Proposed Issue of New Ordinary Shares

RNS Number : 4123B

Real Estate Credit Investments Ltd

20 September 2018

 

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO ANY "US PERSONS" (WITHIN THE MEANING GIVEN TO IT IN REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED) OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN, OR ANY OTHER JURISDICTION, OR TO ANY PERSON, WHERE DOING SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

Investors should not purchase or subscribe for any transferrable securities referred to in this announcement except on the basis of publicly available information published by the Company and not by any other person.

This announcement does not constitute or form a part of any offer to sell or issue, or a solicitation of any offer to purchase or otherwise acquire, securities by any US Persons or in the United States or in any other jurisdiction in which such offer or solicitation would be unlawful. This announcement does not constitute or form part of any offer or invitation to sell or issue, or the solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities other than the securities to which it relates or any offer or invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for or otherwise acquire, such securities by any person in any circumstances in which such offer or solicitation would be unlawful.

20 September 2018

Real Estate Credit Investments Limited

Proposed Issue of New Ordinary Shares

Real Estate Credit Investments Limited (the "Company") is pleased to announce that it intends to issue up to 13,938,298 new ordinary shares ("New Ordinary Shares") in the Company to new and existing investors pursuant to the authority granted to the Directors by Shareholders at the Company's annual general meeting held on 18 September 2018 (the "Issue").

The price at which each New Ordinary Share will be issued pursuant to the Issue will be 167 pence (the "Issue Price").

The Company's board of directors (the "Directors" or "Board"), as advised by Cheyne Capital Management (UK) LLP (the "Investment Manager"), continues to be positive about the investment opportunities available within real estate credit markets. It is the Investment Manager's view that whilst economic and Brexit related uncertainty exists, the UK and Western European real estate markets (particularly those in France and Germany) continue to offer an attractive combination of relatively liquid investment markets and a shortage of debt capital. In light of this, and present investment opportunities in which the Company wishes to participate shortly following the Issue, the Board believes that the Issue is in the best interests of the Company and its shareholders as a whole.

The net proceeds of the Issue are intended primarily to be invested in debt secured by commercial or residential properties in the United Kingdom and Western Europe, which might take the form of: (i) secured senior real estate loans, and (ii) securitised tranches of secured real estate related debt securities such as commercial mortgage-backed securities. 

Liberum Capital Limited ("Liberum") has been appointed as sole bookrunner to procure placees to participate in the Issue.

Details of the Issue

The New Ordinary Shares to be issued pursuant to the Issue will be issued under the Company's general authority to allot and issue equity securities contained in Article 5 of the Company's articles of incorporation (the "Articles"). The Issue will be conducted by the Company on a non-pre-emptive basis pursuant to the authority granted to the Directors by an extraordinary resolution of the shareholders passed at the Company's annual general meeting held on 18 September 2018. The Company currently has capacity to issue up to 13,938,298 New Ordinary Shares under this authority. The Issue is being conducted by the Company pursuant to Article 1(5)(a) of Regulation (EU) 2017/1129 such that the Company is not required to publish a prospectus in connection with the Issue.

The Issue is being conducted through a bookbuild process which will be launched immediately following this announcement (the "Bookbuild"), in accordance with the terms and conditions set out in the Appendix to this announcement.

The size and timing of the closing of the book and allocation is at the discretion of Liberum. The number of New Ordinary Shares and allocation are to be determined by Liberum (in consultation with the Company) at the close of the Bookbuild. Details of the number of New Ordinary Shares will be announced as soon as practicable after the close of the Bookbuild.

The New Ordinary Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the New Ordinary Shares.

Applications will be made to the UK Listing Authority ("UKLA") and the London Stock Exchange ("LSE") for the New Ordinary Shares issued pursuant to the Issue to be admitted to the premium segment of the UKLA's Official List and to trading on the premium segment of the LSE's Main Market for listed securities ("Admission"). It is expected that Admission will become effective and dealings in New Ordinary Shares will commence on or around 26 September 2018.

The Issue is conditional upon, amongst other things, Admission becoming effective and Liberum's obligations in connection with the Issue becoming unconditional and not being terminated.

The appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Issue (the "Issue Terms and Conditions"). By choosing to participate in the Issue and by making an oral and legally binding offer to acquire New Ordinary Shares, investors will be deemed to have read and understood this announcement in its entirety (including the appendix) and to be making such offer on the terms and subject to the Issue Terms and Conditions, and to be providing the representations, warranties and acknowledgements contained in the Issue Terms and Conditions.

