Greenwich Loan Income Fund Limited
23 January 2013
Greenwich Loan Income Fund Limited
("GLIF" or the "Company")
NAV Update, dividend payment and CLO tests for the quarter ended 31 December 2012
Greenwich Loan Income Fund Limited ("GLIF" or "the Company") today announces its dividend for the fourth quarter, unaudited net asset value as at 31 December 2012 and the quarterly CLO test results.
Net Asset Value
The Company's unaudited net asset value (NAV) per share as at 31 December 2012 was 49.1p. This compares to the unaudited NAV of 49.7p per share as at 30 September 2012.
As reported in the Company's full year results on 26 March 2012, the NAV has been calculated using the fair value of the Company's consolidated assets less the par value of the consolidated debt.
During the last quarter of 2012 the US portfolio was flat, as a small gain in dollar terms was balanced by a small adverse movement in the dollar against sterling. Prepayments continued to be high within the CLO, with $54.9m received in prepayments and scheduled amortisations during the quarter, vs $47.5m in the same quarter of 2011 and $53.8m in the same quarter of 2010.
As a whole 2012 saw $141.6m of prepayments and scheduled amortisations, vs $141.6m in 2011 and $106.2m in 2010. Secondary sales were at broadly comparable levels with the previous two years, totaling $23.4m vs $26.5m in 2011 and $24.8m in 2010.
As primary issuance has accelerated reinvestment has continued to focus on both primary and secondary deals, and we believe certain opportunities remain to acquire loans below par and thus the potential to accrete value on eventual repayment, albeit that the rate at which it has been possible to accrete this value has reduced as market conditions have improved.
BMS Finance, our UK business, has showed promising results since its acquisition in November and the Board of GLIF remains confident of the potential in the business. By the end of 2012 there was a marginal uplift in the NAV of the business and the company had made one additional loan. The pipeline of potential business, at £45m, is above target and the team is seeking to diversify their sources of business to ensure that this remains the case.
Dividend
The Directors of GLIF have today declared a dividend of 1.25p per share for the third quarter of 2012. The dividend will be payable to shareholders on the register on the record date of 1 February 2013.
The shares will have an ex-date of 30 January 2013 and the dividend will be paid on 15 February 2013.
Quarterly CLO Test Results
The Company also announces the test results as of 3 January 2013 pursuant to the indenture of T2 Income Fund CLO I Ltd (the "CLO"), of which the Company owns all of the residual economic interest. The report summarising the results of those tests can be found at the link below:
http://www.rns-pdf.londonstockexchange.com/rns/1411W_-2013-1-22.pdf
With respect to the various tests required under the CLO indenture, the CLO passed all of the collateral and coverage tests as of 3 January 2013, but failed one portfolio percentage limitation test, which relates to the minimum percentage requirement for senior secured loans, as the CLO received scheduled amortizations, prepayments and sales proceeds of approximately US$57.5 million during the quarter ended 3 January 2013, and cash balances have the effect of reducing the percentage of invested funds for purposes of the portfolio percentage limitation test. The available cash balance is being reinvested which, to the extent invested in senior secured loans, will address the test requirement. It should be noted that the consequence of failing this percentage limitation test is that each new investment made by the CLO must "maintain or improve" the test result.
The quarterly results indicate that the CLO met all of the covenant tests necessary for a full payment to be made to the Company, and approximately US$3.8 million has been received from the trustee.
As described in previous press releases, the CLO indenture contains a variety of covenants, compliance with which could be made more difficult or impossible should credit markets deteriorate or the loans held by the CLO fail to make expected payments or otherwise not perform, or for a variety of other reasons, and which if violated could result in additional principal paydowns of the CLO's notes and/or interest diversion.
For further information, please contact:
Geoffrey Miller
Greenwich Loan Income Fund Limited
+1 203 916 0003
+44 7408 830719
Patrick Conroy
Greenwich Loan Income Fund Limited
+1 203 983 5282
Investec Bank plc
Tim Mitchell
Jeremy Ellis
+44 (0) 207 597 5970
Mourant Ozannes Securities Limited
Gayna Babinski
+44 (0) 1481 739338
Ed Gascoigne Pees
FTI Consulting
+44 (0) 207 269 7132