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TORONTO, Nov. 20, 2014 /CNW/ - OCP Credit Strategy Fund (the "Fund") (TSX: OCS.UN) announces the extension (the "Extension") of the forward agreement (the "Forward Agreement") entered into between the Fund and The Bank of Nova Scotia on November 20, 2009. The termination date of the Forward Agreement has been extended from November 20, 2014 to December 29, 2014 (the "Termination Date").
As a result of changes to the Income Tax Act (Canada) (the "Tax Act"), the Forward Agreement will be terminated on the Termination Date, and the portfolio comprised primarily of senior debt obligations of non-investment grade North American issuers (the "Portfolio") held by OCP Investment Trust will, subsequent to the Termination Date, be held directly by the Fund. Currently the Fund obtains exposure to the Portfolio through the Forward Agreement.
It is expected that the Fund will generate capital gains upon the termination of the Forward Agreement due to unrealized appreciation in positions selected by the Manager for the Portfolio. Based on current valuations however, the Fund does not expect the amount of such gains to exceed the amount of cash distributions paid to unitholders on account of 2014. To the extent the Fund realizes capital gains which exceed its distributions, the Fund intends to declare a special capital gains distribution to unitholders of record on December 30, 2014 (the "Special Distribution"). In such circumstances, the Fund intends to pay a portion of the Special Distribution in cash (for payment of all or part of the tax liability of unitholders of the Fund resulting from any such capital gains distribution).
In addition, following the termination of the Forward Agreement, distributions paid by the Fund will be characterized primarily as income for tax purposes to the extent they exceed available non-capital losses of the Fund. The Extension and the termination of the Forward Agreement will not affect the status of the Fund as a "mutual fund trust" under the Tax Act.
SOURCE: Onex Credit Partners, LLC
For further information: OCP Credit Strategy Fund, Toronto: 647.260.4055, Toll Free: 1.877.260.4055, www.ocpcreditstrategy.com or Onex Credit Partners, LLC, [email protected], 1.201.541.2121