Canso Credit Income Fund Announces the Termination of its Forward Agreement, Proposed Corresponding Amendments to its Declaration of Trust and the Proposed Acquisition of the Investment Portfolio from its Reference Fund, Canso Credit Trust

TORONTO, March 3, 2015 /CNW/ - Lysander Funds Limited (the "Manager"), as the manager of Canso Credit Income Fund (the "Fund") (TSX: PBY.UN), announces that, as a result of changes to the Income Tax Act (Canada) (the "Tax Act") and in accordance with the declaration of trust of the Fund, it has determined that the forward purchase and sale agreement dated July 16, 2010 entered into between the Fund and The Bank of Nova Scotia (the "Forward Agreement") will settle on or about its scheduled termination date of June 30, 2015 (the "Termination Date") in accordance with its terms and it will not cause the Fund to enter into a new forward agreement.  The Manager has determined, in accordance with the declaration of trust of the Fund, that, after the Termination Date, it will be more efficient and less costly for the Fund to invest its assets directly in securities of the kind that comprise the investment portfolio of Canso Credit Trust (the "Portfolio"), the reference fund of the Fund, using the same, or substantially the same, investment strategies as those employed by Canso Credit Trust prior to the Termination Date.

The Manager expects that, on or about the Termination Date, the Fund will: (i) amend its declaration of trust, among other things, to permit the Fund to invest its assets directly in securities of the kind that comprise the Portfolio using the same, or substantially the same, investment strategies as those employed by Canso Credit Trust prior to the Termination Date and to remove all references to the use of the Forward Agreement to gain exposure to Canso Credit Trust, and (ii) settle the Forward Agreement and acquire the Portfolio from Canso Credit Trust.  These proposed amendments to the declaration of trust are necessary and desirable in connection with the termination of the Forward Agreement and, pursuant to the declaration of trust of the Fund, neither unitholder approval nor notice to unitholders of the proposed amendments is required.  

The Manager also proposes, subject to regulatory approval, to amend the declaration of trust to remove the words "tax-advantaged" and any references to the use of the Forward Agreement to gain exposure to Canso Credit Trust from its investment objectives.  The investment objectives of the Fund after the proposed amendments will be: (i) to maximize total returns for unitholders while reducing risk; and (ii) to provide unitholders with attractive monthly cash distributions, initially targeted to be $0.50 per unit per annum, representing an annual yield of 5.00% based on the original issue price of $10.00 per unit.

Following the termination of the Forward Agreement, distributions paid by the Fund are no longer expected to be characterized primarily as capital gains or returns of capital and instead a portion of distributions will be characterized as ordinary income, although the Fund may still distribute capital gains or returns of capital in the future even without exposure to forward contracts.  The aggregate management fees and incentive fees received by the Manager from the Fund will remain the same as received from the Fund and Canso Credit Trust prior to the Termination Date.

This press release contains forward-looking statements. The statements that are concerning Canso Credit Income Fund's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Canso Credit Income Fund are forward-looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward looking statements are subject to important risks and uncertainties that could cause actual results to differ materially from current expectations. While the Manager considers these risks and uncertainties to be reasonable based on information currently available, they may prove to be incorrect.

SOURCE Canso Credit Income Fund

For further information: Lysander Funds Limited, Raj Vijh, Chief Operating Officer and Chief Financial Officer, (416) 640-4275


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