Portfolio Update

RNS Number : 9180Z

NB Distressed Debt Invest. Fd. Ltd

24 January 2011

 



NB Distressed Debt Investment Fund Limited

Portfolio Update

NB Distressed Debt Investment Fund Limited ("NBDDIF" or "the Company") today announces an update in relation to the Company's investment portfolio.

As at 13 January 2011, the Company had deployed 38% of its capital (including one investment that has already been realised) with investments in 36 companies, close to the target of 40 to 50 holdings once fully deployed.  Accordingly, a significant amount of due diligence has been completed by the team which places the Company in a strong position to scale up its portfolio to achieve full investment. Retaining price discipline has resulted in an average cost of investments of 52% of face value against an expected level of 60%. Industry diversification remains broad with the portfolio invested across 12 industries. The Investment Manager is confident, based on the level of outstanding bids on existing and new names and the current pipeline of additional opportunities, that the cash deployment profile will remain broadly in line with that disclosed in the prospectus.

The Company exited its first investment in November 2010 - the bank debt of a private power generation company which was accumulated in July 2010. The position was approximately 3% of the portfolio at that time. In early August, the investee company announced that it had reached an agreement to sell its assets to another energy company and NBDDIF ultimately sold its interest at a price approximately 15% higher than the purchase price.

Market Environment

Access to the capital markets remains divided with larger cap public companies having greater access than smaller private companies. In 2010 the public high yield bond market saw record issuance of $277 billion compared to $181 billion in 2009, however, bank lending to private companies remains constrained. Total US Commercial and Industrial Loans on banks' balance sheets were $1.2 trillion at year end 2010, compared to a peak of $1.6 trillion in 2008. The Investment Manager believes that the relative lack of capital for private companies will continue to result in opportunities for investing in distressed loans.

Investment Pipeline

The Investment Manager continues to see a strong opportunity set in middle-market and small cap loans backed by hard assets. The Company has bids out on new names as well as for additional exposure to existing investments. Current sectors of interest include Utilities, Surface Transportation, Lodging, Healthcare, Commercial Mortgages and Building & Development. In particular, the Investment Manager has identified a number of very attractive opportunities in Europe and, accordingly, the Board has decided to increase the maximum limit on non-US or Canadian investments from 10% to 30%. The Investment Manager will continue to maintain a rigorous price discipline which to date has resulted in lower than anticipated acquisition costs. 

-ENDS-

For further information please contact:

Neuberger Berman Europe Limited     [phone]

Nick Hoar

Damian Holland

Financial Dynamics                             [phone]

Nick Henderson            

Laura Pope

An accompanying factsheet on the information provided above can be found on the Company's website www.nbddif.com.  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.

Background Information

NB Distressed Debt Investment Fund plc ("NBDDIF") is a Guernsey-incorporated closed-ended investment company that launched in June 2010. NBDDIF's primary objective is to provide investors with attractive risk-adjusted returns through long-biased, opportunistic stressed, distressed and special situation credit-related investments while seeking to limit downside risk.

NBDDIF expects to invest in 40 to 50 holdings diversified across distressed, stressed and special situations investments, with a focus on senior debt backed by hard assets. The portfolio is managed by the Distressed Debt team at Neuberger Berman, which sits within one of the largest and most experienced credit teams in the industry.

To find out more about the Company and the Neuberger Berman Group, please visit www.nbddif.com.

 

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