Meranex Energy uses more recent corporate structure for investing in U.S. business
Meranex Energy Trust is proposing a structure for investing in a U.S. oil and gas business that essentially is identical to that used in Argent Energy Trust and other more recent offerings: it will use a corporate structure, i.e., investing in a Canadian holding corporation which will hold a US Opco, as well as investing in notes of the US Opco. This contrasts to the earlier Eagle Trust offering, which used a hybrid structure (i.e., holding units and interest-bearing notes of a Canadian sub trust that is a corporation for US tax purpose which, in turn, holds a Delaware LP that is disregarded for US tax purposes).
Accordingly, issuers may now be starting to vote in favour of this corporate structure for this type of cross-border business. However, note that the new kid on the block is the Crius offering, which uses a similar corporate structure to Meranex, except that the Canadian mutual fund trust elects to be a partnership for U.S. purposes and contributes the cross-border debt to a subsidiary sub trust - perhaps in order to maximize potential U.S. interest deductions.
Neal Armstrong. See summary of Meranex Energy Trust preliminary prospectus under Foreign Asset Income Funds and LPs.