Half Yearly Report

RNS Number : 3969Q

CVC Credit Partners European OpsLtd

29 August 2014

 



29 August 2014

FOR IMMEDIATE RELEASE

RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., JERSEY BRANCH HALF-YEARLY RESULTS ANNOUNCEMENT

THE BOARD OF DIRECTORS OF CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED ANNOUNCE HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014

INTERIM BOARD report

financial highlights and performance summary

Financial highlights

On 3 April 2014, the Company issued 30,958,500 Euro C shares and 66,352,795 Sterling C shares at a price of €1 and £1 per C share respectively, raising gross proceeds of  €30,958,500 and £66,352,795.

On 21 May 2014, 20,665,600 Euro ordinary shares were issued at a price of €1.0565, raising gross proceeds of €21,833,206. 

Number of shares in issue as at 30 June 2014:

182,886,210 Euro ordinary shares (31 December 2013: 166,615,025 Euro shares)

161,304,834 Sterling ordinary shares (31 December 2013: 157,690,776 Sterling shares)

30,958,500 Euro C shares (31 December 2013: Nil C shares)

66,352,795 Sterling C shares (31 December 2013: Nil C shares)

Market capitalisation as at 30 June 2014:

Euro ordinary share class: €192,944,952 (31 December 2013: €169,114,250)

Sterling ordinary share class: £167,757,027 (31 December 2013: £162,027,272)

Euro C share class: €31,887,255 (31 December 2013: Nil)

Sterling C share class: £66,518,677 (31 December 2013: Nil)

Performance summary
			As at 30 June 2014	As at 31 December 2013
Net asset value per Euro ordinary share			€1.0250 XD	€1.0293
Euro ordinary share price (bid market)*			€1.0550 XD	€1.0150
Net asset value per Sterling ordinary share			£1.0268 XD	£1.0305
Sterling ordinary share price (bid market)*			£1.0400 XD	£1.0275
Net asset value per Euro C share			€1.0039	-
Euro C share price (bid market)*			€1.0300	-
Net asset value per Sterling C share			£1.0035	-
Sterling C share price (bid market)*			£1.0025	-
Period highs and lows	2014	2014	2013	2013
	High	Low	High	Low
Net asset value per Euro ordinary share	€1.0498	€1.0241	€1.0293	€0.9966
Euro ordinary share price (bid market)*	€1.0800	€1.0180	€1.0200	€0.9900
Net asset value per Sterling ordinary share	£1.0516	£1.0258	£1.0305	£0.9966
Sterling ordinary share price (bid market)*	£1.0775	£1.0275	£1.0350	£0.9900
Net asset value per Euro C share	€1.0039	€0.9900	-	-
Euro C share price (bid market)*	€1.0300	€0.9900	-	-
Net asset value per Sterling C share	£1.0035	£0.9899	-	-
Sterling C share price (bid market)*	£1.0125	£0.9875	-	-

* - Source: Bloomberg

Dividend history

	Ex-dividend date	Payment date
For the period ended 31 December 2013
Sterling - £0.01 per ordinary share	29/01/2014	14/02/2014
Euro - €0.01 per ordinary share	29/01/2014	14/02/2014
For the period ended 30 June 2014
Sterling - £0.025 per ordinary share	25/06/2014	22/07/2014
Euro - €0.025 per ordinary share	25/06/2014	22/07/2014

No C share dividend was declared during the period. 

Please refer to note 15 for further information subsequent to the reporting period.

chairman's statement

Introduction

I am pleased to present to you the Half Yearly Financial Statements of the Company for the six month period ended 30 June 2014.

Performance and Market Conditions

The Company's Euro and Sterling Ordinary shares have returned 3.0% and 3.1% respectively on a total return basis for the period under review. Given the challenging market conditions which have prevailed during the period, and which were discussed in some detail in the reports accompanying the Company's annual audited financial statements, I regard this outcome as creditable.

It is notable that the yield compression seen in our asset class in the first half of the year has, for the moment, somewhat reversed itself, and some European-based issuers have recently found it necessary to offer increased margins and issue discount features in order to complete successful offerings.  There may be supply / demand mechanics at work, but the better view is that the investors have started to be more discerning in their credit selection given the relatively low yield on offer by historic standards, particularly given the relatively poor performance of some recent primary market high yield bond issues in the aftermarket.

Corporate Activities

The Company has seen continuing demand for its shares, and during the period has issued 30,958,500 Euro C Class and 66,352,795 Sterling C Class shares (which have now converted to ordinary shares) along with 20,665,600 Euro ordinary shares under the placing programme established at the shareholder meetings in April. The market capitalisation of the Company presently stands at approximately €530million.

The Company intends to continue to issue new shares pursuant to the placing programme over the forthcoming months.

Dividend yield

The Company continues to target a dividend yield of around 5% per annum based on the original placing price of the ordinary shares in June 2013, and investors will now have received interim dividends covering the first half of 2014 of 2.5 pence per share on the Sterling ordinary shares and 2.5 cents per share on the Euro ordinary shares. Given the current yield produced by the Company's investments, which is monitored by your board on a continuing basis, I expect this level of dividends to be maintained.

Other Matters

During the period the Company announced that, in the opinion of the directors, it met the conditions necessary to determine that it did not fall to be treated as a Non-Mainstream Pooled Investment for the purposes of investor eligibility in the United Kingdom. The Company has also registered as a self-managed Alternative Investment Fund under the EU Alternative Investment Fund Managers Directive in its home jurisdiction and as a result was able to register under the United Kingdom National Private Placement Regime. The Company is in the process of registering in a similar manner in a number of other Continental European jurisdictions.

As always, I would like to thank my fellow directors, the portfolio management team at CVC Credit Partners, our advisors and investment bankers for their support and wise counsel, and would also like to extend thanks to all of our shareholders for their continuing commitment to the Company.

Richard Michael Boléat

Chairman

executive sUMMARY

Corporate summary

The Company is a closed-ended investment company limited by shares, registered and incorporated in Jersey under the Companies (Jersey) Law 1991 on 20 March 2013, with registration number 112635. The Company's share capital is denominated in Euro and Sterling and consists of Euro and Sterling ordinary shares and, until their conversion to ordinary shares on 22 July 2014, C shares. The Company's Euro and Sterling ordinary shares are listed on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange, as were the Company's C shares prior to their conversion. On 25 June 2013, the Company issued 325,578,580 ordinary shares, comprising 174,729,500 Euro ordinary shares and 150,849,080 Sterling ordinary shares at a price of €1 and £1 per ordinary share respectively. There are also two management shares in issue, with no par value and no voting rights.

The Company is self-managed and the Directors have invested the net IPO proceeds into Compartments of an existing European credit opportunities investment vehicle, CVC European Credit Opportunities S.à r.l. (the "Investment Vehicle"), managed by CVC Credit Partners Investment Management Limited (the "Investment Vehicle Manager").

Issue of C shares

The Company published a Prospectus on 20 March 2014 setting out the terms of a Placing Programme, of up to 600 million new shares, comprising of both ordinary shares and C shares. The Placing Programme commenced with an initial placing of C shares at a price of €1 and £1 per Euro C share and Sterling C share respectively.

