Publication of Prospectus

The information in this announcement is restricted and is not for publication, release or distribution directly or indirectly in or into or from the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan.

1 February 2016

TwentyFour Income Fund Limited

(the “Company”)

PUBLICATION OF PROSPECTUS

The Board of TwentyFour Income Fund Limited announces a Placing, Offer for Subscription, Open Offer and Placing Programme of New Ordinary Shares of 1p each in the Company (the “Issue”), and an opportunity for shareholders to elect to realise some or all of their investment in the Company. The Board also announces the publication of a prospectus containing full details of the Issue and the Admission to the Official List and to trading on the London Stock Exchange’s main market for listed securities of New Ordinary Shares of 1p each and Realisation Shares of 1p each (“Admission”) (the “Prospectus”). 

TwentyFour Income Fund Limited was launched on 6 March 2013 with an investment objective of generating attractive, risk-adjusted returns, principally through income distributions, by investing in a diversified portfolio of UK and European Asset Backed Securities.

The Articles established at launch provided for a realisation opportunity under which holders of Existing Ordinary Shares could elect to realise some or all of their holding with effect on the Company’s third anniversary.

On 16 December 2015, Shareholders approved certain changes to the Company’s investment policy to reflect the evolving investment opportunity in UK and European Asset Backed Securities. Shareholders also approved the disapplication of pre-emption rights to facilitate the Issue, the Placing Programme and the Realisation Opportunity, which included the making of certain changes to the Articles to, inter alia, amend the form of the realisation opportunity.

The Issue is intended to raise additional capital in part to enable the Company to redeem the shareholdings of Shareholders who wish to realise some or all of their Ordinary Shares through a Realisation Sale Election. Proceeds of the Issue raised in excess of the amount required to redeem the shareholdings of Shareholders who wish to realise some or all of their Ordinary Shares through a Realisation Sale Election, and proceeds raised under the Placing Programme, will be used for investment in accordance with the Company’s investment policy.

Current trading and prospects

Since launch the Company has delivered strong performance for Shareholders:

• the total return of the Shares (based on NAV) from launch to close of business on 27 January 2016, being the latest practicable date prior to the publication of the Prospectus was 30.29 per cent., or 9.56 per cent. per annum, which compares favourably with the Company’s target annual total return of 7 and 10 per cent. per annum;
• the income return to Shareholders has been ahead of the Company’s targets at launch. The IPO Prospectus stated a target dividend of at least 5p per Ordinary Share in respect of the year to 31 March 2014 and at least 6p per Ordinary Share thereafter. The Company met these targets by paying dividends of 6.38p and 6.65p per Ordinary Share in respect of the periods ended 31 March 2014 and 2015 respectively, and the Board currently estimates a total dividend in respect of the year ending 31 March 2016 of in excess of 6p per Ordinary Share*; and
• the Ordinary Shares have predominantly traded at a premium to NAV since launch, reflecting net demand in the market from a broad range of existing and new investors. The [premium] to NAV was 1.27 per cent. as at close of business on 27 January 2016, being the latest practicable date prior to the publication of the Prospectus.

The Company believes that UK and European ABS continue to offer attractive risk-adjusted returns. Recent sentiment across fixed income has been affected by a number of negative events including the material correction in oil and other commodity prices and the moves in the Chinese currency. This has led to more attractive yields in the European ABS market as prices have been supressed by a lower risk tolerance. In addition, specific events in some parts of the European ABS market (over supply of UK RMBS, volatility in Portuguese fixed income) have created further value.

Fundamental performance has improved for the majority of transactions in the European ABS market, buoyed by a low interest rate environment, low inflation and improving employment, wage and housing data. This improved performance has not been matched across the board by lower yields on a consistent basis, and as such the Company believes that a better risk can yield a more attractive return.

The recent change in the rate environment in the US may be followed this year by a similar move in the UK. As the Company’s portfolio derives a yield that is based on floating rate coupons, the Company’s yield can be expected to go up as the financial markets expect a higher rate environment.

The better yields available currently may pull in new investors when compared to historical yields and yields in other parts of fixed income, which could provide material capital gains in a recovering environment.

Importantly the strong performance of transactions is expected to continue with Fitch updating its cumulative lifetime loss rate predictions for European RMBS and ABS to 0.3 per cent. and 0.2 per cent. respectively.