This announcement has been prepared by, and is the sole responsibility of, Real Estate Credit Investments Limited. This announcement has been released by Lisa Garnham of State Street (Guernsey) Limited, Secretary of the Company.

Enquiries

Cheyne Capital Management (UK) LLP	[phone]
Investor Relations
Nicole von Westenholz
Liberum Capital Limited (Sole Bookrunner)	[phone]
Shane Le Prevost
Richard Crawley
Richard Bootle
Laura Hamilton

Important notice

Article 1(5)(a) of Regulation (EU) 2017/1129 provides that the obligation to publish a prospectus shall not apply to the admission to trading on a regulated market of any of securities fungible with securities already admitted to trading on the same regulated market, provided that they represent, over a period of 12 months, less than 20 per cent. of the number of securities already admitted to trading on the same regulated market. The number of New Ordinary Shares to be issued by the Company pursuant to the Issue is less than 20 per cent. of the number of Ordinary Shares admitted to trading on the London Stock Exchange as at 20 September 2018 and the Company has therefore not issued a prospectus in connection with the Issue. Accordingly, investors should not purchase or subscribe for any transferrable securities pursuant to the Issue except on the basis of publicly available information published by the Company.

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the Company. 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.

This announcement does not constitute a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity.

Nothing in this announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient.

All investments are subject to risk, including the loss of the principal amount invested. Past performance is not a reliable indicator of future results. Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person.

This announcement is only addressed to or directed at persons in the United Kingdom who: (i) have professional experience in matters relating to investments and fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order; or (iii) are other persons to whom it may otherwise lawfully be communicated (all such persons referred to in (i), (ii) and (iii) together being "Relevant Persons"). Any investment or investment activity to which this announcement relates is available only to and will only be engaged in with the persons referred to in (i), (ii) and (iii).

Neither this announcement nor any part or copy of it may be taken or transmitted into the United States, Australia, Canada, South Africa or Japan, or distributed, in whole or in part, directly or indirectly, to any US Persons or in or into the United States, Australia, Canada, South Africa, Japan or any other jurisdiction where, or to any other person to whom, to do so would constitute a violation of applicable law. Any failure to comply with this restriction may constitute a violation of applicable law. This announcement does not constitute or form a part of any offer to sell or issue, or a solicitation of any offer to purchase or otherwise acquire, securities by any US Persons or in the United States or in any other jurisdiction in which such offer or solicitation would be unlawful. Persons into whose possession this announcement comes should observe all relevant restrictions.

The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "US Investment Company Act") and as such investors are not and will not be entitled to the benefits of the US Investment Company Act. The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, taken up, exercised, renounced, delivered, distributed or transferred, directly or indirectly, into or within the United States or to, or for the account or benefit of, US Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States and in a manner which would not result in the Company being required to register as an "investment company" under the US Investment Company Act. In connection with the Issue, subject to certain exceptions, offers and sales of Ordinary Shares will be made only outside the United States in "offshore transactions" to non-US Persons pursuant to Regulation S under the US Securities Act. There has been and will be no public offering of the Ordinary Shares in the United States.

Neither the US Securities and Exchange Commission, nor any securities regulatory authority of any state or other jurisdiction of the United States, has approved or disapproved of the securities of the Company or passed upon or endorsed the merits of any offering of such securities.

Prospective investors should take note that any securities may not be acquired by (i) investors using assets of (A) an "employee benefit plan" as defined in Section 3(3) of US Employee Retirement Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA; (B) a "plan" as defined in Section 4975 of the US Internal Revenue Code of 1986, as amended (the "US Tax Code"), including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US Tax Code or (ii) a governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code.

Liberum is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Liberum is acting solely for the Company and no one else in connection with the Issue and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Liberum or for affording advice in relation to any transaction or arrangement referred to in this announcement. This announcement does not constitute any form of financial opinion or recommendation on the part of Liberum or any of its affiliates and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

Target Market Assessment

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended or supplemented from time to time ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any manufacturer (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the market price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Forward-looking statements

This announcement may contain forward-looking statements regarding the financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies, budgets, capital and other expenditures, competitive positions, growth opportunities, plans and objectives of management and other matters relating to the Company. Statements in this announcement that are not statements of historical facts are hereby identified as forward-looking statements. In some instances, forward-looking statements can be identified by the use of forward-looking terminology, including terms such as "projects", "forecasts", "anticipates", "expects", "believes", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.

