Toronto-based Connor, Clark & Lunn Capital Markets said Thursday that the final prospectus for ING Diversified Floating Rate Senior Loan Fund has been filed and receipted for an initial public offering of units.
The closed-end fund proposes to offer Class A and U units at $10 each. Class U Units are designed for investors wishing to make their investment in U.S. dollars. The maximum amount of the offering is $200 million ($230 million if the over-allotment option is exercised in full) and is expected to close on or about March 22. The Toronto Stock Exchange has conditionally approved the listing of the Class A Units under the symbol IFL.UN. Class U Units will not be listed but may be converted into Class A Units on a weekly basis.
The fund’s diversified portfolio will consist primarily of senior, secured floating rate corporate loans and other senior debt obligations of non-investment grade North American borrowers, actively managed by sub-advisor ING Investment Management Co. LLC. The senior loans 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. Given that the majority of the portfolio will be invested in senior loans that are floating rate, 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 hear.
ING Investment Management Co. LLC is currently an indirect, wholly owned subsidiary of ING Group N.V., one of the world’s largest financial services companies.
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.