Icg-longbow Regulatory News (LBOW)

ICG-Longbow Senior Secured UK Property Debt Investments Limited (LBOW)

Unaudited Interim Management Statement

ICG-Longbow Senior Secured UK Property Debt Investments Limited (the "Company") is publishing this Interim Management Statement in accordance with DTR 4.3 of the FCA Handbook.

This interim management statement relates to the period from 5th February 2013 to 14 June 2013, and has been prepared solely to comply with the requirement of the Company to provide additional information to Shareholders in an interim management statement. It should not be relied upon by any other party or for any other purpose.

Unless otherwise noted herein, the financial information provided in this interim management statement, and the asset valuations underlying that financial information, are as at 30 April 2013 and are unaudited.

Background Information:

The Company is a Guernsey closed-ended investment company listed on the Main Market of the London Stock Exchange, and has been registered with the Guernsey Financial Services Commission as a closed-ended collective investment scheme. The Company was admitted to trading on the Main Market of the London Stock Exchange on 5th February 2013. Since that time, and in accordance with the Prospectus, the Company's investment manager, ICG-Longbow (the "Investment Manager"), has been building a pipeline of potential loan transactions which would meet the Investment Objective of the Company, namely:

"…to construct a portfolio of good quality, defensive, senior debt investments secured by first ranking fixed charges predominantly against UK commercial property investments, providing target dividends of circa 6% pa, paid quarterly, with an underlying target portfolio IRR of 8% pa…"

UK Commercial Property Debt Market Update:

The annual survey of bank lending into UK commercial property published by De Montfort University for 2012 was released at the end of May 2013, as was research provided by real estate consultancies, DTZ and Savills. Market dynamics identified in the research include:

·; the modest reduction of existing legacy loan balances to date;

·; the significant volume of refinancing projected over 2013; and

·; the emergence of new market participants, both banks and non-bank lenders.

Whilst there is considerably more lending capacity in the market and competitive pressures are increasing, to date this has been primarily focused on prime London assets and the most highly capitalised borrowers. The Company believes that the opportunity to provide newly originated senior debt remains good, notwithstanding the increase in active lenders, due to the substantial demand for debt during 2013 from regional borrowers. We are closely monitoring the position outside London where we believe the most attractive opportunities for the Company lie.

Investment Activity:

In the period to the date of this announcement, the Company has, through its Investment Manager, reviewed over £250m of potential senior loan transactions from which the Investment Manager has created a short-list of target investments which meet the Investment Objective.

The Company, through its subsidiary, has completed its first transaction with an £18m loan to subsidiaries of the Mansion Student Accommodation Fund. This 6 year facility is secured by a first charge on two purpose built student accommodation blocks in Birmingham and Glasgow. The loan is fully compliant with the parameters set out in the Prospectus.

Within the Investment Manager's current pipeline, there are five further potential transactions which fit the investment parameters of the Company and which are at different stages in the investment process, from initial underwriting through to detailed due diligence and documentation, with aggregate potential advances of £51m.

The Company has a formal treasury policy of holding substantial positions in cash in at least two banks with a credit rating of A or above. The Company is in compliance with this policy.

Financial Information:

The net asset value per share and share price of the Company for the period was as follows:

Investment Manager:

Graham Emmett, one of the four individuals at the Investment Manager identified in the Prospectus as having responsibility for delivering the investment strategy of the Company, has resigned and will be leaving ICG-Longbow. The Company wishes Mr Emmett well.

Mr Emmett will be replaced by Mr Trevor Homes who has joined ICG-Longbow, as a Partner, and brings with him over 30 years' experience in property lending, most recently at Unicredit and Deutsche Bank. 

The Investment Strategy of the Company continues to be supported by the broader Investment Team of the Investment Manager. Mr Emmett's departure is not considered to have a material impact on the performance of the Company.

Outlook:

It is recognised that the initial pace of completing investments by the Company has been slower than planned, and also that competitive pressures in the senior loan market in the UK are increasing. However, based on feedback from prospective borrowers, the Investment Manager's pipeline of potential transactions and the ongoing shortfall in senior real estate financing in the UK market, the Company expects to be substantially invested within 9 months from listing and expects to deliver a net dividend yield of close to 6% per annum following the investment period.

The Company's first dividend will be payable in respect of the period ending 31 July 2013. A further announcement concerning the first dividend will be made in due course.

This interim management statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules and the interim management statement should not be relied on by any other party or for any other purpose. It does not constitute an invitation to subscribe for or otherwise acquire or dispose of securities in the Company in any jurisdiction. The information contained in this interim management statement is subject to updating and amendment, and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this interim management statement in connection with the Company or the purchase of securities in the Company. This interim management statement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares should be made solely on the basis of the information contained in the final prospectus issued by the Company.

 The potential acquisition by the Company of any of the investments referred to in this interim management statement is subject, among other things, to those projects reaching legal completion and to the Company having conducted satisfactory due diligence in relation to such investments. There is therefore no guarantee that any of the investments will be acquired and if they are on what terms.

This IMS contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events; forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document. Subject to their legal and regulatory obligations, the Company and its Investment Manager expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

For further information, please contact:

Further information on the Company can be found on its Investment Manager's website at http://www.icglongbow.co.uk.