Results of Placing,Subscription Offer & Admission

RNS Number : 3210Z

TwentyFour Income Fund Limited

06 March 2013

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, OR INTO OR FROM CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.

This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any shares in TwentyFour Income Fund Limited or securities in any other entity, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

TwentyFour Income Fund Limited

Announcement of the result of the Placing and Offer for Subscription and Admission of the Ordinary Shares to the premium segment of the Official List and dealing in the Ordinary Shares on the London Stock Exchange's Main Market

6 March 2013

TwentyFour Income Fund Limited (the "Company") is a newly formed company which has been incorporated in Guernsey. The Company has appointed TwentyFour Asset Management LLP as its investment manager. The Company has been registered by the GFSC as a registered closed-ended collective investment scheme pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and The Registered Collective Investment Scheme Rules 2008. Applications have been made to the FSA for the Ordinary Shares to be issued pursuant to the Company's prospectus dated 19 February 2012 to be admitted to the premium segment of the Official List and to the London Stock Exchange for such Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Admission is expected to become effective, and dealings in the Ordinary Shares commenced at 8:00 a.m. on 6 March 2013.

The Company is pleased to announce that it has raised £150 million through a Placing of 136,076,790 Ordinary Shares and through applications for 13,923,210 Ordinary Shares through an Offer for Subscription.

The ISIN number is GG00B90J5Z95 and the SEDOL code for the Ordinary Shares is B90J5Z9. The Ordinary Shares trade under the Ticker TFIF.   

Investment policy

The Company's investment policy is to invest in a diversified portfolio of UK and European Asset Backed Securities. The Company will maintain a Portfolio diversified by issuer concentration, it being anticipated that the initial Portfolio will comprise at least 30 to 50 Asset Backed Securities once the Portfolio is substantially invested. It is anticipated that the Portfolio will be substantially invested within three months of Admission.

Investment Portfolio

It is anticipated that the Company will initially target residential and commercial mortgage-backed securities with collateral backing in the UK and Northern Europe. It is expected that, once the Portfolio is substantially invested, at least 50 per cent. of the Portfolio value will be invested in residential and commercial mortgage-backed securities and that at least 50 per cent. of the Portfolio value will be backed by collateral in the UK and Northern Europe. However, the Company has not included in its investment policy any restrictions with respect to investing in particular countries or sectors.

Target Total Return

On the basis of market conditions as at the date of the Prospectus and whilst not forming part of the Company's investment objective, the Company will in respect of the three years following Admission target a net total return on the Issue Price of between 7 and 10 per cent. per annum.

Dividend Policy

The Board intends to distribute an amount at least equal to the value of the Company's net income arising each quarter to the holders of Ordinary Shares. For these purposes, the Company's income will include the coupon payable by the Asset Backed Securities in the Portfolio and the amortisation of any discount or premium to par at which an Asset Backed Security is purchased over its remaining expected life, prior to its maturity.

The Directors believe that, once substantially invested, the annual dividend should be at least equal to, in the financial year ending on 31 March 2014, 5 per cent. of the Issue Price and for each financial year thereafter, 6 per cent. of the Issue Price (or in each case an annualised equivalent).

Investment Manager

TwentyFour is an independent fixed income specialist asset manager established in 2008 and based in the City of London. TwentyFour had approximately £1.4 billion of total funds under management as at 31 December 2012, including a range of funds investing in the asset class proposed for the Company. The Investment Manager is authorised and regulated by the FSA.

Commenting on today's announcement, Trevor Ash, Chairman of TwentyFour Income Fund Limited said:

"The Board is pleased to have raised £150 million from a broad range of investors. Attractive levels of income have become difficult to generate which has led investors to investigate specialist sources of income. The Board believes that the Company, which will invest in a diversified portfolio of UK and European Asset Backed Securities, offers the potential for attractive risk adjusted returns."

Ben Hayward, Portfolio Management of TwentyFour said:

"Investors have taken the opportunity to access a specialised part of fixed income that insulates against risks such as rising gilt yields and changing corporate performance. We believe that, gaining this exposure while receiving an attractive yield premium, at a point in the market where unconventional policy action has pushed mainstream fixed income products to record low yields, emphasises the proposition."

Numis Securities acted as Sponsor, Financial Adviser and Broker on the transaction.

Defined terms used in this announcement shall have the same meaning as ascribed to them in the Company's Prospectus dated 19 February 2013.

A copy of the Prospectus is available for inspection at the National Storage Mechanism which is located at www.morningstar.co.uk/uk/NSM. Copies of the Prospectus will also be available on the Company's website at http://www.twentyfourincomefund.com/  and for collection, free of charge during normal business hours from the Company's registered office at Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL for as long as Ordinary Shares are available for issue under the Prospectus.

Further information, please contact:

TwentyFour Asset Management LLP

John Magrath/Alistair Wilson                                                       [phone]

For shareholder information:

Numis Securities Limited                                                        [phone]

Nathan Brown / Hugh Jonathan              

Notes on the Company: 

Life of the Company

The Company does not have a winding-up date. In order to provide Shareholders with an opportunity to vote on the continuation of the Company if: (i) 85 per cent. of the Net Proceeds

(excluding, for the avoidance of doubt, ABS that are in the process of being reinvested) have not been invested within 12 months of the date of Admission; or (ii) the Dividend Target is not met in any Reporting Period, the Company's Articles provide that if either of those events occur a general meeting of the Company will be convened at which the Directors will propose an ordinary resolution that the Company should continue as an investment company. If any such ordinary resolution is not passed, the Directors shall draw up proposals for the voluntary liquidation, unitisation, reorganisation or reconstruction of the Company for consideration by the Shareholders at a general meeting to be convened by the Directors for a date not more than 6 months after the date of the meeting at which such ordinary resolution was not passed.

 

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