Results of Placing C Shares (5526Z)

TIDMCIF TIDMCIFU TIDMCIFC

RNS Number : 5526Z

Carador Income Fund PLC

19 March 2012

Carador Income Fund plc

Conversion of C Shares

19 March 2012

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

Further to the announcement on 20 February 2012, Carador Income Fund plc (the "Company") announces that the U.S Dollar C Shares currently in issue will be converted into U.S. Dollar Shares at the following rate calculated in accordance with the Company's prospectus dated 6 December 2011 (the "Prospectus").

1.2012 U.S. Dollar Shares for every 1 U.S. Dollar C Share (the "Conversion Ratio")

On the basis of the Conversion Ratio, a holder of 1,000 U.S Dollar C Shares will receive 1,201 U.S. Dollar Shares in accordance with the following timetable:

 
 Class C Conversion Time               26 March 2012 
 Cancellation of the U.S. Dollar       26 March 2012 
  C Shares on the Official List 
  and the London Stock Exchange 
 Admission of new U.S. Dollar          26 March 2012 
  Shares to the Official List 
  and the London Stock Exchange 
 Share certificates in respect          9 April 2012 
  of new U.S. Dollar Shares expected 
  to be despatched by 
 

The U.S. Dollar C Shares will be delisted on 26 March 2012 and an application has been made for 92,299,895 new U.S. Dollar Shares to be admitted to the Official List and to trading on the London Stock Exchange from the same date.

Following conversion of the U.S. Dollar C Shares, the General Pool Shares in issue is expected to consist of the following:

   --      404,926,977 U.S. Dollar Shares trading under ticker CIFU 
   --      13,914,839 Euro Shares trading under the ticker CIF 

The number of voting rights in the Company immediately following Conversion is expected to be 418,841,816.

The new U.S. Dollar Shares arising on Conversion will rank pari passu with, and will have the same rights as, the U.S. Dollar Shares of the Company already in issue. For the avoidance of doubt, the U.S Dollar C Shares (on the basis that they were converted into U.S. Dollar Shares at the ratio determined at the Class C Calculation Time, 29 February 2012) ranked equally for dividends with U.S. Dollar Shares immediately following the Class C Calculation Time,. Following Conversion the new U.S. Dollar Shares arising will rank equally for dividends with existing U.S. Dollar Shares.

The Company now has net assets of U.S. $364,904,686 and its Shares continue to trade at a premium to Net Asset Value. As at 15 March 2012 the Company estimates that the portfolio was 98.2% invested and the annualised dividend yield based on the last declared dividend for the US. Dollar Shares of $0.0330 and the closing share price at 14 March 2012 is 14.75%. The estimated cash flow cover for the dividend on the U.S. Dollar Shares for the 3 months to 31 March 2012 is 1.5 times.

The Company believes there continues to be strong opportunity in the secondary CLO market, where the Company is focused, particularly as reinvestment periods end for such CLOs and the market normalises. The Company should benefit from the 'wall of maturities' in the Bank Loan market in the period 2016 to 2018 and the resulting 'pull to par' on both its underlying Bank Loans and CLO positions. Current default rates on US Bank Loans are at a near historic low and the Investment Manager believes the outlook remains positive. Based on the portfolio as at 29 February 2012 and cash flows of the CLO tranches to maturity, a cumulative annual default of 12% from 2013 would need to occur for only the current NAV to be returned to investors().

The Company continues to attract interest from existing and new investors and, if appropriate, the Directors will consider further issues of Shares, to satisfy demand. Any issue will be in light of the investment opportunities in the CLO secondary market, bearing in mind the Directors intention to hold a continuation vote at the annual general meeting in 2017.

Terms defined in the Prospectus shall have the same meaning in this Announcement except where otherwise stated.

For further information please contact:

 
GSO Capital Partners International LLP 
Miguel Ramos-Fuentenebro                 [phone] 
 
Singer Capital Markets Limited           [phone] 
James Maxwell 
 
Dexion Capital plc 
Ravi Anand                               [phone] 
 

([1]) Cash flows estimated using Intex and subject to certain assumptions. Recovery rates of 70% in case of default, 15% constant prepayment rate, USD and EUR forward Libor curves as at 9 March 2012. Assumes no defaults in 2012, constant default rate thereafter. Other assumptions available on request. It should be noted that assumptions are not intended to reflect an actual outcome and are purely indicative. The bases, models and assumptions could prove to be incorrect and should not be relied upon in any way whatsoever as a forecast or indicative or predictive of returns on investments made by the Company, cashflows or default rates. The results are based on the current portfolio of the Company which will change and may change significantly. The default rates referred to are not intended, and should not be relied upon, to indicate the "worst case" scenario which could apply to the Company.

