CLO test results

RNS Number : 1336W

T2 Income Fund Limited

23 July 2009

 

T2 Income Fund Limited ('T2I' or the 'Company')

 

CLO Test Results

 

The Company announces the test results as of 2 July 2009 pursuant to the indenture of the Company's subsidiary, T2 Income Fund CLO I Ltd (the 'CLO'). The report summarising the results of those tests can be found at the link below:

 http://www.rns-pdf.londonstockexchange.com/rns/1336W_-2009-7-22.pdf

The quarterly results as of 2 July 2009 indicate that the CLO met all of the covenant tests necessary for a full interest payment to be made to the Company, and $2.4 million has been received from the trustee. The Board will make an announcement of its intention with regard to its dividend policy before the end of August at the same time as the Board releases the net asset value as at the end of June.

 

It should be noted that the definition of a “defaulted obligation” shown within the CLO covenant tests includes a range of factors in addition to actual payment defaults. We note that the CLO does not currently hold any loans that are in payment default.

 

Within the loan structure there are $248.9 million of notes outstanding that have been issued by the Company, and this finances an investment portfolio as at 30 June comprising loans valued, for the purposes of the CLO covenant tests, at $272.5 million and $29.5 million cash.

 

With respect to the various collateral covenant tests (the “Collateral Tests”) required under the CLO indenture, the quarterly Collateral Test results can trigger interest diversion and debt repayment. While the Company continues to monitor the situation closely, there is currently only limited visibility with respect to which of the CLO Collateral Tests may or may not be met on future dates, and whether any further principal paydowns or interest diversions may occur and, if so, the magnitude of those paydowns or diversions. 

 

As described in previous press releases, the CLO indenture contains a variety of covenants (including the Collateral Tests), compliance with which could be made more difficult or impossible should credit markets deteriorate and which if violated could result in further principal paydowns or interest diversion.

 

Contacts:

 

Geoffrey Miller

T2 Income Fund Limited

[phone]

 

Patrick Conroy

T2 Income Fund Limited

[phone]

 

Philip Secrett

Nominated Adviser

Grant Thornton UK LLP

[phone]

 

Michael Wentworth-Stanley

JP Morgan Cazenove

[phone]

 

Ed Gascoigne Pees

Financial Dynamics

[phone]

 

 

 

 

END

 

 

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