Half-year Report

RNS Number : 5919K

CVC Credit Partners European OpsLtd

22 September 2016

FOR IMMEDIATE RELEASE

RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., JERSEY BRANCH HALF-YEARLY RESULTS ANNOUNCEMENT

THE BOARD OF DIRECTORS OF CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED ANNOUNCE HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016

The information contained within this announcement constitutes inside information.

HALF YEARLY BOARD report

financial highlights, performance summary and dividend history

Financial highlights

Contractual Quarterly Tenders

During the period CVC Credit Partners European Opportunities Limited (the "Company") completed the following Contractual Quarterly Tenders. On the settlement date the tendered shares were transferred to the Company's name and held in treasury.

Settlement date

Euro ordinary shares

(the "Euro Shares") tendered

Sterling ordinary shares

(the "Sterling Shares") tendered

12 February 2016

29,210,354

262,055

13 May 2016

118,000

9,966,666

Number of shares in issue as at 30 June 2016:

163,868,488 Euro Shares¹ (30 June 2015: 230,375,407 Euro Shares)

261,941,370 Sterling Shares² (30 June 2015: 270,249,675 Sterling Shares)

Market capitalisation as at 30 June 2016:

Euro Share class: €157,805,354 (30 June 2015 €239,590,423)

Sterling Share class: £254,737,982 (30 June 2015: £281,735,286)

Performance summary

	As at 30 June 2016	As at 31 December 2015
Net Asset Value per Euro Share	€1.0199	€1.0257
Euro Share price (bid market)³	€0.9630	€1.0100
Euro Share Net Asset Value total return⁴	1.9324%	5.0820%

Net Asset Value per Sterling Share	£1.0325	£1.0352
Sterling Share price (bid market) ³	£0.9725	£1.0100
Sterling Share Net Asset Value total return⁴	2.2222%	5.6188%

Period highs and lows

	Six months ended 30 June 2016	Six months ended 30 June 2016	Year ended 31 December 2015	Year ended 31 December 2015
	High	Low	High	Low
Net Asset Value per Euro Share	€1.0305	€0.9788	€1.0540	€1.0104
Euro Share price (bid market)³	€1.0250	€0.9400	€1.0550	€1.0000
Net Asset Value per Sterling Share	£1.0425	£0.9875	£1.0597	£1.0139
Sterling Share price (bid market) ³	£1.0150	£0.9525	£1.0650	£1.0050

Dividend history

	Ex-dividend date	Payment date
Sterling - £0.025 per share	05/02/2015	20/02/2015
Euro - €0.025 per share	05/02/2015	20/02/2015

Euro - €0.025 per Euro Share	09/07/2015	07/08/2015
Sterling - £0.025 per Sterling Share	09/07/2015	07/08/2015

Euro - €0.025 per Euro Share	04/02/2016	26/02/2016
Sterling - £0.025 per Sterling Share	04/02/2016	26/02/2016

Please refer to note 15 for further information subsequent to the reporting period.

¹ - Excludes 63,631,844 (2015: 280,875) Euro Shares held as treasury shares

² - Excludes 10,603,193 (2015: 25,839) Sterling Shares held as treasury shares

³ - Source: Bloomberg

⁴ - Sources: BNPP, Bloomberg. NAV total return is net of issue costs and includes dividends. Any dividends received by a shareholder are assumed to have been reinvested in the Company's assets (for NAV total return).

chairman's statement

Introduction

I am pleased to present to you the Half Yearly Financial Report of the Company for the six month period ended 30 June 2016.

Performance and Market Conditions

The Company's Euro and Sterling Shares have returned 1.9% and 2.2% respectively on a Net Asset Value ("NAV") total return basis for the period under review. This performance is reflective both of the difficult trading conditions which characterised the first seven weeks of 2016, combined with a Brexit-influenced downturn at the end of the period. It is notable that many of the macroeconomic and geopolitical factors that the Board reviews on a regular basis have continued to support a low growth, low inflation, low or negative real interest rate environment. The effect of these features on the Company's underlying asset portfolio mean that we continue to see high yield assets and equities rise amidst low volatility and yield contraction.

The Investment Vehicle Manager's response to these conditions has been to continue to balance the portfolio roughly equally between flow names delivering consistent yield, and allocations to the credit opportunities strategy, where excess returns are sought as these investments play out. The Board will be looking to these credit opportunities positions to drive NAV total return performance as we enter the second half of 2016.

Corporate Activities

The Company has seen a reduction in its NAV and market capitalisation across both Sterling and Euro Share classes in the period, due to function of the Contractual Quarterly Tender mechanism available to Shareholders. The results of the recent tender to be effected in quarter three will further reduce the market capitalisations of the two share classes. The Board continues to view the Contractual Quarterly Tender mechanism as being an appropriate and attractive characteristic of the Company's constitutional construction, and sees no impact on the Company's viability as a result of the tenders made by Shareholders to date.

Dividend Payments

The Board has recently received a communication from the board of the Investment Vehicle to the effect that yield flows from the Investment Vehicle will be made on a quarterly basis, with effect from the end of quarter three. As a result, the Board intends to commence the payment of dividends to shareholders on a quarterly basis. The first such quarterly dividend is expected to be declared on 1 November 2016 and paid on 2 December 2016. This change in the frequency of dividend payments will not have any effect on the Company's annual dividend yield of around 5%.

Other Matters

As always, I would like to thank my fellow Directors, the portfolio management team at CVC Credit Partners, our advisors and investment bankers for their support and wise counsel, and I would also like to extend thanks to all of our shareholders for your continuing commitment to the Company.

Richard Michael Boléat

Chairman

22 September 2016

executive sUMMARY

Corporate summary

The Company is a closed-ended investment company limited by shares, registered and incorporated in Jersey under the Companies (Jersey) Law 1991 on 20 March 2013, with registration number 112635. The Company's share capital is denominated in Euro and Sterling and consists of Euro Shares and Sterling Shares. The Company's Euro and Sterling Shares are listed on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange. As at 30 June 2016, the Company's issued share capital comprised 163,868,488 (31 December 2015: 195,451,704) Euro Shares, 261,941,370 (31 December 2015: 270,529,508) Sterling Shares and two management shares, (with no par value or voting rights). The Company also held 63,631,844 (31 December 2015: 34,303,490) Euro Shares and 10,603,193 (31 December 2015: 374,472) Sterling Shares in treasury.

The Company is self-managed and the Directors have invested the net proceeds from share issues into Compartment A of an existing European credit opportunities investment vehicle, CVC European Credit Opportunities S.à r.l. (the "Investment Vehicle"), managed by CVC Credit Partners Investment Management Limited (the "Investment Vehicle Manager").

The Company is a member of the Association of Investment Companies ("AIC") and is regulated by the Jersey Financial Services Commission.

Significant events during the six months ended 30 June 2016

Contractual quarterly tenders

The Company completed the following tenders under its Contractual Quarterly Tender mechanism during the six months ended 30 June 2016. All the shares tendered were transferred into the Company's name and held in treasury.

On 12 February 2016, 29,210,354 Euro Shares and 262,055 Sterling Shares were tendered under the December 2015 tender at a price of €1.0107 and £1.0202 respectively.

On 13 May 2016, 118,000 Euro Shares and 9,966,666 Sterling Shares were tendered under the March 2016 tender at a price of €0.9868 and £0.9969 respectively.

Company investment objective

The Company's investment objective is to provide Shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade debt instruments.

Company asset allocation

The Company's investment policy is to invest predominantly in companies domiciled, or with material operations, in Western Europe across various industries. The Company's investments are focused on senior secured obligations of such companies but investments are also made across the capital structure of such borrowers. The Company pursues its investment policy by investing net placing proceeds from share issues in the Investment Vehicle.

The investment policy of the Investment Vehicle is subject to the following limits (the "investment limits"):

· A minimum of 50 per cent of the Investment Vehicle's gross assets will be invested in senior secured obligations (which, for the purposes of this investment limit will include cash and cash equivalents).

