Citadel Premium Income Fund

Citadel Premium Income Fund

April 24, 2007 13:03 ET

Citadel Premium Income Fund Announces Redemption Information

CALGARY, ALBERTA--(CCNMatthews - April 24, 2007) - Citadel Premium Income Fund (the "Fund") (TSX:CPF.UN) provides additional information to its unitholders that may be considering redeeming units of the Fund on its upcoming annual redemption on June 28, 2007.

Pursuant the Fund's Declaration of Trust and as set out in the Final Prospectus of Citadel Premium Income Fund dated July 13, 2006, trust units of the Fund may be surrendered for redemption commencing in June 2007, subject to certain conditions, for redemption on the second last Business Day of June (the "Redemption Date"). Unitholders whose trust units are redeemed will receive a redemption price equal to the Redemption Value calculated as of the Redemption Date; where "Redemption Value" means an amount equal to 100% of the net asset value per trust unit calculated on the Redemption Date, less the following costs incurred in, and as a result of, funding the redemption, such total costs to be allocated pro rata among the trust units being redeemed:

(1) all commissions and sales charges incurred in funding the redemption;

(2) (an amount equal to the highest marginal tax rate in Alberta multiplied by the taxable portion of capital gains realized by the Fund in funding the redemption;) - See below not applicable for 2007

(3) an amount equal to $0.20, to offset increased general and administrative expenses per trust following the redemption; and

(4) the difference between the proceeds realized on the sale of the Fund's portfolio securities sold to fund the Redemption Value and the value the same portfolio securities are valued at for the purpose of calculating net asset value on the Redemption Date.

Payment of the redemption price calculated in the foregoing manner will be made on or before the 15th business day in July.

The Fund has determined that it will be entitled to claim a capital gains refund in respect of the 2007 tax year in an amount that would offset the taxable capital gains tax costs to the Fund to be incurred in funding redemptions. Accordingly, the Fund has determined that no amount will be deducted from the net asset value of the Fund in determining the Redemption Value under paragraph 2 of the definition of Redemption Value (set out above).

A Unitholder who desires to exercise redemption privileges in 2007 must do so by causing the participant through which he or she holds his or her trust units to deliver to CDS Clearing and Depository Services Inc. ("CDS") at its office in the City of Toronto on behalf of the unitholder, a written notice of the unitholder's intention to redeem trust units by no later than 5:00 p.m. (Toronto time) on May 31, 2007. A Unitholder who desires to redeem trust units should ensure that its CDS participant is provided with notice of his or her intention to exercise his or her redemption right sufficiently in advance of May 31, 2007 so as to permit the CDS participant to deliver a notice to CDS by 5:00 p.m. (Toronto time) on May 31, 2007.

Contact Information

  • Citadel Premium Income Fund
    Joe MacDonald
    Executive Vice President, Sales and Marketing