Interim Management Statement

RNS Number : 6513M

Henderson Diversified Income Ltd

28 August 2013

 



HENDERSON DIVERSIFIED INCOME LIMITED

28 AUGUST 2013

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement

Review of the period from 1 May 2013 to 31 July 2013

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Dividends: a second interim dividend of 1.25p per ordinary share in respect of the year ended 31 October 2013, was paid on 28 June 2013 to holders registered on 7 June 2013.

A third interim dividend of 1.25p per ordinary share in respect of the year ended 31 October 2013, was declared on 28 August 2013 and will be paid on 30 September 2013 to holders registered on 6 September 2013.

Share Price:  Over the period the share price decreased from 87.8p to 82.7p whilst the share price moved from a premium of 1.0% to discount of (3.7%).

Review: 

Over the three months to 31 July 2013, three month sterling LIBOR and three month Euribor remained largely stable at 0.5% and 0.2% respectively. It proved to be a volatile quarter with a sell-off in June, as investors worried about the potential tapering down of quantitative easing by the US Federal Reserve, and a recovery in July, following the more conciliatory tone in communications from America's central bank (the Federal Reserve/Fed) regarding the market's overreaction to the original tapering. The market weakness presented opportunities to buy attractively priced bonds and use credit derivatives to add exposure to high yield and lock in the improved income via these liquid instruments. The primary loan market has been buoyant with both a range of new issues and some re-financing of existing loans by the issue of new debt. Both the American, and to a lesser extent, the European economies are starting to make positive progress but there remain concerns about Chinese growth and some of the imbalances in certain emerging market countries. Overall, credit conditions remain attractive with the exception of sovereign bonds.

Share Issues: During the period 1,850,000 shares were issued in six tranches. The proceeds of these issues, net of commission, was £1,642,635.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 July 2013 (Cum income)

	1 month %	3 months %	3 years %
Share Price Total Return per ordinary share	-3.5	-4.3	35.4
Net Asset Value Total Return per ordinary share	1.9	0.5	29.5

The Fund was launched in July 2007

Source:   Datastream

Financial Position

	at 31 July 2013	at 30 April 2013
Net assets	£75m	£74m
Net asset value (cum income)	85.9p	86.8p
Ordinary share price	82.7p	87.7p
(Discount)/Premium	(3.7%)	1.0%
Total Gearing  (financial and synthetic)	23.08 %	18.8%
Target Yield	3 month LIBOR + 1.25%*	3 month LIBOR + 1.25%*
Total Expense Ratio (Source: Henderson fact sheet)	1.46%	1.46%

*3 month £ LIBOR was 0.50563% on 30 April 2013 and 0.50856% on 31 July 2013

Dividends Paid/Declared in Financial Year to date

	Amount	Pay Date	Record Date
Fourth Interim	1.25p	31 December 2012	7 December 2012
First Interim	1.25p	28 March 2013	8 March 2013
Second Interim	1.25p	28 June 2013	7 June 2013
Third Interim	1.25p	30 September 2013	6 September 2013

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 31 July 2013	at 30 April 2013
Alliance Boots (secured loan 07/07/2017 Extended TLB4)	UK	2.3%	2.4%
Springer (FRN 21/07/16 Loan Term A1 & 23/07/2020 Cov-Lite TLB	Germany	2.1%	1.6%
Unity Media (9.5% 15/03/2021, 9.625% 01/12/2019, 7.5% 15/03/2019, Hessen NRW 5.75% 15/01/2023, Hessen NRW 5.125% 21/01/2023)	Germany	2.0%	2.4%
Firth Rixson Secured Loan 30/06/2017	UK	2.0%	1.5%
Lavena (secured loan FRN 02/03/2016 loan term C1 & FRN 02/03/2015 loan term B1)	Germany	2.0%	2.0%
Flint Consented B1 TLB & C1 French TLC, Consenting 2nd Lien D1	Germany	1.9%	1.9%
Vue entertainment (B FRN 29/11/2017  and Term Loan B)	UK	1.9%	2.0%
Wind Acquisition Finance 11.75% 15/07/2017 & TLB 27/11/2017	Italy	1.8%	2.0%
RBS Worldpay (secured loan 4/2013 TLA and TLB1)	UK	1.8%	1.9%
Technicolour (FRN 25/04/2016 , TLA1 and TLB1)	France	1.8%	1.8%

Sector Breakdown	% at 31 July 2013	% at 30 April 2013
Secured Loans	53.6	55.8
High Yield Corporate Bonds	29.1	26.0
Investment Grade Bonds	10.8	13.3
Equities	5.9	4.3
Derivatives	0.6	0.6

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 BNP Paribas Securities Services S.C.A , Jersey Branch Telephone: [phone]	James de Sausmarez Director and Head of Investment Trusts Henderson Global Investors Telephone: [phone]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

Henderson Diversified Income Limited has its registered office at Liberté House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and it is regulated by the Jersey Financial Services Commission

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

- ENDS -

 

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