Admission to Exchange/First Day Announcement

RNS Number : 8307B

TwentyFour Select Monthly Income Fd

10 March 2014

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, OR INTO OR FROM CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN.

This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus dated 18 February 2014 (the "Prospectus") published by TwentyFour Select Monthly Income Fund Limited in connection with the initial public offering and the admission of its ordinary shares to the premium segment of the Official List of the Financial Conduct Authority and to trading on London Stock Exchange plc's main market for listed securities. A copy of the Prospectus is available from the Company's website.

This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any shares in TwentyFour Select Monthly Income Fund Limited or securities in any other entity, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

TWENTYFOUR SELECT MONTHLY INCOME FUND LIMITED

Announcement of the result of the Placing and Offer for Subscription and Admission of the Ordinary Shares to the premium segment of the Official List and dealing in the Ordinary Shares on the London Stock Exchange's Main Market

10 March 2014

TwentyFour Select Monthly Income Fund Limited (the "Company") is a newly formed non-cellular company limited by shares which has been incorporated in Guernseywith registration number 57985 and whose registered office is at PO Box 255, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3QL.

The Company has appointed TwentyFour Asset Management LLP as its portfolio manager. The Company has been registered by the GFSC as a registered closed-ended collective investment scheme pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and The Registered Collective Investment Scheme Rules 2008. Applications have been made to the FCA for the Ordinary Shares to be issued pursuant to the Company's prospectus dated 18 February 2014 to be admitted to the premium segment of the Official List and to the London Stock Exchange for such Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.Admission is expected to become effective, and dealings in the Ordinary Shares to commence at 8:00 a.m. on 10 March 2014.

The Company is pleased to announce that it has raised approximately £102.7 million through an initial Placing of 91,130,181 Ordinary Shares and through applications for 11,605,700 Ordinary Shares under the Offer for Subscription.

The ISIN number is GG00BJVDZ946 and the SEDOL code for the Ordinary Shares is BJVDZ94. The Ordinary Shares will trade under the Ticker SMIF.   

Numis Securities acted as Sponsor, Financial Adviser and Broker to the transaction.

Investment Objective, Policy and Restrictions

·      The Company's investment objective is to generate attractive risk adjusted returns, principally through income distributions.

·      The Company's investment policy is to invest in a diversified portfolio of Credit Securities.

·      The Portfolio may be comprised of any category of credit security, including, without prejudice to the generality of the foregoing, bank capital, corporate bonds, high yield bonds, leveraged loans, payment-in-kind notes and Asset Backed Securities. The Portfolio will include Less Liquid Securities.

·      The Portfolio will be dynamically managed by the Portfolio Manager, subject to the restrictions set out within Part 5 of the Prospectus. The Company will maintain a Portfolio diversified by issuer concentration, it being anticipated that the initial Portfolio will comprise at least 50 Credit Securities once the Portfolio is substantially invested. It is anticipated that the Portfolio will be substantially invested within three months of Admission. No more than 5 per cent. of the Portfolio value will be invested in any single Credit Security or issuer of Credit Securities, tested at the time of making or adding to an investment in the relevant Credit Security.

·      An important aspect of the management of the Portfolio is the management of Interest Rate Duration (i.e. the sensitivity of the Portfolio's value to changes in interest rates), which the Company intends to achieve using interest rate derivatives.

Target Total Return

On the basis of market conditions as at the date of the Prospectus and whilst not forming part of the Company's investment objective, the Company will target a net total return on the Issue Price of between 8 and 10 per cent. per annum (see Note 3 below).

Dividend Policy

The Board intends to distribute an amount at least equal to the value of the Company's net income arising each financial year to the holders of Ordinary Shares. For these purposes, the Company's income will include the coupon payable by the Credit Securities in the Portfolio and the amortisation of any discount or premium to par at which a Credit Security is purchased over its remaining expected life, prior to maturity.

The Board expects that dividends will constitute the principal element of the return to the holders of Ordinary Shares.

The Board believes that following an initial investment period of 3 months, the monthly dividend will be a minimum of 0.5p per Ordinary Share (see Note 3 below). The Board intends within the final interim dividend of each financial year to distribute an amount equal to the value of any net income of the Company for that financial year remaining after payment of the monthly dividends.

In the absence of unforeseen circumstances, dividends on the Ordinary Shares will be payable monthly, all in the form of interim dividends (the Company does not intend to pay any final dividends). Subject to market conditions and the level of the Company's net income, it is intended that the first interim dividend will be paid in July 2014.

