Peter BriegerFording Canadian Coal Trust (Inc Trust)FDG.UN.TOCOMMENTJun 29, 2005
The pricing outlook for coal is fixed through 2006, met coal at US$125 a ton. Looking out to '07/'08, there are worries about the level of steel production, the extent of exports from China and price weakness. This trust gives a wonderful yield, but how long will it last.
Being acquired by Teck Cominco (TCK.B-T). If you are holding this in a taxable account, there are some very negative consequences. In an RRSP or RIF you can avoid the tax consequences. He sold the majority of his holdings into the market prior to the transaction.
Being acquired by Teck Cominco (TCK.B-T). Arbitrage companies were forced to sell. There is a financing gap and Merrill Lynch (MER-N) is part of that, so the market is concerned. The deal could fall apart.
If held in an RRSP, you could continue holding. If it's in a taxable account, consider selling the units before the new deal gets done. Take it as a gain as opposed to the tax treatment that will supposedly come on the consummation of the deal. (Editor’s note. Check with your broker.)