· A minimum of 70 per cent of the Investment Vehicle's gross assets will be invested in obligations of companies/borrowers domiciled, or with material operations, in Western Europe.

· A maximum of 7.5 per cent of the Investment Vehicle's gross assets will be invested at any given time in obligations of a single borrower subject to a single exception at any one time permitting investment of up to 15 per cent in order to participate in a loan to a single borrower, provided the exposure is sold down to a maximum of 7.5 per cent within 12 months of acquisition.

· A maximum of 7.5 per cent of the Investment Vehicle's gross assets will be invested in credit loan obligation securities, with no primary investments permitted to be made in CVC Credit Partners managed structured finance transactions.

· A maximum of 25 per cent of the Investment Vehicle's gross assets will be invested in CVC Capital Portfolio Company debt obligations calculated as invested cost as a percentage of the Investment Vehicles gross assets.

The Investment Vehicle is permitted to borrow up to an amount equal to 100 per cent of the NAV of the Investment Vehicle at the time of borrowing (the "borrowing limit").

General

The investment objective and investment policy of the Investment Vehicle are consistent with the investment objective and investment policy of the Company. In the event that changes are made to the investment objective or investment policy (including the investment limits and/or the borrowing limit) the procedures set out in the section below entitled "Material changes to the investment objective and policy of the Company or the Investment Vehicle" will apply.

Company borrowing limit

The Company may borrow up to 15 per cent of the NAV of the Company for the sole purpose of purchasing or redeeming its own shares otherwise than pursuant to Contractual Quarterly Tenders.

Material changes to the investment objective and policy of the Company or the Investment Vehicle

The Company receives periodic updates from the Investment Vehicle. Should these updates advise any changes (material or otherwise) to the Investment Vehicle's investment objective, investment policy, investment limits and/or borrowing limit then the Directors will seek Shareholder approval of any changes which are either material in their own right or, when viewed as a whole, together with previous non-material changes, constitute a material change from the published investment objective or policy of the Company.

If Shareholders do not approve the change in investment objective or investment policy of the Company such that it is once again materially consistent with that of the Investment Vehicle (including the Investment Limits and/or the Borrowing Limit), the Directors will redeem the Company's investment in the Investment Vehicle as soon as reasonably practicable.

The Directors do not currently intend to propose any material changes to the Company's investment objective or investment policy, other than in unforeseen circumstances such as to match any changes made to the Investment Vehicle's investment objective or investment policy. As required by the Listing Rules, any material change to the investment policy of the Company would be made only with the approval of Shareholders.

Investment strategy and approach

The Company gave effect to its investment policy by subscribing for Preferred Equity Certificates, (the "PECs"), Series 4 and 5, issued by the Investment Vehicle. Series 4 and 5 PECs are denominated in Euro and Sterling respectively and are income distributing.

The Investment Vehicle Manager's investment strategy for the Investment Vehicle is to make loan or bond investments in companies based on detailed fundamental analysis of the operations and market position of each company and its capital structure.

The Investment Vehicle invests in the debt of larger companies which offer a number of differing characteristics relative to the broader market, including but not limited to:

(i) larger, more defensive market positions;

(ii) access to broader management talent;

(iii) multinational operations which may reduce individual customer, sector or geographic risk and provide diverse cashflow;

(iv) working capital and capital expenditure which can be managed in the event of a slowdown in economic growth; and

(v) wider access to both debt and equity capital markets.

Based on the market opportunity and relative value, the Investment Vehicle invests in a range of different credit instruments across the capital structure of target companies (including but not limited to senior secured, second lien and mezzanine loans and senior secured, unsecured and subordinated bonds).

Assets are sourced in both the new issue and secondary markets, using the sourcing networks of the Investment Vehicle Manager and CVC Group generally.

The Investment Vehicle Manager's access to deals is supported by the network of contacts and relationships of its leadership team and investment professionals, as well as the strong positioning of the CVC Group in the European leveraged finance markets.

The Investment Vehicle Manager analyses the risk of credit loss for each investment on the basis it will be held to maturity but takes an active approach to the sale of investments once the investment thesis has been realised.

The liquidity terms of the Investment Vehicle are also an important factor considered in determining the composition of the investment Portfolio.

Further information can be found in the Investment Vehicle Manager's Report which is incorporated within this Half Yearly Financial Report below for informational purposes only.

Director interests

Information on each Director is shown below.

No Director has any other interest in any contract to which the Company is a party and no Director has held or holds any management or ordinary shares in the Company.

Principal risks and uncertainties

When considering the NAV total return of the Company, the Board takes account of the risk which has been taken in order to achieve that return. The Board has carried out a robust assessment of the principal risks facing the Company including those which would threaten its business model, future performance, solvency or liquidity. The following risk factors have been identified and are listed below:

· Supply and demand

· Investment portfolio concentration

· Liquidity

· Foreign exchange risk

· Macro-economic factors

· Capital management risks

Please refer below for a list of the principal risks relating to an investment in the shares of the Company.

· Shareholders have no right to have their shares redeemed or repurchased by the Company.

· Contractual Quarterly Tenders are subject to certain restrictions and so Shareholders should not have an expectation that all or any of the shares they make available for sale to the Company will be purchased through the Contractual Quarterly Tender facility.

· The Shares in the Company may trade at a discount to the NAV per Share of the relevant class of shares and Shareholders may be unable to realise their Shares on the market at the NAV per Share or at any other price.

Information on these risks and how they are managed is given in the Annual Financial Report for the year ended 31 December 2015. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were in the six months under review.

Events after the reporting date

The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial periods not already disclosed in this report or the attached financial statements.

Going concern

Under the AIC Code of Corporate Governance ("AIC Code") and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern from the date of approval of the condensed financial statements.

After reviewing the Company's budget and cash flow forecast for the next twelve months, the Directors are satisfied that, at the time of approving these financial statements, no material uncertainties exist that may cast significant doubt concerning the Company's ability to continue for the foreseeable future. The Directors therefore believe that it is appropriate to adopt the going concern basis in preparing these condensed financial statements.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Investment Vehicle is appropriate for and is capable of meeting the Company's objectives.

The overall strategy remains unchanged and it is the Directors' assessment that the Investment Vehicle Manager's resources are appropriate to properly manage the Investment Vehicle's portfolio in the current and anticipated investment environment.

Please refer to the Investment Vehicle Manager's report for detail regarding performance to date of the Investment Vehicle's investments and the main trends and factors likely to affect the future development, performance and position of those investments.

Board members

CHAIRMAN

Richard Michael Boléat, aged 53 (independent). Appointed 20 March 2013.

Richard qualified as a Chartered Accountant with Coopers & Lybrand in the United Kingdom in 1987 and subsequently worked in the Middle East, Africa and the United Kingdom for a number of commercial and financial services groups, during which time he acted as a buy-side high yield credit analyst for an Arabian investment bank.

From 1996 he was a Principal of Channel House, a Jersey based financial services group, which was acquired by Capita Group plc in September 2005. Richard led their financial services client practice in Jersey until September 2007.

He currently acts as a non-executive director of a number of substantial collective investment and investment management entities and is active in a number of asset classes including global macro, super-senior corporate CDS, long/short equity, fund of funds and EM real estate. He presently acts as Chairman of Yatra Capital Limited and Funding Circle SME Fund Limited. He is personally regulated by the Jersey Financial Services Commission in the conduct of financial services business and is a member of the Alternative Investment Management Association (AIMA), the International Corporate Governance Network and the European Corporate Governance Institute.

Directors

Mark Richard Tucker, aged 54 (independent). Appointed 20 March 2013.

In 1997 Mark joined Arborhedge Investments, Inc. (formally HFR Investments, Inc.) a Chicago based, boutique broker dealer specialising in the placement of hedge fund interests to institutions globally. Mark served as the President and Chief Executive Officer of Arborhedge until his return to Jersey in 2002, after which he remained a director and shareholder until 2012. Previously, Mark held a variety of retail and private banking roles in Jersey with both HSBC and Cater Allen Bank.

