Toronto-based Connor, Clark & Lunn Capital Markets Inc. Friday announced the closing of the initial public offering of ING Diversified Floating Rate Senior Loan Fund.
The fund raised gross proceeds of $160 million from the sale of 16 million Class A units and US$17,714,670 from the sale of 1,771,467 Class U units.
The fund has granted to the agents an over-allotment option, exercisable for a period of 30 days from the closing date, to offer an additional 971,024 Class A units. The Class A units are listed on the Toronto Stock Exchange (TSX:IFL.UN).
The fund provides exposure to a diversified portfolio consisting primarily of senior, secured floating rate corporate loans and other senior debt obligations of non-investment grade North American borrowers, actively managed by ING Investment Management Co. LLC, the sub-advisor. The portfolio will consist primarily of senior, secured floating rate corporate loans that are expected to generate increased returns in the event that short-term interest rates rise.
The fund will not have a fixed distribution policy, but intends to make monthly distributions based on the actual and expected returns on the portfolio. Returns may vary with changes in interest rates. The fund’s initial distribution target is expected to be $0.05 per unit per month (U.S. $0.05 in the case of the Class U units), representing an initial yield on the unit issue price of 6.0% per year.
The sub-advisor is an indirect, wholly owned subsidiary of ING Group N.V., one of the world’s largest financial services companies.
Connor, Clark & Lunn Capital Markets Inc. will act as manager of the fund.
The units are being offered for sale by a syndicate of agents led by BMO Capital Markets and including CIBC, RBC Capital Markets, TD Securities Inc., GMP Securities L.P., National Bank Financial Inc., Scotiabank, Canaccord Genuity Corp., Macquarie Private Wealth Inc., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation and Manulife Securities Inc.