On 28 March 2014 the Company announced the results of the initial placing of C shares.  The initial placing raised gross proceeds of €111,271,923 through the issue of 30,958,500 Euro denominated shares at an issue price of €1.00 to raise €30,958,500 and 66,352,795 Sterling denominated shares at an issue price of £1.00 to raise £66,352,795.

Application was made to the UK Listing Authority and the London Stock Exchange plc for 97,311,295 C shares to be admitted to the Official List and to trading on the Main Market. The admission became effective on 3 April 2014.

On the 22 July 2014, the Company converted 30,958,500 Euro C shares and 66,352,795 Sterling C shares into 30,320,748 Euro ordinary shares and 64,846,565 Sterling ordinary shares respectively. These new ordinary shares were admitted to the Official List and to trading on the London Stock Exchange on 22 July 2014.

Tap issue of 20,665,600 Euro ordinary shares

On the 16 May 2014, the Company announced the successful placing of Euro denominated ordinary shares. The Placing raised gross proceeds of €21,833,206 through the issue of 20,665,600 Euro denominated shares at an issue price of €1.0565. Application was made to the UK Listing Authority and the London Stock Exchange plc for the newly issued 20,665,600 ordinary shares to be admitted to the Official List and to trading on the Main Market. The admission became effective on 21 May 2014.

Company investment objective

The Company's investment objective is to provide Shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade debt instruments.

Company investment policy

The Company's investment policy is to invest predominantly in companies domiciled, or with material operations, in Western Europe across various industries. The Company's investments are focused on senior secured obligations of such companies but investments are also made across the capital structure of such borrowers.

Further information can be found in the Investment Vehicle Manager report which is incorporated within this Half-Yearly Financial Report for informational purposes only.

Director interests

Information of each Director is detailed in Board members .

No Director has or had any other material interest in any contract to which the Company is or was a party and no director held or holds any management, ordinary or C shares in the Company.

Events after the Reporting Date

The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial periods not already disclosed in this report or the attached financial statements.

Going Concern

After reviewing the Company's budget and cash flow forecast for the next twelve months, the directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements. 

Principal risks and uncertainties

When considering the total return of the Company, the Board takes account of the risk which has been taken in order to achieve that return. The Board looks at numerous risk factors, an overview of which is set out below:

Supply and demand

The value of the investments in which the Company indirectly invests are affected by the supply of primary and secondary issues on the one hand and the demand for such instruments from market participants on the other. A change in the supply of or demand for the underlying investments may adversely affect the performance of the Company.

Portfolio concentration

Risk is concentrated in European corporate issuers with relatively lower credit ratings than other more senior investments and therefore subject to a greater degree of loss than would be the case with higher credit rated instruments. As at 30 June 2014, the underlying portfolio comprised 64 issuers and 9 structured finance positions and may therefore be exposed to concentration of industry risk and concentration of geographical risk.

It is important to note that the investment objective and investment policy of the Investment Vehicle is in line with that of the Company.

Please refer to Investment Vehicle Manager's Report for detail of the investment portfolio held in the underlying Investment Vehicle by country issuer.

Liquidity

Investment in the Company is subject to a number of liquidity constraints as follows:

The Preferred Equity Certificates ("PECs") in which the Company invests are not traded on a stock exchange. The Company will have to rely on the redemption mechanisms offered by the Investment Vehicle in order to realise its investment and on that mechanism operating in a timely manner.

The Investment Vehicle's underlying investments are not traded on a stock exchange. Investments are bought and sold by market participants on a bilateral basis and any reduction in liquidity caused by a reduction of demand can have a negative impact on the Company's ability to conduct its Contractual Quarterly Tenders. Please refer to note 12 for further information.

Foreign exchange risk

Foreign exchange risk is the risk that the values of the Company's and Investment Vehicle's assets and liabilities are adversely affected by changes in the values of foreign currencies by reference to the Company's base currency, the Euro.

The effects of foreign exchange risk at the Investment Vehicle level is actively managed by the Board of the Investment Vehicle and its advisors. The Board monitors the net asset value per share divergence between the Sterling and Euro share classes in order to identify the impacts of flow through foreign exchange risk and is satisfied that the divergence has remained at reasonable levels throughout the period. The Company has not entered into any foreign exchange hedging arrangements during the period.

Macro-Economic Risks

Adverse global conditions are likely to have an adverse effect on the performance of the Investment Vehicle's underlying assets and on the ability of underlying borrowers to service their debt obligations.

Principal risks relating to an investment in the shares of the Company

Please refer below for details of the principal risks relating to an investment in the shares of the Company.

Shareholders have no right to have their shares redeemed or repurchased by the Company

As the Company has been established as a closed-ended vehicle, there is no right or entitlement attaching to any shares that allows them to be redeemed or repurchased by the Company at the option of the Shareholder.

By contrast, Investment Vehicle interest holders (including the Company) who have invested directly in the Investment Vehicle, have a right to redeem their Investment Vehicle interests pursuant to the Investment Vehicle's quarterly redemption facility. The Company has, therefore, established the Contractual Quarterly Tender facility which is subject to annual Shareholder approval and the restrictions as discussed further below and in note 12. The Contractual Quarterly Tender mechanism is available only to ordinary Shareholders of the Company.

Contractual Quarterly Tenders are subject to certain restrictions and so Shareholders should not have an expectation that all or any of the shares they make available for sale to the Company will be purchased through the Contractual Quarterly Tender facility.

The operation of the Contractual Quarterly Tender facility is subject to Shareholder approval on an annual basis and there is no guarantee that Shareholders will vote to renew the Contractual Quarterly Tender facility.

For this reason and the additional restrictions discussed in note 12, Shareholders should note that they are subject to additional liquidity restrictions when compared to direct investors in the Investment Vehicle. Accordingly there is a risk that such other direct investors in the Investment Vehicle may be able to realise their investment sooner than the Shareholders, which may adversely affect the Company's business, financial condition, results of operations, net asset value and/or the market price of the Shares.

Other risks

The Directors wish to draw the attention of Shareholders to the other risks as set out in the Company's prospectuses which are available on the Company's website.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Investment Vehicle is appropriate for and is capable of meeting the Company's objectives.

The overall strategy remains unchanged and it is the Board's assessment that the Investment Vehicle Manager's resources are appropriate to properly manage the Investment Vehicle's portfolio in the current and anticipated investment environment.

Please refer to the Investment Vehicle Manager's report for detail regarding performance to date of the Investment Vehicle's investments and the main trends and factors likely to affect those investments.

Board members

CHAIRMAN

Richard Michael Boléat, aged 50 (independent). Appointed 20 March 2013.

Richard qualified as a Chartered Accountant with Coopers & Lybrand in the United Kingdom in 1987 and subsequently worked in the Middle East, Africa and the United Kingdom for a number of commercial and financial services groups, during which time he acted as a buy-side high yield credit analyst for an Arabian investment bank.

From 1996 he was a Principal of Channel House, a Jersey based financial services group, which was acquired by Capita Group plc in September 2005 and led their financial services client practice in Jersey until September 2007.