By their nature, forward-looking statements involve risk and uncertainty as they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance, and the actual results, performance or achievements of the Company, and development of the markets and the industries in which it operates or is likely to operate, may differ materially from those-described in, or suggested by, any forward-looking statements contained in this announcement. In addition, even if actual results, performance, achievements or developments are consistent with any forward-looking statements contained in this announcement in a given period, those results, performance, achievements or developments may not be indicative of results, performance, achievements or developments in subsequent periods. A number of factors could cause results, performance, achievements and developments to differ materially from those expressed or implied by any forward- looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation and currency fluctuations.

Any forward-looking statements in this announcement reflect the Company's current view with respect to future events, speak only as of their date and are subject to change without notice. Save as required by applicable law or regulation, the Company and the other parties named in this announcement expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

APPENDIX

TERMS AND CONDITIONS OF THE ISSUE

1.         INTRODUCTION

1.1       Defined terms used in these Issue Terms and Conditions and not otherwise defined shall have the meanings ascribed to them in the announcement of the Company with respect to the Issue, dated 20 September 2018 (the "Announcement").

1.2       Each placee which confirms its agreement (whether orally or in writing) to the Company and Liberum to subscribe for the New Ordinary Shares under the Issue (a "Placee") will be bound by these terms and conditions and will be deemed to have accepted them.

1.3       The Company and/or Liberum may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it/they (in its/their absolute discretion) sees fit and may require any such Placee to execute a separate placing letter.

2.         AGREEMENT TO SUBSCRIBE FOR NEW ORDINARY SHARES

2.1       Liberum's obligations in respect of the Issue of the New Ordinary Shares are conditional on, inter alia:

2.1.1     the representations and warranties on the part of the Company and the Investment Manager being true and accurate in all material respects and not misleading on and as of the date of the Announcement and immediately before Admission and the release of any public or press announcement by the Company in connection with the Issue, including an announcement of the results of the Issue;

2.1.2     Admission taking place not later than 8:00 am on 26 September 2018, or such later date as is agreed in writing between the Company and Liberum, but in any event not later than 8:00 am on 3 October 2018; and

2.1.3     Liberum's obligations in relation to the Issue becoming otherwise unconditional in all respects in respect of the Issue and not having been terminated before Admission.

2.2       Any commitment to acquire New Ordinary Shares under the Issue agreed orally with Liberum, as agent for the Company, will constitute an irrevocable, legally binding commitment upon that person (who at that point will become a Placee) in favour of the Company and Liberum, to subscribe for the number of the New Ordinary Shares allocated to it and comprising its placing confirmation on the terms and subject to the conditions set out in the Announcement and in these Issue Terms and Conditions and in the contract note (the "Contract Note") and in accordance with the Articles. Except with the consent of Liberum, such oral commitment will not be capable of variation, revocation or rescission after the time at which it is made.

2.3       Each Placee's allocation of New Ordinary Shares under the Issue will be evidenced by a Contract Note confirming: (i) the Issue Price, (ii) the number of the New Ordinary Shares that such Placee has agreed to acquire; (iii) the aggregate amount that such Placee will be required to pay for such New Ordinary Shares; and (iv) settlement instructions to pay Liberum, as agent for the Company. The provisions as set out in the Announcement and in these Issue Terms and Conditions will be deemed to be incorporated into that Contract Note.

3.         PAYMENT FOR NEW ORDINARY SHARES

3.1       Each Placee undertakes to pay the Issue Price for the New Ordinary Shares issued to the Placee in the manner and by the time directed by Liberum. In the event of any failure by any Placee to pay as so directed and/or by the time required by Liberum, the relevant Placee shall be deemed hereby to have appointed Liberum or any nominee of Liberum as its agent to use its reasonable endeavours to sell (in one or more transactions) any or all of the New Ordinary Shares in respect of which payment shall not have been made as directed, and to indemnify Liberum and its respective affiliates (being (i) an affiliate of, or person affiliated with, a specified person; or (ii) a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified ("Affiliate")) on demand in respect of any liability for stamp duty and/or stamp duty reserve tax or any other liability whatsoever arising in respect of any such sale or sales. A sale of all or any of such New Ordinary Shares shall not release the relevant Placee from the obligation to make such payment for the relevant New Ordinary Shares to the extent that Liberum or its nominee has failed to sell such New Ordinary Shares at a consideration which, after deduction of the expenses of such sale and payment of stamp duty and/or stamp duty reserve tax as aforementioned, exceeds the Issue Price per New Ordinary Share.

