TORONTO - The announcement that Crius Energy Trust (Crius) has filed a preliminary prospectus in connection with a proposed initial public offering of its trust units marks the first cross-border income trust (CBIT) that is not centred on oil & gas assets. It is also the first CBIT to involve a retained interest by the vendors in the operating company.

While associated with the energy sector, Crius is a retail energy marketer and, as their securities lawyer, Christian Gauthier, remarked, "the asset profile is markedly different than the other new CBITs; Crius' primary assets are its energy customers".

"This is an exciting time for Crius and for other non-oil & gas companies looking to take advantage of this investment product", says Tom Bauer, the Bennett Jones tax partner who helped structure the transaction.

To date, all CBITs other than REITs have been executed by companies with oil & gas energy assets and Bennett Jones lawyers have acted on all of them. Bob McCue and David Phillips, partners with Bennett Jones, have long been predicting that companies outside of the energy sector would find this investment vehicle too attractive to ignore.

"The fundamental aspects of this investment product are such that it isn't restricted to a particular industry", says David Phillips. "Bennett Jones' dominance in the energy sector combined with our unique experience in CBITs just made the oil and gas business the logical place to start", he adds.

A CBIT is a Canadian yield investment product that derives its distributable cash from non-Canadian business assets - usually American. Investors anywhere may participate. After the Canadian government's rules ended the tax benefits from income trusts with Canadian assets, investors started looking for a new vehicle that could provide healthy returns as well as the tax advantages they had lost.

Eagle Energy Trust responded by launching the first CBIT in late 2010 with a $169 million IPO. Eagle was quickly followed by Parallel Energy Trust with its $393 million IPO in April of 2011. Argent Energy Trust closed a $244 million IPO in August 2012, which is the largest TSX IPO to date this year. And Meranex Energy Trust launched its IPO in September 2012. As is the case with Crius, Bennett Jones lawyers acted on all of these CBITs.