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Unitholders approve merger of Commercial and Industrial Securities Income Trust (TSX: COI.UN) with Sentry Select Canadian Income Fund
2008-08-13

TORONTO: The Board of Directors of Sentry Select Capital Corp. (“Sentry Select” or the “Manager”) is pleased to announce that at a special meeting held today, the unitholders of Commercial and Industrial Securities Income Trust (the “Terminating Fund”) approved the merger of the Terminating Fund with Sentry Select Canadian Income Fund (“Canadian Income Fund”) (the “Merger”).

The Terminating Fund is a closed-end investment fund listed on the Toronto Stock Exchange (“TSX”) and Canadian Income Fund is an open-end mutual fund. Both funds are managed by Sentry Select.

Completion of the Merger: The effective date of the Merger is expected to be on or about August 20, 2008. The Terminating Fund will transfer all of its assets to Canadian Income Fund in exchange for units of Canadian Income Fund and the assumption by Canadian Income Fund of all the liabilities of the Terminating Fund. Each unitholder of the Terminating Fund will receive units of Canadian Income Fund having the same aggregate net asset value (“NAV”) as their units of the Terminating Fund as of the close of business on the effective date of the Merger.

The proposed Merger is subject to the acceptance and approval by the TSX.

Special distribution: The Merger triggered a tax year-end for the Terminating Fund. An estimated special distribution of $0.43 will be paid to all Terminating Fund unitholders of record as of August 20, 2008. Upon completion of the merger, the final special distribution amount will be announced in a press release and paid by September 15, 2008.

Throughout the year, the Terminating Fund realized capital gains from the sale of securities and must distribute the net income and net realized capital gains to unitholders to ensure that it is not liable for income tax. The special distribution represents the total remaining undistributed net income and net realized capital gains for the year.

The Merger: The Manager believes that the Merger will result in significant benefits to unitholders of the Terminating Fund for the following reasons:

  • Canadian Income Fund is a larger fund with a more flexible investment mandate that includes income trusts, real estate investment trusts (REITs), equities and fixed-income securities. The Terminating Fund is limited to investing in commercial and industrial trusts, and oil and gas royalty and income trusts; changes to the tax treatment of income trusts announced on October 31, 2006 have resulted in a reduction in the number of such trusts due to takeovers and conversions into corporations.
  • Canadian Income Fund’s ability to invest in REITs is particularly beneficial since many REITs were not affected by the tax changes announced October 31, 2006 and the Manager anticipates REITs to be an attractive area of investment in the future. The Manager currently manages $642.6 million in REITs.
  • Units of Canadian Income Fund may be redeemed daily at NAV per unit. The liquidity for the Terminating Fund is provided through the TSX, but the market price tends to be less than NAV per unit and redemption at NAV per unit is only permitted annually. If the Merger occurs, former unitholders of the Terminating Fund will own Series A units of Canadian Income Fund which may be redeemed daily at NAV per unit.
  • Former unitholders of the Terminating Fund will be able to switch their investments into other Sentry Select mutual funds without having to pay a fee to the Manager. Sentry Select offers 19 mutual funds, including trust and corporate structure, with 13 different mandates.

Tax consequences of the Merger: The Manager is proposing that the Merger be effected on a tax-deferred basis.

Costs of the Merger: All costs and expenses associated with the Merger will be borne by the Manager.

Sentry Select Capital Corp.: Sentry Select Capital Corp. is a Canadian wealth management company that manages over $6 billion in assets as of June 30, 2008. The company offers a diverse range of investment products including closed-end trusts, mutual funds, principal-protected notes and flow-through limited partnerships, covering a variety of domestic and global mandates.

More information:  Investor Services (broker/investor inquiries) or Kinga Lam (media inquiries) Tel:  1-888-246-6656   Fax: 416-364-1197   info@sentryselect.com

Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions ‘‘expect’’, ‘‘intend’’, “will” and similar expressions to the extent they relate to Sentry Select. The forward-looking statements are not historical facts but reflect Sentry Select’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Sentry Select believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. Sentry Select undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.


Documents (including press releases) regarding the various investment funds that are managed or advised by Sentry are provided for information purposes only and cannot be relied on to be complete, exhaustive or error-free unless the complete set of documents for any given investment fund with respect to which information is being sought is reviewed and then only on SEDAR (www.sedar.com).