Funding Circle SME Income Fund Ltd Market Update (9842S)
June 29 2018 - 1:01AM
UK Regulatory
TIDMFCIF
RNS Number : 9842S
Funding Circle SME Income Fund Ltd
29 June 2018
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED UNDER
THE MARKET ABUSE REGULATION (EU) NO. 596/2014.
Guernsey, 29 June 2018
Funding Circle SME Income Fund Limited
(the "Company")
Market update
The Company invests in credit assets originated by Funding
Circle's platforms across the UK, US, Germany and the Netherlands.
The Company hedges substantially all of its currency exposure to
Sterling. The Board has noted a material increase in the cost of
hedging the Company's US Dollar-denominated assets back into
Sterling, driven by divergent monetary policy and economic
prospects in the US and UK, which has seen a significant widening
of the GBP/USD interest rate differential over the past eighteen
months. This phenomenon is now assessed as being structural as
opposed to transient, with a not insignificant risk of further
material divergence.
Additionally, the Company's look-through leverage currently
stands at approximately 45% of NAV and will fall in the coming
months as the European Investment Bank facility begins to amortise.
The Board are taking steps to restore gearing to 50% of NAV, and
expect to provide an update to the market in due course.
As a result of the foregoing, the Board has reappraised the
anticipated currency hedged returns available from its SME loan
portfolio over the next 12 months, and has assessed that such
returns will enable the Company to pay a fully covered annual
dividend of 5 to 6 pence per share, with effect from the quarter
ended 30(th) September 2018.
Richard Boleat, Chairman, commented:
"Our geographical diversification means that we, in common with
many other cross-border businesses, are and will continue to be
exposed to divergent macroeconomic and monetary policy effects and
this is the decisive factor that has led to today's revised
guidance. I would like to emphasise that the credit performance of
the Company's portfolio remains in line with expectations. The
Board is considering a number of responses to changing
macroeconomic conditions, including potential leverage transactions
expected to enhance returns, and we will report to investors
further in the near future."
The Company's annual report will be published in July 2018.
CONTACTS
Richard Boleat, Chairman
+44 (0) 1534 615 656
Richard.Boleat@fcincomefund.com
Secretary and Administrator
Sanne Group (Guernsey) Limited
FundingCircle@sannegroup.com
+44 (0) 1481 739810
Media Contact
David de Koning
Natasha Jones
+44 (0) 20 3667 2245
press@fundingcircle.com
Corporate Broker
Numis Securities Limited
Nathan Brown
+44 (0) 207 260 1426
n.brown@numis.com
Website
www.fcincomefund.com
Investor Relations
ir@fcincomefund.com
DEALING CODES
The ISIN number of the Ordinary Shares is GG00BYYJCZ96, the
SEDOL code is BYYJCZ9 and the
TIDM is FCIF.
The LEI number of the Company is 549300ZQIYQVNIZGOW60
ABOUT FUNDING CIRCLE SME INCOME FUND
The Company is a registered closed-ended collective investment
scheme registered pursuant to the Protection of Investors
(Bailiwick of Guernsey) Law, 1987, as amended and the Registered
Collective Investment Scheme Rules 2015 issued by the Guernsey
Financial Services Commission ("GFSC").
The Company's investment objective is to provide shareholders
with a sustainable and attractive level of dividend income,
primarily by way of investment in Credit Assets as defined in the
Company's Prospectus.
The information required to be disclosed by Article 23 of
Directive 2011/61/EU on Alternative Investment Fund Managers (and
any implementing legislation or regulations thereunder) can be
found on the Company's website
(http://fcincomefund.com/documents).
IMPORTANT NOTICES
The information in this announcement may include forward-looking
statements, which are based on the current expectations and
projections about future events and in certain cases can be
identified by the use of terms such as "may", "will", "should",
"expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "believe" (or the negatives thereon) or other
variations thereon or comparable terminology. These forward-looking
statements, as well as those included in any related materials, are
subject to risks, uncertainties and assumptions about the Company,
including, among other things, the development of its business,
trends in its operating industry, and future capital expenditures
and acquisitions. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not
occur.
Each of the Company, Funding Circle Limited and Numis Securities
Limited and their respective affiliates expressly disclaims any
obligation or undertaking to update, review or revise any
forward-looking statement contained in this announcement whether as
a result of new information, future developments or otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUWOURWUANUUR
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