First Trust/Highland Capital Fund Floating Rate Income Fund II completes merger and other matters



    TORONTO, Aug. 18 /CNW/ - First Trust/Highland Capital Floating Rate
Income Fund ("Fund I") and First Trust/Highland Capital Floating Rate Income
Fund II ("Fund II" and together with Fund I, the "Funds") completed the
previously announced merger today resulting in combined assets under
management of Fund II of $28.9 million. Pursuant to the merger, Fund II
acquired all of the assets of Fund I and issued units to Fund I in
consideration therefor. The units of Fund II issued pursuant to the merger
were distributed to unitholders of Fund I upon the redemption of their units.
The units began trading on the Toronto Stock Exchange today. Fund I was
terminated immediately after the merger. The exchange of units of Fund I for
units of Fund II occurred at an exchange ratio of 0.449719 units.
    In addition to the foregoing, the declaration of trust of Fund II was
amended and restated to (i) change the redemption policy of the Fund to, among
other things, cap redemptions in 2010 and 2011; (ii) amend the termination
provisions of the Fund and (iii) allow for certain additional securities
offerings, all as more fully described in the information circular relating to
the meetings dated June 15, 2009 a copy of which is available at
www.sedar.com.
    First Trust/Highland Capital Floating Rate Senior Loan Trust (the "SLT"),
the fund to which Fund II gains exposure pursuant to a forward purchase
agreement, also announced that its declaration of trust was amended and
restated today to amend its investment restrictions, among other things. A
copy of the amended and restated declaration of trust is available at
www.sedar.com.
    Also effective as of today, at the request of the counterparty, the
forward currency hedge between the counterparty and Fund II was amended so
that it will terminate on November 13, 2009. In addition, the SLT announced a
similar change to its forward currency hedge. FT (NSI) Management Co., the
manager of Fund II and the SLT, is seeking alternatives to hedge its foreign
currency exposure but there can be no assurance that alternative arrangements
will be made on substantially similar terms or at all.





For further information:

For further information: regarding the foregoing, please contact: Fraser
Howell, President, First Defined Portfolio Management Co. at (416) 865-8054

Organization Profile

FIRST TRUST/HIGHLAND CAPITAL FLOATING RATE INCOME FUND II

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