Change in Investment Policy & Discount Control

RNS Number : 2644V

NB Global Floating Rate Income Fund

05 August 2020

 

5 August 2020

NB Global Floating Rate Income Fund Limited

Proposed change in Investment Policy and Discount Control Mechanism

The Board of NB Global Floating Rate Income Fund Limited (the "Company") announced on 30 June 2020 that strategic changes to the Company's investment policy and certain other policies were being considered to ensure the investment proposition continues to appeal to the investor community.

The Board is pleased to announce that, after an extensive consultation with shareholders, it intends to propose an amendment of the investment policy, which it believes will provide shareholders with a proposition that can deliver attractive risk-adjusted returns. The Board would also implement a new discount control mechanism, conditional on approval of the revised investment policy. The proposed amendments to the investment policy are subject to approval from both the FCA and shareholders.

A circular containing full details of the proposals will be published by the Company shortly.

Highlights

The Board believes that the proposals will have the following benefits for shareholders:

· Result in an income focused, credit "best opportunities" Company, leveraging the breadth of Neuberger Berman's fixed income platform which manages over $120 billion on behalf of institutional and retail clients.

· Maintain exposure to senior secured floating rate loans.

· Provide shareholders with consistent levels of monthly income. Monthly income to begin following declaration of the Q3 2020 dividend.

· The Board will announce an annual dividend distribution target prior to the commencement of each calendar year, expressed in pence per share.

· Provide shareholders with additional exposure to alternative credit which is intended to increase the risk-adjusted return profile of the Company.

· Underpinned by initial tender offer and new discount control mechanism.

· From end June 2022 and taking into account market conditions, the Board will consider proposing a wind-up of the Company should its NAV drop beneath £150m.

Investment Policy

The Board proposes that the Company's investment objective is changed to provide its shareholders with consistent levels of monthly income, while maintaining or increasing the Company's net asset value per share over time. To pursue its investment objective, the Company will invest in:

(i)  traditional credit, meaning high yield bonds, floating rate loans and investment grade corporate bonds; and

(ii)  alternative credit, meaning "special situations" (consisting generally of tradeable but less liquid debt securities, such as distressed credit and CLO debt tranches), mezzanine debt, "club" loan transactions (being syndicated lending opportunities presented through the Company's or Investment Manager's relationship with loan arrangers and/or borrowers) and private corporate loans issued directly to borrowers.

Initial Tender and On-going Discount Control Mechanism

The Board believes that many shareholders will wish to continue with their investment in the Company, but also proposes that those shareholders wishing to realise part or potentially all of their investment in the Company will have a chance to do so through a tender offer of up to 40 per cent. of the shares in issue at a two per cent. discount to the prevailing net asset value per share (the "Initial Tender Offer").

The Board further proposes to change the on-going discount control mechanism to offer shareholders regular tender opportunities, commencing end June 2022 and every six months thereafter. Shareholders will have the regular opportunity to tender up to 25 per cent. of the shares in issue at a two per cent. discount to the prevailing net asset value per share.

Rupert Dorey, Chairman of NB Global Floating Rate Income Fund Limited, commented:

"Following extensive conversations with shareholders, there is clearly demand to access Neuberger Berman's track record in less liquid credit asset classes such as private credit. The recent backdrop of equity dividend cuts and reductions in bond yields has heightened income investors' needs for a portfolio designed to deliver ongoing monthly income at attractive levels.

The Board is therefore aligning the investment strategy to provide more appealing risk adjusted returns and a more predictable and regular income stream. We believe this will appeal to a wider cross section of the investment community. Protection of capital and growth of NAV per share remains of paramount importance, aided by an enhanced and updated discount control mechanism. We thank shareholders for their ongoing support through the consultation process."

Expected Timing

17 August     Issue notice of Extraordinary General Meeting  

4 September   Latest time and date for receipt of redemption notices and transfer to escrow instructions (together with the relevant CREST Holder Forms) for the Initial Tender Offer

4 September   Latest date of receipt of Form of Proxy for the Extraordinary General Meeting

8 September     Date of Extraordinary General Meeting

The Company will announce the results of the Initial Tender Offer following the Extraordinary General Meeting and will proceed to liquidate assets as necessary to satisfy the Initial Tender Offer. The expected date of payment for the Initial Tender Offer will be announced thereafter.

Neuberger Berman Europe Limited (Manager) Elizabeth Papadopoulos Praxis Fund Services Limited (Company Secretary) Matt Falla Gemma Woods	[phone] [e-mail] [phone]
KL Communications (PR) Charles Gorman Luke Dampier	[phone] [e-mail]

The Chairman, Rupert Dorey, can be contacted via the Company Secretary or KL Communications as detailed above.

LEI: 549300P4FSBHZFALLG04

About NB Global Floating Rate Income Fund Limited

The Company is a registered closed-ended investment company incorporated in Guernsey. It is managed by Neuberger Berman Europe Limited, which has delegated certain of its responsibilities and functions to the sub-investment manager, Neuberger Berman Investment Advisers LLC, both of which are indirect wholly owned subsidiaries of Neuberger Berman Group LLC. The Company's investment objective is to provide its shareholders with regular dividends, at levels that are sustainable, whilst seeking to preserve investors' capital and give protection against rising rates.

About Neuberger Berman

Founded in 1939, Neuberger Berman is a private, independent, employee-owned investment manager. The firm manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide. With offices in 35 cities worldwide, Neuberger Berman's team comprises 650 investment professionals and more than 2,300 employees. The firm was named by  Pensions & Investments  as a "Best Place to Work in Money Management" for five consecutive years. Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking.

 

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