He currently acts as a non-executive director of a number of substantial collective investment and investment management entities and is active in a number of asset classes including global macro, super-senior corporate CDS, long/short equity, fund of funds and EM real estate. He presently acts as Chairman of Yatra Capital Limited. He is personally regulated by the Jersey Financial Services Commission in the conduct of financial services business and is a member of the Alternative Investment Management Association (AIMA), the International Corporate Governance Network and the European Corporate Governance Institute.

Directors

Mark Richard Tucker, aged 51 (independent). Appointed 20 March 2013.

In 1997 Mark joined Arborhedge Investments, Inc. (formally HFR Investments, Inc.) a Chicago based, boutique broker dealer specialising in the placement of hedge fund interests to institutions globally. Mark served as the President and Chief Executive Officer of Arborhedge until his return to Jersey in 2002, after which he remained a director and shareholder until 2012. Previously, Mark held a variety of retail and private banking roles in Jersey with both HSBC and Cater Allen Bank.

In 1988 Mark relocated first to London, where he joined GNI Limited in a financial futures business development role, and later to New York where he was responsible for the alternative investment program of Gresham Asset Management, Inc. and later for the asset allocation and manager selection activities of Mitsui & Company.

Mark is personally regulated by the Jersey Financial Services Commission in the conduct of financial services business, and he is an Associate of the Chartered Institute of Bankers, a Chartered Fellow of the Chartered Institute for Securities and Investment and a member of the Institute of Directors. Mark currently serves as a non-executive director to several other offshore structures.

David Alan Wood, aged 60. Appointed 20 March 2013.

David was a founding partner of CVC Cordatus (a predecessor to CVC Credit Partners Group) in 2006, but retired in April 2012, although he remains a member of CVC Credit Partners Advisory Board. With 36 years of industry experience, David joined from Deutsche Bank where he was Co-Head of European Leveraged Finance. Prior to this, he was a Managing Director at JP Morgan/Chase Manhattan where he worked in leveraged finance and corporate banking.

investment vehicle manager's report

Summary

The Investment Vehicle Manager is pleased with the performance of the Investment Vehicle for the period ended 30 June 2014.

Portfolio

As at 30 June 2014, the Investment Vehicle portfolio was invested in line with the Investment Vehicle's investment policy and was diversified with 64 issuers/borrowers¹ across 22 different industries and 14 different countries, with no individual borrower representing an exposure of more than 5.2% of the portfolio.

Portfolio Statistics

Percentage of Portfolio in Floating Rate Assets	81.2%
Percentage of Portfolio in Fixed Rate Assets	18.7%
Percentage of Portfolio in Warrants	0.1%
Weighted Average Price1	98.4
Yield to Maturity	6.5%
Current Yield	5.8%
Weighted Average Fixed Rate Coupon	7.5%
Weighted Average Floating Rate plus Margin	5.2%

5 Largest Issuers
Issuer	% of NAV	Industry	By country issuer
Boots (AB Acquisitions)	5.2%	Retail Stores	UK
Wind Acquisition Fin SA	4.3%	Telecoms	Italy
Viridian Group	4.1%	Utilities	Ireland
Flint	3.8%	Chemicals	Germany
Domestic & General	3.3%	Insurance	Jersey

5 Largest Industry Positions	%
Chemicals, Plastics and Rubber	9.8%
Retail Stores	9.3%
Telecommunications	7.9%
Broadcasting and Entertainment	7.0%
Buildings and Real Estate	6.5%

Geographical Breakdown by country issuer	%
United Kingdom	30.8%
France	15.2%
Germany	10.5%
Spain	8.1%
Italy	6.2%
USA	6.2%
Luxembourg	6.1%
Jersey	6.1%
Ireland	4.3%
Other	6.5%

Currency Breakdown	%
EUR	60.8%
GBP	30.7%
USD & CHF	8.5%

Note: All above metrics exclude cash.

Asset Breakdown	%
Loans (1st Lien)	53.0%
Senior Secured Bonds	19.4%
Loans (2nd Lien)	7.6%
Senior Unsecured Bonds	7.3%
PIK	4.1%
Structured	4.0%
Other	4.6%

Performance

As at 30 June 2014 the Investment Vehicle was 98.3% invested.  We are pleased with the Investment Vehicle portfolio composition which is currently focused on large, liquid credits.  The weighted average EBITDA of the companies in the portfolio is in excess of €500 million.  We have utilised the CVC sourcing network to (i) secure strong loan and high yield allocations in the primary market and (ii) to originate assets across the Credit Opportunities and Special Situation strategies.

During the period the percentage of Core Income assets held in the Investment Vehicle portfolio has remained at the high-end of our target range, as a result of the opportunities provided by the strong supply from the primary leveraged loan and high yield bond markets, as well as a result of active refinancing activity in the Credit Opportunities segment of the portfolio.  Also our allocation to high yield has remained light as continued demand for sub-investment grade fixed income instruments, driven by yield hungry investors, has reduced the opportunity to allocate capital at appropriate risk-return levels.

For the second half of 2014, we expect to selectively increase the Investment Vehicle portfolio's participation to new structured credit positions with a likely focus across the mezzanine/equity capital of CLO structures, a segment in which the Investment Vehicle portfolio has been relatively underweight.   An increase in new-issue volume and in the underlying liquidity in this space, lends comfort in the further allocation of capital to this asset class. We maintain a bias to top-tier managers who have a history of top-quartile performance in the European market.

We are considering applying moderate leverage, 15-20% of the total value of the Investment Vehicle's assets, to the Investment Vehicle portfolio.  Lenders are currently making available non-mark-to-market medium-term facilities on attractive terms sufficient to enhance returns whilst remaining within appropriate risk-return levels.

Market Review and Outlook

Leveraged Loan Market

·      For the first half of 2014, the European leverage loan market saw leveraged loan volume issuance of €44.9 billion, the highest since H1 2007, of which €27.4 billion (up by over 30% year-on-year) went to the institutional market with the remainder to bank balance sheets³. This was driven by a resurgent M&A market (€25.1 billion of financings), led by several large transactions such as Jacobs Douwe Egberts' leveraged loan, which was the largest post-crisis leveraged loan at €6.8 billion³.

·      Refinancing and dividend recaps continue to support the new issue market. The leveraged loan market saw repayments surge to €16.6 billion in Q2 2014 driven by the IPO market, the highest peak since Q2 2007³.

·      Total buyout loan volume was down slightly at €9.8 billion versus €10.6 billion for the equivalent period in 2013³.

·      Covenant-lite issuance surpassed 2007, with a total of €10 billion of new issuance placed in Europe by Q2 2014³.

High Yield Bond Market

·      European high yield year-to-date volumes of €51.3 billion are now well ahead of €39.4 billion at the same point last year. Q2 2014 high yield volume is greater than each full year between 2006 and 2009, and approached the €35.6 billion and €36.3 billion volume recorded in 2011 and 2012 respectively ⁴.

