SSIF.L Regulatory News (SSIF)

For immediate release 2 August 2017

SQN Secured Income Fund plc

Portfolio Update - positive momentum - Fund now fully committed

SQN Secured Income Fund plc (LSE: SSIF) (the "Company" or "SSIF"), a UK-listed specialist investment trust with a focus on secured investments that produce regular income, is pleased to update shareholders of SSIF on the progress made since SQN Capital Management, LLC together with its UK subsidiary SQN Asset Management Limited (together "SQN") were appointed as the Company's investment managers on 1 April 2017.

Highlights

· Appointment by SQN of Dawn Kendall as managing director with effect from 1 August 2017 and other key hires in pipeline

· Strategic review and resulting rationalisation of platform-originated or related investments completed

· Full commitment of available cash primarily into SQN-originated transactions

· Gross yield on portfolio expected to rise approximately to 8.6%1

· On track to pay targeted dividend of 6.25p per share for current financial year2

Strategic Review

Following its appointment in April 2017, SQN has completed a thorough strategic review of the Company's platform investments.

At the time of SQN's appointment, approximately 31% of the Company's assets were in cash with the remainder already invested via platforms and through working capital loans to platforms. Following the review, a decision has been taken to cease making working capital loans to platforms and to reduce the number of platforms through which the Company conducts business. The selection of preferred platforms has been made after an in-depth analysis of their credit processes and sector preferences, with a focus on diversification, "best in class" and transparency. The Company is confident that relationships with these remaining platforms are strong and will continue to provide consistent attractive deal flow. In the future, the Company expects the percentage of the Company's portfolio represented by platform-originated loans to reduce in favour of direct lending using SQN's own origination capabilities. However, as the Company grows, the amount of funds that the Company will continue to allocate to platforms will remain meaningful.

Almost a third of the Company's assets have now been invested or committed under the SQN mandate with the available cash primarily deployed into direct lending opportunities originated by SQN. The nature of these direct loans is diverse and provides high levels of security with regard to covenant provision. Each loan has been established making use of SQN's extensive network of industry contacts and all loans have been extended at rates of interest commensurate with exceeding the Company's target returns (a target annual dividend of 6.25p per share for the current financial year, increasing to at least 7.0p per share with effect from July 2018, and a target annual total return of at least 8%2).

Examples of the loans extended include:

· A loan to a specialist medical equipment provider which delivers unique laser therapy in the field of tumour treatment. Unusually, this company has been awarded a long, seven-year contract with the NHS.

· SQN has been active in film finance for some time and the team has built a strong relationship with a valued production company in this sector. Working with SQN's partners, SSIF has been able to structure loans against pre-release sales receivables from major studios and distributers, thereby providing a high level of security.

· Loans to two businesses in the finance sector, a leasing business offering facilities to retail operations across the country and a market leading company offering working capital loans to a broad spectrum of UK-based businesses. Both companies have a strong reputation, operate away from the web-based "peer to peer" lending sector and have had below-average defaults over the history of their loan origination.

The Company has additionally made further commitments to a listed specialised LED manufacturer based in the UK and Ireland.

All loans have been negotiated at good commercial rates, meeting the Company's requirements after fees and expenses for its target returns to shareholders2. Most pleasing is that the loans are with businesses with whom the Company expects to nurture long term relationships as they grow.

SQN's Investment in Infrastructure

As previously announced, to strengthen its team, SQN has appointed Dawn Kendall as managing director. In addition, SQN has made further experienced hires for its credit, portfolio reporting and legal teams. SQN intends to recruit further personnel in administration roles in the final quarter of 2017. This commitment is in preparation for future growth of the Company and SQN's direct lending business generally and is indicative of the importance of this division to the SQN group.

SQN's investment approach recognises the significance of strong processes and a robust governance regime and, accordingly, each drawdown requires a "triple lock" sign off from its legal, credit and portfolio management teams. This is in addition to the extensive portfolio management capabilities SQN inherited within Amberton Asset Management.

Outlook

The Company has made good, solid progress on process, governance, credit quality, rationalisation of platform investment and secured direct lending since SQN's appointment. The outlook for direct lending opportunities remains very promising, and the Company already has an abundant pipeline of investment opportunities to consider during the coming months.

Notes:

1Based on invested and committed capital as at July 2017.

2These target returns are targets only and not profit forecasts. There can be no assurance that the targets can or will be met and they should not be seen as an indication of the Company's expected or actual results or returns. Accordingly, investors should not place any reliance on the target returns in deciding whether to invest in the Company or assume that the Company will make any distributions at all.

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