3.2       Settlement of transactions in the New Ordinary Shares following Admission will take place in CREST (as defined in clause 3.6) but Liberum reserves the right in its absolute discretion to require settlement in certificated form if, in its opinion, delivery or settlement is not possible or practicable within the CREST system within the timescales previously notified to the Placee (whether orally, in the Contract Note or otherwise) or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

3.3       The Company will procure the delivery of the New Ordinary Shares to the CREST accounts set out in the Contract Note. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant New Ordinary Shares to that Placee against payment.

3.4       Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above London Interbank Offered Rate (LIBOR) as determined by Liberum.

3.5       If New Ordinary Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the Contract Note is copied and delivered immediately to the relevant person within that organisation. Insofar as New Ordinary Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such New Ordinary Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax (together with interest and penalties) is payable in respect of the issue of the New Ordinary Shares neither Liberum nor the Company shall be responsible for the payment thereof.

3.6       For the purposes of this clause 3, "CREST" means the relevant system as defined in the Uncertificated Securities Regulations 2001 (SI 2001 No. 2001/3755), as amended (the "CREST Regulations") in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the CREST Regulations) in accordance with which securities may be held in uncertificated form.

4.         REPRESENTATIONS AND WARRANTIES

            By agreeing to subscribe for New Ordinary Shares under the Issue, each Placee which enters into a commitment to subscribe for New Ordinary Shares will be (for itself and for any person(s) procured by it to subscribe for the New Ordinary Shares and any nominee(s) for any such person(s)) deemed to represent, warrant, undertake, agree and acknowledge to each of the Company and Liberum that:

4.1       in agreeing to subscribe for the New Ordinary Shares under the Issue, it is relying on publicly available information published by the Company, of which the Announcement and these Issue Terms and Conditions form part and not on any other information given, or representation or statement made at any time, by any other person, concerning the Company, the New Ordinary Shares or the Issue. It agrees that none of the Company, Liberum, the Investment Manager, Link Market Services (Guernsey) Limited (the "Registrar"), or any of their respective officers, agents, employees or Affiliates, will have any liability for any other information or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;

4.2       if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to subscribe for New Ordinary Shares, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company, Liberum, the Investment Manager or the Registrar or any of their respective officers, agents, employees or Affiliates acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Issue;

4.3       it has carefully read and understands the publicly available information published by the Company and acknowledges that it is acquiring New Ordinary Shares on the terms and subject to the conditions set out in the Announcement and these Issue Terms and Conditions and in the Contract Note and the Articles as in force at the date of Admission;

4.4       the price payable per New Ordinary Share is payable to Liberum on behalf of the Company in accordance with the terms of these Issue Terms and Conditions and in the Contract Note;

4.5       it has the funds available to pay in full for the New Ordinary Shares for which it has agreed to subscribe and it will pay the total subscription amount in accordance with the terms set out in these Issue Terms and Conditions and incorporated into the Contract Note on the due time and date;

4.6       it has not relied on Liberum or any person affiliated with Liberum in connection with any investigation of the accuracy of any publicly available information published by the Company;

4.7       it acknowledges that the content of publicly available information published by the Company is exclusively the responsibility of the Company and the Directors and neither Liberum nor any person acting on its behalf nor any of its Affiliates are responsible for or shall have any liability for any information published by or on behalf of the Company and will not be liable for any decision by a Placee to participate in the Issue based on any such information;

4.8       it acknowledges that no person is authorised in connection with the Issue to give any information or make any representation other than as contained in the Announcement and these Issue Terms and Conditions and, if given or made, any information or representation must not be relied upon as having been authorised by Liberum, the Company or the Investment Manager;

4.9       it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 (depository receipts and clearance services) of the Finance Act 1986;

4.10      it accepts that none of the New Ordinary Shares have been or will be registered under the securities laws, or with any securities regulatory authority, of the United States, any member state of the European Economic Area ("EEA") other than the United Kingdom, Australia, Canada, South Africa or Japan (each a "Restricted Jurisdiction"). Accordingly, the New Ordinary Shares may not be offered, sold, issued or delivered, directly or indirectly, within any Restricted Jurisdiction unless an exemption from any registration requirement is available;

