TIDMNBMI
RNS Number : 0564P
NB Global Monthly Income Fund Ltd
16 June 2022
16 June 2022
NB Global Monthly Income Fund Limited
(the "Company")
Cash Exit Facility Offer 2022
The Company announced on 1 June 2022 that the Board intended to
exercise its discretion to implement the first tender offer under
the Cash Exit Facility described in the shareholder circular
published by the Company on 17 August 2020 and approved by
Shareholders at the EGM of the Company held on 8 September
2020.
The Board is pleased to announce that is has today published a
Circular to Shareholders containing details of the first such
tender offer under the Cash Exit Facility (the "Circular"). Terms
used and not defined in this announcement shall have the meanings
given to them in the Circular published by the Company on 16 June
2022. Copies of the Circular will shortly be available on the
Company's website.
1. INTRODUCTION AND BACKGROUND
Cash Exit Facility Offer
In accordance with the discretionary regular cash exit facility
that was introduced at the extraordinary general meeting of the
Company held on 8 September 2020 (the "Cash Exit Facility"), the
Board wishes to inform you that it is exercising its discretion to
offer eligible Shareholders a partial cash exit opportunity by way
of a redemption offer (the "Cash Exit Facility Offer"). As per the
terms of the Cash Exit Facility, the next such potential exercise
of the Board's discretion to offer Shareholders a partial cash exit
opportunity by way a redemption offer would be expected to close in
December 2022 and subsequent Cash Exit Facility Offers every six
months thereafter.
Pursuant to the Cash Exit Facility Offer, Shareholders will be
entitled to elect to have up to 25 per cent. of their Shares held
at the Record Date redeemed.
The redemption price per Share redeemed pursuant to the Cash
Exit Facility Offer will be equal to the Company's published Net
Asset Value per Share on 5 July 2022 (the "NAV Determination
Date"), less 2 per cent.
Following the completion of the Cash Exit Facility Offer, should
the NAV of the Company fall beneath GBP150 million, the Board
reiterates that its intention would be to propose a wind-up of the
Company.
Timings
The Board shall be entitled to defer any effective date
specified in the Circular and the implementation of the Cash Exit
Facility Offer in its absolute discretion to accommodate any legal,
regulatory, operational or other requirements that are not resolved
prior to or on the relevant effective date.
Cancellation
If, at any time between the Record Date and the Cash Exit
Redemption Date, there is a material adverse change in market
conditions such that the Company's ability to realise assets for
the purposes of meeting redemption requests, in a manner which is
fair as between the redeeming Shareholders and the remaining
Shareholders (to the extent that those remaining Shareholders have
not participated in the Cash Exit Facility Offer), is in the
opinion of the Board, acting reasonably and in good faith,
materially impaired or likely to be materially impaired, the
Directors may in their absolute discretion cancel the Cash Exit
Facility Offer. In the event of any such cancellation as described
in this paragraph, no Shares will be redeemed under the Cash Exit
Facility Offer.
2. VIEW FROM THE BOARD
Whilst it is a matter for individual Shareholders to determine
whether to tender Shares for redemption pursuant to the Cash Exit
Facility Offer, the Board believes that the Company's Shares
continue to be an attractive investment, including for the
following reasons:
-- Performance - As of 30 April 2022, the Company has
outperformed the 50%/50% S&P Loans/ICE BofA High Yield Index by
+152, +242 and +275 basis points (gross of fees), respectively,
over the year-to-date period, 1-year period and since inception of
the revised investment strategy in September 2020. Given the recent
macro volatility due to higher inflation, central bank rate hike
expectations and the conflict in eastern Europe, the Company's
investment results, both absolute and relative, have demonstrated
resilience. Since inception of the revised investment strategy,
total annualised returns of 6.68% (gross of fees) and 5.46% (net of
fees) have provided attractive risk-adjusted total returns and
durable income generation.
http://www.rns-pdf.londonstockexchange.com/rns/0564P_1-2022-6-15.pdf
-- Consistent dividends - The Company's objective to generate
durable and predictable monthly income for investors through a
stable dividend paid monthly has been achieved and the Company
expects to continue to deliver on this objective. On 28 April 2022,
it was announced that the target distribution for the remainder of
2022 would increase to a rate of 5.8% of Net Asset Value per annum
(as of 22 April 2022) net of fees and expenses.
-- Benefits of best opportunities mandate - Neuberger Berman,
the Company's investment manager, employs a "best ideas" approach
driven by deep, fundamental credit research that allows focus on
issuers that can navigate the more challenging operating
environment of higher inflation and slowing real growth.
