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TORONTO, March 22, 2017 /CNW/ - Scotia Managed Companies Administration Inc. (the "Manager") announced today that Moneda LatAm Fixed Income Fund (the "Fund") (TSX: MLF.UN) will terminate after the close of business on or about June 20, 2017 (the "Termination Date").
The Fund currently derives its returns principally from a forward agreement (the "Forward") which provides the Fund with exposure to the returns of MLF Trust (the "Trust") on a tax-advantaged basis. The Forward will mature on June 19, 2017 (the "Maturity Date") and, due to changes in Canadian tax laws affecting the Forward which no longer allow distributions paid by the Fund to be characterized as capital gains or returns of capital, will not be replaced. Following the Maturity Date, the Fund will no longer be able to fulfil its investment objective which includes providing unitholders with tax-advantaged distributions consisting primarily of returns of capital. The Manager also anticipates that the discontinuation of tax-advantaged distributions may prompt a significant number of unitholders to redeem their units on the next annual redemption date of the Fund, which may result in the Fund no longer being economically practical to continue. Consequently, the Manager believes that it would be in the best interests of the unitholders to terminate the Fund following the Maturity Date of the Forward. The Trust also will terminate on or about the same date as the Fund.
The Fund's units will continue to trade on the Toronto Stock Exchange (the "TSX") until the close of business on the Termination Date, with abridged settlement procedures being in effect such that all trades occurring less than three trading days prior to the Termination Date will settle on the Termination Date. After the close of business on the Termination Date, the Fund will distribute to unitholders their pro rata share of the net assets of the Fund after all liabilities of the Fund have been paid or provided for. It is anticipated that the amount that will be paid will be comprised of a distribution of capital gains by the Fund and a return of capital of the balance of the net asset value per unit. A further press release will be issued by the Fund in the near future with details regarding the Termination Date and the amount that will be paid to unitholders on the Termination Date.
SOURCE Moneda LatAm Fixed Income Fund
For further information: Investor Relations, Moneda LatAm Fixed Income Fund, Web site: www.scotiamanagedcompanies.com, Email: [email protected], 26th Floor, 40 King Street West, Toronto, Ontario M5W 2X6, Tel: (416) 945-4994, Fax: (416) 863-7425