Argent Energy Trust closes its $212 million
initial public offering. As Argent's counsel, Bennett Jones
continues its dominance of cross-border income trust (CBIT)
financings, sometimes known as foreign asset income trusts.
A CBIT is a Canadian yield investment product that derives its
distributable cash from non-Canadian business assets –
usually American. Investors anywhere may participate. CBITs are a
response to the Canadian government's rules, announced in 2006,
that ended the tax benefits from income trusts with Canadian
assets. Investors started looking for a new vehicle that could
provide healthy returns as well as the tax shelter they had lost.
Richard Clark responded by launching the first CBIT – Eagle
Energy Trust – in late 2010 with a $169 million IPO.
Eagle was quickly followed by Parallel
Energy Trust with its $393 million IPO in April of 2011. Eagle
and Parallel have oil and gas assets in Texas and each recently
returned to market with follow-on public offerings to finance
additional acquisitions. What did these offerings have in common?
Bennett Jones lawyers.
Bob McCue and David Phillips, now Bennett Jones partners, worked
with Richard Clark from Eagle's beginning, This experience,
combined with Bennett Jones' unique expertise and bench
strength, has earned the firm a market leading position regarding
CBIT transactions. Bennett Jones has been involved with virtually
every CBIT that has seriously attempted to launch so far. The
firm's resulting expertise should prove to be particularly
valuable to its current and future CBIT and investment banking
Bennett Jones is actively involved in the development of early
stage CBITs as well, working with a number of management teams and
investment banking firms who are currently considering this
"Bob McCue and David Phillips have been trusted
advisors to Eagle from the very beginning. We rely heavily upon
them and the Bennett Jones team for a wide range of energy sector
legal services, including tax, securities, immigration, employment
and governance advice, they are responsive and effective and we
appreciate all their hard work on our behalf." - Richard
Clark, President and CEO of Eagle Energy Trust
Argent Energy Trust recently closed its $212 million IPO, making
it the latest publicly traded CBIT. The allure of healthy, tax
efficient distributions is the primary reason for this relatively
new vehicle's success to date.
Bennett Jones' CBIT success is an outgrowth of its robust
tax, securities and M&A practices. The firm has been involved
in four out of the five largest non-structured product Canadian IPO
deals since January of 2010, including MEG Energy
Corporation ($700 million) (acted for issuer), SMART
Technologies (US$660 million) (acted for issuer), Gibson Energy
($568 million) (acted for issuer) and Parallel Energy Trust ($393
million) (acted for issuer).
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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