TIDMNBMI
RNS Number : 3760K
NB Global Monthly Income Fund Ltd
20 December 2022
20 December 2022
NB Global Monthly Income Fund Limited
(the "Company")
Publication of Circular in relation to the proposed Managed
Wind-down of the Company and return of capital to Shareholders
Further to the announcement on 21 November 2022, the Board of NB
Global Monthly Income Fund Limited (the "Company") has today
published a circular to Shareholders (the "Circular") in relation
to recommended proposals for a Managed Wind-down of the Company and
related matters.
The Circular includes a notice of an extraordinary general
meeting ("EGM") to be held at 1 Royal Plaza, Royal Avenue, St Peter
Port, Guernsey, GY1 2HL at 11 a.m. on 27 January 2023. Resolutions
will be put to the Company's shareholders to seek their approval at
the EGM. Definitions in this announcement shall take the same
meaning as in the Circular.
Introduction
As announced by the Company on 21 November 2022, following a
review of the Company's strategy and prospects, the Board decided
not to implement the Company's semi-annual cash exit facility in
December 2022 (the "December Cash Exit"). The Board anticipated
that participation in the December Cash Exit offer would likely
result in the Company's net asset value ("NAV") falling below
GBP150 million, rendering the Company, in the opinion of the Board,
sub-scale. It has therefore decided instead to put forward
proposals to realise the Company's Portfolio in an orderly manner
and distribute the realisation proceeds to Shareholders over time
(the "Managed Wind-down").
Further details of these proposals, which require Shareholder
approval, are set out in the Circular posted to Shareholders today
and this should be read in full by Shareholders before voting on
the proposals.
Extraordinary General Meeting
The purpose of the Circular is to convene an EGM at which the
Board proposes to seek Shareholder approval to:
(i) amend the Company's Investment Objective and Policy; and
(ii) amend the articles of incorporation of the Company (the
"Articles") to allow for the realisation proceeds of selling assets
in accordance with the Managed Wind-down to be distributed to
Shareholders by way of pro rata compulsory redemptions of
Shares,
(together, the "Proposals").
The EGM will be held at 1 Royal Plaza, Royal Avenue, St Peter
Port, Guernsey, GY1 2HL at 11 a.m. on 27 January 2023, to seek
Shareholder approval of the Proposals, in accordance with
applicable law.
Overview of the Managed Wind-down and proposed change to the
Company's Investment Objective and Policy
Proposed Managed Wind-Down
The Board proposes to implement the Managed Wind-down by
realising the assets comprised in the Portfolio in an orderly
manner and to make capital distributions to Shareholders during the
wind-down period as and when sufficient cash is realised to make it
economically expedient to make a distribution. At an appropriate
point in the future, further proposals to place the Company into
liquidation will be put to Shareholders.
Having consulted the Investment Manager, it is expected that as
the Company's portfolio consists of both liquid and less liquid
assets, it will take varied time periods to realise assets in an
orderly manner with a view to maintaining Shareholder value. Based
on current and anticipated market conditions, the Investment
Manager anticipates that the process of realising the most illiquid
assets in the Company's portfolio could require a period of up to
24 months.
