Real Est.cred Regulatory News (RECI)

16 October 2013

REAL ESTATE CREDIT INVESTMENTS PCC LIMITED

PLACING OF NEW CORE SHARES

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the Prospectus. This announcement is not for release, publication, or distribution, directly or indirectly, in whole or in part, to US Persons or into or within the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, Japan and South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

Real Estate Credit Investments PCC Limited

Further to the announcement of 23 September 2013, Real Estate Credit Investments PCC Limited ("RECI" or the "Company") today announces that, conditional on (amongst other things) the Required Resolutions being passed at the EGM of the Company to be held on 11 November 2013 and Admission occurring, it has completed a placing of New Core Shares to raise £50 million (the "Placing"). The price at which each New Core Share will be issued will be the Net Asset Value per Core Share (less dividends declared per Core Share) for the period ended 31 October 2013, and announced to the market on or about 5 November 2013 (the "Placing Price").

Summary

· The Company has raised gross proceeds of £50 million by way of a Placing of New Core Shares at the Placing Price.

· The Company intends to utilise the net proceeds of the Placing to invest primarily in debt secured by commercial or residential properties in the United Kingdom and Western Europe which might take the form of (i) secured real estate loans, debentures or any other form of debt instrument and (ii) securitised tranches of secured real estate related debt securities, for example, RMBS and CMBS.

Background to the Placing

The Company's investment manager Cheyne Capital Management (UK) LLP (the "Investment Manager") believes that a dislocation between supply and demand has emerged in commercial real estate debt markets as many established banks retreat from lending. The availability of traditional senior debt financing has reduced as banks work through legacy loan books, reduce loan to deposit ratios and increase their capital buffers, providing an attractive opportunity for non-bank lenders with the necessary expertise and capital. In addition, the European RMBS and CMBS market, which provided increasing amounts of capital in the last cycle, remains dislocated.

As market dislocations correct over time, value shifts between the loan and bond markets with each market at any given time offering a superior risk/return profile. These dislocations provide an attractive opportunity for companies such as RECI which can invest in both the loan and bond markets and offer the best opportunities to maximize returns for investors.

In the loan markets, the Investment Manager believes that mezzanine debt offers the benefits of a higher loan margin combined with defensive debt covenants and protections. The Investment Manager believes that there is still an attractive opportunity in the real estate bond markets, with many real estate bonds trading at attractive valuations, which the Investment Manager believes will repay at par on a 3-5 year view. The Investment Manager is also well placed to participate in new primary bonds at attractive yields.

The Board, as advised by the Investment Manager, continues to be positive about the prospects for the real estate debt markets. In the Investment Manager's view, the UK and Western European real estate markets in particular will, even in a continued low-growth macroeconomic environment, offer an interesting combination of reasonable underlying tenant demand, relatively liquid investment markets and, as described above, a shortage of debt capital. In their opinion, the accommodating monetary policy of global central banks seems likely to continue to drive investors to seek income-generating and real assets in an attempt to increase their returns in a low interest rate environment and hedge against inflation.

Benefits of the Placing

The Directors believe that an issue of New Core Shares is in the best interests of the Company and the Shareholders as a whole. The Net Placing Proceeds will be used for new investments and will have a number of benefits:

· Greater scope to expand and diversify the Core Portfolio;

· Be best placed to take advantage of the investment opportunities which the Directors and the Investment Manager anticipate arising in the future;

· Rebalance the leverage resulting from outstanding Preference Shares;

· Improve the size of the free float with the expectation of greater liquidity in the Core Shares;

· Reduce the total expense ratio per Core Share by spreading the Company's fixed running costs over a larger Core Shareholder base; and

· The Board intends to increase the Company's target dividend for 2014 to a minimum of 7 per cent of the Placing Price as a result of the beneficial effect on the Company's total expense ratio which the Placing Programme is expected to have.

Copies of the Prospectus will shortly be available in electronic form on the Company's website at www.recreditinvest.com and, are available for collection at the registered office of the Company at First Floor, Dorey Court, Admiral Park, St.Peter Port, Guernsey GY1 6HJ.

Terms used and not defined in this announcement have the meanings given in the Prospectus.

-ENDS-

For further information:

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, Canada, Australia, Japan and 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 does not constitute a recommendation regarding any securities.

This announcement, and the information contained therein, is not for viewing, release, distribution or publication in or into the United States, Canada, Australia, Japan and 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, Canada, Australia, Japan and 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 New Core Shares to be issued by the Company have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Core 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 New Core 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 (the "Investment Company Act") and, as such, holders of the New Core Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the New Core 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.

Liberum Capital, which is regulated in the United Kingdom by the FCA, is acting as financial adviser to the Company and for no one else and will not regard any other person (whether or not a recipient of this document) as a client in relation to Initial Admission or the Placing Programme and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing any advice in connection with Initial Admission, the Placing Programme, the contents of this document or any other matter referred to herein.

All investments are subject to risk, including the loss of the principal amount invested. Past performance is no guarantee of future returns. All investments to be held by the Company involve a substantial degree of risk, including the risk of total loss. You should always seek expert legal, financial, tax and other professional advice before making any investment decision.

This announcement contains statements that are, or may be deemed to be, "forward looking statements". By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's ability to control or predict. Forward looking statements are not guarantees of future performance. The Company's or the Group's actual financial performance, results of operations, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward looking statements contained in this announcement. In addition, even if the financial performance, results of operations and dividend policy of the Company, and the development of the industry in which it operates, are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. The forward looking statements contained in this document speak only as of the date of this announcement.

Neither the Company, Cheyne Capital Management LLP or Liberum Capital Limited, their affiliates nor any other person (including without limitation, the directors, officers, employees, partners, agents, representatives, members and advisers of the Company, Cheyne Capital Management LLP, Liberum Capital Limited and their affiliates) undertakes any obligation to update or revise any statement made in this announcement (including, without limitation, any forward looking statements), whether as a result of new information, future events or otherwise.