UK Mortgages Ltd - Result of AGM and Update

UK MORTGAGES LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 60440)

(“the Company”)

Result of Annual General Meeting and Update

7 December 2016

Please be advised that at the Annual General Meeting (the “AGM”) of the Company held on 7 December 2016 at 10.00am, all resolutions set out in the AGM Notice sent to shareholders were duly passed. The breakdown of votes is detailed at the end of this notice.

Investment update

The Board of UK Mortgages Limited (“UKML”) and TwentyFour Asset Management LLP (“TwentyFour”) would like to thank investors for their support and for their patience whilst the investment of the Fund’s remaining capital is finalised.  As expressed in our last update to investors and during the investor roadshow and webinar in November we continue to work extremely hard to achieve a fully covered dividend as soon as possible.

In that regard, we are pleased to advise investors that we are now at an advanced stage of negotiation regarding the purchase and financing of an existing pool of mortgages, that will deploy the Fund’s remaining available capital. During the aforementioned roadshow and webinar we discussed a transaction of future origination flow – we continue work on this transaction, however it is highly likely that the purchase of the existing pool mentioned above will complete first.

Regarding the fund’s existing investments:

·         The pool of mortgages purchased from The Coventry Building Society continues to demonstrate exceptional underlying credit performance.  As mentioned during the roadshow, we have been updating our model assumptions following the first year of performance history since purchase and despite the fall in absolute rates following the UK Bank Base Rate cut in August, the improvements in financing costs and the excellent credit performance means that we now expect an IRR in the region of 7.63% for the Fund’s investment in the portfolio, an improvement of 28bps from our initial assumption.

·         The pipeline of mortgage product for the TML investment is building steadily, drawing down on the committed capital as per the timeframe at closing.  The active pipeline is now nearing £40m, in line with our expectations. The first quarter is typically extremely busy for UK mortgage lenders with renewed interest from buyers and sellers, and we believe TML is now well placed for this period.

A further announcement will be made on signing of terms relating to UKML’s next investment.

Details of the proxy voting results which should be read alongside the Notice sent to shareholders on 7 November 2016 are noted below.  A vote withheld is not a vote in law and has not been counted in the votes for and against a resolution.

Ordinary Resolutions	For	Against	Withheld
1	127,776,715	5,680,259	6
2	133,456,974	0	6
3	127,776,715	0	5,680,265
4	133,456,974	0	6
5	133,456,974	0	6
6	133,456,974	0	6
7	133,456,974	0	6
8	133,456,974	0	6
9	141,958,629	0	15,839,036
10	133,456,974	0	6
11	133,456,974	0	6
12	133,456,974	0	6

At the same AGM noted above, the following Extraordinary and Special Resolutions were also passed:

Extraordinary Resolution 1:

(133,091,807 in favour / 365,167 against / 6 withheld)

            That, in addition to and without prejudice to any authority currently in force, (and in addition to any power conferred on them by ordinary resolution 12 above), the Directors be and are authorised generally and unconditionally in accordance with Article 6.7 of the Articles to exercise all powers of the Company to issue equity securities (as defined in Article 6.1.1(a)) for cash as if the members’ pre-emption rights contained in Article 6.2 of the Articles did not apply to any such issue pursuant to the general authority conferred on them by the ordinary resolution numbered 11 above (as varied from time to time by the Company in general meeting):

a)     pursuant to an offer of equity securities open for acceptance for a period fixed by the Directors where the equity securities respectively attributable to the interests of holders of Ordinary Shares are proportionate (as nearly as may be) to the respective numbers of Ordinary Shares held by them but subject to such exclusions or other arrangements in connection with the issue as the Directors may consider necessary, appropriate or expedient to deal with equity securities representing fractional entitlements or to deal with legal or practical problems arising in any overseas territory, the requirements of any regulatory body or stock exchange, or any other matter whatsoever; and

b)     provided that (otherwise than pursuant to sub-paragraph (a) above) this power shall be limited to the allotment of equity securities up to an aggregate nominal value equal to 10% of the total number of shares in issue in the Company at the date of the passing of this extraordinary resolution, and provided further that (i) the number of equity securities to which this power applies shall be reduced from time to time by the number of treasury shares which are sold pursuant to any power conferred on the Directors by resolution 12 above and (ii) no issue of equity securities shall be made under this power which would result in Ordinary Shares being issued at a price which is less than the net asset value per Ordinary Share as at the latest practicable date before such allotment of equity securities as determined by the Directors in their reasonable discretion,

            and such power hereby conferred shall expire on whichever is the earlier of: (i) the conclusion of the annual general meeting of the Company to be held in 2017; or (ii) the date 15 months after the date on which this extraordinary resolution is passed (unless renewed, varied or revoked by the Company prior to that date) save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be issued after such expiry and the Directors may issue equity securities in pursuance to such offers or agreements as if the authority conferred hereby had not expired.

Special Resolution 1:

(133,456,974 in favour / 0 against / 6 withheld)

That, the Amended and Restated Articles of Incorporation in the form produced to the meeting and initialled for identification by the Chairman of the Meeting be adopted as the Articles of Incorporation of the Company in substitution for and to the exclusion of all previous articles of incorporation.

Enquiries:

Northern Trust International Fund Administration Services (Guernsey) Limited
The Company Secretary
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel:       [phone]

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