CIF revenue jumps 35.5% | Local company

The CLICO Investment Fund (CIF) yesterday reported net income of $390.93 million for the nine months ending December 31, 2021, up 35.5% from the same period in 2020.

CIF, which is a closed-end mutual fund, derives its investment income from three sources: dividends from the 40,072,299 shares it holds in Republic Financial Holdings Ltd; interest on government bonds in its portfolio and net gains from investments at fair value through profit or loss.

CIF received dividend income of $160.28 million for the nine months ended December 31, 2021, an increase of 48% over the $108.19 million it earned for the same period in 2020 .

Bond interest income was $30.28 million for the nine months ended December 31, 2021, compared to $30.18 for the same period in 2020.

CIF reported $203.22 million in net investment gains for the period ending December 31, 2021, 32.6% higher than the $153.18 for the period ending December 31, 2020.

The mutual fund reported an unrealized gain of $154.2 million, based on RFHL’s price increasing to $140.16 per share, at the end of 2021, from $136.31 as of September 30. 2021.

The 204 million units of the CIF began trading at $25 per unit on the T&T Exchange in January 2013 for a total initial value of $5.1 billion.

The value of the 40,072,299 Republic shares and government bonds – which had a coupon of 4.25%, a term of 25 years and a total face value of $702.8 million – was 5 .1 billion in January 2013, at the start of trading. .

The CIF was created as part of the government’s resolution plan, following the bankruptcy of the insurance companies CLICO and British American Trinidad in January 2009.

The government initially offered holders of short-term investment products (STIPs), issued by insurance companies, the following:

* STIP holders with principal balances up to $75,999 received cash payouts;

* STIP holders with a principal balance greater than $75,999 received a combination of cash and 20 zero-coupon bonds with maturities ranging from one to ten and from 11 to 20.

“Subsequently, the government has agreed to establish a trust in which will be placed the shares of RFHL and the government securities, which will be held in trust in accordance with the provisions of the trust deed,” according to the prospectus of the RFHL. CIF, which was released on November 1, 2012.

Initially, each $1,000 of zero-coupon 11- to 20-year government bonds traded at $25 per unit. Thus, a CLICO holder of a STIP who had $1 million in 11 to 20 zero-coupon bonds would have received 40,000 units of CIF units.

The administrator of the CIF is CLICO Trust Corporation Ltd, a wholly state-owned company, whose current chairman is Polycarp Stephen Romany.

The government acquired the RFHL shares and government securities and entrusted the investments to the trustee, free of all encumbrances, in accordance with the prospectus of the CIF, which was published on November 1, 2012.

The Fund was created on October 31, 2012 and became effective on January 2, 2013. It is intended to have a duration of ten years since its liquidation or redemption date is January 2, 2013.

The CIF may also be terminated, prior to the redemption date, by a special operation, which “means a sale of all or part of the issued and outstanding shares of the Republic or a merger which results in the change of control of RBL, the counterparty which may take the form of, among other things, an exchange of shares only, a sale in cash only or an exchange of shares and cash.

If the CIF is terminated as a result of a special operation, the CLICO indenture provides that the proceeds, whether cash, shares or both, “shall be distributed to unitholders at proportionate to the number of units held by each unitholder.”

If there is no special transaction, in accordance with clause 19.2.1 of the CLICO Indenture: “…The Trustee will distribute the shares of the Republic, any other assets including deposited property and any income of the fund in cash to unitholders…”