Portfolio Update

RNS Number : 4412V

NB Global Floating Rate Income Fund

12 January 2012

 



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

12 January 2012

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 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.

As at December 31, 2011, the Company had invested approximately 94% of the net proceeds of the C Share issue. The C Share Portfolio has therefore satisfied the percentage investment condition set out in the C Share Prospectus, and the Company expects that the conversion of the C Shares to ordinary shares ("Conversion") will take place shortly after the next quarterly dividend is announced in early January. The specific portfolio at this date:

u was split 90.2% USD and 9.8% EUR1

u was diversified across 27 industries with no industry representing over 13% of the    invested 

       portfolio1

u was invested primarily in B (51.96%) and Ba (44.91%) rated investments^1,2

Market Environment³

December ended on a positive note with the S&P/LSTA Leveraged Loan Index returning 0.51%, pushing the full-year return to 1.52%, the thirteenth annual gain in the Index's fourteen year history. From a quality perspective, BB and B rated issuers, where the Fund's investments are concentrated, outperformed the overall Index in 2011. In Europe, December was similarly positive with the S&P European Leveraged Loan Index (ELLI) returning 0.89%, taking the full year return to 0.72%. 

The loan market experienced significant volatility throughout the year (-4.4% in August; +2.9% in October) driven by a series of extraordinary macroeconomic events, particularly the European sovereign debt crisis. Despite the significant macro concerns, the fundamentals of the underlying companies in the US remained strong, as we expected. The default rate on the US S&P/LSTA Index was a mere 0.17% for 2011, just above the all-time low of 0.15%. The Fund has not experienced any defaults since inception. We continue to expect the US default rate to track well below historical levels as companies face very little in the way of near-term debt maturities and maintain extremely healthy liquidity positions. On the ELLI the default rate for the year was 4.1% and we expect this to rise to between 5 - 7% in 2012, given the potential for one or two larger defaults, as well as more acute operational/funding problems for some of the smaller, more regionalised issuers in the ELLI.

Investment Pipeline

As is typical at year-end, the US forward calendar fell and now sits at a two-year low of $5.1 billion, including $4.6 billion of M&A-related paper. We expect the forward calendar to ramp up as issuers continue to look to refinance debt and equity sponsors put their uninvested capital to work. The European pipeline through December was similarly light as arrangers continued to close syndication of partially sold deals from earlier in the year. Given the prevailing macro uncertainties in Europe, our buying focus remains in the US and this is certainly reflective of the investments made during December. We continue to maintain a bias toward the primary issue market as these deals generally offer a 50 -100bps yield pick-up on comparable secondary market opportunities.

Source: BNP Paribas and Bloomberg. Data as at 31 December 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

FTI Consulting                                              [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.

 

END

 

 

PFUGCGDBUGBBGDD