Global Credit Pref Corp.
TSX : GPA.PR.A

Global Credit Pref Corp.
Gatehouse Capital Inc.

Gatehouse Capital Inc.

July 06, 2009 17:36 ET

Global Credit Pref Corp. Announcement

TORONTO, ONTARIO--(Marketwire - July 6, 2009) - Global Credit Pref Corp. (TSX:GPA.PR.A) announced that it received a credit event notice today from The Toronto-Dominion Bank with respect to Lear Corp. as a result of that entity failing to make the $38 million required interest payments within the 30 day grace period on its 8.5% and 8.75% senior notes.

Global Credit Pref Corp. is a mutual fund corporation that issued 10-year redeemable, retractable cumulative preferred shares. The Company has exposure, by way of an equity forward sale agreement, to a structured credit linked note issued by The Toronto-Dominion Bank and held by Global Credit Trust, the return on which is currently linked to the credit performance of 122 reference entities, subsequent to the removal of Lear Corp. (the "CLN Portfolio").

The return on the credit linked note is linked to the number of defaults experienced over its term among the reference entities in the CLN Portfolio. The credit linked note has been structured so that it is unaffected by the first net losses on the CLN Portfolio up to 5.12% of the initial value of the CLN Portfolio (initially representing defaults by 11 reference entities in a CLN Portfolio comprised of 129 reference entities). The net loss on a reference entity that defaults is calculated as the percentage exposure in the CLN Portfolio to such reference entity reduced by a 40% fixed recovery rate. Following the credit event, the credit linked note will be able to withstand approximately 5 further credit events in the CLN Portfolio.

Global Credit Pref Corp.'s capacity to return $25.00 per preferred share on the scheduled redemption date of September 30, 2015 and the payment of quarterly fixed cumulative preferential distributions of $0.3281 per preferred share (a 5.25% yield on the original subscription price of $25.00 per preferred share) will not be affected by this credit event.

The preferred shares are listed for trading on the Toronto Stock Exchange under the symbol GPA.PR.A.

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