In 1988 Mark relocated first to London, where he joined GNI Limited in a financial futures business development role, and

later to New York where he was responsible for the alternative investment program of Gresham Asset Management, Inc. and later for the asset allocation and manager selection activities of Mitsui & Company.

Mark is personally regulated by the Jersey Financial Services Commission in the conduct of financial services business, and he is an Associate of the Chartered Institute of Bankers, a Chartered Fellow of the Chartered Institute for Securities and Investment and a member of the Institute of Directors. Mark also serves as a non-executive director to several other offshore structures.

David Alan Wood, aged 62. Appointed 20 March 2013.

David was a founding partner of CVC Cordatus (a predecessor to CVC Credit Partners Group) in 2006, but retired in April 2012. He was a member of CVC Credit Partners Advisory Board until April 2015. With 36 years of industry experience, David joined from Deutsche Bank where he was Co-Head of European Leveraged Finance for 5 years. Prior to this, he was a Managing Director at JP Morgan/Chase Manhattan where he worked in leveraged finance and corporate banking. Mr Wood continues to sit on the CVC Credit Partners Conflicts Committee.

investment vehicle manager's report

Summary

The Investment Vehicle Manager is pleased with the portfolio composition for the period ended 30 June 2016, with each strategy performing to expectations against a challenging market backdrop. The Investment Vehicle Manager remains optimistic with regards to the continued growing opportunities within the Credit Opportunities and Special Situations segments of the portfolio given the positive asset flows seen across the desk.

Portfolio

As at 30 June 2016, the Investment Vehicle portfolio was invested in-line with the Investment Vehicle's investment policy and was diversified with 65 issuers¹ across 23 different industries and 15 different countries, with no individual issuer representing an exposure of more than 4.4% of the portfolio.

Portfolio Statistics²

Percentage of Portfolio in Floating Rate Assets	90.2%
Percentage of Portfolio in Fixed Rate Assets	9.8%
Weighted Average Price³	87.9
Yield to Maturity	8.4%
Current Yield	6.9%
Weighted Average Fixed Rate Coupon	8.1%
Weighted Average Floating Rate plus Margin	5.1%

5 Largest Issuers
Issuer	% of Gross Assets	Industry	Country
Zodiac	4.4	Leisure	France
Euro Garages	3.5	Retail Store	UK
Tipico	3.3	Gaming	Luxembourg
Saur	3.0	Ecological	France
Consolis	2.8	Buildings & Real Estate	France

5 Largest Industry Positions¹	%
Finance	10.8%
Leisure, Amusement, Motion Pictures, Entertainment	10.1%
Retail Store	9.9%
Chemicals, Plastics and Rubber	9.9%
Hotels, Motels, Inns and Gaming	9.8%

Geographical Breakdown by issuer country¹	%
France	23.3%
UK	18.0%
U.S.	13.9%
Spain	11.9%
Luxembourg	10.6%
Sweden	6.5%
Other	15.8%

Currency Breakdown	%
EUR	65.1%
USD	18.1%
GBP	16.7%
Other	0.1%

Asset Breakdown	%
Loans (1st Lien)	57.9%
Senior Secured Bonds	15.8%
Loans (2nd Lien)	8.3%
Cash	6.3%
Structured	6.1%
PIK	4.7%
Other	2.6%
Senior Unsecured Bonds	(1.7)%

Performance

In H1 2016 the portfolio's total return (including dividends reinvested) was 1.9% to Euro investors and 2.2% to Sterling investors. For the same period, the Credit Suisse European HY Index returned 3.48% and the Credit Suisse European Leveraged Loan Index returned 2.28%.

Throughout the year, as per our monthly reports, we have maintained a conservative approach to positioning especially in the lead up to the end of Q2. Expectations were that if Brexit did not happen, the market would not move significantly higher; however, if it were to occur, there would be an initial negative mark-to-market movement in both GBP assets and exposures to the Credit Opportunities segment of the portfolio. Positioning into the vote included:

(i) increasing exposure to European Performing Credit as the supply and demand remained evenly balanced;

(ii) managing cash balances to allow the portfolio to take advantage of volatility;

(iii) focusing GBP exposures predominantly in Performing Core Income Term Loans (in leading domestic names as well as in large cross border transactions) with issuers with strong credit fundamentals; and

(iv) limiting exposure to fixed rate high yield assets - in particular USD cross border positions which the Investment Manager anticipated would see risk off sentiment to European credit as uncertainty persisted.

The immediate post-Brexit market movements were in a very illiquid environment where broker dealers pulled marks back on little to no trading. The portfolio responded as anticipated under a Brexit scenario with GBP Performing Credit names being marked back anything from 1-2 points. All GBP positions within the portfolio hold solid fundamental credit thesis given their global cross border cashflows, or being clear market leaders within the domestic market. At time of publication of this document, the portfolio had more than recouped the mark-to-market losses associated with the event.

Core Income Performing Credit delivered 1.8% to gross portfolio performance through June, which, grossed up against an average allocation of 44% for the year, equates to 4.1% which is a significant outperformance to the Credit Suisse European Hedged Loan Index of 2.3%. The strategy is to continue to actively manage primary new issue and trade paper within the capital structure of existing exposures to enhance returns and yields. This active approach has increased Core Income cash yield from 5.4% as at the start of the year to 5.6% by the end of the first half of 2016; this increase in Core Income was not delivered by increasing the risk profile of the segment. We anticipate that new issue yields in this segment will range between 4.5-5.5% in the current market environment.

The Credit Opportunities segment of the portfolio delivered 0.8% in the year to June which, when grossed up for a 45% average allocation in the period, equates to a 1.8% gross return for H1 2016, against -0.8% recorded by the Hedge Fund Research HFRX Global Hedge Fund Index which tracks the performance of active managers within the Hedge Fund universe. With the fallout of Brexit in the latter part of June, Q2 2016 Credit Opportunities saw significant moves on a mark-to-market basis.

Per the weekly estimates following the end of Q2 2016, the portfolio rebounded in early Q3 2016, driven by this segment. By way of comparison, the H1 2015 Credit Opportunities grossed up return was 9%, albeit that this was delivered in what was a comparatively stable market environment.

Market Review and Outlook

New-issue volume in European leveraged finance was significantly down year-on-year by the end of June (H1 2016: €54.2bn versus H1 2015: €83.8bn⁴). Activity during Q2 2016 was muted, with loan issuance for European buyouts providing the only, somewhat lacklustre, momentum. Pre-'Brexit' HY issuance had benefitted from the European Central Bank's ("ECB") Corporate Sector Purchase Programme ("CSPP"), particularly B rated bonds, which allowed a number of borrowers to refinance and offer lower yields. Following the result of the referendum, new-issuance stalled and the supply rapidly ran dry. As the theme of banks focusing on capital ratios through asset disposition continues, and institutional lenders fill the funding requirements across Performing and Opportunistic Credit Markets, the Investment Vehicle Manager believes opportunities will build in these areas.

European Leveraged Loan Market

· H1 2016 saw volatile levels of issuance, peaking at €8.6bn in January, and bottoming out at €2.1bn in February. Leveraged loan volume during H1 2016 totalled €30.4bn and averaged €5.1bn per month - 20% down on the same period in H1 2015. The January peak was primarily attributed to deals which had been prepared, but not finalised, in Q4 2015. Low volumes in February and March reflected the market volatility and little M&A activity. Activity gained traction in April and May following the ECB's announcement in March to increase its CSPP, and to add investment grade ("IG") corporate bonds to the scheme. Issuance slowed during June due to heightened uncertainty around the UK's EU referendum on 23 June, and stalled after 'Brexit' was announced.