·      Quarterly activity of €32.3 billion from 85 deals exceeded all previous quarterly performances, and almost matched many full-year totals. The busiest quarter previously was Q1 2013, which hosted €21.1 billion from 60 deals.⁴ Inflows into the asset class continued to be very strong during H1 2014.

·      The demand for yield continues to be a driving theme across the European high yield market and the Investment Vehicle Manager anticipates that this will continue through 2014.

Event Driven Opportunity

We believe that the on-going implementation by the European Central Bank of its Asset Quality Review ("AQR") programme is causing a structural change within the European leveraged finance market which we anticipate will provide attractive opportunities in the medium-term. The AQR programme if successfully implemented will provide, for the first time in Europe, a common framework for the standardised treatment of impaired assets.  This is proving to be an important catalyst for European financial institutions to address the large volume of potentially mispriced legacy assets still held on balance sheets.  Market research suggests that asset dispositions in excess of €500 billion are likely to have occurred by the end of 2018⁴.  In anticipation of the full implementation of the AQR programme many European financial institutions have already commenced the sale of impaired assets.  Evidence of this can be found in the volume of European loan sales, which have experienced a significant increase during the past three years to over €60 billion in 2013 compared with only €11 billion in 2010⁵. We expect that the AQR programme will continue to drive up the provisioning for and disposition of impaired assets from the levels already seen in 2013.

Conclusion

The Investment Vehicle Manager believes that there is significant opportunity available for refinancing, cross border M&A and bond refinancings in H2 2014.  Leveraged loan issuance will continue to be strong as will high yield issuance, as long as fund flows into the asset class continue to seek yield.  Bank divestiture of assets driven by AQR, and capital raising across the European bank sector is presenting significant opportunity to source secondary assets and evaluate refinancing opportunities for various bank only financed credits. 

The Investment Vehicle Manager report was approved by the Investment Vehicle Manager on 29 August 2014 and signed on its behalf by:

Jonathan Bowers                                                                                 Andrew Davies

Senior Portfolio Manager                                                                   Portfolio Manager

¹Excludes nine structured finance positions.

² Average market price of the portfolio weighted against the size of each position.

³Source: S&P LCD European Quarterly, Second quarter 2014.

⁴ PwC's Portfolio Advisory Group estimates that European Banks are carrying €2.4 trillion of non-core loans on their balance sheets. (PwC, European Portfolio Advisory Group Investor Insights Survey, March 2014).

⁵ Source: PwC European Portfolio Advisory Group Market Update October 2013 and March 2014.

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Half-Yearly Financial Report and condensed set of financial statements in accordance with applicable Jersey law and regulations.

The Directors confirm to the best of their knowledge that:

·      the condensed set of financial statements has been prepared in accordance with IAS 34 - "Interim Financial Reporting";

·      the Chairman's Statement, the Investment Vehicle Manager's Report, the Executive Summary and the notes to the unaudited condensed Half-Yearly Financial Report includes a fair review of the information required by:

a) DTR 4.2.7R (indication of important events up to 30 June 2014 and a description of principal risks and uncertainties for the remaining six months of the year);

b) DTR 4.2.8R (disclosure of related parties' transactions and charges therein);

Richard Michael Boléat                                                                                         Mark Richard Tucker

Chairman                                                                                                                    Audit Committee Chairman

29 August 2014

independent review report to the members of cvc credit partners european opportunities limited

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half-Yearly Financial Report for the period 1 January 2014 to 30 June 2014 which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Net Assets, the Condensed Statement of Cash Flows and the related notes 1 to 16.

We have read the other information contained in the Half-Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The Half-Yearly Financial Report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half-Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half-Yearly Financial Report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half-Yearly Financial Report for the period from 1 January 2014 to 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

29 August 2014

CONDENSED Statement of comprehensive income

For the period from 1 January 2014 to 30 June 2014

		Six months ended 30 June 2014	For the period 20 March to 30 June 2013	For the period 20 March to 31 Dec 2013
		(Unaudited)	(Unaudited)	(Audited)
		Total	Total	Total
	Notes	€	€	€
Income
Investment income	3	3,676,341	5,313	5,819
Net gains on investments held at fair value		9,520,354	-	11,794,198
Net foreign currency exchange gains through profit or loss		87,214	-	5,541
		13,283,909	5,313	11,805,558
Expenses
Share issue costs	4	(485,694)	(878,543)	(881,860)
Operating expenses	4	(438,161)	(5,618)	(266,708)
		(923,855)	(884,161)	(1,148,568)
Profit / (loss) before finance costs and taxation		12,360,054	(878,848)	10,656,990
Finance costs		(13,069,953)	-	(565)
(Loss) / profit before taxation		(709,899)	(878,848)	10,656,425
Taxation		-	-	-
(Decrease) / increase in net assets attributable to shareholders from operations		(709,899)	(878,848)	10,656,425
(Decrease) / increase in net assets for the period analysed as follows:
Attributable to ordinary shareholders:		(1,631,111)	(878,848)	10,656,425
Attributable to C shareholders:		921,212	-	-
Total		(709,899)	(878,848)	10,656,425
Earnings per Euro ordinary share	12	(€0.004966)	(€0.002699)	€0.032781
Earnings per Sterling ordinary share (Sterling equivalent)	12	(£0.004079)	(£0.002305)	£0.027779
Earnings per Euro C share	12	€0.009467	-	-
Earnings per Sterling C share (Sterling equivalent)	12	£0.007775	-	-

The Company has no items of other comprehensive income, and therefore the profit for the period is also the total comprehensive income.

The notes form an integral part of these financial statements.

CONDENSED statement of financial position

As at 30 June 2014

		30 June  2014 (Unaudited)	30  June 2013 (Unaudited)	31 December 2013 (Audited)
	Notes	€	€	€
Assets
Cash and cash equivalents	8	574,791	349,867,368	595,498
Other receivables	6	43,550	5,293	355,886
Prepayments		23,611	-	19,185
Financial investments held at fair value through profit or loss	7	517,702,077	-	365,938,563
Total assets		518,344,029	349,872,661	366,909,132
Liabilities
Dividend payable		(9,609,705)	-	-
Payables	9	(102,142)	(7,255)	(99,858)
Total liabilities		(9,711,847)	(7,255)	(99,858)
Net assets attributable to Shareholders	13	508,632,182	349,865,406	366,809,274

The financial statements were approved by the Board of Directors on 29 August 2014 and signed on its behalf by:

Richard Michael Boléat                                                                                                                            Mark Richard Tucker

Chairman                                                                                                                                                                                 Director

The notes form an integral part of these financial statements.

CONDENSED statement of changes in net assets

For the six months ended 30 June 2014 (Unaudited)

		Net Assets Attributable to Shareholders
		2014
	Notes	€
As at 31 December 2013		366,809,274
Issuance of shares	12	132,312,843
Foreign exchange on opening shares and shares issued during the period		10,219,964
Decrease in net assets attributable to  shareholders from operations		(709,899)
As at 30 June 2014		508,632,182

For the period ended 30 June 2013 (Unaudited)

		Net Assets Attributable to Shareholders
		2013
	Notes	€
As at 20 March 2013		-
Issuance of ordinary shares	12	350,744,254
Decrease in net assets attributable to shareholders from operations		(878,848)
As at 30 June 2013		349,865,406

For the period from 20 March 2013 (Inception) to 31 December 2013 (Audited)

		Net Assets Attributable to Shareholders
		2013
	Notes	€
As at 20 March 2013		-
Issuance of ordinary shares	12	356,152,849
Increase in net assets attributable to shareholders from operations		10,656,425
As at 31 December 2013		366,809,274

The notes form an integral part of these financial statements.

