Unitholders to vote on proposed CC&L fund mergers

CC&L says the objectives of the merger are to provide RRB unitholders with the opportunity to continue their investment in a single fund that will have a larger market capitalization, increased liquidity for the units and a lower management expense ratio.

The investment objectives of ISL, as the continuing fund, are to: provide unitholders with tax-advantaged distributions consisting primarily of returns of capital; preserve capital; and generate increased returns in the event that short-term interest rates rise. The investment strategy of ING is to obtain exposure, in a tax-efficient manner, to the performance of a diversified portfolio consisting primarily of senior, secured floating rate corporate loans and other senior debt obligations of non-investment grade North American borrowers held by ISL Loan Trust and actively managed by ING Investment Management Co. LLC.

The merger must still be approved by a two-thirds majority of RRB unitholders. A special meeting of unitholders will be held on December 12 in Toronto.

If approved, the merger is expected to be implemented on Jan. 8, 2013. RRB unitholders will have the opportunity to redeem their RRB units for a redemption price equal to net asset value per unit if they choose not to participate going forward by tendering their units no later than December 28 for a redemption price per unit equal to the net asset value on Jan. 4, 2013.

Separately, CC&L Capital Markets Inc., approved a proposal that would result in the merger of CC&L Capital Class Inc., Natural Resources Class Shares (NR) and CC&L Capital Class Inc., Balanced Portfolio Class Shares, Series 1 (BP) with Connor, Clark & Lunn Core Income and Growth Fund (CIGF).

CIGF will be the continuing fund and, as a result, shareholders of NR and BP would become holders of CIGF Series A Units. The objectives of the merger are to: lower the administrative costs by establishing a larger fund; lower the management fees borne by NR and BP shareholders; and benefit from gaining access to a broader asset pool and more balanced income producing investment portfolio.

The investment objectives of CIGF, as the continuing fund, are to provide unitholders with an attractive yield through receipt of monthly distributions initially targeted to yield approximately 6% of net asset value per annum; downside protection through diversification across multiple asset classes and a conservative approach to security selection; and growth that outpaces inflation by investing in securities that provide both a high yield and capital appreciation potential.

The investment strategy of CIGF is to invest in an actively managed diversified portfolio of high income investments across a broad range of income-oriented securities, which may include equities, income trusts, limited partnerships, real estate investment trusts, corporate bonds, convertible bonds, preferred shares, other income funds and other investments.

Shareholders of NR and BP will have the opportunity to redeem their NR and BP shares at net asset value per share until the day before the effective date of the merger if they choose not to participate going forward. In order for the merger to become effective with respect to the funds, it must be approved by a two-thirds majority of the shareholders of the funds. The merger is also subject to the receipt of all necessary regulatory approvals. If approved, the special resolutions are expected to be implemented on or about Jan. 8, 2013.

Special meetings of holders of NR and BP will be held on December 20 in Toronto.