The Transaction

The Company intends to implement the Transaction, which provides holders of Existing Ordinary Shares with the following options:

• retain their current investment in the Company, which requires no action;
• increase their investment in the Company, by making an Open Offer application. The proceeds of the Open Offer are intended to be supplemented by those of the Placing and the Offer for Subscription; or
• realise their investment in the Company, by making a Realisation Sale Election. Such elections will initially be satisfied by their Existing Ordinary Shares being redeemed by the Company at the Redemption Price, funded by the net proceeds of the Issue up to an amount equal to the net proceeds of the Issue. Where the value of such elections (calculated by reference to the Redemption Price) exceeds the net proceeds of the Issue resulting in the Company not being able to redeem such Ordinary Shares, such Ordinary Shares will be converted into Realisation Shares with effect from the 2016 Reorganisation Date. In such case, following the 2016 Reorganisation Date, the Portfolio will be split into two separate and distinct pools and the assets attributable to the Realisation Pool will be managed in accordance with an orderly realisation programme with the aim of making progressive returns of cash.

The Issue

The Issue consists of a placing, an offer for subscription and an open offer at the Issue Price as explained below.

The Issue is intended to raise additional capital in part to enable the Company to redeem the shareholdings of Shareholders who wish to realise some or all of their Ordinary Shares through a Realisation Sale Election. Subject to the Issue raising sufficient funds, Shareholders who make a Realisation Sale Election will receive payment in cash as soon as practicable after 6 March 2016 of a purchase price which is intended to represent a 1.0 per cent. discount to the then prevailing NAV per Ordinary Share. This will enable Shareholders who make a Realisation Sale Election to receive payment for the Ordinary Shares that they wish to realise faster than would be the case if they had to wait for the proceeds of the sale of assets in the Realisation Pool to be distributed to them.

If the Issue does not raise sufficient funds to fund the repurchase of all Tendered Ordinary Shares, the shortfall will be apportioned to Shareholders pro rata to the number of Ordinary Shares respectively held by them in respect of which a Realisation Sale Election is made and such Ordinary Shares which are not redeemed out of the proceeds of the Issue will be converted into Realisation Shares and cash will be returned to the holders of the Realisation Shares as the proceeds of the Realisation Pool are realised.

The Issue Price per Ordinary Share will depend on the latest published NAV immediately before the Reorganisation Date and the level of demand for New Ordinary Shares relative to Realisation Sale Elections.

Under the Issue, each New Ordinary Share will be made available to investors, in the event that the number of New Ordinary Shares issued under the Issue:

• exceeds the number of Ordinary Shares in respect of which Realisation Elections are validly made, at a price per New Ordinary Share calculated as (A) the blended average of (i) the NAV per Ordinary Share on 29 February 2016, less an amount equal to the Final Interim Dividend per Ordinary Share, multiplied by the aggregate number of Ordinary Shares in respect of which Realisation Elections are validly made, and (ii) a 2 per cent. premium to NAV per Ordinary Share on 29 February 2016, less an amount equal to the Final Interim Dividend per Ordinary Share multiplied by the number of New Ordinary Shares issued under the Issue in excess of the number of Ordinary Shares in respect of which Realisation Elections are validly made and (B) dividing such blended average by the number of New Ordinary Shares issued under the Issue; or

• does not exceed the number of Ordinary Shares in respect of which Realisation Elections are validly made, at a price per New Ordinary Share calculated as the NAV per Ordinary Share on 29 February 2016, less an amount equal to the Final Interim Dividend per Ordinary Share.

Further details of the calculation of the Issue Price are set out in Part 7 of the Prospectus.

The Prospectus sets out key information relating to the Company (Part 5), investment opportunity in UK and European Asset Backed Securities (Part 6), and the Transaction (Part 7).

Expected Timetable of Principal Events

Record Date for entitlement under the Open Offer	5.00pm on 28 January 2016
Placing opens	1 February 2016
Offer for Subscription opens	1 February 2016
Open Offer opens	1 February 2016
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	as soon as practicable after 8.00am on 2 February 2016
Latest time for withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30pm on 22 February 2016
Latest time for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00pm on 23 February 2016
Latest time for splitting Open Offer Application Forms (to satisfy bona fide market claims only)	3.00pm on 24 February 2016
Final Interim Dividend announced	25 February 2016
Latest time and date for receipt of Offer for Subscription Application Forms under the Offer for Subscription and Open Offer Application Forms under the Open Offer and payment in full or settlement of the relevant CREST instruction	11.00am on 26 February
Latest time and date for receipt of Election Forms in respect of the 2016 Realisation Opportunity	11.00am on 26 February 2016
NAV announced, which dictates the Issue Price	29 February 2016
Placing closes	12 noon on 1 March 2016
Issue Price and result of the Issue announced	by close of business on 4 March 2016
Admission of any Ordinary Shares that are redesignated as Realisation Shares pursuant to the Realisation to the Official List and dealing in the Realisation Shares on the London Stock Exchange’s Main Market commence	8.00am on 8 March 2016
Admission of the New Ordinary Shares issued under the Issue to the Official List and dealing in the New Ordinary Shares on the London Stock Exchange’s Main market commence	8.00am on 8 March 2016
CREST accounts credited with Ordinary Shares held in uncertificated form that have been redesignated as Realisation Shares	8.00am on 8 March 2016
CREST accounts credited in respect of Ordinary Shares issued in uncertificated form	8.00am on 8 March 2016
Certificates despatched in respect of certificated Realisation Shares	week commencing 21 March 2016
Certificated despatched in respect of Ordinary Shares issued in certificated form	week commencing 21 March 2016
Placing Programme opens	9 March 2016
Placing Programme closes	27 January 2017

