EX-99.12 2 taxopinion.htm OPINION OF STRADLEY RONON STEVENS & YOUNG, LLP, SUPPORTING THE TAX MATTERS AND CONSEQUENCES TO SHAREHOLDERS.
 
EX-99.12
   
Stradley Ronon Stevens & Young, LLP
2005 Market Street
Suite 2600
Philadelphia, PA 19103
Telephone  215.564.8000
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www.stradley.com

November 1, 2021

Board of Trustees, Invesco Dynamic Credit Opportunities Fund
11 Greenway Plaza, Suite 1000
Houston, TX  77046
Board of Trustees, Invesco Dynamic Credit Opportunity Fund
11 Greenway Plaza, Suite 1000
Houston, TX  77046

 
Re:
Agreement and Plan of Reorganization (“Agreement”) adopted as of July 15, 2021 by and among (i) Invesco Dynamic Credit Opportunities Fund, a registered closed-end investment company organized as a Delaware statutory trust (the “Target Fund”); (ii) a newly created Invesco closed-end registered investment company, Invesco Dynamic Credit Opportunity Fund, also organized as a Delaware statutory trust (the “Acquiring Fund”); and (iii) Invesco Advisers, Inc.

Ladies and Gentlemen:

You have requested our opinion as to certain federal income tax consequences of the Reorganization of the Target Fund, pursuant to which: (i) the Acquiring Fund will acquire the Assets and Liabilities of the Target Fund in exchange for Class AX shares of beneficial interest of the Acquiring Fund (“Acquiring Fund Shares”) of equal value to the net assets of the Target Fund, and (ii) the Target Fund will distribute such Acquiring Fund Shares to shareholders of the Target Fund’s common shares of beneficial interest (“Target Fund Common Shares”), in connection with the liquidation of the Target Fund, all upon the terms and conditions set forth in the Agreement (the “Reorganization”).  The Acquiring Fund is, and will be immediately prior to Closing, a shell fund, without assets (other than seed capital) or liabilities, created solely for the purpose of acquiring the Assets and Liabilities of the Target Fund. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Agreement.


Philadelphia, PA • Malvern, PA • Cherry Hill, NJ • Wilmington, DE • Washington, DC • New York, NY • Chicago, IL
A Pennsylvania Limited Liability Partnership
Board of Trustees, Invesco Dynamic Credit Opportunities Fund
Board of Trustees, Invesco Dynamic Credit Opportunity Fund
November 1, 2021
Page 2 of 4


In rendering our opinion, we have reviewed and relied upon: (a) a copy of the executed Agreement, dated as of July 15, 2021; (b) the Proxy Statement/Prospectus provided to shareholders of the Target Fund dated July 21, 2021; (c) certain representations concerning the Reorganization made to us by the Acquiring Fund and the Target Fund in a letter dated November 1, 2021 (the “Representation Letter”); (d) all other documents, financial and other reports and corporate minutes we deemed relevant or appropriate; and (e) such statutes, regulations, rulings and decisions as we deemed material in rendering this opinion.

For purposes of this opinion, we have assumed that the Target Fund on the Closing Date of the Reorganization satisfies, and immediately following the Closing Date of the Reorganization, the Acquiring Fund will continue to satisfy, the requirements of Subchapter M of the Code, for qualification as regulated investment companies.

Based on the foregoing, and provided the Reorganization is carried out in accordance with the applicable laws of the State of Delaware, the terms of the Agreement and the statements in the Representation Letter for the Target Fund and the Acquiring Fund, it is our opinion that for federal income tax purposes:

1. The acquisition by the Acquiring Fund of all of the Assets of the Target Fund, as provided for in the Agreement, in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the Liabilities of the Target Fund, followed by the distribution by the Target Fund to its shareholders of the Acquiring Fund Shares in complete liquidation of the Target Fund, will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, and the Target Fund and the Acquiring Fund each will be a “party to the reorganization” within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Target Fund upon the transfer of all of its Assets to, and assumption of its Liabilities by, the Acquiring Fund in exchange solely for the Acquiring Fund Shares pursuant to Section 361(a) and Section 357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund upon the receipt by it of all of the Assets of the Target Fund in exchange solely for the assumption of the Liabilities of the Target Fund and issuance of the Acquiring Fund Shares pursuant to Section 1032(a) of the Code.
4. No gain or loss will be recognized by the Target Fund upon the distribution of the Acquiring Fund Shares by the Target Fund to its shareholders in complete liquidation of the Target Fund pursuant to Section 361(c)(1) of the Code.
5. The tax basis of the Assets of the Target Fund received by the Acquiring Fund will be the same as the tax basis of such Assets in the hands of the Target Fund immediately prior to the transfer pursuant to Section 362(b) of the Code.
Board of Trustees, Invesco Dynamic Credit Opportunities Fund
Board of Trustees, Invesco Dynamic Credit Opportunity Fund
November 1, 2021
Page 3 of 4


6. The holding periods of the Assets of the Target Fund received by the Acquiring Fund will include the periods during which such Assets were held by the Target Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the Target Fund shareholders upon the exchange of all of their Target Fund Common Shares for the Acquiring Fund Shares (including fractional shares to which they may be entitled), pursuant to Section 354(a) of the Code.
8. The aggregate tax basis of the Acquiring Fund Shares to be received by each shareholder of the Target Fund (including fractional shares to which they may be entitled) will be the same as the aggregate tax basis of the Target Fund Common Shares exchanged therefor pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by a shareholder of the Target Fund (including fractional shares to which they may be entitled) will include the holding period of the Target Fund Common Shares exchanged therefor, provided that the shareholder held such Target Fund Common Shares as a capital asset on the date of the Reorganization pursuant to Section 1223(1) of the Code.
10. For purposes of Section 381 of the Code, the Acquiring Fund will succeed to and take into account, as of the date of the transfer as defined in Section 1.381(b)-1(b) of the regulations issued by the United States Department of the Treasury (the “Income Tax Regulations”), the items of the Target Fund described in Section 381(c) of the Code as if there had been no Reorganization, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code, if applicable, and the Income Tax Regulations promulgated thereunder.
Notwithstanding anything to the contrary herein, we express no opinion as to the effect of the Reorganization on the Target Fund, the Acquiring Fund or any Target Fund shareholders with respect to any asset  (including without limitation any stock held in a passive foreign investment company as defined in Section 1297(a) of the Code or any contract described in Section 1256(b) of the Code) as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) regardless of whether such transfer would otherwise be a nonrecognition transaction under the Code.

Our opinion is based upon the Code, the applicable Income Tax Regulations, the present positions of the Internal Revenue Service (the “Service”) as are set forth in published revenue rulings and revenue procedures, present administrative positions of the Service, and existing judicial decisions, all of which are subject to change either prospectively or retroactively.  We do not undertake to make any continuing analysis of the facts or relevant law following the date of the Reorganization.
Board of Trustees, Invesco Dynamic Credit Opportunities Fund
Board of Trustees, Invesco Dynamic Credit Opportunity Fund
November 1, 2021
Page 4 of 4


Our opinion is conditioned upon the performance by the Acquiring Fund and the Target Fund of the undertakings in the Agreement and the Representation Letter. Except as expressly set forth above, we express no other opinion to any party as to the tax consequences, whether federal, state, local or foreign, with respect to (i) the Reorganization or any transaction related to or contemplated by such Reorganization (or incident thereto) or (ii) the effect, if any, of the Reorganization on any other transaction and/or the effect, if any, of any such other transaction on the Reorganization.

We hereby consent to the use of this opinion as an exhibit to the registration statement of each Acquiring Fund on Form N-14, and any amendments thereto, covering the registration of the Acquiring Fund Shares under the Securities Act of 1933, as amended, to be issued in the Reorganization.


 
Very truly yours,
   
 
/s/ Stradley Ronon Stevens & Young, LLP [CCS]
   
 
Stradley Ronon Stevens & Young, LLP