Innovative security developed by CIBC World Markets

• IDSs are yield-oriented securities that consist of
  debt and common stock paired together as a single unit
  for trading purposes
• Designed to distribute nearly all of a company's free cash flow to investors

• As interest payments on the debt and
  expected dividend payments on the common stock

• Modeled after the Canadian Income Trust structure
• Also called Enhanced Income Securities

Promise wasn't realized

• Thought to be an effective way to IPO
  a stable company with low growth prospects

• e.g, private equity fund's portfolio company

• Many proposed deals were SEC-filed but few priced

• Hybrid equity-debt structure didn't appeal to
  US institutional investors
• SEC subjected filings to protracted review
• SEC disclosure issues 12.01.05
• Structuring to achieve tax-deductible debt was cumbersome

• Several filed deals were completed as common stock IPOs
• At least four deals were completed as IDSs

• Otelco
• Coinmach Service
• B&G Foods
• Centerplate (Volume Services of America)

Client mailing - Bryan Cave

Client mailing - Weil Gotshal re: Canadian income trusts

Selected deals

• Over 20 deals were filed, styled as

• IDSs
• Enhanced Income Securities
  RBC Capital as underwriter
• Investment Units
  Other underwriters

• Many withdrawn deals were completed
  as ordinary common stock IPOs

Eye Care Centers of America

Alliance Laundry Holdings

Alaska Communications Systems Group

Iowa Telecommunications Services

UAP Holding

Valor Communications Group

American Seafoods Corporation

$131.6 million offering of IDSs, consisting of

• Class A common stock
• 13% senior secured notes

• $8.5 million of notes also sold separately
• Presumably to buttress tax treatment

• Trading chart

Underwriters advisors

• CIBC / RBC Capital Markets / UBS
• O'Melveny & Myers  / Skadden Arps

Prospectus 12.17.04

• Table of contents
• Description of IDSs

SEC filings

SEC_CODE_REF_0090001192884

$250 million offering of IDSs, consisting of

• Class A common stock
• 11% senior secured notes

• $20 million of notes also sold separately
• Presumably to buttress tax treatment

• Trading chart

Underwriters advisors

• Merrill Lynch
• Mayer Brown / Cahill Gordon

Prospectus

• Table of contents
• Description of IDSs
• US tax consequences
• ERISA considerations
• Use of proceeds

SEC filings

$261 million offering of EISs, consisting of

• Class A common stock
• 12% senior secured notes

• $22.8 million of notes also sold separately
• Presumably to buttress tax treatment

• Pricing 10.08.04
• Trading chart

Underwriters advisors

• RBC Capital Markets / CSFB / Merrill
• Dechert / Debevoise

Prospectus 10.12.04

• Table of contents
• Description of EISs

SEC filings

$251.8 million offering of IDSs, consisting of

• Class A common stock
• 13.5% senior secured notes

• Trading chart

Underwriters advisors

• CIBC
• Simpson Thacher  / Skadden Arps

Prospectus 12.05.03

SEC filings

Dividends (Disclosure Policies)