The Consumers’ Waterheater Income Fund Announces $50 Million Public Offering Through a Combination of Units and Convertible Debentures

TORONTO, ONTARIO–(Marketwire – May 18, 2010) –


The Consumers' Waterheater Income Fund ("Fund") (TSX:CWI.UN) today announced that it ha s entered into an agreement to sell, on a bought deal basis, to a syndicate of underwriters led by TD Securities Inc., a combination of 5,210,000 Units of the Fund (the "Units") at a price of $4.80 per Unit for gross proceeds of approximately $25 million and $25 million principal amount of 6.25% convertible unsecured subordinated debentures due June 30, 2017 (the "Debentures"), for aggregate gross proceeds of approximately $50 million. The Fund has also granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days following closing, pursuant to which the underwriters may purchase up to an additional 781,500 Units and $3.75 million principal amount of Debentures, on the same terms. If the over-allotment option is exercised in full, the gross proceeds from the offering will be approximately $57.5 million.

Each Debenture is convertible into Units at the option of the holder at a conversion price of $6.48 (or 154.3210 Units per $1,000 principal amount of Debentures).

The offering is scheduled to close on or about June 8, 2010, and is subject to regulatory approval.

The net proceeds of the offering will be used for general purposes of the Fund, which may include, among other things, paying down amounts on the Fund's revolving line of credit, repaying certain amounts of secured debt assumed by the Fund in connection with its purchase of Stratacon Inc. in August 2008, and funding the purchase of possible future acquisitions.

This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority.

This press release is not an offer of securities for sale in the United States. The securities being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offer ed for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person.

About The Consumers' Waterheater Income Fund

The Fund owns a portfolio of approximately 1.3 million installed water heaters and other assets, rented primarily to residential customers in Ontario. The Fund also owns Stratacon Inc., a leading "smart" sub-metering business, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada.

Additional information regarding the Fund, including its current Annual Information Form, is available on SEDAR at

For further information: The Consumers’ Waterheater Income Fund
Steve Bower
1.905.695.7793 or 1.800.781.2943
[email protected]