4.11      if it is within the United Kingdom, it is (a) a person who falls within (i) Articles 49(2)(A) to (D) or (ii) Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or is a person to whom the New Ordinary Shares may otherwise lawfully be offered under such Order, or, if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, that it is a person to whom the Shares may be lawfully offered under that other jurisdiction's laws and regulations and (b) a qualified investor (as such term is defined in section 86(7) of the Financial Services and Markets Act 2000 ("FSMA"));

4.12      if it is a resident in the EEA (other than the United Kingdom), it is (a) a qualified investor within the meaning of the law in the relevant EEA State implementing Article 2(1)(e)(i) or (ii) of Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (the "Prospectus Directive") and (b) if the Relevant Member State (being any Member State of the EEA which has implemented the Prospectus Directive) has implemented EU Directive 2011/61/EU on Alternative Investment Fund Managers, that it is a person to whom the New Ordinary Shares may lawfully be marketed to under the applicable implementing legislation (if any) of the Relevant Member State;

4.13      in the case of any New Ordinary Shares acquired by a Placee as a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive (i) the New Ordinary Shares acquired by it in the Issue have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of Liberum has been given to the offer or resale; or (ii) where New Ordinary Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those New Ordinary Shares to it is not treated under the Prospectus Directive as having been made to such persons;

4.14      if it is outside the United Kingdom, neither the Announcement and these Issue Terms and Conditions, or any other offering, marketing or other material in connection with the Issue (for the purposes of these Issue Terms and Conditions, each an "Issue Document") constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for New Ordinary Shares pursuant to the Issue unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and New Ordinary Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements;

4.15      it does not have a registered address in, and is not a citizen, resident or national of an Excluded Territory or any jurisdiction in which it is unlawful to make or accept an offer of the New Ordinary Shares and it is not acting on a non-discretionary basis for any such person;

4.16      if the investor is a natural person, such investor is not under the age of majority (18 years of age in the United Kingdom) on the date of such investor's agreement to subscribe for New Ordinary Shares under the Issue;

4.17      it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the New Ordinary Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and you acknowledge and agree that no Issue Document is being issued by Liberum in its capacity as an authorised person under section 21 of FSMA and such documents may not therefore be subject to the controls which would apply if they were made or approved as a financial promotion by an authorised person;

4.18      it is aware of and acknowledges that it is required to comply with all applicable provisions of FSMA with respect to anything done by it in relation to the New Ordinary Shares in, from or otherwise involving, the United Kingdom;

4.19      it is aware of the provisions of the Criminal Justice Act 1993 regarding insider dealing, the EU Market Abuse Regulation (596/2014) and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with any obligations imposed by such statutes and/or regulations;

4.20      unless it is expressly agreed otherwise with the Company and Liberum, it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted the Announcement, these Issue Terms and Conditions, or any other Issue Document to any persons within the United States or to any US Persons, nor will it do any of the foregoing;

4.21      it represents, acknowledges and agrees to the representations, warranties and agreements as set out under the heading "United States Purchase and Transfer Restrictions" in clause 5 below;

4.22      no action has been taken or will be taken in any jurisdiction other than the United Kingdom that would permit a public offering of the New Ordinary Shares in any country or jurisdiction where action for that purpose is required;

4.23      it acknowledges that neither Liberum nor any of its Affiliates nor any person acting on its or their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Issue or providing any advice in relation to the Issue and participation in the Issue is on the basis that it is not and will not be a client of Liberum and that Liberum does not have any duties or responsibilities to it for providing protections afforded to its clients or for providing advice in relation to the Issue;

4.24      that, save in the event of fraud on the part of Liberum, none of Liberum, its ultimate holding companies nor any direct or indirect subsidiary undertakings of such holding companies, nor any of their respective directors, members, partners, officers and employees shall be responsible or liable to a Placee or any of its clients for any matter arising out of Liberum's role as sole bookrunner or otherwise in connection with the Issue and that where any such responsibility or liability nevertheless arises as a matter of law the Placee and, if relevant, its clients, will immediately waive any claim against any of such persons which the Placee or any of its clients may have in respect thereof;

4.25      it acknowledges that where it is subscribing for the New Ordinary Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for the New Ordinary Shares for each such account; (ii) to make on each such account's behalf the representations, warranties and agreements set out in the Announcement and these Issue Terms and Conditions; and (iii) to receive on behalf of each such account any documentation relating to the Issue in the form provided by the Company and/or Liberum. It agrees that the provision of this clause shall survive any resale of the New Ordinary Shares by or on behalf of any such account;

