TORONTO, Sept. 29, 2011 /CNW/ - Crown Hill Capital Corporation, the
administrative agent (the "Administrative Agent") for Citadel SMaRT Fund (TSX: CRT.UN) ("Smart") received a notice from Merrill Lynch Canada Inc. ("MLCI") pursuant to Section 6(b) of the ISDA Master Agreement between Smart
and MLCI dated September 14, 2001 (the "Agreement") notifying Smart that an Additional Termination Event had occurred
with respect to MLCI under Part 1(h) of the Schedule to the Agreement.
The notice stated that the downgrade of the credit rating of the debt of
Merrill Lynch & Co., Inc. by Moody's Investor Service ("Moodys") on September 21, 2011 constituted an Additional Termination Event
pursuant to the Agreement.
An Additional Termination Event gives Smart the right to designate an
early termination date for the Agreement and all transactions entered
into pursuant to the Agreement upon no more than 20 days' notice to
MLCI. The early termination date may be any day following the date on
which the notice to MLCI becomes effective according to the terms of
The downgrade of Merrill Lynch & Co., Inc.'s credit rating by Moodys
also means that the credit rating of the guarantor of the Agreement no
longer qualifies as an "approved credit rating" under National
Instrument 81-102 Mutual Funds ("NI 81-102"). Pursuant to NI 81-102, Smart is required to close out its position
under the share basket forward transaction between Smart and MLCI dated
September 14, 2001 (the "Forward") in an orderly and timely fashion.
The Administrative Agent has acknowledged receipt of the notice of the
Additional Termination Event from MLCI and is currently evaluating
Smart's options with respect to the early termination of the Agreement
and the close out of Smart's position under the Forward.
The Administrative Agent does not believe that the termination of the
Agreement and the close out of Smart's position under the Forward will
have a material effect on the net asset value of the units of Smart.
However, the Administrative Agent believes that the termination may
lead to the premature realization of taxable capital gains in Smart.
Certain statements contained in this press release may include
forward-looking information with respect to Smart's operations and
future financial results. Such statements are based on current
expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such
statements. Further information can be found in the disclosure
documents filed by Smart at www.sedar.com.
SOURCE Citadel SMaRT Fund
For further information:
Crown Hill Capital Corporation at 1-877-261-9674 or visit our website www.crownhill.ca