· S&P's European Leveraged Loan Index ("ELLI") contracted in H1 2016, closing at 96.47, down from 96.91 at the end of 2015. ELLI's 2016 YTD total returns (excluding returns from currency gains/ losses) were 1.89% versus 3.11% for the same period in 2015. Europe's loan market performance was overshadowed by that of the U.S., with S&P's LSTA Leveraged Loan Index (U.S. Leveraged Loan Index) recording a H1 2016 total return of 4.51%.

· ELLI loan default rates increased marginally during the period, up to 2.54% from 2.12% at the end of 2015, but were still within margins the Investment Vehicle Manager believed to be acceptable, despite the instability and uncertainty surrounding the European Union following the UK's 'Brexit'.

High Yield Bond Market

· Issuance in the HY bond market for H1 2016 saw further consolidation, with new issuance falling dramatically to €24.0bn, versus €45.8bn for the same period in 2015. The risk-off sentiment in Q1 2016 resulted in prices on the secondary market falling, as outflows dominated. HY issuance began to pick up in Q2 2016, as IG buyers competed with the ECB's CSPP, causing yields to fall. There was €16.9bn of new issuance priced during Q2 2016 from 42 transactions, versus €7.1bn in Q1 2016 from 15 transactions⁴.

· As the availability of BB rated bonds grew, there was a notable shift in investors' attitude towards this instrument and they began to form an increasingly large position in HY portfolios. Despite the lower yields offered on BB paper, with central banks offering low single digit returns, appetite to invest in HY bonds increased.

· The yields offered by European HY BB investments rose during Q1 2016, from 4.23% in December 2015 to a high of 4.77% in March⁵. The impact of the ECB's CSPP policy expansion was to compress yields, with 38% of new issuance priced between 3.00%-3.99% in Q2 2016, versus 21% in Q1 2016, and an average of 6% in quarters between 2010 and 2015⁴.

The ECB will continue to stand behind the European recovery with its bond purchase programme, which should help to limit financial contagion from the Brexit vote. Whilst risk of political contagion is hard to judge, a recent Ipsos MORI poll showed that less than 50% of people in aggregate in Italy, Spain, France and Germany would support an exit from the EU.⁶ With falling unemployment, and credit demand and supply improving, the European economic recovery appears to still be in the relatively early stages. The Investment Vehicle Manager believes that Brexit may result in growth being weaker than otherwise anticipated; however, the expected baseline scenario remains that the Eurozone will continue to grow.

Despite yields compressing across the world, the Investment Vehicle Manager anticipates that the portfolio is well balanced to achieve the lower end of the target return for 2016 due to (i) the combination of the current portfolio composition (in particular within the Credit Opportunities strategy), (ii) the actively managed approach, and (iii) the relatively stable market dynamics within the sub-investment grade universe.

The key driver of performance at year end will be dependent on the exit expectations of the core Credit Opportunities positions which have been built through the course of the last 18 months. The yield to maturity of the portfolio is currently 8.4%; however, driving earlier exits across the opportunistic positions should generate higher returns.

Conclusion

The portfolio has outperformed broader market indices despite significant market volatility. For H2 2016 the Investment Vehicle Manager expects higher levels of volatility to persist driven by the effects of Brexit and the consequent macro-economic policies such as the interest rate cut by the Bank of England, as well as the surprising impact on the Italian banks. In addition, broader concerns regarding economic growth will impact risk assets across markets.

Going into H2 2016, the Investment Vehicle Manager continues to focus on maintaining a low NAV volatility in challenging markets, while seeking to maintain asset allocations in the Credit Opportunities and Special Situations segment of the portfolio.

CVC Credit Partners Investment Management Limited

Investment Vehicle Manager

22 September 2016

¹Excludes 21 structured finance positions.

²Note: All metrics exclude cash unless otherwise stated.

³Average market price of the portfolio weighted against the size of each position.

⁴Source: LCD Q2 2016 European Quarterly Wrap

⁵Source: LCD Q1 2016 European Quarterly Wrap

⁶ Source: Ipsos MORI Brexit Poll - May 2016

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable Jersey law and regulations.

The Directors confirm to the best of their knowledge that:

· the condensed financial statements within the Half Yearly Financial Report has been prepared in accordance with IAS 34 - "Interim Financial Reporting" as adopted by the European Union ("EU") and gives a true and fair view on the state of the affairs of the Company as at 30 June 2016, as required by the UK's Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.2R;

· the Chairman's Statement, the Investment Vehicle Manager's Report, the Executive Summary and the notes to the condensed financial statements include a fair review of the information required by:

a) DTR 4.2.7R of the Disclosure Guidance and the Transparency Rules of the UK's Financial Conduct Authority, being an indication of important events that have occurred during the six months ended 30 June 2016 and their impact on the condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules of the UK's Financial Conduct Authority, being related party transactions that have taken place during the six months ended 30 June 2016 and that have materially affected the financial position or performance of the Company during that period.

Richard Michael Boléat Mark Richard Tucker

Chairman Audit Committee Chairman

22 September 2016

independent review report to the members of cvc credit partners european opportunities limited

Introduction

We have been engaged by CVC Credit Partners European Opportunities Limited ("the Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Net Assets, the Condensed Statement of Cash Flows, and the related notes 1 to 16 to the Condensed Financial Statements. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in the Basis of Preparation section of the Accounting Policies, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of Financial Statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of Financial Statements in the half-yearly financial report for the six months ended 30 June 2015 are not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

22 September 2016

CONDENSED Statement of comprehensive income

For the six months ended 30 June 2016

			Six months ended 30 June 2016	Six months ended 30 June 2015
			(Unaudited)	(Unaudited)
	Notes		€	€
Income
Investment income	3		14,301,129	14,526,036
Net (losses) / gains on investments held at fair value through profit or loss		7	(2,705,681)	15,628,766
Foreign exchange (losses) / gains on investments held at fair value through profit or loss	7		(43,804,439)	32,785,025
Foreign exchange gains / (losses) on ordinary shares			43,859,430	(32,811,794)
Other net foreign currency exchange (losses) / gains through profit or loss			(21,944)	10,937
			11,628,495	30,138,970
Expenses
Operating expenses	4		(561,920)	(562,504)
Partial termination fee			(644,326)	-
			(1,206,246)	(562,504)

Profit before finance costs and taxation			10,422,249	29,576,466
Bank charges			(1,606)	-
Share issue finance cost	4		-	(364,640)
Finance costs - dividend payment			(13,155,549)	(14,346,949)

(Loss) / Profit before taxation			(2,734,906)	14,864,877
Taxation			-	-

(Decrease) / increase in net assets attributable to shareholders from operations			(2,734,906)	14,864,877


(Losses) / earnings per Euro Share	12		€(0.006273)	€0.030200

(Losses) / earnings per Sterling Share (Sterling equivalent)	12		£(0.004548)	£0.024338

All items in the above statement are derived from continuing operations.

The Company has no items of other comprehensive income, and therefore the decrease in net assets attributable to ordinary shareholders for the period is also the total comprehensive income.

The notes form an integral part of these condensed financial statements.

CONDENSED statement of financial position

As at 30 June 2016

		30 June 2016 (Unaudited)	31 December 2015 (Audited)
	Notes	€	€
Assets
Cash and cash equivalents	8	577,179	1,484,546
Other receivables	6	99,940	7,748
Prepayments		29,933	39,162
Financial investments held at fair value through profit or loss	7	490,615,073	579,495,831
Total assets		491,322,125	581,027,287

Liabilities
Payables	9	(132,926)	(784,794)
Total liabilities		(132,926)	(784,794)

Net assets attributable to Shareholders	13	491,189,199	580,242,493

The condensed financial statements together with the notes thereto, were approved by the Board of Directors on 22 September 2016 and signed on its behalf by:

Richard Michael Boléat Mark Richard Tucker

Chairman Audit Committee Chairman

The notes form an integral part of these condensed financial statements.