4.26      it irrevocably appoints any Director and any director of Liberum to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the New Ordinary Shares for which it has given a commitment under the Issue, in the event of its own failure to do so;

4.27      it accepts that if the Issue does not proceed or the relevant conditions to the Placing Agreement are not satisfied as regards the Issue or the New Ordinary Shares for which valid applications are received and accepted are not admitted to trading on the premium segment of the Main Market for any reason whatsoever, then none of Liberum or the Company or the Investment Manager, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

4.28      in connection with its participation in the Issue it has observed all relevant legislation and regulations, in particular (but without limitation) those relating to money laundering and that its application is only made on the basis that it accepts full responsibility for any requirement to verify the identity of its clients and other persons in respect of whom it has applied. In addition, it warrants that it is a person: (i) subject to the Money Laundering Regulations 2007 (SI 2007 No. 2157) in force in the United Kingdom; or (ii) subject to the Money Laundering Directive (2015/849/EC) of the European Parliament (the "Money Laundering Directive") and of the EC Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or (iii) subject to the Guernsey AML Requirements; or (iv) acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a country in which there are in force provisions at least equivalent to those required by the Money Laundering Directive;

4.29      it acknowledges that due to anti-money laundering requirements, Liberum, State Street (Guernsey) Limited (the "Administrator"), the Registrar and the Company may require proof of identity and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the applicant to produce any information required for verification purposes, Liberum and the Company may refuse to accept the application and the subscription monies relating thereto. It holds harmless and will indemnify Liberum and the Company against any liability, loss or cost ensuing due to the failure to process such application, if such information as has been requested has not been provided by it in a timely manner;

4.30      that it is aware of, has complied with and will at all times comply with its obligations in connection with money laundering under the Proceeds of Crime Act 2002;

4.31      it acknowledges and agrees that information provided by it to the Company, the Administrator or the Registrar will be stored on the Registrar's and the Administrator's computer system and manually;

4.32     by submitting personal data to the Administrator (acting for and on behalf of the Company), the Registrar or Liberum:

4.32.1   in the case of a Placee, where (a) the Placee is a natural person or (b) where the Placee is not a natural person, he/she/it (as the case may be) represents and warrants that he/she/it (as applicable):

(A)        has read and understood the terms of the privacy notice as set out on the Company's website (the "Privacy Notice"); and/or

(B)        has brought the Privacy Notice to the attention of any underlying data subjects on whose behalf or account the Placee may act or whose personal data will be disclosed to the Company, Liberum, the Registrar and the Administrator as a result of the Placee subscribing for New Ordinary Shares under the Issue; and

(C)        the Placee has complied in all other respects with Data Protection Laws (as defined in clause 4.32.3 below) in respect of the disclosure and provision of personal data to the Company; or

4.32.2   where the Placee acts for or on account of an underlying data subject, he/she/it      shall, in respect of the personal data it processes in relation to or arising out of the          Issue:

(A)        comply with all applicable Data Protection Laws;

(B)        take appropriate technical and organisational measures against unauthorised or unlawful processing of the personal data and against accidental loss or destruction of, or damage to the personal data;

(C)        if required, agree with Company, the Administrator, Liberum or the Registrar (as appropriate), the responsibilities of each such entity as regards relevant data subjects' rights and notice requirements; and

(D)        immediately on demand, fully indemnify the Company, the Administrator, Liberum and the Registrar and keep them fully and effectively indemnified against all costs, demands, claims, expenses (including legal costs and disbursements on a full indemnity basis), losses (including indirect losses and loss of profits, business and reputation), actions, proceedings and liabilities of whatsoever nature arising from or incurred by the Company, the Administrator, Liberum and the Registrar in connection with any failure by the Placee to comply with the provisions of this clause 4.32.2; and

4.32.3   for the purposes of this clause 4.32, "Data Protection Laws" means  Regulation (EU) 2016/619 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (known as the "General Data Protection Regulation") and any associated code, regulation or guidance (as may be amended or replaced from time to time), the Data Protection (Bailiwick of Guernsey) Law 2001, as such may be varied, amended or replaced from time to time, any successor legislation thereto and any related regulations and guidance;

4.33      Liberum and the Company are entitled to exercise any of their rights under the Placing Agreement or any other right in their absolute discretion without any liability whatsoever to them;

4.34      the representations, undertakings and warranties contained in the Announcement and these Issue Terms and Conditions are irrevocable. It acknowledges that Liberum and the Company and their respective Affiliates will rely upon the truth and accuracy of the foregoing and following representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the New Ordinary Shares are no longer accurate, it shall promptly notify Liberum and the Company;

