EDMONTON, June 10 /CNW/ - Carfinco Income Fund ("Carfinco" or the "Fund")
announced on March 31, 2008 that the Fund changed its distribution policy from
a monthly cash distribution to a quarterly "in-kind" unit distribution. The
Fund's Board of Trustees has unanimously approved to not distribute any units
for the three-month period ending June 30, 2008.
As previously announced, the Fund is currently experiencing several
short-term challenges, which Management has been actively addressing by
implementing changes to both loan origination policies and collection
procedures. While loan originations remain strong, the majority of the growth
is in the Fund's Regular Program, which incurs the lowest losses of all its
programs, but requires the highest allowance for credit losses. The challenges
also include, reduced recovery amounts on repossessed vehicles as a percentage
of the principal outstanding on the loan. This is due to lower auction values
and the timing of adjustments to Black Book pricing, which dictates the
maximum amount the Fund will lend using the vehicle as security. In addition,
although the delinquencies have decreased during Q2 2008, to become more
comparable with historical levels, the higher charge off level will continue
as the delinquencies from the prior two quarters are absorbed.
"With the changes implemented by Management having a positive impact on
operations, we are optimistic the Fund is on track to earn an acceptable
return on equity", commented Tracy Graf, CEO of the Fund.
About Carfinco Income Fund
A growth-oriented income trust, Carfinco focuses on providing consumer
car loans to borrowers unable to obtain financing through traditional lending
sources. A network of select independent and franchise dealerships offer
Carfinco's payment plan to their customers who must, along with the vehicle,
meet Carfinco's underwriting guidelines.
The units of the Fund trade on The Toronto Stock Exchange under the
Caution Regarding Forward-Looking Statements - This news release contains
certain forward-looking statements, including statements regarding the
business and anticipated financial performance of the Fund. These statements
are subject to a number of risks and uncertainties. Actual results may differ
materially from results contemplated by the forward-looking statements. When
relying on forward-looking statements to make decisions, investors and others
should carefully consider the foregoing factors and other uncertainties and
should not place undue reliance on such forward-looking statements.
For further information:
For further information: Mr. Tracy A. Graf, CEO & Trustee of Carfinco
Income Fund, Telephone: 1-888-486-4356, Facsimile: 1-888-486-7456, E-mail: