TORONTO, June 12 /CNW/ - Investment Grade Trust announces that it
received a credit event notice today from UBS AG with respect to Visteon
Corporation as a result of that entity filing for bankruptcy protection under
Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court
for the District of Delaware.
The Investment Grade Trust (the "Fund") is an investment trust
established under the laws of the Province of Ontario on January 28, 2003. The
Fund will terminate operations on December 31, 2012 (the "Termination Date")
and the net assets will be distributed pro rata to holders of units (the
"Unitholders"). The Fund has exposure, by way of a share basket forward
agreement, to a portfolio of debt securities and certain derivatives contracts
held by Bond Trust.
One of the derivatives contracts held by Bond Trust is a Swap Contract
with UBS AG that provides a currency hedge, smoothes out the cash flow of the
portfolio of debt securities and provides additional yield through exposure to
additional debt securities. Visteon Corporation is one of the debt issuers
referenced in the Swap Contract and the occurrence of a credit event with
respect to Visteon Corporation results in a decrease of 0.495% in the yield of
the Swap Contract. This reduction in yield will result in an approximately
$0.05 reduction in the annual distributions paid to Unitholders by the Fund.
The Fund will use its best efforts to delay the implementation of the
reduction in the distributions paid by the Fund to Unitholders and, barring
any other credit events, the Fund expects that distribution for 2009 will
remain $0.50. The Fund expects that the reduced yield will result in a
reduction in the 2012 distributions of approximately $0.20.
The units are listed for trading on the Toronto Stock Exchange under the
For further information:
For further information: Crown Hill Capital, (416) 361-1212