4.35      where it or any person acting on behalf of it is dealing with Liberum, any money held in an account with Liberum on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the UK Financial Conduct Authority ("FCA") which therefore will not require Liberum to segregate such money, as that money will be held by Liberum under a banking relationship and not as trustee;

4.36      any of its clients, whether or not identified to Liberum, will remain its sole responsibility and will not become clients of Liberum for the purposes of the rules of the FCA or for the purposes of any other statutory or regulatory provision;

4.37      it accepts that the allocation of the New Ordinary Shares shall be determined by Liberum, in its absolute discretion, and that it may scale down any Issue commitments for this purpose on such basis as it may determine;

4.38      time shall be of the essence as regards its obligations to settle payment for the New Ordinary Shares and to comply with its other obligations under the Issue;

4.39      it authorises Liberum to deduct from the total amount subscribed under the Issue the aggregation commission (if any) (calculated at the rate agreed with the Placee) payable on the number of the New Ordinary Shares allocated under the Issue;

4.40      the commitment to subscribe for New Ordinary Shares on the terms set out in these terms and conditions will continue notwithstanding any amendment that may in the future be made to the terms of the Issue and that it will have no right to be consulted or require that its consent be obtained with respect to the Company's conduct of the Issue;

4.41      it is capable of being categorised as a person who is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook; and

4.42      if it is acting as a "distributor" (for the purposes of the MiFID II Product Governance Requirements):

4.42.1   it acknowledges that the target market assessment undertaken by the Investment Manager and Liberum does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to, the New Ordinary Shares, and each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels;

4.42.2   notwithstanding any target market assessment undertaken by the Investment Manager and Liberum, it confirms that it has satisfied itself as to the appropriate knowledge, experience, financial situation, risk tolerance and objectives and needs of the investors to whom it plans to distribute the New Ordinary Shares and that it has considered the compatibility of the risk/reward profile of such Shares with the end target market; and

4.42.3   it acknowledges that the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.

5.         UNITED STATES PURCHASE AND TRANSFER RESTRICTIONS

5.1       Unless it is expressly agreed otherwise with the Company and Liberum, by agreeing to subscribe for New Ordinary Shares, each Placee which enters into a commitment with Liberum to subscribe for New Ordinary Shares will (for itself and any person(s) procured by it to subscribe for New Ordinary Shares and any nominee(s) for any such person(s)) be deemed to represent, warrant, undertake, agree and acknowledge to Liberum, the Company, the Registrar, the Board, the Investment Manager and their respective Affiliates, that:

5.1.1       it is not a US Person, is not located within the United States at the time it received the offer to subscribe for New Ordinary Shares and is not acquiring the New Ordinary Shares for the account or benefit of a US Person;

5.1.2       it is acquiring the New Ordinary Shares in a manner qualifying as an "offshore transaction" meeting the requirements of Regulation S under the US Securities Act;

5.1.3       the Ordinary Shares have not been and will not be registered under the US Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, distributed or otherwise transferred, directly or indirectly, into or within the United States or to, or for the account or benefit of, US Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States and in a manner which would not result in the Company being required to register under the US Investment Company Act;

5.1.4       the Company has not been and will not be registered under the US Investment Company Act and as such investors are not and will not be entitled to the benefits of the US Investment Company Act, and that the Company has put in place restrictions on the ability of investors to hold or transfer Ordinary Shares to ensure that the Company is not and will not be required to register under the US Investment Company Act; 

5.1.5       no portion of the assets used to acquire, and no portion of the assets used to hold, the New Ordinary Shares or any beneficial interest therein constitutes or will constitute the assets of (i) an "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (ii) a "plan" as defined in Section 4975 of the US Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (iii) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US Tax Code. In addition, if an investor is a governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code, its acquisition, holding, and disposition of the New Ordinary Shares will not constitute or result in a non-exempt violation of any such substantially similar law;

5.1.6       if any New Ordinary Shares are issued to it in certificated form, then such certificates evidencing ownership will contain a legend substantially to the following effect unless otherwise determined by the Company in accordance with applicable law:

