TORONTO, March 3, 2015 /CNW/ - Lysander Funds Limited (the
"Manager"), as the manager of Canso Credit Income Fund (the "Fund")
(TSX: PBY.UN), announces that, as a result of changes to the
Income Tax Act (Canada)
(the "Tax Act") and in accordance with the declaration of
trust of the Fund, it has determined that the forward purchase and
sale agreement dated July 16, 2010
entered into between the Fund and The Bank of Nova Scotia (the "Forward Agreement")
will settle on or about its scheduled termination date of
June 30, 2015 (the "Termination
Date") in accordance with its terms and it will not cause the
Fund to enter into a new forward agreement. The Manager has
determined, in accordance with the declaration of trust of the
Fund, that, after the Termination Date, it will be more efficient
and less costly for the Fund to invest its assets directly in
securities of the kind that comprise the investment portfolio of
Canso Credit Trust (the "Portfolio"), the reference fund of
the Fund, using the same, or substantially the same, investment
strategies as those employed by Canso Credit Trust prior to the
Termination Date.
The Manager expects that, on or about the Termination Date, the
Fund will: (i) amend its declaration of trust, among other things,
to permit the Fund to invest its assets directly in securities of
the kind that comprise the Portfolio using the same, or
substantially the same, investment strategies as those employed by
Canso Credit Trust prior to the Termination Date and to remove all
references to the use of the Forward Agreement to gain exposure to
Canso Credit Trust, and (ii) settle the Forward Agreement and
acquire the Portfolio from Canso Credit Trust. These proposed
amendments to the declaration of trust are necessary and desirable
in connection with the termination of the Forward Agreement and,
pursuant to the declaration of trust of the Fund, neither
unitholder approval nor notice to unitholders of the proposed
amendments is required.
The Manager also proposes, subject to regulatory approval, to
amend the declaration of trust to remove the words "tax-advantaged"
and any references to the use of the Forward Agreement to gain
exposure to Canso Credit Trust from its investment objectives.
The investment objectives of the Fund after the proposed
amendments will be: (i) to maximize total returns for unitholders
while reducing risk; and (ii) to provide unitholders with
attractive monthly cash distributions, initially targeted to be
$0.50 per unit per annum,
representing an annual yield of 5.00% based on the original issue
price of $10.00 per unit.
Following the termination of the Forward Agreement,
distributions paid by the Fund are no longer expected to be
characterized primarily as capital gains or returns of capital and
instead a portion of distributions will be characterized as
ordinary income, although the Fund may still distribute capital
gains or returns of capital in the future even without exposure to
forward contracts. The aggregate management fees and
incentive fees received by the Manager from the Fund will remain
the same as received from the Fund and Canso Credit Trust prior to
the Termination Date.
This press release contains forward-looking statements. The
statements that are concerning Canso Credit Income Fund's
objectives, goals, strategies, intentions, plans, beliefs,
expectations and estimates, and the business, operations, financial
performance and condition of Canso Credit Income Fund are
forward-looking statements. The words "believe", "expect",
"anticipate", "estimate", "intend", "may", "will", "would" and
similar expressions and the negative of such expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward looking statements are subject to important risks and
uncertainties that could cause actual results to differ materially
from current expectations. While the Manager considers these risks
and uncertainties to be reasonable based on information currently
available, they may prove to be incorrect.
SOURCE Canso Credit Income Fund