Furthermore, Neuberger Berman's ability to rotate the portfolio
based on relative value by issuer, rating, region and sector as
well as the flexibility to allocate across the capital structure
are particularly beneficial features in the current macroeconomic
environment. That said, this has also proven to be the case across
a full market cycle with attractive total returns since
inception.
-- Outlook for portfolio - Neuberger Berman believes that
non-investment grade credit yields are compensating investors for
the relatively benign default outlook, will continue to provide
durable income and are attractive compared to other fixed income
alternatives. Real global GDP growth is estimated to be around
trend for 2022 and input costs for many issuers are being passed on
to end markets and consumers. However, as real growth slows back
towards trend, this will help to alleviate some of the inflationary
pressures. Neuberger Berman continues to be focused on the outlook
for issuer margins given rising input costs. Mitigating this,
however, are strong consumer and business balance sheets and
positive GDP growth. Neuberger Berman's global research team
continues to monitor the investment thesis for each issuer in the
Company's portfolio. Even with the heightened uncertainty, which is
resulting in short-term volatility, Neuberger Berman believes that
its bottom-up, fundamental credit research focused on security
selection while seeking to avoid credit deterioration and putting
only its "best ideas" into portfolios, positions the Company well
to take advantage of the increased volatility.
The Directors do not intend to participate in the Cash Exit
Facility Offer in respect of those Shares held by them. Any funds
managed by Neuberger Berman which are Shareholders also do not
intend to participate in the Cash Exit Facility Offer.
3. CASH EXIT FACILITY OFFER
The Board is providing Shareholders (other than Shareholders in
certain jurisdictions as described in paragraph 2 in Part II of the
Circular) with the opportunity to realise by way of redemption up
to 25 per cent. of their Shares through participation in the Cash
Exit Facility Offer. Further details of how the Cash Exit Facility
Offer will operate are set out below.
All Shares that are redeemed will be cancelled with effect from
the Cash Exit Redemption Date. Accordingly, once redeemed, Shares
will be incapable of transfer and no dividend will be paid in
respect of those Shares.
Shareholders should note that the issued share capital of the
Company will be reduced as a result of the Cash Exit Facility Offer
to the extent that Shares are redeemed. Consequently, the fixed
costs of the Company will be spread over fewer Shares.
Mechanics of the Cash Exit Facility Offer
Pursuant to the Cash Exit Facility Offer, Shareholders will be
entitled to elect to have up to 25 per cent. of the Shares held by
them as at the Record Date (being 30 June 2022) redeemed.
A Shareholder who requests the redemption of Shares pursuant to
the Cash Exit Facility Offer will need to submit a Redemption
Notice for Shares held in certificated form or TTE Instruction(s)
for Shares held in uncertificated form for the number of Shares
that they wish to offer for redemption by 1.00 p.m. on 30 June
2022.
Details on submitting Redemption Notices and TTE Instruction(s)
are set out in paragraph 1 in Part II of the Circular.
Proceeds of the Cash Exit Facility Offer
Following the receipt of the Redemption Notices and/or TTE
Instruction(s) from Shareholders, the Shares to be redeemed
pursuant to the Cash Exit Facility Offer will be redeemed on the
Cash Exit Redemption Date. The redemption proceeds per share that a
redeeming Shareholder will receive pursuant to the Cash Exit
Facility Offer will be equal to the Company's published Net Asset
Value per Share as at the NAV Determination Date, less 2 per cent.
(the "Redemption Proceeds").
Absent any unforeseen circumstances and subject to general
market conditions, the Company expects to realise assets for the
purposes of meeting redemption requests under the Cash Exit
Facility Offer and to be in receipt of the proceeds of such
realisations within 30 to 90 Business Days after the Cash Exit
Redemption Date. Although the Company's portfolio contains assets
with high trading liquidity (which subject to unforeseen
circumstances and general market conditions, the Company estimates
will be disposed of in the market within 2 to 3 Business Days of
the Cash Exit Redemption Date), the settlement liquidity of the
Company's assets varies. The Company estimates that it will receive
payment for those assets with higher settlement liquidity, such as
bonds and collateralised loan obligations ("CLOs"), within 30
Business Days of the Cash Exit Redemption Date. The Company
estimates that it will receive payment for those assets with lower
settlement liquidity, such as loans and private credit, within 90
Business
Days of the Cash Exit Redemption Date. The Company estimates
that as at the date of the Circular, 40 per cent. of the assets to
be realised in connection with the Cash Exit Facility Offer have
higher settlement liquidity, with the remaining 60 per cent. having
lower settlement liquidity. Payment of the Redemption Proceeds to
each Shareholder redeeming Shares will be made within 10 Business
Days of the Registrar receiving such realisation proceeds from the
Company.