REAL ESTATE CREDIT INVESTMENTS LIMITED (THE "COMPANY") HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "US INVESTMENT COMPANY ACT"). IN ADDITION, THE SECURITIES OF THE COMPANY REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (I) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT TO A PERSON OUTSIDE THE UNITED STATES AND NOT KNOWN BY THE TRANSFEROR TO BE A "US PERSON" AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT (A "US PERSON") OR ACTING FOR THE ACCOUNT OR BENEFIT OF A US PERSON, BY PRE-ARRANGEMENT OR OTHERWISE, (II) TO THE COMPANY OR A SUBSIDIARY THEREOF, OR (III) PURSUANT TO ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT, IF ANY, IN EACH CASE UNDER CIRCUMSTANCES WHICH WILL NOT REQUIRE THE COMPANY TO REGISTER UNDER THE US INVESTMENT COMPANY ACT AND IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. IN ADDITION, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON USING THE ASSETS OF (I) (A) AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE US EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), THAT IS SUBJECT TO TITLE I OF ERISA; (B) A "PLAN" AS DEFINED IN SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "US TAX CODE"), INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE US TAX CODE; OR (C) AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY OF THE FOREGOING TYPES OF PLANS, ACCOUNTS OR ARRANGEMENTS THAT IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE US TAX CODE OR (II) A GOVERNMENTAL, CHURCH, NON-US OR OTHER EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-US LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE US TAX CODE IF THE PURCHASE, HOLDING OR DISPOSITION OF THE SECURITIES WOULD RESULT IN A VIOLATION OF APPLICABLE LAW AND/OR CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 503 OF THE US TAX CODE OR ANY SUBSTANTIALLY SIMILAR LAW.

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THESE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES, ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK.

5.1.7       if in the future it decides to offer, resell, transfer, assign, pledge or otherwise dispose of Ordinary Shares or any beneficial interest therein, it will do so only (i) in an "offshore transaction" complying with the provisions of Rule 903 or Rule 904 of Regulation S under the US Securities Act to a person outside the United States and not known by the transferor to be a US Person, by prearrangement or otherwise, (ii) to the Company or a subsidiary thereof, or (iii) pursuant to another exemption from the registration requirements of the US Securities Act, if any, and in each case, in compliance with all applicable securities laws;

5.1.8       it is acquiring the New Ordinary Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with any distribution of Ordinary Shares in any manner that would violate the US Securities Act, the US Investment Company Act or any other applicable securities laws;

5.1.9       the Company reserves the right to make inquiries of any holder of the Ordinary Shares or interests therein at any time as to such person's status under US federal securities laws and to require any such person that has not satisfied the Company that the holding by such person will not violate or require registration under US federal securities laws to transfer such Shares or interests in accordance with the Articles;

5.1.10     the representations, warranties, undertakings, agreements and acknowledgements contained herein are irrevocable and it acknowledges that the Company, Liberum and their respective directors, officers, agents, employees, advisers and others will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings, agreements and acknowledgements;

5.1.11     if any of the foregoing representations, warranties, undertakings, agreements or acknowledgements are no longer accurate or have not been complied with, it will immediately notify the Company; and

5.1.12     if it is acquiring any Shares as a fiduciary or agent for one or more accounts, it has sole investment discretion with respect to each such account and it has full power to make, and does make, each of the foregoing representations, warranties, undertakings, agreements and acknowledgements on behalf of each such account.

6.         SUPPLY OF INFORMATION

If Liberum, the Registrar or the Company or any of their agents request any information about a Placee's agreement to subscribe for the New Ordinary Shares under the Issue, such Placee must promptly disclose it to them.

7.         MISCELLANEOUS

7.1       The rights and remedies of the Company, the Registrar, the Investment Manager and Liberum under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

7.2       On application, if a Placee is an individual, that Placee may be asked to disclose in writing or orally, his nationality. If a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Issue will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

7.3       Each Placee agrees to be bound by the Articles once the New Ordinary Shares, for which the Placee has agreed to subscribe pursuant to the Issue, have been acquired by the Placee. The contract to subscribe for the New Ordinary Shares under the Issue and the appointments and authorities mentioned in the Announcement and these Issue Terms and Conditions will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of Liberum, the Registrar and the Company, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against a Placee in any other jurisdiction.

7.4       In the case of a joint agreement to subscribe for the New Ordinary Shares under the Issue, references to a Placee in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several.

7.5       Liberum and the Company expressly reserve the right to modify the Issue (including, without limitation, the timetable) at any time before allocations are determined. The Issue is subject to the satisfaction of the conditions contained in the Placing Agreement and the Placing Agreement not having been terminated.

 

END

 

 

IOEPGUWABUPRUBU