The table below, which excludes equity holdings and cash,
provides an overview of the Company's portfolio composition as of
16 December 2022, including applicable asset rating, time to
maturity and the approximate percentage of total portfolio market
value that each asset comprises:
Portfolio Assets; Applicable Market Value
Ratings Time To Maturity %
Private Debt 5.91Y 24.8%
----------------- -------------
B 5.83Y 2.0%
----------------- -------------
B 5.76Y 1.1%
----------------- -------------
B- 5.91Y 0.9%
----------------- -------------
CCC 5.80Y 19.1%
----------------- -------------
CCC+ 6.01Y 7.0%
----------------- -------------
CCC 5.68Y 12.0%
----------------- -------------
CCC- 3.69Y 0.0%
----------------- -------------
NR 6.48Y 3.8%
----------------- -------------
NR 6.48Y 3.8%
----------------- -------------
Distressed Debt 5.00Y 16.3%
----------------- -------------
B 5.01Y 10.0%
----------------- -------------
B+ 4.86Y 3.4%
----------------- -------------
B 4.19Y 1.1%
----------------- -------------
B- 5.26Y 5.5%
----------------- -------------
CCC 5.14Y 5.9%
----------------- -------------
CCC+ 5.54Y 3.3%
----------------- -------------
CCC 4.55Y 1.5%
----------------- -------------
CCC- 4.81Y 0.9%
----------------- -------------
Other 4.20Y 0.2%
----------------- -------------
NR 2.45Y 0.4%
----------------- -------------
NR 2.45Y 0.4%
----------------- -------------
US High Yield 5.31Y 17.8%
----------------- -------------
BB 4.65Y 4.1%
----------------- -------------
BB+ 7.25Y 0.1%
----------------- -------------
BB 3.30Y 1.7%
----------------- -------------
BB- 5.49Y 2.4%
----------------- -------------
B 4.80Y 7.1%
----------------- -------------
B+ 4.85Y 2.6%
----------------- -------------
B 4.47Y 2.6%
----------------- -------------
B- 5.16Y 1.9%
----------------- -------------
CCC 6.29Y 6.5%
----------------- -------------
CCC+ 6.25Y 4.9%
----------------- -------------
CCC 6.42Y 1.6%
----------------- -------------
EUR High Yield 3.71Y 2.4%
----------------- -------------
BB 1.75Y 0.2%
----------------- -------------
BB- 1.75Y 0.2%
----------------- -------------
B 3.44Y 1.8%
----------------- -------------
B+ 2.59Y 0.9%
----------------- -------------
B 4.64Y 0.7%
----------------- -------------
B- 3.21Y 0.2%
----------------- -------------
CCC 6.14Y 0.4%
----------------- -------------
CCC+ 6.14Y 0.4%
----------------- -------------
US Loans 4.02Y 22.0%
----------------- -------------
BB 5.27Y 1.2%
----------------- -------------
BB 6.11Y 0.7%
----------------- -------------
BB- 3.88Y 0.4%
----------------- -------------
B 4.28Y 18.5%
----------------- -------------
B+ 4.52Y 1.8%
----------------- -------------
B 4.02Y 9.0%
----------------- -------------
B- 4.52Y 7.7%
----------------- -------------
CCC 1.44Y 0.6%
----------------- -------------
CCC+ 2.79Y 0.2%
----------------- -------------
CCC 0.93Y 0.4%
----------------- -------------
NR 1.35Y 1.7%
----------------- -------------
NR 1.35Y 1.7%
----------------- -------------
EUR Loans 3.79Y 3.7%
----------------- -------------
B 3.79Y 3.7%
----------------- -------------
B+ 6.24Y 0.3%
----------------- -------------
B 3.01Y 1.6%
----------------- -------------
B- 4.03Y 1.7%
----------------- -------------
CLO 11.01Y 10.7%
----------------- -------------
BB 10.62Y 6.2%
----------------- -------------
BB 8.33Y 0.5%
----------------- -------------
BB- 10.80Y 5.7%
----------------- -------------
B 11.35Y 3.1%
----------------- -------------
B+ 11.63Y 1.6%
----------------- -------------
B- 11.04Y 1.5%
----------------- -------------
NR 12.04Y 1.4%
----------------- -------------
Asset Class Breakdown
The following table, which excludes equity holdings and cash,
further shows a percentage breakdown of the market value as of 16
December 2022 of the Company's portfolio by currency:
Currency Market Value %
EUR 6.5%
---------------
GBP 7.3%
---------------
USD 83.8%
---------------
Currency Breakdown
New Articles
It is proposed that in order to enable the Company to implement
the Proposals, a new Article 50A is inserted in the Articles (the
"Amended Articles"). This will permit the Directors, at their sole
discretion, to compulsorily redeem Shares pro rata on an ongoing
basis in order to return capital to Shareholders.