The total Redemption Proceeds due to each redeeming Shareholder
will therefore be paid in two instalments, the first being paid on
or around 1 September 2022, and the second instalment being paid on
or around 24 November 2022. The Redemption Proceeds are to be paid
in two instalments in order to expedite payment to redeeming
Shareholders (to the extent possible). However, Shareholders are
nonetheless advised that it may be up to 100 Business Days or more
after the Cash Exit Redemption Date before redeeming Shareholders
receive full payment pursuant to the Cash Exit Facility Offer.
The redemption of the Shares pursuant to the Cash Exit Facility
Offer will constitute a distribution for the purposes of the
Companies Law. Accordingly, the Board will follow the procedure for
making a distribution set out at section 303 of the Companies Law
and will consider the statutory solvency test set out therein. The
redemption of the Shares pursuant to the Cash Exit Facility Offer
is therefore subject to the Directors being satisfied that the
provisions of section 303 of the Companies Law are satisfied at the
relevant time.
Details regarding the tax consequences of the Cash Exit Facility
are set out in paragraph 4 in Part II of the Circular.
4. RISK FACTORS RELATING TO THE CASH EXIT FACILITY OFFER
Shareholders should, when considering participating in the Cash
Exit Facility Offer, have regard to the following risk factors.
-- Once a Redemption Notice has been served on the Company or a
TTE Instruction(s) has been submitted, the relevant Shareholder
will be unable to access or otherwise deal in those Shares pending
completion (or cancellation) of the Cash Exit Facility Offer.
Shares will be held in escrow subject to the completion (or
cancellation) of the Cash Exit Facility Offer. In the case of
Shareholders who hold their Shares in certificated form (that is,
not in CREST), the restriction on dealing shall also apply in
respect of all Shares to which any surrendered share certificates
relate. A Redemption Notice or TTE Instruction(s), once submitted,
may only be withdrawn with the consent of the Company.
-- Securities laws in certain jurisdictions may prevent certain
Shareholders from participating in the Cash Exit Facility Offer.
For more information, please refer to paragraph 2 in Part II of the
Circular.
5. ACTION TO BE TAKEN BY SHAREHOLDERS IN CONNECTION WITH THE CASH EXIT FACILITY OFFER
Shareholders should note that, if they wish to participate in
the Cash Exit Facility Offer, action is required to be taken by
them. Information on such action to be taken by Shareholders
seeking to participate in the Cash Exit Facility Offer is set out
in Part II of the Circular.
6. DOCUMENTS AVAILABLE FOR INSPECTION
The Circular will be dispatched today to all eligible
shareholders. A copy of the Circular will be submitted to the
National Storage Mechanism and will shortly be available for
inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism . This
Circular will also be available on the Company's website:
https://www.nbgmif.com/ .
Expected Timetable
CASH EXIT FACILITY OFFER
Circular sent to Shareholders 16 June 2022
Record Date 30 June 2022
Latest time and date for receipt of Redemption 1.00 p.m. on 30 June
Notices and TTE Instructions for the Cash 2022
Exit Facility Offer
NAV Determination Date 5 July 2022
Announcement of results of the Cash Exit 6 July 2022
Facility Offer
Cash Exit Redemption Date 6 July 2022
Estimated asset realisation period for 7 July - 17 August 2022
assets with higher settlement liquidity*
Estimated asset realisation period for 7 July - 9 November 2022
assets with lower settlement liquidity*
Estimated date of payment of the first 1 September 2022
instalment of the Redemption Proceeds**
Estimated date of payment of the second 23 November 2022
instalment of the Redemption Proceeds**
*Absent any unforeseen circumstances and subject to general
market conditions, it is currently estimated that the Registrar
will be in receipt of the proceeds for the first instalment
of the Redemption Proceeds within 30 Business Days of the Cash
Exit Redemption Date and will be in receipt of the proceeds
for the second instalment of the Redemption Proceeds within
90 Business Days of the Cash Exit Redemption Date.
**Certificated Shareholders will be paid by cheque despatched
at the latest known address as indicated on the Shareholders'
register. Uncertificated Shareholders will be paid via CREST.
Payments will be made w ithin 10 Business Days of the Registrar
receiving the proceeds of the Company's assets realised pursuant
to the Cash Exit Facility Offer.
Enquiries:
Neuberger Berman Europe Limited (Manager)
Elizabeth Papadopoulos +44 (0) 20 3214 9078
Numis Securities Limited (Broker)
Hugh Jonathan
Matt Goss +44 (0) 20 7260 1000
KL Communications (PR)
Charles Gorman +44 (0) 20 7995 6673
Sanne Fund Services (Guernsey) Limited
(Company Secretary) +44 (0) 1481 737
Matt Falla/Gemma Woods 600
LEI: 549300P4FSBHZFALLG04
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