CIFU.L Regulatory News (CIFU)

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3 February 2020

Carador Income Fund plc ("Carador" or the "Company")

Update on Divestment of the Portfolio, Directorate Changes, and Change in Portfolio Adviser

On 17 December 2018, the Shareholders of the US dollar class shares (the "US Dollar Shares") of Carador passed a resolution to change the investment objective and policy of the Company to realise all remaining assets of the Company with a view to returning capital to the Shareholders in an orderly manner (the "Managed Wind-Down"). The Company has since been in the process of completing the Managed Wind-Down.

Since the Managed Wind-Down began to 31 January 2020, the Company had sold 46 positions in total raising $160.2 million attributable to the US Dollar Shares, which was returned to US Dollar Shareholders through a series of seven compulsory redemptions. These assets have been sold, on average, at a premium to their latest month end valuation. Inclusive of the December 2018 dividend, these realisations have resulted in an effective realised gain to shareholders of approximately +1.6% above the December 2018 net asset value.

At the commencement of the Managed Wind-Down, it was anticipated that in normal circumstances it would be possible to realise the assets of the US Dollar Shares and distribute the proceeds within six to twelve months of the date when the Investment Manager commenced the Managed Wind-Down. As at 31 January, the Company's portfolio had been significantly realised in accordance with the expected timing and the total portfolio consisted of only five assets, including two CLO mezzanine debt positions and three CLO fee rebate receivables. In the context of the length of time in which the Company anticipates the realisation of these few remaining assets, the Directors have reviewed certain underlying financial information provided to them by Carador's Investment Manager, GSO / Blackstone Debt Funds Management LLC. Based on this information and following discussions with the Investment Manager, the Directors have concluded that, while they remain confident that further realisations from the Company's underling portfolio will be achieved, there is now a higher level of uncertainty as to both the value of the remaining assets to be realised and the timing of distributions to shareholders. Due to the nature of the Managed Wind-Down and to minimise the ongoing operating expenses as the Company continues to realise its remaining assets, there is a possibility that assets may sell at a discount to the carrying value stated in Carador's latest monthly report as at 31 December 2019. However, the Company will continue to strive to achieve the best price available for all remaining assets.

To reduce the Company's ongoing costs and bring the size of the Board in line with the nature, scale and complexity of the Company at this stage of the Managed Wind-Down, the Company announces that Adrian Waters and Edward D'Alelio have stepped down from the Board with effect from 31 January 2020. It is also anticipated that Nicholas Moss will step down from the Board after the 2019 annual report and audited financial statements have been approved. It is anticipated that Fergus Sheridan will be appointed to Chair of the Audit Committee, subject to approval by the Central Bank of Ireland.

The Company's Investment Manager has also informed the Board that J. Richard ("Dik") Blewitt, the portfolio adviser for the Company, has resigned from GSO. All other members of the GSO Structured Credit Investment Committee and investment team remain unchanged.

Werner Schwanberg, Chairman of Carador Income Fund plc, said: "The Board and I would like to thank Adrian, Edward, Nicholas, and Dik for their many years of dedicated commitment and valuable service."

Capitalised terms used but not defined in this announcement shall bear the meanings ascribed to them in the Circular dated 23 November 2018.

Enquiries:

IMPORTANT INFORMATION

This announcement has been prepared by, and is the sole responsibility of, the directors of the Company.

Nplus1 Singer Advisory LLP ("N+1 Singer") is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of N+1 Singer or advice to any other person in relation to the matters contained herein.

This announcement should not be taken as an inducement to engage in any investment activity and is for the purpose of providing information about the Company. This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any share in the Company or securities in any other entity, in any jurisdiction, including the United States, any member state of the European Economic Area (other than the United Kingdom or Ireland), Canada, Japan or South Africa nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.

This announcement, and the information contained therein, is not for viewing, release, distribution or publication in or into the United States, any member state of the European Economic Area (other than the United Kingdom or Ireland), Canada, Japan, South Africa or any other jurisdiction where applicable laws prohibit its release, distribution or publication, and will not be made available to any national, resident or citizen of the United States, any member state of the European Economic Area (other than the United Kingdom or Ireland), Canada, Japan or South Africa.

The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes must inform themselves about, and observe, any such restrictions. Any failure to comply with the restrictions may constitute a violation of the federal securities law of the United States and the laws of other jurisdictions.

The shares issued and to be issued by the Company (the "Shares") have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be offered, sold, resold, pledged, delivered, distributed or otherwise transferred, directly or indirectly, into or within the United States, or to, or for the account or benefit of, US persons (as defined in Regulation S under the Securities Act). No public offering of the Shares is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act") and, as such, holders of the Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the Shares may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act. Neither the U.S. Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the Shares or passed upon or endorsed the merits of the offering of the Shares or the adequacy or accuracy of the Prospectus. Any representation to the contrary is a criminal offence in the United States. In addition, the Shares are subject to restrictions on transferability and resale in certain jurisdictions and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors may be required to bear the financial risks of their investment in the Shares for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.

This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, investment strategy, plans and objectives are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

The Company is an investment company with variable capital incorporated under the laws of Ireland and authorised by the Central Bank of Ireland as a professional investor fund. A copy of the Company's prospectus and key information document may be obtained from the website of the Company at www.carador.co.uk.