Investment Objective and Policy
In order for the Company to follow the Managed Wind-down process
set out in this Circular, it is necessary to amend the Company's
Investment Objective and Policy. If the Proposals are approved, the
Company's revised Investment Objective and Policy will be as set
out below.
"Investment Objective
The Company's investment objective is to realise all existing
assets in the Company's portfolio in an orderly manner.
Investment Policy
The Company will pursue its investment objective by effecting an
orderly realisation of its assets and making timely returns of
capital to Shareholders, by way of several capital distributions.
The Company will aim to effect the sale of its assets, including
both liquid and less liquid assets, in a manner that will maintain
Shareholder value.
The Company will cease to make any new investments or to
undertake capital expenditure except where, in the opinion of the
Board and the Investment Manager:
-- the investment is a follow-on investment made in connection
with an existing asset in order to comply with the Company's
pre-existing obligations; or
-- failure to make the follow-on investment may result in a
breach of contract or applicable law or regulation by the Company;
or
-- the investment is considered necessary to protect or enhance
the value of any existing investments or to facilitate orderly
disposals.
Any cash received by the Company as part of the realisation
process, but prior to its distribution to Shareholders, will be
held by the Company as cash on deposit and/or as cash
equivalents.
Borrowing and derivatives
The Company will not undertake borrowing other than for
short-term working capital purposes. The Company may use
derivatives for hedging as well as for efficient portfolio
management, including managing currency risks between cash flows
from its assets and Sterling, being the currency of the Shares.
Changes to the Company's investment policy
Any material change to the Company's investment policy will be
made only with the approval of the Shareholders."
Compulsory Redemption Mechanism
Shareholders should expect that, under the terms of the Managed
Wind-down, the Board and the Investment Manager will be committed
to distributing as much of the available cash from the realisation
of assets as soon as reasonably practicable having regard to cost
efficiency and working capital requirements. Accordingly,
Shareholders should expect that redemptions will be made regularly
but, in order to minimise the administrative burden, not
necessarily as soon as cash becomes available.
Under the Proposals, the return of cash to Shareholders pursuant
to the Managed Wind-down will be effected through the compulsory
redemptions of Shares in volumes and on dates to be determined at
the Directors' sole discretion. Shares will be redeemed from all
Shareholders pro rata to their existing holdings of Shares on the
relevant record date for any given Redemption Date. The Directors
will be authorised to make such redemptions under the Amended
Articles.
Under current UK taxation law and practice, redemptions of
Shares will constitute a disposal for the purposes of UK capital
gains tax. Further details of the tax consequences of the Proposals
are set out in the Circular.
Dividends
If the Proposals are approved at the EGM, the Company will move
to paying dividends on a quarterly rather than monthly basis, with
the first such dividend being paid in relation to the period ending
31 March 2023. The Board intends to pay quarterly dividends where
there is sufficient net income to do so. As the Managed Wind-down
progresses, the Board anticipates that the income from the
Portfolio will gradually reduce. As a result of this reduction, the
Company may have insufficient net income to pay dividends.
It is the Board's intention that the dividend to be distributed
in respect of January 2023 will be paid at the current dividend
target rate for 2022, which equates to GBP0.0054 per share paid
monthly.
Listing during the Managed Wind-down
The Board intends to maintain the Company's listing and the
trading of its Shares on the Main Market of the LSE for as long as
the Directors believe to be practicable during the Managed
Wind-down period, subject to the ability of the Company to continue
to comply with its obligations under the Listing Rules (including
the obligation to ensure that a sufficient number of its Shares are
in public hands (as such phrase is used in current Listing Rule
6.1.19(3) R)).
The Board believes that maintaining the Company's listing is in
the best interests of Shareholders for the following reasons:
-- the listing will allow the Shares to remain eligible for ISAs and SIPPs;
-- the listing will allow for the maintenance of a daily market
price in the Shares, as required by certain Shareholders;
-- maintaining the listing enables certain Shareholders to
continue to meet their own investment restrictions, for example
where they are required to hold listed securities or instruments
with daily liquidity; and
-- maintaining the listing allows continued trading, which
allows opportunities for secondary market sales prior to the
conclusion of the Managed Wind-down.
