Fair Oaks Income Limited Portfolio Update (6243I)

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RNS Number : 6243I

Fair Oaks Income Limited

20 June 2017

Fair Oaks Income Limited

20 June 2017

FAIR OAKS INCOME LIMITED (the "Company")

(Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended, with registered number 58123 and registered as a Registered Closed-ended Collective Investment Scheme with the Guernsey Financial Services Commission)

Portfolio Update

Fair Oaks Income Limited (the "Company") is pleased to announce that FOMC II LP ("Master Fund II") has made two investments which will result in the C share proceeds being fully invested. A further announcement will be made shortly with details of the conversion of the C Shares into 2017 Shares.

Master Fund II has entered into binding contracts to acquire, in the primary market, $30 million notional of equity notes, representing 78% of the total equity of Elevation CLO 2017-6, a new CLO backed by a portfolio of US broadly syndicated, secured loans.

The manager of this CLO's portfolio is 325 Fillmore, an affiliate of ArrowMark Partners ("ArrowMark"). Arrowmark, formerly known as Arrowpoint, is a 100% employee owned investment manager focused on credit-oriented fixed income and selected equity strategies with over $12bn in assets under management. ArrowMark manages seven CLOs.

This CLO's current target portfolio has a principal value of $400 million across an expected 187 bank loan issuers, with an expected weighted average exposure per issuer of approximately 0.6%. The potential total return for this investment as estimated by the general partner of Master Fund II is between 15% and 17% per annum (see Note 1).

In addition, the Company is pleased to announce that Master Fund II has also entered into binding contracts to invest $17 million in a newly established co-investment vehicle which will acquire, in the secondary market, majority equity positions in three CLOs managed by Mariner Investment Group ("Mariner"). Mariner is a subsidiary of Orix Corporation, a global financial services firm with over $300 billion in assets under management. The potential total return for this investment as estimated by the general partner of Master Fund II is between 15% and 16% per annum (see Note 1).

The acquisition vehicle for the Mariner CLOs will be managed by the general partner of Master Fund II, without any additional fees being charged to Master Fund II. Income and principal received by the acquisition vehicle will be distributed to Master Fund II for distribution or reinvestment in accordance with its terms.

Both investments will be funded by a final draw-down from the C Share pool, following which the C Shares will have an interest in Master Fund II and c.$2 million of cash. The Investment Adviser's strong access to primary and secondary opportunities has provided Master Fund II with a transaction pipeline which has resulted in an effective deployment of capital ahead of original expectations, and which the General Partner believes continues to offer attractive investment opportunities for the Master Fund.

Enquiries:

Fair Oaks Income Limited

Email: [e-mail]

Web: www.fairoaksincome.com

Fair Oaks Capital Limited

Miriam Macor

DDI: [phone]

Email: [e-mail]

Praxis Fund Services Limited

Ben Le Prevost

DDI: [phone]

Email: [e-mail]

Numis Securities Limited

Nathan Brown, Corporate Broking Advisory

DDI: [phone]

Email: [e-mail]

Fair Oaks Income Limited

Fair Oaks Income Limited is a registered closed-ended investment company incorporated in Guernsey. The Company was admitted to trading on the Specialist Fund Market of the London Stock Exchange (now the Specialist Fund Segment of the Main Market of the London Stock Exchange) on 12 June 2014.

The investment policy of the Company is to invest (either directly and/or indirectly through the Master Fund and/or Master Fund II) in US and European CLOs or other vehicles and structures which provide exposure to portfolios consisting primarily of US and European floating-rate senior secured loans and which may include non-recourse financing. The Company will implement its investment policy by remaining invested in the Master Fund and making new investments in Master Fund II.

Notes

1) The General Partner's estimate of the potential total return for this investment in calculated across certain scenarios and subject to certain assumptions. This and any other references herein to potential future returns or distributions are targets and not forecasts and there can be no guarantee or assurance that they will be achieved.

This document is for information purposes only and is not an offer to invest. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.

This information is provided by RNS

The company news service from the London Stock Exchange

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June 20, 2017 09:00 ET (13:00 GMT)