Progress since admission

T2 Income Fund Limited
20 December 2005


T2 Income Fund - progress since admission

December 20, 2005. T2 Income Fund Limited ('T2' or the 'Company'), a newly
established closed-end Guernsey exempt investment company, announced today an
update on progress since its admission to trading on AIM on August 5, 2005. T2
has completed its initial transaction, a £1.1 million investment in secured
second-lien term notes issued by a Canadian-based technology firm in the
packaged software publishing industry, bearing interest at 8% over LIBOR. The
transaction was finalized on December 15, 2005.

T2 has been generally pleased with the quality and number of investment
opportunities in profitable and growing technology companies available to it
since its initial public offering. It has however, for a variety of reasons,
chosen not to pursue many of those potential transactions thus far, including
three out of the five prospective portfolio opportunities referred to in the AIM
admission document. The reasons include transaction-specific due-diligence
issues, and the pricing and equity terms available which have made it not
possible to achieve terms that T2 considers to be an appropriate risk/reward
relationship in its investments. The Board believes that a limiting factor in
progressing certain of those transactions has been the deliberative approach
towards debt financing on the part of some potential portfolio companies, which
has led to slower-than-expected progress in the negotiation and completion of
certain transactions.

T2 has seen a range of technology companies (including companies in the
enterprise software, IT services and Internet sectors) for which debt financing
represents an attractive and efficient alternative to traditional equity capital
investment, and the Company remains focused on opportunities to make investments
consistent with its mandate.  Since the time of its admission to trading on AIM
in August 2005, the Company has reviewed 19 transactions involving the debt
securities of technology companies. The Company is currently working on 7
transactions, ranging in size from approximately £1.75 million to approximately
£7.5 million, although the Company continues to note that there can be no
guarantee that it will make these or similar investments. Of the five investment
opportunities described in the admission document, one of those investments is
reflected in the recently finalized transaction disclosed above; the interest
rate remained the same as anticipated although the principal amount of the
investment was smaller than planned. One of the other original five deals is
still being actively pursued, while the other three deals have been eliminated
from consideration as a result of matters arising in due diligence.

In view of the above, and reflecting the slower pace of investment than that
envisaged in the AIM admission document, it is unlikely at this time that the
Company will achieve the original projected yield of 7.2% for the four quarters
ending June 2006.  A further update will be given, together with a restatement
of the projected yield for this period if appropriate, when progress has been
made on the prospective transactions referred to above.

In reference to the employee departures announced in September 2005, the
Company's investment manager believes that it continues to be adequately staffed
and notes that it has recently hired a senior managing director with 27 years of
relevant experience. Further, another experienced investment professional has
accepted an offer to join the investment adviser as a vice president in January
2006.


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