This document and the information contained herein is not for release, publication or distribution (directly or indirectly) in or into the United States, Canada, Australia or Japan or to any "US person" as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act") or into any other jurisdiction where applicable laws prohibit its release, distribution or publication. It does not constitute an offer of securities for sale anywhere in the world, including in or into the United States, Canada, Australia or Japan. No recipient may distribute, or make available, this document (directly or indirectly) to any other person. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of this document may in certain jurisdictions be restricted by law. Accordingly, recipients represent that they are able to receive this document without contravention of any applicable legal or regulatory restrictions in the jurisdiction in which they reside or conduct business.

This document has been prepared by Carador Income Fund PLC ("Carador") and is the sole responsibility of Carador. No liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document is accepted and no representation, warranty or undertaking, express or implied, is or will be made by Carador, GSO Capital Partners International LLP ("GSOCPI") or any of their respective directors, officers, employees, advisers, representatives or other agents ("Agents") for any information or any of the opinions contained herein or for any errors, omissions or misstatements. None of GSOCPI nor any of its respective Agents makes or has been authorised to make any representation or warranties (express or implied) in relation to Carador or as to the truth, accuracy or completeness of this document, or any other written or oral statement provided. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in this document and nothing in this document is or should be relied on as a promise or representation as to the future. Neither the issue of this document nor any part of its contents constitutes an offer to sell or invitation to purchase any securities of Carador or any other entity or any persons holding securities of Carador.

Carador will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and investors will not be entitled to the benefits of that Act. The securities described in this document have not been and will not be registered under the Securities Act, or the laws of any state of the United States. Consequently, such securities may not be offered, sold or otherwise transferred within the United States or to or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, applicable state laws and under circumstances which will not require Carador to register under the Investment Company Act. No public offering of the securities is being made in the United States.

This document may contain certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, forward-looking statements can be indentified by terms such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will", and "would", or the negative of those terms or other comparable terminology. The forward-looking statements are based on Carador's beliefs, assumptions, and expectations of future performance and market developments, taking into account all information currently available. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known or are within Carador's control. If a change occurs, Carador's business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Some of the factors that could cause actual results to vary from those expressed in forward-looking statements, include, but are not limited to: the factors described in this document; the rate at which Carador deploys its capital in investments and achieves

expected rates of return; Carador or GSOCPI's ability to execute Carador's investment strategy, including through the identification of a sufficient number of appropriate investments; the continuation of GSOCPI as investment manager of Carador's investments; the continued affiliation with GSOCPI of its key investment professionals; Carador's financial condition and liquidity; changes in the values of or returns on investments that the Company makes; changes in financial markets, interest rates or industry, general economic or political conditions; and the general volatility of the capital markets and the market price of Carador's shares.

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Any forward-looking statements are only made as at the date of this document, and Carador neither intends nor assumes any obligation to update forward-looking statements set forth in this document whether as a result of new information, future events, or otherwise, except as required by law or other applicable regulation. In light of these risks, uncertainties, and assumptions, the events described by any such forward-looking statements might not occur. Carador qualifies any and all of their forward-looking statements by these cautionary factors. Please keep this cautionary note in mind while reading this document.

Prospective investors should take note that any securities may not be acquired by investors using assets of any retirement plan or pension plan that is subject to Part 4 of Subtitle B of Title I of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA") or section 4975 of the United States Internal Revenue Code of 1986, as amended (the "Code"), entities whose underlying assets are considered to include "plan assets" of any such retirement plan or pension plan, or any governmental plan, church plan, non-U.S. plan or other investor subject to any state, local, non-U.S. or other laws or regulations similar to Title I or ERISA or Section 4975 of the Code or that would have the effect of the regulations issued by the United States Department of Labor set forth at 29 CFR Section 2510.3-101, as modified by section 3(42) of ERISA.

This information is provided by RNS

The company news service from the London Stock Exchange

END

CONBLGDXGUBBGDL