FBS.PR.B to be Refunded by New Issue

5Banc Split Corp. announced on November 16:

that the final condition required to extend the term of the Company for an additional five years to December 15, 2016 has been satisfied as holders of approximately 76% of Class B capital shares (“Class B Capital Shares”) have elected to continue their participation in the Company. Holders of Class B Capital Shares approved the extension of the term of the Company on October 7, 2011 subject to the condition that a minimum of 2,500,000 Class B Capital Shares remain outstanding after giving effect to the special retraction right (the “Special Retraction Right”).

Under the Special Retraction Right, 1,592,428 Class B Capital Shares were tendered to the Company for retraction on December 15, 2011. The holders of the remaining 5,160,270 Class B Capital Shares will continue to enjoy the benefits of a leveraged participation in the capital appreciation of the Company’s portfolio of publicly listed common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank while deferring the recognition of capital gains or capital losses which would otherwise be realized on the redemption of their Class B Capital Shares.

The Class B preferred shares (the “Class B Preferred Shares”) will be redeemed by the Company on December 15, 2011 in accordance with the redemption provisions detailed in the prospectus dated November 28, 2006. Pursuant to these provisions, the Class B Preferred Shares will be redeemed at a price per Class B Preferred Share equal to the lesser of $10.00 and the Net Asset Value per Unit determined on or about December 8, 2011. In order to maintain the leveraged “split share” structure of the Company, the Company intends to create and issue a new series of Class C preferred shares, which are expected to be issued following the redemption of the Class B Preferred Shares on December 15, 2011.

The Class B Capital Shares and the Class B Preferred Shares of 5Banc Split are listed and posted for trading on the Toronto Stock Exchange under the symbols FBS.B and FBS.PR.B respectively.

They announced today that:

it has filed a preliminary short form prospectus in respect of a proposed public offering of a new series of Class C preferred shares (the “Class C Preferred Shares”). The Class C Preferred Shares are being offering to the public on a best efforts basis by a syndicate of agents led by TD Securities Inc. which includes Scotia Capital Inc., BMO Capital Markets and National Bank Financial Inc.

The Company holds a portfolio of publicly listed common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank in order to provide holders of the Class C Preferred Shares with fixed cumulative preferential dividends and to provide holders of its Class B capital shares (the “Capital Shares”) with a leveraged investment and excess dividends, if any, subject to the prior rights of holders of Class C Preferred Shares and after payment of the expenses of the Company and dividends payable on the Class C Preferred Shares.

The Capital Shares and the Class B preferred shares of the Company (the “Class B Preferred Shares”) are listed and posted for trading on the Toronto Stock Exchange under the symbols FBS.B and FBS.PR.B respectively. The Class B Preferred Shares will be redeemed on December 15, 2011 in accordance with their terms.

The preliminary prospectus is on SEDAR, but the vital details are yet to be filled in.

FBS.PR.B was last mentioned on PrefBlog when it was upgraded to Pfd-3(high) by DBRS. FBS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

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