SSIF.L Regulatory News (SSIF)

23 January 2020  

SQN Secured Income Fund plc

(LSE: SSIF) (the "Fund") 

Fund Update

Dear Investors,

We would like to share with you a recently published research note from Kepler on the SQN Secured Income Fund.

http://www.rns-pdf.londonstockexchange.com/rns/7915A_1-2020-1-23.pdf

In light of Monday's announcement from SSIF's sister fund, the Asset Finance Income Fund, we would like to take this opportunity to highlight the following points:

·; The SQN Secured Income Fund is managed by Dawn Kendall who joined to set up a separate subsidiary for SQN in April 2017 in order to take over stewardship of the trust. Dawn has over 30 years experience of fixed income investing, previously holding senior positions at Twenty Four, Investec, Architas, Newton and SG Warburg. 

·; The Fund is very well diversified across sectors with the diversity of borrowers reducing thematic or sector risk. The Fund does not hold any exposure to Anaerobic Digestion projects and therefore will be unaffected by the write downs associated with these assets in the sister fund SQN Asset Finance Income Fund managed by Neil Roberts.

·; As you will read in the attached independent note from Kepler, since taking over the Fund Dawn has built a portfolio of senior secured direct loans and reduced the Fund's (inherited) exposure to peer to peer platforms. Dividend cover has been achieved with the new asset mix, the underlying portfolio now generates a yield of 10% which is in excess of the target return of net 8% total return per annum.

·; As highlighted in the note, the Fund AUM at the end of December was £50m which is below £250m targeted when management was assumed. As a result, investors will be given the opportunity to decide on the Fund's future by way of a continuation vote and as mentioned in a press release in December 2019, SQN and the Board are in discussions regarding the timing for this and we will be in touch on that point shortly. 

We hope that the work carried out by Dawn and the team provides comfort that the mandate is in good shape and will continue to provide the returns that make it an attractive proposition to investors seeking a regular income. We thank you for your continued trust and support. If you would appreciate a follow up call to discuss the Secured Income Fund in further detail we would be very happy to organise.

With kindest regards,

Nicola Bird

(http://www.sqncapital.com/managed-funds/sqn-secured-income-fund/about/)

For further information please contact:

Notes to Editor

The Company aims to provide shareholders with attractive risk-adjusted returns, principally in the form of regular, sustainable dividends, through investment predominantly in a range of secured loans and other secured loan-based instruments originated through a variety of channels and diversified by way of asset class, geography and duration.

The Company's Investment Managers are SQN Capital Management, LLC, a Registered Investment Advisor with the United States Securities and Exchange Commission and its subsidiary, SQN Asset Management Limited. The principals responsible for managing the portfolio are Jeremiah Silkowski, Dawn Kendall and Neil Roberts.