2008 Ruling 2008-0273501R3 - Guarantee by a MFT -- summary under Subsection 132(6)

A mutual fund trust holds all the units of a subsidary trust which in turn holds the share of the general partner and the Class A units of a limited partnership (the "LP"). There also are subordinated exchangeable units of the LP which are exchangeable into units of the mutual fund trust. In order to finance the expansion of its business, the LP sells a property to a third party, and leases the property back from the third party.

The agreement of the fund as guarantor (and for no fee) to bind and oblige itself solidarily with LP for the full performance by LP of all its obligations under the lease agreement does not cause the fund to lose its mutual fund status.

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