Greenwich Loan Income Fund Limited
NAV Update and dividend payment for the quarter ended 31 December 2011
Greenwich Loan Income Fund Limited ("GLIF" or "the Company") today announces its unaudited net asset value as at 31 December 2011 and an increased dividend for the fourth quarter.
Net Asset Value
The Company's unaudited net asset value (NAV) per share was 73.4p. This compares to the unaudited NAV of 71.6p per share as at 30 September 2011. The increase in NAV during the most recent quarter is principally attributable to an increase in the valuation of the Company's equity portfolio while values within the loan portfolio were flat. Offset against the increase in equity values, the fair value of liabilities rose and the dollar weakened slightly against sterling.
At the quarter end, the weighted average market bid for the Company's loan portfolio was 92.3% of par and for the liabilities 84.5%. This compares to last quarter's figures of 92.6% of par and 83.2% respectively.
As previously described to shareholders, under International Financial Reporting Standards (IFRS) the consolidated results of operations for the Company include the impact of carrying its investments and its liabilities at fair value. Shareholders should be aware that the Company's realisation of the full NAV is unlikely. The NAV, as calculated in accordance with IFRS, reflects the theoretical fair value of the liabilities of the CLO but, because the market is rather illiquid, it may be difficult for the Company to acquire any or a significant portion of those liabilities.
The other two values customarily calculated to provide further clarity as to the dynamics within the value of the business are as follows:
- the value based upon assets at market value and liabilities at par was 48.3p per share as at 31 December 2011, compared to 44.4p as at 30 September 2011 and 45.4p per share as at 31 December 2010.
- the value based upon CLO assets as calculated for interest diversion purposes, remaining assets at market and liabilities at par was 56.8 per share as at 31 December 2011, compared to 53.7p per share as at 30 September 2011 and 52.8p as at 31 December 2010.
It should be noted that the figures presented herein are unaudited and may be subject to revision.
The net asset value benefited from the inclusion for the first time of a valuation of CBA Group (UI Holdings) and Provo Craft equity positions, held within T2 CLO I Ltd ("the CLO") and both valued by an independent valuation company. While the Company's holding of the CLO was under review no value was attributed to these holdings but now that GLIF has decided to retain the CLO in its entirety the Board felt it appropriate to reflect the value of all of the positions within the CLO.
The Company's total equity related positions, including CBA Group and Provo Craft , the IFDC equity position (held through Asset Management Investment Company Ltd), Stratus Technologies equity and a Lombardia Capital Partners warrant (both held directly by GLIF), are valued at approximately £8.7 million. This does not include GSC 2007-8X and Halcyon 2007-2A CLO where the Company owns a proportion of the residual economic interests ("CLO equity"); these holdings are valued at £1.9 million and £2.2 million, respectively.
Dividend
The Company's revenue has been strengthened by a higher level of interest from the CLO, interest payments from the two CLO equity positions purchased towards the end of last year and income from both of the remaining investments from the Asset Management Investment Company acquisition. Between them these factors increased the income by over US$1 million in the past quarter compared to the same period last year.
Accordingly, rather than review the level of dividend next quarter as had been previously indicated, the Directors of GLIF have declared an increased dividend of 1.15p per share for the fourth quarter of 2011.
The quantum of the increase reflects the Board's desire to balance a progressive dividend policy with an intention to strengthen the Company's dividend cover in order to increase its ability to absorb external shocks and to allow flexibility in its future portfolio management. The Board believes that a sustainable and progressive dividend is more valuable to long term shareholders than achieving the highest possible dividend in any one period.
The dividend will be payable to shareholders on the register on the record date of 27 January 2012.
The shares will have an ex-date of 25 January 2012 and will be payable on 13 February 2012.
Contacts:
Geoffrey Miller
Greenwich Loan Income Fund Limited
+353 1 4433 466
Patrick Conroy
Greenwich Loan Income Fund Limited
+1 203 983 5282
Philip Secrett
Nominated Adviser
Grant Thornton Corporate Finance
+44 (0) 20 7383 5100
James Maxwell
Singer Capital Markets Limited
+44 (0) 20 3205 7623
Ed Gascoigne Pees
Financial Dynamics
+44 (0) 20 7269 7132