Exchange Bulletin
First Asset Active Credit ETF (FAO, FAO.U) To Trade On Toronto Stock Exchange
First Asset Active Credit ETF (the "ETF") - An application has been granted for the original listing in the Industrial category of approximately 3,000,000 common units (the “CAD$ Common Units”) of the ETF all of which will be issued and outstanding upon completion of a merger with First Asset Active Credit Fund (the “Fund”) (Symbols: FAY.UN and FAY.U).
An application has also been granted for the original listing of approximately 250,000 U.S. dollar denominated common units (the “US$ Common Units”) of the ETF, all of which will be issued upon completion of a merger with the Fund. The US$ Common Units will be traded in U.S. funds. Accordingly, they will appear under the heading U.S. funds in newspapers and the Exchange’s Daily Record and Monthly Review.
Prior to the open of business on Monday, January 19, 2015 (the “Effective Date”), the ETF will merge with the Fund (the “Merger”). Pursuant to the Merger, Series A Units (Symbol: FAY.UN) of the Fund will be exchanged for CAD$ Common Units of the ETF (Symbol: FAO) at an exchange ratio calculated by dividing the net asset value (the “NAV”) per Series A Unit of the Fund, as determined at the close of business on Friday, January 16, 2015 by $10, representing the issue price of each CAD$ Common Unit of the ETF. Series B Units (Symbol: FAY.U) of the Fund will be exchanged for US$ Common Units (Symbol: FAO.U) of the ETF at an exchange ratio calculated by dividing the NAV per Series B Unit of the Fund, as determined at the close of business on Friday, January 16, 2015 by US$10 representing the issue price of each US$ Common Unit of the ETF.
Listing of the CAD$ Common Units and the US$ Common Units (collectively, the “Units”) will become effective at 5:01 p.m. on Friday, January 16, 2015 in anticipation of the Merger closing prior to the opening of business on Monday, January 19, 2015. The Units will be posted for trading at the opening of business on January 19, 2015, upon confirmation of the closing.
The ETF is authorized to issue an unlimited number of Units, each of which represents an equal, undivided interest in the net assets of the ETF. Units of the ETF are being issued and sold on a continuous basis and there is no maximum number of Units that may be issued.
Registrations and transfers of Units will be effected through the book-entry only system administered by CDS Clearing and Depository Services Inc. Beneficial owners of Units will not have the right to receive physical certificates evidencing their ownership of the Units. Units must be purchased, transferred and surrendered for redemption only through a CDS participant.
Additional information on the Units may be found in the final prospectus dated January 12, 2015 (the “Prospectus”), which is available at www.SEDAR.com. Capitalized terms not otherwise defined herein are as defined in the Prospectus.
CAD$ Common Units
| Stock Symbol: "FAO" | CUSIP: 31864X 10 7 | Trading Currency: CDN$ |
US$ Common Units
| Stock Symbol: "FAO.U" | CUSIP: 31864X 30 5 | Trading Currency: US$ |
| Designated Market Maker: | BMO Nesbitt Burns Inc. |
| Other Markets: | None |
| Head Office Address: |
95 Wellington Street West |
| Email Address: | info@firstasset.com |
| Website: | www.firstasset.com |
| Head Office Telephone Number: | (416) 642-1289 |
| Fax Number: | (416) 362-2199 |
| Investor Relations: | Z. Edward Akkawi Tel:(416) 6640-4938 eakkawi@firstasset.com |
| Chief Financial Officer: | Karen Wagman |
| Corporate Secretary: | Z. Edward Akkawi |
| Incorporation: | The ETF is an open-ended mutual fund established under the laws of the Province of Ontario pursuant to the Declaration of Trust dated January 12, 2015. |
| Manager of the Fund: | First Asset Investment Management Inc. |
| Fiscal Year End: | December 31 |
| Transfer Agent & Registrar: | Computershare Trust Company of Canada at its principal office in Toronto. |
| Nature of Business: | The investment objective of the ETF is to maximize long term risk adjusted total returns, delivered through cash distributions and long term capital appreciation, in a manner consistent with preservation of capital and prudent risk management by actively investing primarily in credit securities of North American issuers. |
| US$ Common Units: | The primary difference between the currency hedged Units and the US$ Units is that (i) the exposure in relation to the US$ Units to currencies other than the Canadian dollar will not be hedged back to the Canadian dollar, and (ii) the US$ Units will be denominated in US dollars whereas the currency hedged Units will be denominated in Canadian dollars. Accordingly, the net asset value per Unit of each class will not be the same as a result of the different currency hedging strategy. |
| Conversion of CAD$ Units and US$ Units: | Unitholders may convert Units of any class of the ETF (the “Converting Units”) into whole Units of any other class of the ETF (the “Converted Units”) in any month. To do so, the Converting Units must be surrendered and the Unitholder’s CDS Participant must deliver to CDS (at its office in the City of Toronto) on behalf of the Unitholder a written notice of the Unitholder’s intention to convert during the period from the first day of a month until 5:00 p.m. (Toronto time) on the last business day prior to the 16th day of such month. Converting Units surrendered for conversion will be converted on the last Trading Day of that month (the “Monthly Conversion Date”). For a Unitholder’s Converting Units so converted, the Unitholder will receive a number of whole Converted Units equal to the net asset value per Converting Unit as of the Monthly Conversion Date, multiplied by the number of Converting Units so converted divided by the net asset value per Converted Unit as of the Monthly Conversion Date. In the case of a conversion to or from US$ Units, the applicable net asset value per Converting Unit or Converted Unit, as the case may be, will be determined for purposes of such conversion with reference to the WM/Reuters New York Closing Spot Rate (WM16) on the Monthly Conversion Date, or if such rate is not available, the WM/Reuters London Closing Spot Rate (WM11). The Manager will post the applicable conversion rate on its website, www.firstasset.com. As no fractional Units will be issued upon conversion, any remaining fraction of a Converting Unit will be redeemed at its net asset value. Unitholders who desire to convert their Units should ensure that the CDS Participant is provided with notice of his or her intention to do so sufficiently in advance of the relevant notice period so as to permit the CDS Participant to deliver notice to CDS and so as to permit CDS to deliver notice to the Registrar and Transfer Agent in advance of the required time. |
| Distributions: | It is anticipated that the ETF will make monthly distributions in the currency in which the Units of the ETF are dominated. The ETF will not have a fixed distribution amount. The amount of such distributions, if any, will be based on the Manager’s assessment of anticipated cash flow and anticipated expenses of ETF from time to time. |
| Initial Issuance of Units: | Pursuant to the Prospectus and the Merger approximately 3,000,000 CAD$ Common Units and approximately 250,000 US$ Common Units of the ETF will be initially issued at a subscription price of $10 per CAD$ Common Unit and US$ 10 per US$ Common Unit. |
See elsewhere in today’s Toronto Stock Exchange Bulletins for information regarding the Merger and delisting of the Fund.
