MUH.PR.A Contemplating Reorganization

Mulvihill Premium Split Share Corp. has announced:

that its manager Mulvihill Capital Management Inc. has voluntarily agreed to decrease the management fee from 1.25% per annum of the net asset value to 0.50% per annum of net asset value for an indefinite period. The Fund implemented its Priority Equity Portfolio Protection Plan as required, to protect the original value of the Priority Equity Shares and is consequently invested in cash and cash equivalents. At this time, the manager has determined to consider strategic alternatives regarding the Fund and its operations.

The Priority Equity Portfolio Protection Plan was grafted on to the structure with the 2007 reorganization. In the Semi-annual Financials for July 31, 2010, the company disclosed:

Due to the above strategy to protect the Priority Equity shares the Fund is entirely in cash and cash equivalents. The Priority Equity shares have residual risk now, since they will be expected to cover expenses of the Fund in future years.

MUH.PR.A was last mentioned on PrefBlog when the company announced an issuer bid. MUH.PR.A is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

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