CONDENSED statement of cash flows 

For the six months ended 30 June 2014

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Cash (outflow) / inflow from operating activities
(Loss) / profit from ordinary activities after taxation	(709,899)	(878,848)	10,656,425
Adjustments to reconcile profit before tax to net cash flows:
Investment income	(3,676,341)	-	-
Net gains on investments held at fair value	(9,520,354)	-	(11,794,198)
Foreign currency exchange gain	(87,214)	-	(5,539)
Bank interest received	-	-	(5,819)
Finance costs	13,069,953	-	565
	(923,855)	(878,848)	(1,148,566)
Changes in working capital
Decrease / (increase) in receivables	307,910	(5,293)	(375,071)
Increase in payables	2,284	7,255	99,858
Cash used in operations	(613,661)	(876,886)	(1,423,779)
Purchase of investments (PECs)	(131,894,476)	-	(354,013,217)
Subscriptions arising from conversion of investments (PECs)	(4,632,935)	-	(8,369,449)
Redemption proceeds arising from conversion of investments (PECs)	4,504,214	-	8,238,301
Investment income received	3,676,341	-	-
Interest received	-	-	5,819
Net cash used in operating activities	(128,960,517)	(876,866)	(355,562,325)
Financing activities
Net proceeds from Issuance of ordinary shares	21,533,920	350,744,254	356,152,849
Net proceeds from Issuance of C shares	110,778,923	-	-
Dividend paid	(3,458,881)	-	-
Bank charges paid	(1,366)	-	(565)
Net cash used in financing activities	128,852,596	350,744,254	356,152,284
Net (decrease) / increase in cash and cash equivalents in the period	(107,921)	349,867,368	589,959
Foreign currency exchange gain	87,214	-	5,539
Cash and cash equivalents at beginning of the period	595,498	-	-
Cash and cash equivalents at the end of the period	574,791	349,867,368	595,498

The notes form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1. General information

The Company was incorporated on 20 March 2013 and is registered in Jersey as a closed-ended Investment Company. It listed its Euro and Sterling ordinary shares on the London Stock Exchange on 25 June 2013.

The Company's registered address is Liberté House, 19-23 La Motte Street, St Helier, Jersey, JE2 4SY.

2. Accounting policies

The Annual Financial Report is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee (IASC) which remain in effect. The condensed Half-Yearly Financial Report has been prepared in accordance with International Accounting Standards (IAS) 34 - 'Interim Financial Reporting'. They have also been prepared using the same accounting policies applied for the period ended 31 December 2013 financial statements, which were prepared in accordance with IFRS, and which received an unqualified audit report.

The financial statements have been prepared under a going concern basis. After reviewing the Company's budget and cash flow forecast for the next financial period, the directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements. 

Prior period comparatives have been updated to conform to the current period presentation.

2.1. Segmental reporting

The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company's investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole.

2.2 Financial instruments

a)    Classification

The Company classifies its investments as financial assets at fair value through profit or loss. These are financial instruments held for investment purposes. Financial assets also include cash and cash receivables as well as other receivables.

Financial assets designated at fair value through profit or loss at inception

Financial assets designated at fair value through profit or loss at inception are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy.

The Company's policy requires the Investment Vehicle Manager and the Board of Directors to evaluate the information about these financial assets on a fair value basis together with other related financial information.

b)    Recognition, measurement and  derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in the statement of comprehensive income.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

c)     Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company holds PECs issued by the Investment Vehicle. This investment is not listed or quoted on any securities exchange and is not traded regularly and on this basis no active market exists. 

The Company relies on the Board of the Investment Vehicle making fair value estimates of an equivalent basis to those that would be made under IFRS. As at 30 June 2014, these fair value estimates were subject to review by their independent auditor. The Directors then incorporated those fair value estimates into the Company's balance sheet.

d)    Valuation process

The Directors have interviewed representatives of the Investment Vehicle Manager in order to verify for themselves the composition of the net asset value of the PECs as of the balance sheet date.

The Directors are in ongoing communications with the Investment Manager and hold meetings on a timely basis to discuss performance of the Investment Vehicle and its underlying portfolio and in addition review monthly investment performance reports. The Directors analyse the Investment Vehicle portfolio in terms of both investment mix and fair value hierarchy and consider the impact on the valuation at both the PECs and Investment Vehicle portfolio of general credit conditions and more specifically credit events in the European corporate environment.

PECs

The PECs are valued by the Directors, taking into consideration a range of factors including the audited net asset value of the Investment Vehicle and other relevant available information, including the review of available financial and trading information of the Investment Vehicle and of its underlying portfolio, price of recent transactions of PECs redeemed, (if any) and advice received from the Investment Vehicle Manager and such other factors as the Directors, in their sole discretion, deem relevant in considering a positive or negative adjustment to the valuation.

The estimated fair values may differ from the values that would have been realised had a ready market existed and the difference could be material.

The fair value of the investment is reassessed on an ongoing basis by the Board.

Investment Vehicle Portfolio

The Directors also discuss the Investment Vehicle Manager's monthly valuation process, specifically in respect  to understand the methodology regarding valuation of level 3 credit facilities and collateralised loan obligations (CLOs) held at the Investment Vehicle portfolio, which includes discussion on the assumptions used and significant fair value changes during the period.

Investments in these CLOs are valued based on the Net Asset Value (NAV) published by the administrator of the CLOs. Such a NAV is adjusted when necessary, to reflect the effect of the time passed since the calculation date, liquidity risk, limitations on redemptions and other factors. Depending on the fair value level of a CLO's assets and liabilities and on the adjustments needed to the NAV published by that CLO, the Compartment classifies the fair value of these investments as Level 3.

Investments in debt securities for which limited broker quotes and for which no other evidence of liquidity exists are classified as Level 3, these are then valued by considering in detail the limited broker quotes available for evidence of outliers (which may skew the average) which if existent are then removed, and then by calculating the average of the remaining quotes.

If the Investment Vehicle Manager and the independent service provider have difficulty in establishing an agreed upon valuation for an asset, they will discuss and agree alternative valuation methods. No such discussions were held in 2014.

Financial liabilities

e)    Classification

The Company classifies its ordinary shares as financial liabilities held at amortised cost. Financial liabilities also include payables which are also held at amortised cost.

f)      Recognition, measurement and derecognition

Financial liabilities are measured initially at their fair value plus any directly attributable incremental costs of acquisition or issue.

Ordinary shares are carried at amortised cost being the carrying amount of ordinary share value at which investors have the opportunity to partially tender their shareholding in accordance with the Company's quarterly contractual tender facility.

Gains and losses are recognised in profit or loss when the liabilities are derecognised.

