Guardian Trust confirms that the ninth partial capital repayment to Guardian Mortgage Fund investors, of 3%, is being made on 21 March 2011. This latest repayment brings the total amount repaid to date to 65.25%.
Unit holders made the decision to wind up the Guardian Mortgage Fund in February 2009, and Guardian Trust is now nearly half-way through the period anticipated to full wind-up.
Due to new legislation passed by Government on 10 December 2010 that clarified the rules on how tax is calculated for investment losses from a Portfolio Investment Entity (PIE), Guardian Trust is pursuing a tax rebate on investors’ behalf from the IRD on the loss sustained by the Guardian Mortgage Fund.
Guardian Trust indicated in its communications to investors in November 2010 that the Fund may sustain a loss on the recovery of some loans. The company’s current estimate is that this will be in the region of 7% to 10% of the Fund (as at the date of suspension, 29 July 2008).
The tax rebate will be calculated on the basis of using a 7% loss on the Fund. By applying the loss to the Fund now, Guardian Trust passes on the cash benefit of a rebate to investors immediately, rather than investors having to wait until the date of final wind-up. The rebate application to the IRD will be processed as part of the Fund’s annual tax return (for the year ended 31 March 2011) and requires a write-down to the face value of investors’ units. The write-down will be applied to the Fund on 23 March 2011, following the ninth capital repayment.
Guardian Trust remains committed to its strategy of carefully liquidating loans and returning capital in a programme of regular partial repayments, which the company believes serves the best interest of all unit holders.
Guardian Trust is working hard to protect capital through the wind-up process in an economic environment which remains difficult, and will continue to update investors with its expectations of forthcoming repayments.