CONDENSED statement of changes in net assets

For the six months ended 30 June 2016 (Unaudited)

		Net Assets Attributable to Shareholders
		2016
Notes		€
As at 1 January 2016		580,242,493
Issuance of shares	12	3,173,615
Redemption of shares	12	(45,632,573)
Increase in net assets attributable to Shareholders from operations		(2,734,906)
Net foreign currency exchange gain on opening shares		(43,859,430)
As at 30 June 2016		491,189,199

For the six months ended 30 June 2015 (Unaudited)

		Net Assets Attributable to Shareholders
		2015
Notes		€
As at 1 January 2015		568,829,019
Issuance of shares	12	27,452,620
Redemption of shares	12	(780,539)
Decrease in net assets attributable to Shareholders from operations		14,864,877
Net foreign currency exchange loss on opening shares and shares issued during the period		32,811,794
As at 30 June 2015		643,177,771

The notes form an integral part of these condensed financial statements.

CONDENSED statement of cash flows

For the six months ended 30 June 2016

			Six months ended 30 June 2016	Six months ended 30 June 2015
			(Unaudited)	(Unaudited)
	Notes		€	€
Cash inflow from operating activities
(Loss) / profit from ordinary activities before taxation			(2,734,906)	14,864,877

Adjustments to reconcile profit before tax to net cash flows:

Net losses / (gains) on investments held at fair value through profit or loss		7	2,705,681	(15,628,766)
Foreign exchange losses / (gains) on investments held at fair value through profit or loss		7	43,804,439	(32,785,025)
Foreign currency exchange (gains) / losses on ordinary shares		12	(43,859,430)	32,811,794
Bank charges			1,606	-
Finance costs - dividend payment			13,155,549	14,346,949
			13,072,939	13,609,829
Changes in working capital
(Increase) / decrease in receivables and prepayments			(82,963)	13,094
Decrease in payables			(651,868)	(10,117)
Cash provided by operations			12,338,108	13,612,806

Net proceeds / (payments) from redemption / (subscription) of investments (PECs)		7	42,370,638	(26,297,934)
Net cash provided by / (used in) operating activities			54,708,746	(12,685,128)

Financing activities
Proceeds from issuance of ordinary shares	12		3,972,469	27,452,620
Payments for redemption of ordinary shares	12		(46,431,427)	(780,539)
Dividend paid			(13,155,549)	(14,346,949)
Bank charges paid			(1,606)	-
Net cash (used in) / provided by financing activities			(55,616,113)	12,325,132

Net decrease in cash and cash equivalents in the period			(907,367)	(359,996)

Cash and cash equivalents at beginning of the period			1,484,546	687,635
Cash and cash equivalents at the end of the period	8		577,179	327,639

The notes form an integral part of these condensed financial statements.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1. General information

The Company was incorporated on 20 March 2013 and is registered in Jersey as a closed-ended Investment Company. Euro Shares and Sterling Shares were admitted to the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange on 25 June 2013.

The Company's registered address is Liberté House, 19-23 La Motte Street, St Helier, Jersey, JE2 4SY.

2. Accounting policies

The Annual Financial Report is prepared in accordance with the Disclosure and Transparency Rules of the FCA and with International Financial Reporting Standards (IFRS) as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee (IASC) which remain in effect. The Half Yearly Financial Report has been prepared in accordance with International Accounting Standards (IAS) 34 - 'Interim Financial Reporting'. They have also been prepared using the same accounting policies applied for the year ended 31 December 2015 Annual Financial Report, which was prepared in accordance with IFRS.

The Half Yearly Financial Report has been prepared under a going concern basis. After reviewing the Company's budget and cash flow forecast for the next financial period, the Directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements.

There have been no changes in accounting policies during the period. The accounting policies in respect of financial instruments are set out below at 2.2 due to the significance of financial instruments to the company.

2.1. Segmental reporting

The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company's investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole, which are evaluated regularly by the chief operating decision-maker (the Board with insight from the Investment Vehicle Manager).

2.2 Financial instruments

(a) Classification

The Company classifies its investments as financial assets at fair value through profit or loss. These are financial instruments held for investment purposes. Financial assets also include cash and cash equivalents as well as other payables and receivables.

Financial assets designated at fair value through profit or loss at inception

Financial assets designated at fair value through profit or loss at inception are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy.

The Company's policy requires the Investment Vehicle Manager and the Board to evaluate the information about these financial assets on a fair value basis together with other related financial information.

(b) Recognition, measurement and derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at fair value through profit or loss are measured initially and subsequently at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in the Statement of Comprehensive Income.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company holds PECs issued by the Investment Vehicle. These investments are not listed or quoted on any securities exchange and are not traded regularly and on this basis no active market exists.

The Company relies on the board of the Investment Vehicle making fair value estimates of an equivalent basis to those that would be made under IFRS. As at 30 June 2016, the Audit Committee reviewed documentary evidence of the valuation of Investment Vehicle investments and scrutinised fair value estimates used to gain assurances as to the appropriateness and robustness of the valuation methodology applied by the Investment Vehicle to its underlying portfolio assets and hence to the Company investments in the Investment Vehicle. The Directors then incorporated those fair value estimates into the Company's Statement of Financial Position.

(d) Valuation process

The Directors have interviewed representatives of the Investment Vehicle Manager in order to verify for themselves the composition of the NAV of the PECs as of the balance sheet date.

The Directors are in ongoing communications with the Investment Vehicle Manager and hold meetings on a timely basis to discuss performance of the Investment Vehicle and its underlying portfolio and in addition review monthly investment performance reports. The Directors analyse the Investment Vehicle portfolio in terms of both investment mix and fair value hierarchy and consider the impact on the valuation at both the PECs and Investment Vehicle portfolio of general credit conditions and more specifically credit events in the European corporate environment.

PECs

The PECs are valued by the Directors, taking into consideration a range of factors including the audited NAV of the Investment Vehicle and other relevant available information, including the review of available financial and trading information of the Investment Vehicle and of its underlying portfolio, price of recent transactions of PECs redeemed, (if any), and advice received from the Investment Vehicle Manager and such other factors as the Directors, in their sole discretion, deem relevant in considering a positive or negative adjustment to the valuation.

The estimated fair values may differ from the values that would have been realised had a ready market existed and the difference could be material.

The fair value of the investment is reassessed on an ongoing basis by the Board.

Investment Vehicle Portfolio

The Directors also discuss the Investment Vehicle Manager's monthly valuation process, to understand the methodology regarding valuation of Level 3 debt securities and collateralised loan obligations (CLOs) held at the Investment Vehicle portfolio, which includes discussion on the assumptions used and significant fair value changes during the year.

Investments in CLOs are primarily valued based on the bid price as provided by the third party pricing service, and may be amended following consideration of the Net Assets Value (NAV) published by the administrator of the CLOs. Furthermore, such a NAV is adjusted when necessary, to reflect the effect of the time passed since the calculation date, liquidity risk, limitations on redemptions and other factors. Depending on the fair value level of a CLO's assets and liabilities and on the adjustments needed to the NAV published by that CLO, the Compartment (being Compartment A of the Investment Vehicle) classifies the fair value of these investments as Level 3.

Investments in debt securities for which limited broker quotes and for which no other evidence of liquidity exists are classified as Level 3. These are then valued by considering in detail the limited broker quotes available for evidence of outliers (which may skew the average) which, if existent, are then removed, and then by calculating the average of the remaining quotes. If there are no broker quotes, the Investment Vehicle Manager produces a pricing memorandum for the Compartment drawing on the International Private Equity Valuation guidelines, which is discussed, reviewed and accepted by the board of the Investment Vehicle and the independent service provider.

If the Investment Vehicle Manager and the independent service provider have difficulty in establishing an agreed upon valuation for an asset, they will discuss and agree alternative valuation methods.

(e) Classification

The Company classifies its ordinary shares as financial liabilities held at amortised cost. Financial liabilities also include payables which are also held at amortised cost.

Financial liabilities

(f) Recognition, measurement and derecognition

Financial liabilities are measured initially at their fair value plus any directly attributable incremental costs of acquisition or issue.