3. Investment income

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Investment income	3,676,341	-	-
Bank interest income	-	5,313	5,819
Total income	3,676,341	5,313	5,819

4. Operating expenses

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Administration fees	71,521	1,826	45,970
Directors' fees (see note 5)	131,387	2,402	76,444
Regulatory fees	26,545	-	18,133
Audit fees	69,845	-	27,149
Non-audit fees - interim audit services	10,000	-	-
Non-audit fees - other services	8,750	-	-
Professional fees	58,923	-	6,345
Sundry expenses	61,190	1,390	92,667
Total operating expenses	438,161	5,618	266,708

The costs and expenses of the Placing attributable to the Company, excluding placing commissions (€728,542 (30 June 2013: nil, 31 December 2013: nil), have been expensed in the Statement of Comprehensive Income and amounted to a total of €485,694 (30 June 2013: €878,543, 31 December 2013: €881,860).

5. Directors' fees and interests

The Directors of the Company are remunerated for their services at a fee of £35,000 per annum (£50,000 for the Chairman). The Chairman of the Audit Committee receives an additional £5,000 for his services in this role. There has been no change in Director fees in comparison to prior period.

During the period the Directors received a Directors one off payment fee of £45,000 (2013: Nil) (Richard Boléat: £20,000, Mark Tucker: £15,000 and David Wood: £10,000). It was agreed this one off payment fee was payable as a result of the Board carrying out more work than originally anticipated as a result of the Company being a self-managed fund and the additional work arising out of the C Share prospectus.

The Company has no employees other than the Directors. Director's fees payable as at 30 June 2014 were nil (30 June 2013: €2,402, 31 December 2013: nil).

None of the Directors hold shares in the Company.

No pension contributions were payable in respect of any of the Directors.

David Wood is a member of the CVC Credit Partners Advisory Board, which is an advisory body established to comment on strategic plans, budgets and markets. Mr Wood has several investments in a number of CVC entities. 

CVC Credit Partners Group has established an independent sub-committee (the "Independent Sub- committee") of independent directors drawn from its group board and the boards of certain of its funds and investment vehicles for the purpose of providing review and guidance to the relevant investment committee with respect to any situation where there is the potential for (or perception of) a material conflict of interest.

The Independent Sub-committee currently consists of two independent directors from CVC Investment Services' board of directors (being Douglas Maccabe and Stephen Linney), and David Wood. Any such conflict is required to be presented to the Independent Sub-committee by the relevant portfolio manager and, if necessary, CVC Credit Partners Group's chief executive officer and/or chief investment officer. To date, no Independent Sub-committee meetings have taken place.

6. Other receivables

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Receivable from Northern Trust	-	-	53,513
Receivable from CVC Credit Partners Investment Services Management Limited	-	-	302,373
Other receivable	43,550	5,293	-
Total other receivables	43,550	5,293	355,886

Receivable balance due from Northern Trust relates to sums reimbursed during the period for administration services not rendered as a result of the change in administrator from Northern Trust to BNP Paribas Securities Services S.C.A..

Receivable balance due from CVC Credit Partners Investment Services Management Limited relates to set up costs paid by the Company which have been reimbursed to the Company during the period.

The Directors believe that these balances are fully recoverable.

7. Financial Investments held at fair value through profit or loss

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
PECs - Unquoted investment	517,702,077	-	365,938,563

On 1 July 2013 the Company subscribed for 173,086,671.59 Euro and 149,430,778.01 Sterling Preferred Equity Certificates ("PECs") issued by the Investment Vehicle.

On the 21 May 2014, the Company subscribed for an additional 20,517,290.38 Euro PECs issued by the Investment Vehicle. 

On the 3 April 2014 the Company subscribed for an additional 30,726,311 Euro and 65,855,149 Sterling PECs issued by the Investment Vehicle.

During the period 4,353,092.50 (2013: 8,038,444.11) Euro PECS were converted into 3,578,724.22 (2013: 6,791,185.05) Sterling PECs as part of the monthly voluntary conversion process.

As at the period ended 30 June 2014 the Company held 211,938,736.36 Euro and 225,655,836.28 Sterling PECs (30 June 2013: Nil, 31 December 2013: 165,048,227.48 Euro and 156,221,963.06 Sterling PECs).

The Investment Vehicle's investment objective is to provide investors with regular income returns and capital appreciation from a diversified portfolio of sub-investment grade debt instruments. The Company is entitled to receive income distributions every six months, which will equate to not less than 75% of the net income of the Company's investment in the Investment Vehicle.

The Investment Vehicle Manager pursues the Investment Vehicle's investment policy subject to the Investment Vehicle's Investment Limits and Borrowing Limit as explained in the Company's prospectus.

Fair value hierarchy

IFRS 13 'Fair Value Measurement' requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value.

The Company categorises its financial assets according to the following fair value hierarchy detailed in IFRS 13, that reflects the significance of the inputs used in determining their fair values;

Level 1:Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2:Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes  instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3:Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair value measurement of assets and liabilities

	Level 1	Level 2	Level 3	Period ended 30 June 2014
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	€	€	€	€
Financial assets
Financial investments held at fair value through profit and loss	-	-	517,702,077	517,702,077
Financial liabilities
Ordinary shares	517,489,416	-	-	517,489,416
	Level 1	Level 2	Level 3	Period ended 31 December 2013
	(Audited)	(Audited)	(Audited)	(Audited)
	€	€	€	€
Financial assets
Financial investments held at fair value through profit and loss	-	-	365,938,563	365,938,563
Financial liabilities
Ordinary shares	363,858,568	-	-	363,858,568

Level 3 reconciliation - PECs

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting period.

	Period ended 30 June  2014 Total
	€
Balance as at 1 January 2014	365,938,563
Purchases of investments (PECs)	131,894,476
Subscriptions arising from conversion of investments (PECs)	4,632,935
Redemption proceeds arising from conversion of investments (PECs)	(4,504,214)
Net gains on investments held at fair value	9,520,354
Foreign currency exchange gain	10,219,963
Balances as at 30 June 2014	517,702,077
Total gains and losses on investments for the period ended 30 June 2014	9,520,354

During 2014, there were no reclassifications between levels of the fair value hierarchy.

	Period ended 31 December 2013 Total
	€
Balance as at 20 March 2013	-
Purchases of investments (PECs)	354,013,217
Subscriptions arising from conversion of investments (PECs)	8,369,449
Redemption proceeds arising from conversion of investments (PECs)	(8,238,301)
Net gains on investments held at fair value	11,794,198
Balances as at 31 December 2013	365,938,563
Total gains and losses on investments for the period ended 31 December 2013	11,794,198

During 2013, there were no reclassifications between levels of the fair value hierarchy.

Quantitative information of significant unobservable inputs - level 3 - PECs

Description	30 June 2014	Valuation technique	Unobservable input	Range (weighted average)
	€
PECs	517,702,077	Net asset value adjustment	Discount for lack of liquidity	0-2%
		Net asset value	Net asset value	1.18 (*)

Description	31 December 2013	Valuation technique	Unobservable input	Range (weighted average)
	€
PECs	365,938,563	Net asset value adjustment	Discount for lack of liquidity	0-3%
		Net asset value	Net asset value	1.14 (*)

The Board believe that it is appropriate to measure the PECs at the net asset value of the investments held at the Investment Vehicle, adjusted for percentage holding of PECs in the Investment Vehicle.

