Harvest Portfolios Group Inc.

Harvest Portfolios Group Inc.
Global Advantaged Telecom & Utilities Income Fund
TSX : HGI.UN

Global Advantaged Telecom & Utilities Income Fund

September 15, 2015 13:22 ET

Global Advantaged Telecom & Utilities Income Fund Announces the Proposed Termination of its Forward Agreement

OAKVILLE, ONTARIO--(Marketwired - Sept. 15, 2015) - Global Advantaged Telecom & Utilities Income Fund, (TSX:HGI.UN), (the "Fund") announces that as a result of changes to the Income Tax Act (Canada) (the "Tax Act"), Harvest Portfolios Group Inc., the manager of the Fund (the "Manager") has determined that it would be in the best interests of the Fund to terminate the forward purchase and sale agreement dated March 23, 2011 entered into between the Fund and a Canadian chartered bank (the "Forward Agreement") on or about December 11, 2015 (the "Effective Date"). The Forward Agreement is currently scheduled to terminate in accordance with its terms on March 23, 2016 (the "Termination Date").

The Fund has been established to provide its unitholders with exposure to an actively managed portfolio held by the GTU Portfolio Trust, which is comprised primarily of equity securities of global telecom issuers and global utilities issuers. The Fund's investment objectives are to provide its unitholders with: (i) tax-advantaged monthly distributions; and (ii) capital appreciation.

Through the use of the Forward Agreement, the Fund currently provides tax-advantaged distributions to its security holders because the Fund realizes capital gains or capital losses on the disposition of securities acquired under the Forward Agreement, rather than ordinary income. As a result of the changes to the Tax Act, this favourable tax treatment of character conversion transactions will be eliminated for the Fund after the Termination Date.

The Manager has determined that it will be more efficient and less costly for the Fund to terminate the Forward Agreement and seek to achieve its investment objectives by investing its assets directly in securities of the kind that comprise the investment portfolio of the GTU Portfolio Trust, using the same, or substantially the same, investment strategies as those employed by the GTU Portfolio Trust prior to the Effective Date.

Subject to regulatory approval, the Manager proposes to amend the Fund's investment objectives to remove the words "tax-advantaged". The investment objectives of the Fund after the proposed amendments will be to provide unitholders of the Fund with: (i) monthly distributions; and (ii) capital appreciation.

Subsequent to the termination of the Forward Agreement, the Fund's distributions are no longer expected to be characterized primarily as capital gains or returns of capital and, instead, a portion of the distributions will be characterized as ordinary income. The Fund may still distribute capital gains or returns of capital in the future.

The Manager will receive the same aggregate management fees received from the Fund as paid by the Fund and the GTU Portfolio Trust prior to the termination of the Forward Agreement.

On or about the Effective Date, the Manager expects that the Fund will amend its declaration of trust as required to reflect the termination of the Forward Agreement and revise the investment objectives of the Fund as set out above.

Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Fund. The forward-looking statements are not historical facts but reflect the Fund's, the Manager's and/or investment manager's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including, but not limited to, market factors. Although the Fund, the Manager and/or investment manager believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Fund, the Manager and/or investment manager undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

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