CLO Test Results

RNS Number : 0152E

Greenwich Loan Income Fund Ltd

14 December 2009

 



Greenwich Loan Income Fund Limited ("GLIF" or the "Company")

CLO Test Results

 14 December 2009

The Company announces the test results as of 2 December 2009 pursuant to the indenture of T2 Income Fund CLO I Ltd (the "CLO"), of which the Company owns all of the residual economic interest. The report summarising the results of those tests can be found at the link below: 

http://www.rns-pdf.londonstockexchange.com/rns/0152E_-2009-12-11.pdf 

With respect to the various tests required under the CLO indenture, the CLO failed the Class E Principal Coverage Ratio and the Interest Diversion Test. The principal reason for these failures was due to the recent ratings downgrade of an investment which resulted in a significantly lower carrying value for purposes of calculating the CLO collateral coverage and interest diversion test. 

The CLO also failed two portfolio percentage limitation tests, one of which relates to limitations on loans rated CCC+/Caa1 and lower by S&P and Moody's, respectively. One relates to the highest single obligor for non-senior secured loans. It should be noted that the consequence of failing these percentage limitation tests is that each new investment made by the CLO must "maintain or improve" the test result.

While the current month's test results are not controlling as to the 4 January, 2010 payment test, it may be worth noting that had this been a payment test, there would have been a partial principal paydown of the Class A Notes and interest diversion, but a partial payment would have also been paid to the Company.

As described in previous press releases, the CLO indenture contains a variety of covenants, compliance with which, as well as curing existing defaults, could be made more difficult or impossible should credit markets deteriorate or the loans held by the CLO fail to make expected payments or otherwise not perform, or for a variety of other reasons, and which if violated could result in further principal paydowns and/or interest diversion.

Contacts:

Geoffrey Miller

Greenwich Loan Income Fund Limited

[phone]

Patrick Conroy
Greenwich Loan Income Fund Limited
[phone]

Philip Secrett

Nominated Adviser

Grant Thornton Corporate Finance

[phone]

Jos Trusted

Singer Capital Markets Limited 

[phone]

Ed Gascoigne Pees

Financial Dynamics

[phone]

 

END

 

 

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