Portfolio Update

RNS Number : 0731S

NB Global Floating Rate Income Fund

15 November 2011

 



NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

15 November 2011

NB Global Floating Rate Income Fund Limited

C Share Portfolio Update

NB Global Floating Rate Income Fund Limited (the "Fund") is a Guernsey incorporated closed-ended investment company. This Fund targets an annualised net yield per share (net of fees and expenses) in the region of 5% on the issue price in the first full year of investment, plus capital appreciation, while seeking to protect investors from rising interest rates. The Fund's managers expect to generate this yield by investing in a global portfolio of more than 100 senior secured corporate loans with selective use of senior bonds, diversified across at least 15 industry sectors. The Fund is managed by three accomplished portfolio managers backed by a credit team of over 30 investment professionals.

In September 2011 it raised an additional $187m of capital via a C Share raise and this Factsheet is specific to that raise and should be read in conjunction with the C Share update release of 28th October 2011.

We are in the process of investing the $187m C Share proceeds and, as at the 31st October, were 54.99% invested. The specific portfolio detail as at this date is:

u 81 investments across 70 different issuers

u was split 90.12% USD and 9.88% EUR¹

u was diversified across 26 industries with no industry representing over 16% of the invested portfolio¹

u was invested primarily in B (56.86%) and Ba (40.86%) rated investments^1,2

Market Environment³

Improving technical conditions and a broader rally in the capital markets lifted the US Loan market in October, with the S&P/LSTA Leveraged Loan Index hitting its highest level in 22 months at 2.89%, a favourable comparison to the 0.43% return generated in September. Year to date loan returns have now reversed from the negative 1.34% recorded up to September, to a positive 1.51% at the end of the month. The S&P/LSTA Leveraged Loan 100 Index, which represents the more liquid part of the market and is where the Fund's investments are concentrated, generated a return of 4.35% for October, taking the year to date figure to 1.28%. In Europe, the S&P ELLI Index also reversed a September decline of -1.95%, as the index regained ground in October returning a positive 1.43% for the period to 27th October. Currently, the year-to-date return stands at 0.04%, compared to -1.54% at the start of the month. As per previous updates, we continue to believe that the fundamentals of the underlying companies in our portfolio remain strong, and this is being reaffirmed by the Q3 earnings reports that are being published at present. Current spreads continue to imply a default rate that is in excess of what we expect and our view of low default rates over the next 24 months remains intact.

Investment Pipeline

In the US, the forward calendar stood at $10 billion at the end of October, a nine month low and $4 billion down on September. This level is unlikely to grow to any great degree over the remainder of the year as arrangers continue to look at keeping new underwriting mandates to a minimum as we head towards year end. What we have seen recently are a number of opportunistic financings for existing issuers. These additional tranches have been attractively priced versus current yields on offer in the secondary market for the same issuers, therefore we have participated in most. As of October 28th, in Europe the forward calendar stood at a low €590 million. We do not expect any further issuance in Europe through to year end as arrangers have a number of protracted syndications in the market that need to clear, prior to new business being underwritten.

Market uncertainty remains less acute in the US than in Europe and it therefore stands as the primary focus of our investments at present. We anticipate that the majority of our investment focus for the remainder of the year will be centered around the previously mentioned opportunistic financings and the secondary market.

Source: BNP Paribas and Bloomberg. Data as at 31 October 2011. Past performance is not indicative of future returns.

1.     Excluding cash.

2.     Source: Moody's Investors Service.

3.     Source: Standard & Poor's.

-ENDS-

For further information please contact:

Neuberger Berman Europe Limited          [phone]

Anji Stewart

Financial Dynamics                                       [phone]

Neil Doyle                   

Ed Berry

Laura Pope

www.nbgfrif.com

Background Information

The Company is a registered closed-ended investment company incorporated in Guernsey. The Company is managed by Neuberger Berman Europe Limited, which has delegated certain of its responsibilities and functions to the sub-investment manager, Neuberger Berman Fixed Income LLC, both of which are indirect wholly owned subsidiaries of NB Group. The Company's investment objective is to provide its shareholders with regular dividends, at levels that are sustainable, whilst growing the capital value of its investment portfolio over the long term. To pursue its investment objective, the Company will invest mainly in floating rate senior secured loans issued in U.S. Dollars, Sterling, and Euros by North American and European Union corporations, partnerships and other business issuers.

This document is not for release, publication or distribution (directly or indirectly) in or into the United States, Canada, Australia or Japan or to any "U.S. person" as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act") or into any other jurisdiction where applicable laws prohibit its release, distribution or publication. This document is not an offer to sell or a solicitation of any offer to buy the securities referred to herein in the United States, Australia, Canada or Japan or in any other jurisdiction where such offer or sale would be unlawful. No recipient may distribute, or make available, this document (directly or indirectly) to any other person. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of this document may in certain jurisdictions be restricted by law. Accordingly, recipients represent that they are able to receive this document without contravention of any applicable legal or regulatory restrictions in the jurisdiction in which they reside or conduct business.

This document has been prepared by NB Global Rate Income Fund Limited ("NBGFRIF") and is the sole responsibility of NBGFRIF. No liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document is accepted and no representation, warranty or undertaking, express or implied, is or will be made by NBGFRIF, Neuberger Berman Europe Limited ("NBEL"), Oriel Securities Limited ("Oriel Securities") or Dexion Capital plc ("Dexion") or any of their respective directors, officers, employees, advisers, representatives or other agents ("Agents") for any information or any of the opinions contained herein or for any errors, omissions or misstatements. None of Neuberger Berman L.L.C., Neuberger Berman Group LLC, Neuberger Berman Fixed Income LLC ("NBFI"), Oriel Securities, Dexion nor any of their respective Agents makes or has been authorised to make any representation or warranties (express or implied) in relation to NBGFRIF or as to the truth, accuracy or completeness of this document, or any other written or oral statement provided. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in this document and nothing in this document is or should be relied on as a promise or representation as to the future. The name "Neuberger Berman" is used interchangeably throughout these materials for a number of entities associated with the Neuberger Berman Group and NBGFRIF and when used in this notice includes all such entities.

This document is an advertisement and does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of NBGFRIF or other evaluation of any securities of NBGFRIF or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities. Neither the issue of this document nor any part of its contents constitutes an offer to sell or invitation to purchase any securities of NBGFRIF or any other entity or any persons holding securities of NBGFRIF and no information set out in this document or referred to in other written or oral information are intended to form the basis of any contract of sale, investment decision or any decision to purchase any securities in it. An investment decision must be made solely on the basis of the prospectus published by NBGFRIF. Copies of the prospectus may be obtained, subject to applicable law, at no cost from the registered office of NBGFRIF and are available for viewing at the National Storage Mechanism, www.hemscott.com/nsm.do.

This document, any presentation made in conjunction with this document and any accompanying materials (the "Information Materials") are preliminary and made available for information purposes only. The Information Materials, which are not a prospectus or listing particulars or an admission document, do not contain any representations, do not constitute or form part of any offer or invitation to sell or transfer, or to underwrite, subscribe for or acquire, any shares or other securities, and do not constitute or form any part of any solicitation of any such offer or invitation, nor shall they are or any part of them or the fact of their distribution form the basis of or be relied upon in connection with any contract therefore, and do not constitute a recommendation regarding the securities of NBGFRIF.

Neuberger Berman gives no undertaking to provide the recipient with access to any additional information, or to update this document or any additional information, or to correct any inaccuracies in it which may become apparent and the distribution of this document shall not be deemed to be any form of commitment on the part of Neuberger Berman to proceed with any transaction.

The securities described in this document have not been and will not be registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) absent registration or an applicable exemption from the registration requirements of the Securities Act. NBGFRIF has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and investors will not be entitled to the benefits of that Act. No offering of the securities is being made in the United States.

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of Neuberger Berman. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities. Recipients of this document are recommended to seek their own independent legal, tax, financial and other advice and should rely solely on their own judgment, review and analysis in evaluating Neuberger Berman, its business and its affairs. Potential investors and their representatives are invited to ask questions of, and receive answers from, NBEL and NBFI concerning the contemplated investment to the extent the same can be acquired without unreasonable effort or expense, in order to verify the accuracy of the information herein.

This document may contain certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, forward-looking statements can be indentified by terms such as "anticipate", believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will", and "would", or the negative of those terms or other comparable terminology. The forward-looking statements are based on Neuberger Berman's beliefs, assumptions, and expectations of future performance and market developments, taking into account all information currently available. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known or are within Neuberger Berman's control. If a change occurs, the NBGFRIF's business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Some of the factors that could cause actual results to vary from those expressed in forward-looking statements, include, but are not limited to: the factors described in this document; the rate at which NBGFRIF deploys its capital in investments and achieves expected rates of return; NBGFRIF, NBEL and NBFI's ability to execute NBGFRIF's investment strategy, including through the identification of a sufficient number of appropriate investments; the continuation of NBEL and NBFI as investment manager and subinvestment manager, respectively, of NBGFRIF's investments, the continued affiliation with Neuberger Berman of its key investment professionals; NBGFRIF's financial condition and liquidity; changes in the values of or returns on investments that the Company makes; changes in financial markets, interest rates or industry, general economic or political conditions; and the general volatility of the capital markets and the market price of NBGFRIF's shares.

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Any forward-looking statements are only made as at the date of this document, and Neuberger Berman neither intends nor assumes any obligation to update forward-looking statements set forth in this document whether as a result of new information, future events, or otherwise, except as required by law or other applicable regulation. In light of these risks, uncertainties, and assumptions, the events described by any such forward-looking statements might not occur. Neuberger Berman qualifies any and all of their forward-looking statements by these cautionary factors. Please keep this cautionary note in mind while reading this document.

Oriel Securities and Dexion, each of which is authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for NBGFRIF and no-one else in connection with the offering of securities by NBGFRIF and will not be responsible to anyone other than NBGFRIF for providing the protections afforded to customers of Oriel Securities and Dexion or for providing advice in relation to the offer of securities by NBGFRIF. By reading this document you will be deemed to have represented, warranted and undertaken for the benefit of Neuberger Berman, Oriel Securities and Dexion and others that (a) you are outside of the United States, (b) you have read and agree to comply with the contents of this notice, you will keep the information in this document and delivered during any accompanying document and all information about Neuberger Berman confidential, and will not reproduce or distribute, in whole or in part, (directly or indirectly) any such information, until such information has been made publicly available and take all reasonable steps to preserve such confidentiality, and (c) you are permitted, in accordance with applicable laws, to receive such information.

This document is issued by Neuberger Berman Europe Limited, which is authorised and regulated by the United Kingdom Financial Services Authority and whose registered address is at Lansdowne House, 57 Berkeley Square, London, W1J 6ER. Neuberger Berman LLC is a registered Investment Adviser and Broker Dealer and member of the New York Stock Exchange, the Financial Industry Regulation Authority and the Securities Investor Protection Corporation. Neuberger Berman Fixed Income LLC is a U.S.-registered Investment Adviser. Neuberger Berman is a registered trademark.

 

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