Interim Management Statement

RNS Number : 3680N

Henderson Diversified Income Ltd

31 August 2011

 



HENDERSON DIVERSIFIED INCOME LIMITED

31 AUGUST 2011

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement

Review of the period from 1 May 2011 to 31 July 2011

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Dividends: a second interim dividend of 1.20p per ordinary share in respect of the year ended 31 October 2011, was paid on 30 June 2011 to holders registered on 10 June 2011.

A third interim dividend of 1.20p per ordinary share in respect of the year ended 31 October 2011, was declared on 31 August 2011 and will be paid on 30 September 2011 to holders registered on 09 September 2011.

Share Price:  Over the period the share price declined from 86.3p to 84.4p whilst the share price premium to net asset value widened from +0.9% to +1.1%.

Review: 

Over the three months to 31 July 2011, three month sterling LIBOR increased marginally from 0.82% to 0.83%. The income target of 1.25% over LIBOR continues to be exceeded and as and when interest rates are finally raised in the UK the distributable income will increase, albeit with a lag. Over the period bond markets remained volatile as European peripheral sovereign risks remained at the forefront of investors' minds. The loan market was less volatile supported by continued refinancings into the bond market and investor demand for the asset class. During the quarter the company began to reduce its modest holdings in higher yielding equities which were opportunistically purchased in the summer of 2010 and which had generated significant capital gains.

On 25 July 2011 the Company announced it is considering raising additional capital by way of a C share offer.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 July 2011

	1 month	3 months	Since launch
Net Asset Value Total Return per ordinary share	-1.05	-1.22	13.30
Share Price Total Return per ordinary share	-3.01	-0.86	14.55

The Fund was launched in July 2007

Source:   Datastream

Financial Position

	at 30 April 2011	at 31 July 2011
Net assets	£72m	£70m
Net asset value (cum income)	85.5p	83.4p
Ordinary share price	86.3p	84.4p
Premium/Discount	+0.9%	+1.1%%
Gearing	13%	6%
Target Yield	3 month LIBOR + 1.25%*	3 month LIBOR + 1.25%*
Total Expense Ratio (Source: Henderson fact sheet)	1.71%	1.71%

*3 month £ LIBOR was 0.82% on 30 April 2011 and 0.83% on 31 July 2011

Dividends Paid/Declared in Financial Year to date

	Amount	Pay Date	Record Date
Fourth Interim	1.15p	31 December 2010	10 December 2010
First Interim	1.15p	31 March 2011	11 March 2011
Second Interim	1.20p	30 June 201	10 June 2011
Third Interim	1.20p	30 September 2011	09 September 2011

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 30 Apr 2011	at 31 Jul 2011
ISS 11% 15/06/2014, 8.875% 15/05/2016 and FRN 15/05/2018 Second Lien	Denmark/ Sweden	2.9%	2.9%
Alliance Boots (secured loan 05/07/2015 term B2)	UK	2.5%	2.5%
Lloyds Banking Group (Lloyds 11.04% 19/03/2020 & 7.869% 25/08/2020, HBOS-Cap funding 6.461% & Sterling finance 7.881%, Bank of Scotland 7.281%, 7.286% and Capital funding 8.117%)	UK	2.5%	2.4%
RBS WorldPay (secured loan FRN 15/10/2017 term B1 and FRN 30/11/2016 Term A)	UK	2.2%	2.3%
Bauch & Lomb (secured loan term B)	United States	2.2%	2.3%
XSYS Flint (secured loan FRN 08/11/2017 B1)	Luxembourg	2.2%	2.2%
Nycomed (secured loan FRN 29/01/2015 B,B1 FRN 29/01/2016 C,C1)	Denmark	2.1%	2.2%
Infonxx	United States	2.1%	2.2%
Lavena (secured loan B1 and C1)	Germany	2.1%	2.1%
Polyconcept (secured loan FRN 28/07/2012 B2 and  FRN 2807/2014 C)	France	-  %	2.1%

Sector Breakdown	% at 30 April 2011	% at 31 July 2011
Secured Loans	54.9	57.3
Investment Grade Bonds	19.5	18.9
High Yield Corporate Bonds	21.2	21.3
Equities	4.4	2.5

The objective of Henderson Diversified Income Limited is to provide Shareholders with a high level of income and capital growth over the long term.

The Company aims to deliver these objectives for Shareholders by investing selectively across the full spectrum of fixed income asset classes including, but not limited to, secured loans, asset-backed securities, investment grade corporate bonds, high yield corporate bonds, unrated bonds, gilts, preference and selective high yield equity shares, hybrid securities, convertible bonds and floating rate notes.

Further information on the Company, including an up to date NAV and share price information, can be found at http://www.hendersondiversifiedincome.com

For further information, please contact:

Jeremy Hamon Company Secretary Telephone: [phone]	James de Sausmarez Director Head of Investment Trusts Henderson Global Investors Telephone: [phone]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

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