Senior Secured Floating Rate Loan Fund raises C$181.64 million in IPO

By Toni Weeks

San Luis Obispo, Calif., Sept. 23 - The Senior Secured Floating Rate Loan Fund completed its initial public offering, raising C$172 million from the issuance of 17.2 million class A units (TSX: FRL.UN) and C$9,641,400 from the issuance of 964,140 class U units.

A syndicate of agents, which was led by CIBC, National Bank Financial Inc., RBC Capital Markets and TD Securities Inc., also has a 30-day over-allotment option for an additional 15% of class A units. Both types of units were sold at C$10 per unit.

According to a press release, the fund seeks to provide stable monthly cash distributions, preservation of capital and increased returns when short-term interest rates rise. The fund invests in an actively managed portfolio consisting primarily of first-lien senior secured floating-rate corporate loans of U.S. borrowers. The fund's distributions are initially targeted to be 6.5% per year, or C$0.054167 per class A unit and $0.054167 per class U unit per month.

Toronto-based Propel Capital Corp. is the manager of the fund. Credit Suisse Asset Management, LLC is the portfolio manager.

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