SSIF.L Regulatory News (SSIF)

25 July 2018  

SQN Secured Income Fund plc

SQN Secured Income Fund plc (LSE: SSIF) (the "Company"), a specialist secured lending income investment trust, listed in the UK, is pleased to provide guidance on implementation of IFRS9.

IFRS 9 Declaration

The Company will formally adopt IFRS 9 from 1 July 2018 and publish its July 2018 NAV under this new accounting standard. IFRS 9 provisioning will to lead to a one-off decrease in the Company's NAV of 0.42%.

All material loss provisions are related to platform impairments on investments made before the manager took control of the portfolio. Since assuming management of the Company on April 1st 2017, SQN has reduced platform exposure from 100% to just over 50%, delivering on their strategy of providing income from direct lending originated and underwritten solely by SQN. The Company has managed the risk posed by peer to peer platform exposure effectively and will continue to reduce the overall exposure to these platforms to the target weight of 20% of the whole portfolio. Once this has been implemented, using the same methodology, the reserve loss will reduce to 0.23%.

Given that the adjustment to NAV is purely driven by a revised accounting methodology, it will have no impact on the Company's future cash flows. The Board therefore expects the Company to commence paying a dividend of 7p per annum on its Ordinary shares. Underlying performance is unaffected as this change is purely an accounting adjustment and has no bearing on the loans held within the SQN Secured Income Fund.

Please note, all calculations have been made on the basis of available information with regard to new IFRS 9 regulatory reporting. The Board and Manager of the Company will review from time to time and adjust as necessary to reflect the inevitable evolution of best practice.

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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.