Alaris Equity Partners Income 6 25 Senior Unsecured Debentures T.AD.UN

Primary Symbol: T.AD.DB.A Alternate Symbol(s): ADLRF

Financial Services Asset Management

Alaris Equity Partners Income Trust (the Trust) is a Canada-based trust. The Trust’s operations consist of investments in private operating entities, typically in the form of preferred or common limited partnership interests, preferred or common interest in limited liability corporations in the United States, and loans receivable. The Trust’s Canadian investments are made through a wholly owned Canadian corporation, Alaris Equity Partners Inc. and its American investments are made through two Delaware corporations, Alaris Equity Partners USA Inc., Salaris USA Royalty Inc., and their subsidiaries.

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Alaris Equity Partners Income 6 25 Senior Unsecured Debentures > Stock price

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Comment by TickerTwiton Apr 15, 2021 11:03pm

279 Views

Post# 33008891

RE:RE:RE:RE:Stock price

I found this in the "Dear Shareholders" letter that accompanied the Voting Instruction Form:

Management intends to determine the composition of the Trust's income for Canadian income tax purposes with the intent of maximizing ultimate value to Unitholders.

I wonder what their unit of measure was for "ultimate value".

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CanSiamCyp wrote: TT: Agree with your comments re tax inefficiency of trust vs. former dividend paying corporation. This does not jive with their comments at the time that the conversion to a trust would optimize total return to shareholders (now unitholders). I rolled our holding over to RRSP - which had sufficient cash due to GIC maturing. I wonder if they will be quizzed on this by the analysts at the time of the next Q report. Probably not! Cheers!

TickerTwit wrote: Actually, as of 2020/Q4, they DON'T both pay a dividend.

The DIV payout is 100% eligible dividend and benefits fully from the dividend tax credit, but the AD payout is only 7% dividend. This change in tax status is severe; on learning this my son and I did a total sell-off of AD.UN units in our taxable accounts. Going forward we'll mainly keep AD.UN in our TFSAs (I have some in my LIRA, where the payout type doesn't matter). We still have DIV in taxable accounts.

I wonder if some, even all, of the price drop in AD.UN is due to others selling off as well after seeing the tax bill.

My son is in the 20% tax bracket in Ontario. His effective tax rate (including deferred tax) on AD.UN is 16%, but on AD it had been 0%. The after-tax payout is 26 cents ... 3 cents lower than before the income trust conversion. Quite a slap in shareholders' faces by management.
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babedinkleman wrote:
Apples and oranges....other than they both pay a dividend and are/were (in Alaris' case) called royalty companies.