Portfolio Manager

TwentyFour is an independent fixed income specialist asset manager established in 2008 and based in the City of London. TwentyFour had over £2 billion of total funds under management as at 31 December 2013, including a number of funds investing in the asset class proposed for the Company. The Investment Manager is authorised and regulated by the FCA.

The Board has approved the appointment of Phoenix as the Company's AIFM to provide investment management services to the Company as required by the AIFM Rules. Investment management services comprise risk management and portfolio management services. In accordance with the AIFM Rules, Phoenix will delegate the performance of the portfolio management services to TwentyFour and will monitor TwentyFour's provision of such services in accordance with the AIFM Rules and the terms of the Portfolio Management Agreement.

Capital Structure

The Company does not have a fixed winding-up date. However, the Company's Articles provide that if certain events as set out in the Prospectus occur a General Meeting will be convened at which the Directors will propose an Ordinary Resolution that the Company should continue as an investment company.

The Directors currently have authority to issue further shares representing a number of Ordinary Shares equal to up to 300 per cent. of the number of Ordinary Shares in issue immediately following Admission on a non pre-emptive basis, provided that such number of Ordinary Shares to be issued pursuant to the Placing Programme may not, in aggregate with those Ordinary Shares issued pursuant to the Issue, exceed 500 million, such authority extending until the date of the first AGM expected to be held in July 2015.

With the objective of minimising the risk of the Ordinary Shares trading at a discount to NAV and to assist in the narrowing of any discount at which the Ordinary Shares may trade from time to time, the Company has incorporated into its structure a quarterly tender mechanism, contingent on certain factors as described in the Prospectus, to provide Shareholders with a quarterly opportunity to submit Ordinary Shares for placing or repurchase by the Company at a price representing a discount of no more than 2 per cent. to the then prevailing NAV. Following Admission, it is anticipated that the Company will tender on a quarterly basis for up to 20 per cent. of the Ordinary Shares in issue as at the relevant Quarter Record Date, subject to an aggregate limit of 50 per cent. of the Ordinary Shares in issue in any twelve month period ending on the relevant Quarter Record Date. The terms and conditions applicable to each Quarterly Tender, if made, are set out in the Prospectus and will also be contained, along with specific details for Quarterly Tenders in a given 12 month period, including all relevant deadlines, in an Annual Circular to be distributed to Shareholders in advance of each AGM.

Net Asset Value Calculation

The unaudited Net Asset Value per Ordinary Share will be calculated as at the close of business on:

·      each Wednesday that is also a Business Day; and

·      on the last Business Day of every month,

and shall be announced by a Regulatory Information Service the following Business Day.

Further information, please contact:

TwentyFour Asset Management LLP

John Magrath/Alistair Wilson                                                       [phone]

Numis Securities Limited                                                        [phone]

Nathan Brown / Hugh Jonathan              

Notes

1.    Defined terms used in this announcement shall have the same meaning as ascribed to them in the Prospectus dated 18 February 2014.

2.    A copy of the Prospectus is available for inspection at the National Storage Mechanism which is located at www.morningstar.co.uk/uk/NSM. Copies of the Prospectus are also available on the Company's website at http://www.selectmonthlyincomefund.com and for collection, free of charge during normal business hours from the Company's registered office at Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL for as long as Ordinary Shares are available for issue under the Prospectus.

3.    The figures set out in the Target Total Return and Dividend Policy sections of this announcement are targets only and not profit forecasts. There can be no assurance that these targets will be met or that the Company will make any distributions at all. These target returns 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 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 the Company. See further disclosure in the 'Risk Factors section of the Prospectus.

Important Information

This announcement has been prepared by, and is the sole responsibility of, TwentyFour Select Monthly Income Fund Limited.

Numis Securities Limited is acting only for TwentyFour Select Monthly Income Fund Limited in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Numis Securities Limited or advice to any other person in relation to the matters contained herein.

The Fund is not and will not be registered under the US Investment Company Act of 1940, as amended. The Ordinary Shares have not been, nor will they be, registered under the US 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 or under the applicable securities laws of Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa. Subject to certain exceptions, the Ordinary Shares may not be offered or sold in the United States, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or to or for the account or benefit of any national, resident or citizen of Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or any person located in the United States. Placings under the Placing Programme and the distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

 

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