Ordinary shares are carried at amortised cost, being the carrying amount of ordinary share value at which investors have the opportunity to partially tender their shareholding in accordance with the Company's quarterly contractual tender facility.

Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised.

3. Investment income

	Six months ended 30 June 2016	Six months ended 30 June 2015
	(Unaudited)	(Unaudited)
	€	€
Investment income	14,199,372	14,393,698
Other income	101,757	132,338
Total income	14,301,129	14,526,036

Other income of €101,757 (30 June 2015: €132,338) relates to income receivable from CVC Credit Partners Investment Services Management Limited ("the Corporate Services Manager") for reimbursement of share issue costs and AIFMD marketing legal costs paid by the Company on behalf of the Corporate Services Manager. Please refer to note 4.

4. Operating expenses

	Six months ended 30 June 2016	Six months ended 30 June 2015
	(Unaudited)	(Audited)
	€	€
Administration fees	94,156	89,282
Directors' fees (see note 5)	103,188	99,049
Regulatory fees	27,141	9,860
Audit fees	30,600	30,408
Non-audit fees - interim review services	10,200	10,000
Professional fees (*)	177,803	182,388
Brokerage fees	39,205	35,017
Registrar fees	46,569	27,670
Sundry expenses	33,058	78,830
Total operating expenses	561,920	562,504

The costs and expenses of the Placing attributable to the Company have been expensed in the Statement of Comprehensive Income and amounted to a total of €nil (30 June 2015: €364,640).

(*) Note that €101,757 (30 June 2015: €132,338) of professional fees relate to share issue costs and AIFMD marketing legal costs paid by the Company on behalf of the Corporate Services Manager. Total expenses of €101,757 (30 June 2015: €132,338), have been recharged to the Corporate Services Manager.

5. Directors' fees and interests

During the period ended 30 June 2015, the Directors of the Company were remunerated for their services at a fee of £35,000 per annum (£50,000 for the Chairman). The Chairman of the Audit Committee received an additional £5,000 for his services in this role.

With effect from 1 July 2015, Director fees were increased as follows:

Richard Boleat (Chairman): £65,000 per annum

David Wood: £42,500 per annum

Mark Tucker: £50,000 (inclusive of £6,250 for his service as Audit Committee Chairman)

During the six months ended 30 June 2016, the Directors have not received any one off payments in addition to their annual remuneration (30 June 2015: €nil). During the year ended 31 December 2015, the Directors received a one off payment fee of £37,500 as a result of the additional work arising out of AIFMD, supplementary prospectuses and carrying out more work than initially anticipated (Richard Boléat: £15,000, Mark Tucker: £12,500 and David Wood: £10,000).

The Company has no employees. Director's fees payable as at 30 June 2016 were €nil (30 June 2015: €nil).

None of the Directors hold shares in the Company.

No pension contributions were payable in respect of any of the Directors.

Until April 2015 David Wood was a member of the CVC Credit Partners Advisory Board, which is an advisory body established to comment on strategic plans, budgets and markets. Mr Wood has several investments in a number of CVC entities.

CVC Credit Partners Group has established an independent sub-committee (the "Independent Sub-committee") of independent directors drawn from its group board and the boards of certain of its funds and investment vehicles for the purpose of providing review and guidance to the relevant investment committee with respect to situations where there is the potential for (or perception of) a material conflict of interest.

The Independent Sub-committee currently consists of two independent Directors from CVC Investment Services' board of directors (being Douglas Maccabe and Stephen Linney), and David Wood. Any such conflict is required to be presented to the Independent Sub-committee by the relevant portfolio manager and, if necessary, CVC Credit Partners Group's managing partner and/or chief investment officer.

6. Other receivables

	30 June 2016	31 December 2015
	(Unaudited)	(Audited)
	€	€
Receivable from CVC Credit Partners Investment Services Management Limited	99,940	7,748
Total other receivables	99,940	7,748

Receivable balance due from CVC Credit Partners Investment Services Management Limited relates to legal costs incurred in the year in respect to AIFMD matters concerning marketing in Europe and share issue costs paid by the Company which are due to be reimbursed to the Company.

The Directors believe that these balances are fully recoverable.

7. Financial Investments held at fair value through profit or loss

	30 June 2016	31 December 2015
	(Unaudited)	(Audited)
	€	€

PECs - Unquoted investment	490,615,073	579,495,831

During the period, the Company subscribed for nil Euro PECs (31 December 2015: 12,158,322) and nil Sterling PECs (31 December 2015: 12,141,488) issued by the Investment Vehicle.

During the period 3,100,121.15 (31 December 2015: 1,794,572.23) Euro PECs were converted into 2,281,113.30 Sterling PECs (31 December 2015: 1,265,599.36) and 656,205.39 Sterling PECs (31 December 2015: 900,655.72) were converted into 866,070.85 Euro PECs (31 December 2015: 1,221,521.69) and 29,129,257.00 Euro PECs (31 December 2015: 37,186,412.00) and 10,156,585.00 (31 December 2015: 364,635.00) Sterling PECs, were redeemed as part of the Quarterly Contractual Tender.

As at the six months ended 30 June 2016 the Company held 162,373,962.72 (31 December 2015: 193,737,270.02) Euro PECs and 259,781,919.01 (31 December 2015: 268,313,596.10) Sterling PECs. Please refer below for reconciliation of PECs from 1 January 2015:

Compartment A


Date	Transaction type	Euro PEC Units	Sterling PEC Units

As at 1 January 2015		219,338,410.11	256,171,799.60

28/01/2015	Quarterly tender	-	(18,761.00)
30/01/2015	Monthly conversion	513,214.14	(396,712.77)
19/03/2015	PEC subscription	8,758,399.31	12,141,487.86
26/06/2015	Monthly conversion	(194,835.18)	139,456.04
01/07/2015	Quarterly tender	-	(345,873.00)
30/07/2015	Monthly conversion	449,254.81	(316,401.91)
28/08/2015	Monthly conversion	(939,172.71)	660,694.70
30/09/2015	Monthly conversion	259,026.32	(187,522.29)
01/10/2015	Quarterly tender	(37,186,412.00)	(1.00)
27/11/2015	Monthly conversion	(412,739.11)	292,863.96
17/12/2015	PEC subscription	3,399,923.14	-
30/12/2015	Monthly conversion	(247,798.81)	172,565.91
As at 31 December 2015		193,737,270.02	268,313,596.10

01/01/2016	Quarterly tender	(29,012,049.00)	(260,363.00)
29/01/2016	Monthly conversion	(2,577,193.91)	1,881,536.18
29/01/2016	Monthly conversion	29,750.49	(21,719.99)
29/02/2016	Monthly conversion	693,049.73	(523,882.33)
29/02/2016	Monthly conversion	(371,578.48)	280,879.41
31/03/2016	Monthly conversion	139,917.80	(108,067.57)
01/04/2016	Quarterly tender	(117,208.00)	(9,896,222.00)
29/04/2016	Monthly conversion	(151,348.76)	118,697.71
30/06/2016	Monthly conversion	3,352.83	(2,535.50)
As at 30 June 2016		162,373,962.72	259,781,919.01

The Investment Vehicle's investment objective is to provide investors with regular income returns and capital appreciation from a diversified portfolio of sub-investment grade debt instruments. The Company is entitled to receive income distributions on a quarterly basis, which will equate to not less than 75% of the net income of the Company's investment in the Investment Vehicle.

The Investment Vehicle Manager pursues the Investment Vehicle's investment policy subject to the Investment Vehicle's Investment Limits and Borrowing Limit as explained in the Company's prospectus.

Fair value hierarchy

IFRS 13 'Fair Value Measurement' requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value.

