Chenavari Toro Regulatory News (TORO)

Chenavari Toro Income Fund Limited (the Company)

08 JUNE 2020

Enhanced dividend policy and rebalancing of investment strategy

In the past few years, the Board of the Company has implemented several measures to seek to enhance the share price of the Company, in particular by reducing the discount between the Company's share price and the net asset value per share ("NAV per Share"). These measures have included undertaking share buy-backs, the implementation of a semi-annual tender offer mechanism, and a simplification of the Company's investment strategy.

While the Board acknowledges that the Company's net asset value ("NAV") has held up more robustly than most of the Company's listed peers in the recent major market dislocation arising from the global COVID-19 pandemic, it also acknowledges the disappointment caused to shareholders by the persistent share price discount to NAV.

The Board is therefore pleased to announce the implementation of a series of new initiatives with the intention of narrowing the share price discount to NAV. These initiatives are as follows:

1. An enhanced dividend policy: The Company is targeting a quarterly dividend yield of 2.5 per cent. (by reference to NAV) equating to a targeted annualised dividend yield of 10 per cent. (by reference to NAV). The Company's net target return remains 9-11 per cent. per annum

The dividend and net target return targets stated above are targets only and are not a profit forecast. There can be no assurance that these targets will be met and they should not be taken as an indication of the Company's expected future results.

2. The continued rebalancing of the investment strategy towards tradable securities, as well as the realisation of illiquid assets: Operating within the parameters of the Company's existing investment policy, the Company's investment strategy will be rebalanced with a focus on investment in liquid and tradable European ABS/CLO, through the Company's existing "opportunistic credit strategy" (provided that a significant market opportunity arises). Consequently, the Company will cease to make new investments in illiquid assets through its current "originated transactions" and "private asset backed" strategies, but will continue to support existing illiquid assets, where required, with a view to maximising shareholder value. The Company will seek to realise its illiquid assets and redeploy the proceeds into liquid and tradable European ABS/CLO if the opportunity arises. In addition to this rebalancing of the investment strategy, the Company will continue to consider share buy-backs, where appropriate, to assist in narrowing the discount to NAV, and will continue to invest in hedging instruments.

3. The implementation of quarterly special distributions of available excess cash: at the end of each calendar quarter until 31 December 2020, the Company will maintain a maximum cash balance in its portfolio of 10 per cent. of NAV and will distribute all excess cash above this balance arising in the portfolio as special dividends on a quarterly basis. These special dividends will be in addition to any quarterly dividends paid pursuant to the Company's dividend policy outlined above. With effect from 1 January 2021, the maximum cash balance cap will be reduced to a level of not more than 5 per cent. of NAV, unless the investment manager, at its discretion, decides to maintain such cap at a maximum of 10 per cent., should market opportunities in liquid and tradable European ABS / CLO arise.

The payment of any quarterly special dividends is a target only and will be subject to the Company having excess cash available to do. Shareholders should have no expectation of any such quarterly special dividends being paid in any quarter or at all.

Fred Hervouet, Chairman of the Board, commented:

"The persistence of the discount to NAV has somewhat overshadowed the underlying quality of the Company. We hope that the announcement of these new initiatives will provide assurance to shareholders that the Company will do whatever it takes to seek to narrow and eventually eliminate the discount. Through these new steps, we are demonstrating the Board's commitments to seek to; (i) generate a high investment return profile for shareholders, and (ii) maximize shareholder value".

Further information in relation to the Company is available at:

http://www.chenavaritoroincomefund.com

Enquiries:

Kirstie Sumarno or Guy Goyard

Chenavari Investment Managers

Email: tlir@chenavari.com

Telephone: +44 20 7259 3600