(*) Net asset value of the Investment Vehicle attributable per PEC unit.

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3 - PECs

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 30 June 2014 and comparative are as shown below:

As at 30 June 2014

Description	Input	Sensitivity used	Effect on fair value €
PECs	Discount for lack of liquidity	2%	10,354,042

As at 31 December 2013

Description	Input	Sensitivity used	Effect on fair value €
PECs	Discount for lack of liquidity	3%	10,978,157

Please refer to note 2.2 for valuation methodology of PECs.

8. Cash and cash equivalents

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Total cash and cash equivalents	574,791	349,867,368	595,498

9. Payables

	Six months ended 30 June 2014	Period ended 30 June 2013	Period ended 31 December 2013
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Administration fees	(17,545)	(1,826)	(45,035)
Directors' fees	-	(2,402)	-
Other payables	(84,597)	(3,027)	(54,823)
Total payables	(102,142)	(7,255)	(99,858)

10. Contingent liabilities and  commitments

As at 30 June 2014 the Company had no contingent liabilities or commitments (30 June 2013: nil, 31 December 2013: nil).

11. Stated capital

	Number of shares	Stated capital	Number of shares	Stated capital	Number of shares	Stated capital
	30 June 2014	30 June 2014	30 June 2013	30 June 2013	31 December 2013	31 December 2013
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
		€		€		€
Management shares	2	-	2	-	2	-

Management shares

Management shares are non redeemable, have no par value and no voting rights, and also no profit allocated to them for the earnings per share calculation.

Management shares are however entitled to receive an annual cumulative dividend at a fixed rate of £10 per management share (the "Preferred Dividend"), irrespective of whether their management shares are denominated in Sterling or in any other currency, but the management shares shall confer no other right to share in the profits of the Company.

12. Ordinary and C shares

	Number of shares	Stated capital	Number of shares	Stated capital	Number of shares	Stated capital
	30 June 2014	30 June 2014	30 June 2013	30 June 2013	31 December 2013	31 December 2013
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
		€		€		€
Euro ordinary shares	182,886,210	183,561,202	174,729,500	174,729,500	166,615,025	166,469,205
Sterling ordinary shares	161,304,834	201,790,351	150,849,080	176,014,754	157,690,776	189,683,644
Euro C shares	30,958,500	30,819,187	-	-	-	-
Sterling C shares	66,352,795	82,514,916	-	-	-	-
Total	441,502,339	498,685,656	325,578,580	350,744,254	324,305,801	356,152,849

Ordinary shares

The Company has two classes of ordinary shares, being Euro ordinary shares and Sterling ordinary shares.

174,729,500 Euro ordinary shares and 150,849,080 Sterling ordinary shares were issued on 25 June 2013 at a price of €1 and £1 per ordinary share respectively.

On the 21 May 2014,  an additional 20,665,600 Euro ordinary shares were issued at a price of €1.0565, raising gross proceeds of €21,833,206. 

As at 30 June 2014, the Company had 182,886,210 Euro ordinary shares and 161,304,834 Sterling ordinary shares. There were no share subscriptions or redemptions during the period. The movement is a result of monthly conversions which have taken place during the period between share classes.

Each Euro ordinary share holds 1 voting right, and each Sterling ordinary share holds 1.17 voting rights.

Voluntary conversion

The Company offers a monthly conversion facility pursuant to which holders of ordinary shares of one class may convert such shares into ordinary shares of any other class, subject to regulatory considerations as detailed in the prospectus.

Such conversion will be effected on the basis of the ratio of the net asset value per class to be converted (calculated in Euro less the costs of effecting such conversion and adjusting any currency hedging arrangements and taking account of dividends resolved to be paid), to the net asset value per class of the shares into which they will be converted (also calculated in Euro), in each case on the relevant conversion calculation date being the first business day of the month. During the period 4,394,415 (2013: 8,114,475) Euro shares were converted into 3,614,058 (2013: 6,841,696) Sterling shares.

The ordinary shares of each class carry the right to receive all income of the Company attributable to such class of ordinary share, and to participate in any distribution of such income made by the Company and within each such class such income shall be divided pari passu among the Shareholders in proportion to the shareholdings of that class.

Dividends are expected to be paid half-yearly. Please refer below for amounts recognised as dividend distributions to ordinary shareholders in the period ended 30 June 2014.

	Ex-dividend date	Payment date	£ equivalent	€ (*)
For the period ended 31 December 2013
Sterling - £0.01 per share	29/01/2014	14/02/2014	1,585,218	1,930,163
Euro - €0.01 per share	29/01/2014	14/02/2014	-	1,656,150
For the period ended 30 June 2014
Sterling - £0.025 per share	25/06/2014	22/07/2014	4,032,621	4,910,119
Euro - €0.025 per share	25/06/2014	22/07/2014	-	4,572,155
(*) - translated as at dividend payment date.

No dividend distributions were recognised in the period ended 31 December 2013.

As the Company has been established as a closed-ended vehicle, there is no right or entitlement attaching to the ordinary shares that allows them to be redeemed or repurchased by the Company at the option of the Shareholder. The Company has, however, established a Contractual Quarterly Tender facility that enables Shareholders to tender their shares in the Company in accordance with a stated contracted mechanism.

The Directors believe that the Company's Contractual Quarterly Tender mechanism should provide Shareholders with additional liquidity when compared with other listed closed-ended investment companies.

The offer of Contractual Quarterly Tenders will be subject to annual Shareholder approval and subject to the terms, conditions and restrictions as set out in the prospectus. The Company will be subject to annual Shareholder approval to tender each quarter for up to 24.99 per cent. of the shares in issue at the relevant quarter record date, (being the date on which the number of shares then in issue will be recorded for the purposes of determining the restrictions), subject to a maximum annual limit of 50 per cent. of the shares in issue.

However, it is important to note that Contractual Quarterly Tenders, if made, are contingent upon certain factors including, but not limited to, the Company's ability to finance tender purchases through submitting redemption requests to the Investment Vehicle to redeem a pro rata amount of Company Investment Vehicle Interests.

Factors, including restrictions at the Investment Vehicle level on the amount of PECs which can be redeemed, may mean that sufficient Company Investment Vehicle Interests cannot be redeemed and, consequently, tender purchases in any given quarter may be scaled back on a pro rata basis.

Shareholders should therefore have no expectation of being able to tender their shares to the Company successfully on a quarterly basis.

In addition to the Contractual Quarterly Tender facility, the Directors may seek Shareholder approval to grant them the power to make ad hoc market purchases of Shares, although it is not currently anticipated that the Directors will seek this authority. If such authority is sought and subsequently granted, the Directors will have complete discretion as to the timing, price and volume of shares to be purchased. Shareholders should not place any reliance on the willingness of the Directors so to act.