There are, however, significant costs to the Company in
maintaining the listing. The cost efficiency of retaining the
Company's listing will continue to be monitored and reviewed by the
Board on an ongoing basis. The Board may propose a cancellation of
the Company's listing before it ceases to comply with the Listing
Rules, although any such proposal will be subject to the approval
of Shareholders.
In the event that the Company can no longer satisfy the
continuing obligations for listing set out in the Listing Rules
(including if the percentage of Shares held in public hands falls
below 10 per cent. of the total number of issued Shares), the
Directors shall immediately notify the FCA, which may suspend the
listing of the Shares pursuant to Listing Rule 5. Following
Shareholder approval, the listing will then be cancelled.
NAV Reporting
During the Managed Wind-down period, the Company intends to
continue to publish the NAV per Share on a daily basis, but will
keep this under review in light of the diminishing size of the
Company and the costs of preparing daily NAVs. It is also proposed
that if the Proposals are approved by Shareholders, the Company
will cease publishing monthly factsheets and instead publish ad hoc
portfolio data during the Managed Wind-down as appropriate.
Liquidation
At an appropriate point in the future, subject to the
implementation of the Proposals, the Board will propose the
appointment of a liquidator which will require a further
extraordinary general meeting. The Board's assessment of the
correct juncture to propose liquidation will be driven, inter alia,
by an assessment of whether it is viable for the Company to
continue operating following the principal Managed Wind-down
redemption distributions. Following the required extraordinary
general meeting to implement a liquidation process, the remaining
assets of the Company will be realised and returned to Shareholders
net of costs.
Management Fees
On the basis that the Proposals are approved by Shareholders at
the EGM, during the Managed Wind-down period, the Investment
Manager will reduce its applicable investment management fee by 7.5
basis points until 50% of the Company's assets by market value held
as at the date of the EGM have been realised and thereafter the
Investment Manager will reduce its applicable investment management
fee by a further 7.5 basis points until all of the Company's assets
have been realised. The Company and the Investment Manager will
enter into an amendment agreement in respect of the amended and
restated investment management agreement dated 16 July 2014, as
amended, to reflect this change. The Investment Manager will
continue to review its fees together with the Board every six
months during the course of the Managed Wind-down period.
Expected Timetable
The anticipated dates and sequence of events relating to the
implementation of the Proposals are set out below:
Record date for participation and 11 a.m. on 25 January 2023
voting at the Extraordinary General
Meeting
Latest time and date for receipt 11 a.m. on 25 January 2023
of Proxy Appointments for the Extraordinary
General Meeting*
Extraordinary General Meeting 11 a.m. on 27 January 2023
Announcement of result of the Extraordinary 27 January 2023
General Meeting
Each of the times and dates in the expected timetable of events
may be extended or brought forward without notice. If any of the
above times and/or dates change, the revised time(s) and/or date(s)
will be notified to Shareholders by an announcement through an RIS
provider. All references are to London time unless otherwise
stated.
* Please note that the latest time for receipt of the Proxy
Appointments is not less than 48 hours prior to the time allotted
for the meeting.
Resolutions and Shareholder Approval
The Proposals are subject to the approval of Shareholders, and
the notice convening the EGM at which the Resolutions to approve
the Proposals will be considered is set out in the Circular.
Resolution 1, which will be proposed as an Ordinary Resolution,
seeks authority to amend the Investment Objective and Policy of the
Company. Resolution 2, which will be proposed as a Special
Resolution, seeks authority to incorporate a new Article 50(A) and
new definitions in the Company's articles of incorporation.
Resolution 1 and Resolution 2 are interconditional.
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)
Matt Falla
Gemma Woods +44 (0) 1481 737 600
LEI: 549300P4FSBHZFALLG04
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