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Trading on the Aeroplan Income Fund officially kicked off Wednesday, June 29, with 25 million units being offered at an initial price of $10 each. At the end of the trading day the units closed at $11.92, up more than 19 percent from the IPO price.
Though trading officially began June 29, the units have been trading on a conditional, "when issued" basis since June 23. They made their debut above the $11 level and have never traded below that.
The fund will pay distributions to unitholders every month. The first distribution comes Aug. 15, to unitholders of record on July 29. Based on the $10 IPO price, the fund's yield is seven percent.
Aeroplan is the most profitable part of Air Canada. It made a profit of $21 million in the first quarter this year, while the corporate parent, ACE Aviation Holdings, lost $77 million. It has about five million active members.
This was the first spinoff of a loyalty program by any airline. The spinoff values all of Aeroplan at $2 billion. That's half the market worth of ACE Aviation Holdings.
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