Notes:

(1)  References to time above and in the Prospectus generally are to London times unless otherwise specified.

(2)  All times and dates in the expected timetable and in the Prospectus may be adjusted by the Company.  Any changes to the timetable will be notified by RIS.

Dealing Codes

New Ordinary Shares ISIN SEDOL Ticker	GG00B90J5Z95 B90J5Z9 TFIF
Realisation Shares ISIN SEDOL Ticker	GG00BYW8B177 BYW8B17 TFIR
Offer for Subscription ISIN SEDOL	GG00BDGN6C75 BDGN6C7
Open Offer Entitlement ISIN SEDOL	GG00BDGN5Y21 BDGN5Y2
Excess Open Offer Entitlement ISIN SEDOL	GG00BDGN5Z38 BDGN5Z3

Prospectus

Further details of the Issue and Admission are set out in the Prospectus, which will be available on the Company's website at www.twentyfourincomefund.com. A copy of the Prospectus will be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM.

Unless otherwise defined, capitalised words and phrases used in this announcement shall have the meaning given in the Prospectus.

Contact details

For further information, please contact:

Numis Securities Limited Nathan Brown Hugh Jonathan	[phone]
TwentyFour Income Fund Limited John Magrath Alistair Wilson	[phone]

Important Notice

This Announcement has been prepared for information purposes only, it is not a prospectus.  Recipients of this Announcement who are considering acquiring New Ordinary Shares in the Company in connection with the Issue and the Placing Programme are reminded that any such acquisition must be made only on the basis of the information contained in the Prospectus and any supplementary prospectus(es) thereto which may be different from the information contained in this Announcement.  This Announcement does not constitute or form part of and may not be construed as an offer to sell, or an invitation to purchase, investments of any description, nor as 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 any investment opportunity.  In particular, an investment in the Company involves a high degree of risk and prospective investors should read the section in the Prospectus entitled "Risk Factors" for further information.

Any data on past performance, modelling or back-testing contained herein is no indication as to future performance and there can be no assurance that targeted or projected returns will be achieved, that the Company will achieve comparable results or that the Company will be able to implement its investment strategy or achieve its investment objectives.  All opinions and estimates are given as of the date hereof and are subject to change.  The value of any investment may fluctuate as a result of market changes. 

Ordinary Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and the New Ordinary Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons. There will be no public offer of the New Ordinary Shares in the United States. Subject to certain exceptions, the New Ordinary Shares are being offered and sold only outside the United States to persons who are not U.S. Persons in reliance on the exemption from registration provided by Regulation S under the Securities Act.

Moreover, the Company has not been and will not be registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and investors will not be entitled to the benefits of the Investment Company Act. The New Ordinary  Shares and any beneficial interests therein may only be transferred in an offshore transaction in  accordance with Regulation S (i) to a person outside the United States and not known by the transferor to be a U.S. Person, by prearrangement or otherwise; or (ii) to the Company or a subsidiary thereof.

The distribution of this Announcement in certain jurisdictions may be restricted by law.  No action has been taken by the Company or Numis that would permit an offering of any Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required,.  Persons into whose possession this Announcement comes are required by the Company and Numis to inform themselves about, and to observe, such restrictions.

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts.  These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.  Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The information contained in this Announcement is subject to change without notice and neither the Company nor Numis assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

* This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Company will make any distributions at all. This target return should not be taken as an indication of the Company’s expected or actual current or future results. The Company’s actual return will depend upon a number of factors, including but not limited to the size of the Issue, the number of Ordinary Shares in respect of which Realisation Elections are made and the Company’s total expense ratio. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in or retain or increase their investment in the Company. See further in the ‘‘Risk Factors’’ section of the Prospectus.