The Company categorises its financial assets according to the following fair value hierarchy detailed in IFRS 13, that reflects the significance of the inputs used in determining their fair values;

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

	Level 1	Level 2	Level 3	30 June 2016
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	€	€	€	€
Financial assets
Financial investments held at fair value through profit and loss	-	-	490,615,073	490,615,073

Financial liabilities
Ordinary shares (*)	463,032,404	-	-	463,032,404

	Level 1 (Audited)	Level 2 (Audited)	Level 3 (Audited)	31 December 2015 (Audited)
	€	€	€	€
Financial assets
Financial investments held at fair value through profit and loss	-	-	579,495,831	579,495,831

Financial liabilities
Ordinary shares (*)	567,912,614	-	-	567,912,614

* - Please note for disclosure purposes only ordinary shares have been disclosed at fair value using the quoted price in accordance with IFRS 13. As disclosed in note 2.2, the Company classifies its ordinary shares as financial liabilities held at amortised cost.

Level 3 reconciliation - Compartment A PECs

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting period.

			30 June 2016 (Unaudited)
			€
Balance as at 1 January 2016			579,495,831
Purchases of investments (PECs)			-
Subscriptions arising from conversion of investments (PECs)			3,970,404
Redemption proceeds arising from conversion of investments (PECs)			(4,039,981)
Redemption proceeds arising from quarterly tenders of investments (PECs)			(42,301,061)
Net losses on investments held at fair value			(2,705,681)
Foreign exchange loss on investments held at fair value			(43,804,439)
Balance as at 30 June 2016			490,615,073

Change in unrealised gain / (loss) related to investments still held at six months ended 30 June 2016			(2,588,207)

During 2016, there were no reclassifications between levels of the fair value hierarchy.

			31 December 2015 (Audited)
			€
Balance as at 1 January 2015			568,219,412
Purchases of investments (PECs)			29,636,533
Subscriptions arising from conversion of investments (PECs)			3,373,266
Redemption proceeds arising from conversion of investments (PECs)			(3,422,148)
Redemption proceeds arising from quarterly tenders of investments (PECs)			(39,116,247)
Net gains on investments held at fair value			2,808,420
Foreign exchange gain on investments held at fair value			17,996,595
Balance as at 31 December 2015			579,495,831

Change in unrealised gain / (loss) related to investments still held at year ended 31 December 2015			1,818,991

During 2015, there were no reclassifications between levels of the fair value hierarchy.

Quantitative information of significant unobservable inputs - Level 3 - PECs


Description	30 June 2016 (Unaudited)	Valuation technique	Unobservable input	Range (weighted average)
	€

PECs	490,615,073	Adjusted Net Asset Value	Discount for lack of liquidity	0-3%
			Net Asset Value	1.16 (*)

Description	31 December 2015 (Audited)	Valuation technique	Unobservable input	Range (weighted average)
	€

PECs	579,495,831	Adjusted Net Asset Value	Discount for lack of liquidity	0-3%
			Net Asset Value	1.25 (*)

The Directors believe that it is appropriate to measure the PECs at the NAV of the investments held at the Investment Vehicle, adjusted for percentage holding of PECs in the Investment Vehicle.

(*) NAV of the Investment Vehicle attributable per PEC unit.

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3 - PECs

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 30 June 2016 and comparative are as shown below:

As at 30 June 2016 (Unaudited)

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount for lack of liquidity

14,718,452

As at 31 December 2015 (Audited)

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount for lack of liquidity

17,384,875

Please refer to note 2.2 for valuation methodology of PECs.

8. Cash and cash equivalents


	30 June 2016	31 December 2015
	(Unaudited)	(Audited)
	€	€
Total cash and cash equivalents	577,179	1,484,546

9. Payables


	30 June 2016	31 December 2015
	(Unaudited)	(Audited)
	€	€
Administration fees	(22,146)	(65,964)
Auditors' fees	(40,800)	(61,200)
Partial termination fee payable	-	(575,243)
Other payables	(69,980)	(82,387)
Total payables	(132,926)	(784,794)

10. Contingent liabilities and commitments

As at 30 June 2016, the Company had no contingent liabilities or commitments (31 December 2015: nil).

11. Stated capital

	Number of shares	Stated capital	Number of shares	Stated capital
	30 June 2016	30 June 2016	30 June 2015	30 June 2015
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
		€		€
Management shares	2	-	2	-

Management shares

Management shares are non redeemable, have no par value and no voting rights, and also no profit allocated to them for the earnings per share calculation.

12. Ordinary shares

	Number of shares 30 June 2016	Stated capital 30 June 2016	Number of shares 30 June 2015	Stated capital 30 June 2015
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
		€		€
Euro Shares	163,868,488	165,018,505	230,375,407	232,389,312
Sterling Shares	261,941,370	317,496,662	270,249, 675	386,146,112

Total	425,809,858	482,515,167	500,625,082	618,535,424

			30 June 2016 Total (Unaudited)
			€
Balance as at 1 January 2016			568,833,555
Issue of shares			-
Subscriptions arising from conversion of shares			3,972,469
Redemption proceeds arising from conversion of shares			(4,042,049)
Redemption proceeds arising from quarterly tenders of shares			(42,389,378)
Foreign currency exchange gain on shares			(43,859,430)
Balances as at 30 June 2016			482,515,167

			30 June 2015 Total (Unaudited)
			€
Balance as at 1 January 2015			559,579,246
Issue of shares			26,712,998
Subscriptions arising from conversion of shares			739,622
Redemption proceeds arising from conversion of shares			(755,682)
Redemption proceeds arising from quarterly tenders of shares			(24,857)
Foreign currency exchange loss on shares			32,284,097
Balances as at 30 June 2015			618,535,424

Ordinary shares

The Company has two classes of ordinary shares, being Euro Shares and Sterling Shares.

Each Euro Share holds 1 voting right, and each Sterling Share holds 1.17 voting rights.

As at 30 June 2016, the Company had 163,868,488 Euro shares (exclusive of 63,631,844 treasury shares) (30 June 2015: 230,375,407 (exclusive of 280,875 treasure shares), 31 December 2015: 195,451,704 (exclusive of 34,304,490 treasury shares)) and 261,941,370 Sterling Shares (exclusive of 10,603,193 treasury shares) (30 June 2015: 270,249,675 (exclusive of 25,839 treasury shares), 31 December 2015: 270,529,508 (exclusive of 374,472 treasury shares)). The movement is a result of monthly conversions which have taken place during the period between share classes and quarterly tenders. Please refer below for further details.

Voluntary conversion

The Company offers a monthly conversion facility pursuant to which holders of ordinary shares of one class may convert such shares into ordinary shares of any other class, subject to regulatory considerations as detailed in the prospectus.

Such conversion will be effected on the basis of the ratio of the NAV per class to be converted (calculated in Euro less the costs of effecting such conversion and adjusting any currency hedging arrangements and taking account of dividends resolved to be paid), to the NAV per class of the shares into which they will be converted (also calculated in Euro), in each case on the relevant conversion calculation date being the first business day of the month. During the period 3,127,742 (30 June 2015, 196,507, 31 December 2015: 1,810,146) Euro Shares were converted into 2,302,213 (30 June 2015: 140,495, 31 December 2015: 1,276,518) Sterling Shares and 661,630 (30 June 2015: 400,000, 31 December 2015: 907,557) Sterling Shares were converted into 872,880 (30 June 2015: 517,442, 31 December 2015: 1,229,993) Euro Shares.

Dividends

The ordinary shares of each class carry the right to receive all income of the Company attributable to such class of ordinary share, and to participate in any distribution of such income made by the Company and within each such class such income shall be divided pari passu among the Shareholders in proportion to the shareholdings of that class.

Please refer below for amounts recognised as dividend distributions to ordinary shareholders in the period ended 30 June 2016.

