TIDMCIF TIDMCIFU TIDMCIFC
RNS Number : 5526Z
Carador Income Fund PLC
19 March 2012
Carador Income Fund plc
Conversion of C Shares
19 March 2012
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES,
AUSTRALIA, CANADA OR JAPAN.
Further to the announcement on 20 February 2012, Carador Income
Fund plc (the "Company") announces that the U.S Dollar C Shares
currently in issue will be converted into U.S. Dollar Shares at the
following rate calculated in accordance with the Company's
prospectus dated 6 December 2011 (the "Prospectus").
1.2012 U.S. Dollar Shares for every 1 U.S. Dollar C Share (the
"Conversion Ratio")
On the basis of the Conversion Ratio, a holder of 1,000 U.S
Dollar C Shares will receive 1,201 U.S. Dollar Shares in accordance
with the following timetable:
Class C Conversion Time 26 March 2012
Cancellation of the U.S. Dollar 26 March 2012
C Shares on the Official List
and the London Stock Exchange
Admission of new U.S. Dollar 26 March 2012
Shares to the Official List
and the London Stock Exchange
Share certificates in respect 9 April 2012
of new U.S. Dollar Shares expected
to be despatched by
The U.S. Dollar C Shares will be delisted on 26 March 2012 and
an application has been made for 92,299,895 new U.S. Dollar Shares
to be admitted to the Official List and to trading on the London
Stock Exchange from the same date.
Following conversion of the U.S. Dollar C Shares, the General
Pool Shares in issue is expected to consist of the following:
-- 404,926,977 U.S. Dollar Shares trading under ticker CIFU
-- 13,914,839 Euro Shares trading under the ticker CIF
The number of voting rights in the Company immediately following
Conversion is expected to be 418,841,816.
The new U.S. Dollar Shares arising on Conversion will rank pari
passu with, and will have the same rights as, the U.S. Dollar
Shares of the Company already in issue. For the avoidance of doubt,
the U.S Dollar C Shares (on the basis that they were converted into
U.S. Dollar Shares at the ratio determined at the Class C
Calculation Time, 29 February 2012) ranked equally for dividends
with U.S. Dollar Shares immediately following the Class C
Calculation Time,. Following Conversion the new U.S. Dollar Shares
arising will rank equally for dividends with existing U.S. Dollar
Shares.
The Company now has net assets of U.S. $364,904,686 and its
Shares continue to trade at a premium to Net Asset Value. As at 15
March 2012 the Company estimates that the portfolio was 98.2%
invested and the annualised dividend yield based on the last
declared dividend for the US. Dollar Shares of $0.0330 and the
closing share price at 14 March 2012 is 14.75%. The estimated cash
flow cover for the dividend on the U.S. Dollar Shares for the 3
months to 31 March 2012 is 1.5 times.
The Company believes there continues to be strong opportunity in
the secondary CLO market, where the Company is focused,
particularly as reinvestment periods end for such CLOs and the
market normalises. The Company should benefit from the 'wall of
maturities' in the Bank Loan market in the period 2016 to 2018 and
the resulting 'pull to par' on both its underlying Bank Loans and
CLO positions. Current default rates on US Bank Loans are at a near
historic low and the Investment Manager believes the outlook
remains positive. Based on the portfolio as at 29 February 2012 and
cash flows of the CLO tranches to maturity, a cumulative annual
default of 12% from 2013 would need to occur for only the current
NAV to be returned to investors().
The Company continues to attract interest from existing and new
investors and, if appropriate, the Directors will consider further
issues of Shares, to satisfy demand. Any issue will be in light of
the investment opportunities in the CLO secondary market, bearing
in mind the Directors intention to hold a continuation vote at the
annual general meeting in 2017.
Terms defined in the Prospectus shall have the same meaning in
this Announcement except where otherwise stated.
For further information please contact:
GSO Capital Partners International LLP
Miguel Ramos-Fuentenebro +44 (0)20 7451 4000
Singer Capital Markets Limited +44 (0)20 3205 7500
James Maxwell
Dexion Capital plc
Ravi Anand +44 (0)20 7832 0981
([1]) Cash flows estimated using Intex and subject to certain
assumptions. Recovery rates of 70% in case of default, 15% constant
prepayment rate, USD and EUR forward Libor curves as at 9 March
2012. Assumes no defaults in 2012, constant default rate
thereafter. Other assumptions available on request. It should be
noted that assumptions are not intended to reflect an actual
outcome and are purely indicative. The bases, models and
assumptions could prove to be incorrect and should not be relied
upon in any way whatsoever as a forecast or indicative or
predictive of returns on investments made by the Company, cashflows
or default rates. The results are based on the current portfolio of
the Company which will change and may change significantly. The
default rates referred to are not intended, and should not be
relied upon, to indicate the "worst case" scenario which could
apply to the Company.
