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14 Dec 2009 07:00
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Greenwich LoanΒ IncomeΒ FundΒ LimitedΒ ("GLIF"Β orΒ theΒ "Company")
CLOΒ TestΒ Results
Β 14Β DecemberΒ 2009
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The Company announces the test results as of 2 December 2009 pursuant to the indenture of T2 Income Fund CLO I Ltd (the "CLO"), of which the Company owns all of the residual economic interest. The report summarising the results of those tests can be found at the link below: http://www.rns-pdf.londonstockexchange.com/rns/0152E_-2009-12-11.pdfΒ
WithΒ respectΒ toΒ theΒ variousΒ testsΒ requiredΒ underΒ theΒ CLOΒ indenture,Β theΒ CLOΒ failed the Class EΒ PrincipalΒ CoverageΒ RatioΒ andΒ theΒ Interest DiversionΒ Test. The principal reason for these failures wasΒ due toΒ the recent ratings downgrade of an investmentΒ which resulted in aΒ significantlyΒ lower carrying value for purposes of calculating the CLO collateral coverageΒ and interest diversion test.Β
The CLO also failed two portfolio percentage limitation tests, one of which relates to limitations on loans rated CCC+/Caa1 and lower by S&P and Moody's, respectively. One relates to the highest single obligor for non-senior secured loans. It should be noted that the consequence of failing these percentage limitation tests is that each new investment made by the CLO must "maintain or improve" the test result.
While the current month's test results are not controlling as to the 4 January, 2010 payment test, it may be worth noting that had this been a payment test, there would have been aΒ partialΒ principal paydown of the Class A Notes and interest diversion, but a partial payment would haveΒ alsoΒ been paid to the Company.
As described in previous press releases, the CLO indenture contains a variety of covenants, compliance with which, as well as curing existing defaults, could be made more difficult or impossible should credit markets deteriorate or the loans held by the CLO fail to make expected payments or otherwise not perform, or for a variety of other reasons, and which if violated could result in further principal paydowns and/or interest diversion.
Contacts:
Geoffrey Miller
Greenwich LoanΒ Income Fund Limited
+353 1 4433 466
PatrickΒ ConroyGreenwich LoanΒ IncomeΒ FundΒ Limited+1Β 203Β 983Β 5282
PhilipΒ Secrett
NominatedΒ Adviser
GrantΒ ThorntonΒ Corporate Finance
+44Β (0)Β 20Β 7383Β 5100
Jos Trusted
Singer Capital Markets LimitedΒ
+44 (0) 20Β 3205Β 7622
Ed Gascoigne Pees
Financial Dynamics
+44 (0) 20Β 7269 7132
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