	Ex-dividend date	Payment date	£ equivalent	€³
Sterling - £0.025 per share²	05/02/2015	20/02/2015	6,446,910	8,892,868
Euro - €0.025 per share²	05/02/2015	20/02/2015	-	5,543,704

Sterling - £0.025 per share²	09/07/2015	07/08/2015	6,747,526	9,307,537
Euro - €0.025 per share²	09/07/2015	07/08/2015	-	5,759,385

Sterling - £0.025 per share¹	04/02/2016	26/02/2016	6,803,607	9,063,766
Euro - €0.025 per share¹	04/02/2016	26/02/2016	-	4,091,783

¹- Recognised in the period ended 30 June 2016

²- Recognised in the year ended 31 December 2015

³- Translated as at dividend payment date.

Please refer to note 15 for further information subsequent to the reporting period.

Contractual Quarterly Tender facility

As the Company has been established as a closed-ended vehicle, there is no right or entitlement attaching to the ordinary shares that allows them to be redeemed or repurchased by the Company at the option of the Shareholder. The Company has, however, established a Contractual Quarterly Tender facility that enables Shareholders to tender their shares in the Company in accordance with a stated contracted mechanism.

The Directors believe that the Company's Contractual Quarterly Tender facility should provide Shareholders with additional liquidity when compared with other listed closed-ended investment companies.

The offer of Contractual Quarterly Tenders will be subject to annual Shareholder approval and subject to the terms, conditions and restrictions as set out in the prospectus. The Company will be subject to annual Shareholder approval to tender each quarter for up to 24.99 per cent of the shares of such class in issue at the relevant quarter record date, (being the date on which the number of shares then in issue will be recorded for the purposes of determining the restrictions), subject to a maximum annual limit of 50 per cent of the shares of such class in issue.

However, it is important to note that Contractual Quarterly Tenders, if made, are contingent upon certain factors including, but not limited to, the Company's ability to finance tender purchases through submitting redemption requests to the Investment Vehicle to redeem a pro rata amount of Company Investment Vehicle Interests.

Factors, including restrictions at the Investment Vehicle level on the amount of PECs which can be redeemed, may mean that sufficient Company Investment Vehicle Interests cannot be redeemed and, consequently, tender purchases in any given quarter may be scaled back on a pro rata basis.

Shareholders should therefore have no expectation of being able to tender their shares to the Company successfully on a quarterly basis.

In addition to the Contractual Quarterly Tender facility, the Directors will seek annual Shareholder approval to grant them the power to make ad hoc market purchases of Shares. If such authority is subsequently granted, the Directors will have complete discretion as to the timing, price and volume of shares to be purchased. Shareholders should not place any reliance on the willingness of the Directors so to act.

In the absence of the availability of the Contractual Quarterly Tender facility Shareholders wishing to realise their investment in the Company will be required to dispose of their shares on the stock market.

Accordingly, Shareholders' ability to realise their investment at any particular price and/or time may be dependent on the existence of a liquid market in the shares.

During the period 29,328,354 Euro shares (30 June 2015: nil, 31 December 2015: 37,446,615) and 10,228,721 Sterling shares (30 June 2015: 18,438, 31 December 2015: 367,071) were redeemed as part of the Contractual Quarterly Tender facility and held by the Company in the form of treasury shares. Treasury shares do not carry any right to attend or vote at any general meeting of the Company. In addition, the Contractual Quarterly Tenders and the voluntary conversion facility are not available in respect of Treasury shares.

As at 30 June 2016, 63,631,844 (30 June 2015: 280,875, 31 December 2015: 34,303,490) Euro shares and 10,603,193 Sterling shares (30 June 2015: 25,839, 31 December 2015: 374,472) are held as treasury shares.

Earnings per share


	30 June 2016	30 June 2016	30 June 2015	30 June 2015
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£	€	£	€
Euro Shares
(Decrease) / increase in net assets for the period	-	(1,030,678)	-	6,857,831
(Losses) / earnings per share	-	(0.006273)	-	0.030200

Sterling Shares
(Decrease) / increase in net assets for the period	(1,235,485)	(1,704,228)	6,452,611	8,007,046
(Losses) / earnings per share	(0.004548)	(0.006273)	0.024338	0.030200

Earnings per share has been calculated on a weighted average basis. The weighted average number of ordinary shares held during the six months ended 30 June 2016 was 435,894,524 (30 June 2015: 492,206,463), comprising 163,986,488 (30 June 2015: 227,076,818) Euro Shares and 271,908,036 (30 June 2015: 265,129,645) Sterling Shares.

13. Net Asset Value per share


	30 June 2016	30 June 2016	31 December 2015	31 December 2015
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	£	€	£	€
Euro Shares
Net Asset Value	-	167,128,465	-	200,482,379
Net Asset Value per share	-	1.0199	-	1.0257

Sterling Shares
Net Asset Value	270,456,296	324,060,734	280,059,081	379,760,114
Net Asset Value per share	1.0325	1.2371	1.0352	1.4038

14. Related Party Disclosure

All transactions between related parties were conducted on terms equivalent to those prevailing in an arm's length transaction.

The Directors are entitled to remuneration for their services. Please refer to Note 5 for further detail.

15. Material events after the Statement of Financial Position date

Management has evaluated subsequent events for the Company through 22 September 2016, the date the financial statements were available to be issued, and had concluded there are not any material events that require disclosure or adjustment of the financial statements other than those listed below:

On 7 July 2016, the Company declared a dividend of €0.025 per Euro Share (total €3,411,039) and £0.025 per Sterling Share (total £6,353,879) and a dividend of £4.41 per management share. The dividends were paid to Shareholders on 5 August 2016.

On 10 August 2016, the Company announced it had received applications from Shareholders to tender 7,128,382 Euro Shares and 39,612,080 Sterling Shares under the September 2016 Contractual Quarterly Tender.

On 12 August 2016, the June 2016 Contractual Quarterly Tender completed with 27,426,944 Euro Shares and 7,786,215 Sterling Shares being repurchased and transferred into the Company's name and held as treasury shares.

On 18 August 2016, the Company changed its registrar and receiving agent service provider to Computershare Investor Services (Jersey) Limited.

16. Controlling party

In the Directors' opinion, the Company has no ultimate controlling party.

Company information

Registered Office		Advocates to the Company
Liberté House		(as to Jersey law)
19-23 La Motte Street St Helier, Jersey JE2 4SY		Bedell Cristin 26 New Street St Helier, Jersey JE2 3RA

Investment Vehicle Manager		Custodian
CVC Credit Partners Investment Management Limited		BNP Paribas Securities Services S.C.A., Jersey Branch
111 Strand, London WC2R 0AG		19-23 La Motte Street St Helier, Jersey JE2 4SY

Corporate Services Manager		Auditor
CVC Credit Partners Investment Services Management Limited		Ernst & Young LLP 25 Churchill Place
22-24 Seale Street, St. Helier, Jersey JE2 3QG		Canary Wharf London, E14 5EY

Corporate Brokers		Administrator and Company Secretary
Goldman Sachs International Peterborough Court, 133 Fleet Street		BNP Paribas Securities Services S.C.A., Jersey Branch
London EC4A 5ER		19-23 La Motte Street St Helier, Jersey JE2 4SY
Fidante Capital 1 Tudor Street London EC4Y 0AH		BNP Paribas Securities Services S.C.A. Jersey Branch is regulated by the Jersey Financial Services Commission.
Solicitors to the Company		Registrar
(as to English law and U.S. securities law)		Computershare Investor Services (Jersey)
Paul Hastings LLP Ten Bishops Square Eighth Floor London E1 6EG		Limited Queensway House Hilgrove Street St Helier Jersey JE1 1ES

		Receiving Agent
		Computershare Investor Services (Jersey) Limited
		Queensway House
		Hilgrove Street St Helier Jersey JE1 1ES

The person responsible for arranging for the release of this announcement on behalf of the Company is Siobhan Lavery of BNP Paribas Securities Services S.C.A., Jersey Branch, Company Secretary.

Liberté House - 19-23 La Motte Street - St Helier - Jersey - JE2 4SY

Company Secretary

Tel: +44 (0) 1534 709181

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR XLLFLQKFBBBV