Bank Debt and Hedging Update

RNS Number : 1262H

Utilico Limited

31 October 2008

 



31 October 2008                            

Utilico Limited

Bank debt and hedging update

Utilico Limited ('Utilico') has this month released significant capital from its market hedge position and the portfolio and facilitated a reduction in its bank debt. 

The sharp falls in the market resulted in the matched option spreads being deep in the money and reflected for the most part intrinsic value. As such they were no longer acting as a hedge, but rather a residue of value. These positions have now been realised. The proceeds together with realisations from the portfolio have been used to reduce the bank debt from £70.6m at the end of September to £37.1m.

Following the realisation of the matched option positions the option hedge for Utilico now comprises only a naked position of 1,200 S&P 500 Index put option contracts expiring in January 2009 with an average strike price of 870. Should markets weaken further, these contracts would be expected to result in gains for Utilico. The managers will continue to keep this position under review.

As a result of these changes the bank utilisation and debt maturities are:

Facility Utilised	Currency Drawn	Maturity
£19.1m	CHF	29 November 2009
£7.7m	EUR	29 November 2009
£10.3m	EUR	29 November 2010
£37.1m

In addition, Utilico has some US$11.0m on deposit today. Gross assets at 28 October 2008 were £284.0m (1) (adjusted for the debt reduction).

Note 1. These values are based on the price and exchange rates as of Tuesday 28 October 2008.

Enquiries:

Charles Jillings

[phone]

Arbuthnot Securities, 

Alastair Moreton,

[phone]

 

END

 

 

MSCFDESUFSASEDS