This document and the information contained herein is not for
release, publication or distribution (directly or indirectly) in or
into the United States, Canada, Australia or Japan or to any "US
person" as defined in Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act") or into
any other jurisdiction where applicable laws prohibit its release,
distribution or publication. It does not constitute an offer of
securities for sale anywhere in the world, including in or into the
United States, Canada, Australia or Japan. No recipient may
distribute, or make available, this document (directly or
indirectly) to any other person. Recipients of this document in
jurisdictions outside the UK should inform themselves about and
observe any applicable legal requirements in their jurisdictions.
In particular, the distribution of this document may in certain
jurisdictions be restricted by law. Accordingly, recipients
represent that they are able to receive this document without
contravention of any applicable legal or regulatory restrictions in
the jurisdiction in which they reside or conduct business.
This document has been prepared by Carador Income Fund PLC
("Carador") and is the sole responsibility of Carador. No liability
whatsoever (whether in negligence or otherwise) arising directly or
indirectly from the use of this document is accepted and no
representation, warranty or undertaking, express or implied, is or
will be made by Carador, GSO Capital Partners International LLP
("GSOCPI") or any of their respective directors, officers,
employees, advisers, representatives or other agents ("Agents") for
any information or any of the opinions contained herein or for any
errors, omissions or misstatements. None of GSOCPI nor any of its
respective Agents makes or has been authorised to make any
representation or warranties (express or implied) in relation to
Carador or as to the truth, accuracy or completeness of this
document, or any other written or oral statement provided. In
particular, no representation or warranty is given as to the
achievement or reasonableness of, and no reliance should be placed
on any projections, targets, estimates or forecasts contained in
this document and nothing in this document is or should be relied
on as a promise or representation as to the future. Neither the
issue of this document nor any part of its contents constitutes an
offer to sell or invitation to purchase any securities of Carador
or any other entity or any persons holding securities of
Carador.
Carador will not be registered under the U.S. Investment Company
Act of 1940, as amended (the "Investment Company Act") and
investors will not be entitled to the benefits of that Act. The
securities described in this document have not been and will not be
registered under the Securities Act, or the laws of any state of
the United States. Consequently, such securities may not be
offered, sold or otherwise transferred within the United States or
to or for the account or benefit of U.S. persons (as such term is
defined in Regulation S under the Securities Act) except pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, applicable state
laws and under circumstances which will not require Carador to
register under the Investment Company Act. No public offering of
the securities is being made in the United States.
This document may contain certain forward-looking statements.
Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not
historical facts. In some cases, forward-looking statements can be
indentified by terms such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "may", "plan", "potential",
"should", "will", and "would", or the negative of those terms or
other comparable terminology. The forward-looking statements are
based on Carador's beliefs, assumptions, and expectations of future
performance and market developments, taking into account all
information currently available. These beliefs, assumptions, and
expectations can change as a result of many possible events or
factors, not all of which are known or are within Carador's
control. If a change occurs, Carador's business, financial
condition, liquidity, and results of operations may vary materially
from those expressed in forward-looking statements. Some of the
factors that could cause actual results to vary from those
expressed in forward-looking statements, include, but are not
limited to: the factors described in this document; the rate at
which Carador deploys its capital in investments and achieves
expected rates of return; Carador or GSOCPI's ability to execute
Carador's investment strategy, including through the identification
of a sufficient number of appropriate investments; the continuation
of GSOCPI as investment manager of Carador's investments; the
continued affiliation with GSOCPI of its key investment
professionals; Carador's financial condition and liquidity; changes
in the values of or returns on investments that the Company makes;
changes in financial markets, interest rates or industry, general
economic or political conditions; and the general volatility of the
capital markets and the market price of Carador's shares.
By their nature, forward-looking statements involve known and
unknown risks and uncertainties because they relate to events, and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance. Any forward-looking statements are only made as at the
date of this document, and Carador neither intends nor assumes any
obligation to update forward-looking statements set forth in this
document whether as a result of new information, future events, or
otherwise, except as required by law or other applicable
regulation. In light of these risks, uncertainties, and
assumptions, the events described by any such forward-looking
statements might not occur. Carador qualifies any and all of their
forward-looking statements by these cautionary factors. Please keep
this cautionary note in mind while reading this document.
Prospective investors should take note that any securities may
not be acquired by investors using assets of any retirement plan or
pension plan that is subject to Part 4 of Subtitle B of Title I of
the United States Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or section 4975 of the United States Internal
Revenue Code of 1986, as amended (the "Code"), entities whose
underlying assets are considered to include "plan assets" of any
such retirement plan or pension plan, or any governmental plan,
church plan, non-U.S. plan or other investor subject to any state,
local, non-U.S. or other laws or regulations similar to Title I or
ERISA or Section 4975 of the Code or that would have the effect of
the regulations issued by the United States Department of Labor set
forth at 29 CFR Section 2510.3-101, as modified by section 3(42) of
ERISA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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