(Alliance News) - Alcentra European Floating Rating Income Fund Ltd said Monday it has received tender requests for 16.5 million shares in the company's quarterly tender offer.
The requests represent 14% of the company's issued share capital but less than the 20% maximum allowed.
In July, the fund introduced a quarterly redemption mechanism priced at 1.5% below its net asset value per share in order to narrow its discount. The trust will give shareholders the option to redeem as much as 20% of their holding on a quarterly basis at a 1.5% discount to NAV.
At the end of its financial year on March 31, Alcentra's NAV 103.61p per share, which would have given a 102.06p per share quarterly redemption price. The final offer price for the tender offer will be the fund's December 31 NAV minus 1.5%. The company will repurchase the shares on January 10.
Shares in Alcentra closed 0.8% higher in London on Monday at 99.83 pence each.
Chair Ian Fitzgerald said: "Following the comprehensive review of the outlook for the company, the board concluded that it would best serve shareholders by strengthening the approach to discount control through the introduction of the quarterly tender offers.
"Following the announcement in July, the discount to NAV at which the company's shares trade has narrowed, latterly in the absence of share repurchases. Having received tender requests fewer than the maximum available, it is pleasing to see shareholders remain supportive of the approach and strategy followed by the company's investment manager, Alcentra."
Shareholders can request to redeem more than their allotted 20%, which will be granted to the extent that other shareholders opt to use less or none of their own allowance. No more than half of Alcentra's issued shares may be redeemed in any year.
By Paul McGowan; paulmcgowan@alliancenews.com
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