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IFPT SELLS UNITS FOR U.S. $360,000,000
Exclusive Canadian Placement Provides Unique Asset Class for
Canadian Pension and Endowment Funds
Montreal, Quebec - December 12, 2001 - IFPT Management Inc., the
manager of International Finance Participation Trust, announced today
that the Trust has accepted subscriptions from a number of Canada's
largest pension funds for U.S. $360,000,000 (about Cdn $564,000,000)
of Trust units. The Trust expects to draw down and invest the subscription
proceeds over the next eighteen months.
The Trust is a vehicle for conservative diversification
in international credit markets. The Trust offers Canadian pension
and endowment funds a unique opportunity to invest in a portfolio
of broadly diversified private sector loans made by a number of international
financial institutions ("IFIs") such as International Finance
Corporation of Washington, D.C. The loans are made to corporations
operating in emerging markets, which are normally secured by the project
or other assets of the borrower and other protections negotiated by
IFIs. In most cases, the loans are entitled to the "preferred
creditor status" of the IFIs - a status, which, among other things,
entitles the lender to preferential access to foreign exchange in
the event of an exchange crisis.
Trust unitholders receive their proportionate benefit
of loan interests acquired by the Trust through their holdings of
Trust units. Even though the units represent interest in a non-Canadian
loan portfolio, they do not count against the 30% "foreign property" limit
applicable to Canadian pension funds under the Income Tax Act (Canada).
The loans tend to have a low correlation to traditional investments
of Canadian institutional investors. In committing to loans, the Trust
will target an average spread of 250 basis points over the London
Interbank Offered Rate.
The Trust Manager, IFPT Management Inc., specializes
in international project finance. It was established by Chief Executive
Officer Carl Otto, with the support of International Financial Centre
Montreal. Its senior staff includes Chief Operating Officer David
Creighton an early member of the project team with more than eighteen
years experience in the international investment field, and Vice President
Portfolio Management Tony Iskarpatyoti, who has twenty-three years
experience in the developing country investments, most recently with
the World Bank and IFC.
"The key to the success of the Trust was developing
a simple and tax-efficient structure that would fit in with the conservative
investment practices of pension fund managers", said CEO Carl
Otto. "The Trust offers Canadian funds an attractive investment
return and broad diversification in emerging markets."
COO, David Creighton added "The calibre of
professionals attracted to this project from the outset has been truly
outstanding, a reflection of Canada's business elite who are supported
today by a broad range of experience in project finance drawn directly
from Eastern Europe, Latin America and Asia. We have a team in place
that meets every test of excellence and a product that offers a unique,
well-informed opportunity for investors looking for new offshore growth
scenarios."
VP Portfolio Management, Tony Iskarpatyoti explained
that "Emerging markets have vast infrastructural needs, strong
economic and social reasons to develop higher value-added production
steams and growth rates that have exceeded those of higher income
countries, although from a much lower base. Globalization makes it
prohibitive to ignore the investment opportunities they present. The
key is to go beyond sovereign ratings and select bankable deals structured
with the right technical, managerial, marketing and political know-how.
Fundamental analysis allows us to identify these deals, which offer
returns higher than those for the equivalent risk level in developed
economies. The Trust will aim to reduce risk further by limiting investment
to participations in loans made by the IFIs and Export Development
Corporation of Canada."
The Trust offers Canadian pension and endowment
funds access to a floating rate return to carefully selected loans
in emerging markets. IFPT Management Inc. is a portfolio manager headquartered
in Montreal, Quebec. It specializes in international project finance
with emphasis on emerging markets.
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For more information, contact:
David Creighton
IFPT Management Inc.
Tel No: (514) 286-5015
Fax No: (514) 286-6145
URL: http://www.ifpt.com
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