Business
Review of CLO market exposure & Directorate Change
Review of CLO market exposure & Directorate Change.
About this update from Sancus Lending Group Limited
[{"type":"text","content":"\n \nRNS Number : 4955F Greenwich Loan Income Fund Ltd 27 April 2011 \n \n\n27 April 2011\n \nGreenwich Loan Income Fund Limited (\"GLIF\" or the \"Company\")\n \nReview of CLO market exposure and Directorate Change\n \nConsistent with the Company's strategy to take advantage of market opportunities and to optimise returns from our direct and indirect investments in the loan market, the Company today announces two significant steps in that process.\n \nFirstly, Berkshire Capital has been engaged by GLIF to undertake a review of the Company's exposure to the CLO market. This exposure is currently through GLIF's holding of 100% of the residual economics (commonly referred to as an equity interest) of T2 CLO I Ltd (\"the CLO\"). The purpose of this review is to establish whether GLIF could enhance its return, whilst not materially affecting its risk profile, through the reduction in its holding in the CLO to the point that the CLO is no longer consolidated. The review will also consider replacement investment opportunities of comparable risk and reward in line with the Company's investment objective.\n \nWere the CLO no longer consolidated the effect would be to substantially reduce management fees paid by GLIF, as the gross assets of the Company would be significantly reduced. Thus both the income and capital prospects for the Company would potentially benefit materially.\n \nIn addition, the net asset value of the Company would reduce, as it would no longer reflect the marking to market of liabilities below par, but the net asset value would then be more comparable to other listed loan-focused investment companies. \n \nGiven that the risk profile of the CLO is far lower than the average CLO equity and that the wider CLO market is illiquid, shareholders should be aware that there can be no certainty that it will be possible to replace the Company's existing exposure with something of comparable risk and reward, and therefore there cannot be any certainty at this stage that a transaction will complete. The market will be kept informed of developments.\n \nIn addition to the review, the Company announces that with effect from 28 April 2011 Geoff Miller will move from his current role as Non-executive Chairman to that of a full time Executive Director of the Company. Patrick ...