In the absence of the availability of the Contractual Quarterly Tender facility Shareholders wishing to realise their investment in the Company will be required to dispose of their shares on the stock market.

Accordingly, Shareholders' ability to realise their investment at any particular price and/or time may be dependent on the existence of a liquid market in the shares.

C shares

On the 3 April 2014, the Company issued two classes of C shares, being Euro C shares and Sterling C shares. 30,958,500 Euro C shares and 66,352,795 Sterling C shares were issued at a price of €1 and £1 per C share respectively.

As at 30 June 2014, the Company had 30,958,500 Euro C shares and 66,352,795 Sterling C shares.

C Shares do not carry any right to attend or vote at any general meeting of the Company (but holders of C shares are entitled to receive notice of such general meetings). In addition, the Contractual Quarterly Tenders and the voluntary conversion facility are not available in respect of C Shares, although they are available to holders of ordinary shares arising on the Conversion of their C shares.

Notwithstanding any other provision of the Articles, the holders of any class of C Shares will be entitled to receive such dividends as the Directors may resolve to pay to such holders out of the assets attributable to such class of C Shares (as determined by the Directors).

In accordance with paragraph 11 of IAS 32 (Financial Instruments: Presentation), C shares are classified as a liability prior to conversion due to the inherent variability of the number of ordinary shares attributable to C shareholders on conversion.

Earnings per share

	30 June 2014	30 June 2014	30 June 2013	30 June 2013	31 December 2013	31 December 2013
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	£ equivalent	€	£ equivalent	€	£ equivalent	€
Euro ordinary shares
(Decrease) / increase in net assets for the period	-	(835,299)	-	(471,655)	-	5,632,654
Earnings per share	-	(0.004966)	-	(0.002699)	-	0.032781
Sterling ordinary shares
(Decrease) / increase in net assets for the period	(653,591)	(795,812)	(347,646)	(407,193)	4,680,395	5,625,475
Earnings per share	(0.004079)	(0.004966)	(0.002305)	(0.002699)	0.027779	0.032781
Euro C shares
Increase in net assets for the period	-	293,073	-	-	-	-
Earnings per share	-	0.009467	-	-	-	-
Sterling C shares	515,882	628,139	-	-	-	-
Increase in net assets for the period	0.007775	0.009467	-	-	-	-
Earnings per share

13. Net asset value per share

	30 June 2014	30 June 2014	30 June 2013	30 June 2013	31 December 2013	31 December 2013
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	£ equivalent	€	£ equivalent	€	£ equivalent	€
Euro ordinary shares
Net asset value	-	187,466,496	-	174,289,083	-	171,500,155
Net asset value per share	-	1.0250	-	0.9975	-	1.0293
Sterling ordinary shares
Net asset value	165,607,000	206,910,372	150,473,334	175,576,323	162,497,187	195,309,119
Net asset value per share	1.0268	1.2827	0.9975	1.1639	1.0305	1.2386
Euro C shares
Net asset value	-	31,078,929	-	-	-	-
Net asset value per share	-	1.0039	-	-	-	-
Sterling C shares
Net asset value	66,621,607	83,176,385	-	-	-	-
Net asset value per share	1.0035	1.2535	-	-	-	-

14.  Related Party Disclosure

All transactions between related parties were conducted on terms equivalent to those prevailing in an arm's length transaction.

The Directors are entitled to remuneration for their services. Please refer to Note 5 for further detail.

15. Material events after the Statement of Financial Position date

Management has evaluated subsequent events for the Company through 29 August 2014, the date the financial statements are available to be issued, and had concluded there are not any material events that require disclosure or adjustment of the financial statements other than those listed below:

A dividend of €4,572,155.25 per Euro class and £4,032,620.85 per Sterling class was paid to Shareholders on the 22 July 2014. On 22 July 2014, the Company declared and paid a preferred dividend of £11.18 per management share.

On the 22 July 2014, the Company converted 30,958,500 Euro C shares and 66,352,795 Sterling C shares into 30,320,748 Euro ordinary shares and 64,846,565 Sterling ordinary shares respectively. These new ordinary shares were admitted to the Official List and to trading on the London Stock Exchange on 22 July 2014.

On the 13 August 2014, 280,875 Euro ordinary shares and 7,401 Sterling ordinary shares were tendered in line with the Company's Contractual Quarterly tender mechanism. These shares have been transferred to the Company's name and held in treasury.

On 26 August 2014, the Company converted 500,000 Sterling ordinary shares into 632,226 Euro ordinary shares. As a result of this conversion, the Company had 213,839,184 Euro ordinary shares and 225,651,399 Sterling ordinary shares (inclusive of treasury shares).

16. Controlling party

In the Directors' opinion, the Company has no ultimate controlling party.

Company information
Registered Office		Advocates to the Company
Liberté House		(as to Jersey law)
19-23 La Motte Street St Helier, Jersey  JE2 4SY		Bedell Cristin 26 New Street St Helier, Jersey JE2 3RA
Investment Vehicle Manager		Custodian
CVC Credit Partners Investment Management Limited		BNP Paribas Securities Services S.C.A., Jersey Branch
111 Strand, London WC2R 0AG		19-23 La Motte Street St Helier, Jersey  JE2 4SY
Corporate Services Manager		Reporting Accountant and Auditor
CVC Credit Partners Investment Services Management Limited		Ernst & Young LLP 1 More London Place
22-24 Seale Street, St. Helier, Jersey JE2 3QG		London SE1 2AF
Corporate Brokers		Administrator and Company Secretary
Goldman Sachs International Peterborough Court, 133 Fleet Street		BNP Paribas Securities Services S.C.A., Jersey Branch
London EC4A 5ER		19-23 La Motte Street St Helier, Jersey  JE2 4SY
Dexion Capital plc 1 Tudor Street London EC4Y 0AH		BNP Paribas Securities Services S.C.A. Jersey Branch is regulated by the Jersey Financial Services Commission.
Solicitors to the Company		Registrar
(as to English law and U.S. securities law)		Capita Registrars (Jersey) Limited
Paul Hastings LLP Ten Bishops Square Eighth Floor London E1 6EG		12 Castle Street St Helier, Jersey JE2 3RT
		Receiving Agent
		Capita Registrars
		Corporate Actions
		The Registry, 34 Beckenham Road Beckenham, Kent BR3 4TU

Ends

Enquiries:

CVC Credit Partners European Opportunities Limited   - Richard Boléat, Chairman                

Tel: [phone]

BNP Paribas Securities Services S.C.A., Jersey Branch - Company Secretary

Tel: [phone] 

A copy of the Company's Half-Yearly Financial Report will be available shortly from the Company Secretary, (BNP Paribas Securities Services S.C.A., Jersey Branch, 19-23 La Motte Street, St Helier, Jersey, JE2 4SY), or will be circulated on the Company's website (www.ccpeol.com)

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

CVC Credit Partners European Opportunities Limited is regulated by the Jersey Financial Services Commission

This information is provided by RIS

The company new service from the London Stock Exchange

A copy of this announcement is and will be available, subject to certain restrictions relating to persons resident in restricted jurisdictions for inspection on the Company's web site at www.ccpeol.com

 

END

 

 

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