Securities Inc., GMP Securities L.P., Raymond James Ltd., Desjardins Securities Inc., Macquarie Private Wealth Inc., Dundee Securities Ltd., Mackie Research Capital Corporation, Manulife Securities Incorporated, Sherbrooke Street Capital (SSC) Inc. and Union Securities Ltd.