27 Apr 2012 07:00
Carador Income Fund PLC
Annual Financial Report 2011
27 April 2012
Carador Income Fund PLC (the "Company"), a listed investment company investing in debt securities of companies across multiple sectors through collateralised loan obligations ("CLOs"), today announces its audited results for the twelve months ended 31 December 2011.
Financial highlights
·; NAV per US$ share class up 8.16% to US$81c per share, as at 31 December 2011. NAV total return, including distributions, was up 19.18% over the 12 months
·; NAV per Euro share class up 9.21% to €62c per share, as at 31 December 2011 NAV total return, including distributions, was up 19.91% over the 12 months
·; Quarterly dividends increased from US$0.021 in Q1 2010 to US$0.032 in Q4 2011 with improved cashflow cover
·; At 31 December 2011 shares traded at US$81.75c and €64.25c, a 0.93% and 3.63% premium to NAV
·; Annualised dividend yield at 31 December 2011, based on the dividend declared in Q4 2011, for the US$ and Euro shares of 15.66% and 15.56% of closing mid-market price respectively
Company Highlights and Market Opportunity
·; Successful placing of US$ C Shares in August and December raising $150m, underlining the attraction of the opportunity for investors
·; Relative value in secured loans vs unsecured bonds, as the spread differential between secured loans and unsecured bonds continues to be more attractive than its historical average
·; Valuation gap between the underlying loan portfolios of secondary CLOs and the value of the debt and income notes issued by the CLOs
·; Cash flows on CLO Income Notes have greatly improved as US loans continued to be refinanced, increasing the CLO's average portfolio spreads
Portfolio Highlights
·; Portfolio actively managed in the period - 46 new investments (total consideration US$169m) and sold 14 securities (US$47m)
·; As at 31 December 2011, the Company's portfolio had exposure to 53 loan portfolios. The Company's portfolio is diversified across 26 managers.
·; Effectively fully invested at 31 December 2011 with a cash balance of 3.34%
Corporate activity
The Company currently has net assets of approximately $350 million and the board is aware of continued demand for the Company's shares. The Directors have determined to issue new C shares through a placing which is expected to close in early to mid June 2012.
In order to preserve the Company's investment flexibility and in light of the maturing nature of the Company's portfolio together with its continuation vote in 2017, the Directors have agreed with the Company's investment manager, GSO Capital Partners International LLP, that an aggregate of $175 million of new funds can be raised through future fund raisings. Once this level has been reached or by 31 May 2013, whichever is earlier, new fund raisings will be only undertaken with the approval of shareholders through an ordinary resolution or otherwise subject to an annual limit of 10% of the issued share capital of the Company, as approved by shareholders at the Company's annual general meeting.
Commenting, Miguel Ramos Fuentenebro, Manager of Carador Income Fund PLC, said:
"The portfolio overall has performed strongly reflected in the strong growth of NAV and the rising cashflow and dividend. The Company was well positioned in 2011 to take advantage of potential opportunities presented by the market. Although we remain cautious in the near term about future volatility, we believe that current market conditions offer an opportunity to identify new investments with attractive risk-reward profiles. Over the medium term we believe the Company will benefit from its exposure to the US loan market which has experienced strong refinancing of shorter term maturities. We believe that the lack of significant maturities in 2012 and 2013 will support defaults below the historical average. This general market background, together with our ability to mitigate default risk, creates a supportive environment for the Company."
Click on, or paste the following link into your web browser, to view the associated PDF document:
http://www.rns-pdf.londonstockexchange.com/rns/1813C_-2012-4-26.pdf
For further information, please contact:
Miguel Ramos Fuentenebro
GSO Capital Partners (UK) Limited
+44 (0) 207 451 8000
Ed Gascoigne Pees
FTI Consulting
+44 (0) 207 269 7132
Notes to Editors
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Disclaimer
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.
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.
This document is an advertisement and does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of Carador or other evaluation of any securities of Carador or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities. 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. An investment decision must be made solely on the basis of the Prospectus. Copies of the Prospectus may be obtained, subject to applicable law, at no cost from the registered office of Carador.
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.