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Crown Hill Capital Corporation Announces Occurrence of Additional Termination Event under Citadel SMaRT Fund Forward Agreement

^{Published on 2011-09-29 15:13:53 - Market Wire}
 

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 Agreement.

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 ].