Funding Circle SME Income Fund Ltd British Business Bank Transaction (6849I)

TIDMFCIF

RNS Number : 6849I

Funding Circle SME Income Fund Ltd

27 November 2018

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OR TO US PERSONS.

Guernsey, 27 November 2018

Funding Circle SME Income Fund Limited

(the "Company")

British Business Bank Transaction

The Board is pleased to announce that the Company has established a funding transaction for loans to small and medium-sized businesses ("SMEs") via Funding Circle's UK platform and through the British Business Bank's ENABLE Funding Programme (the "BBB Transaction"). Under the terms of the transaction, the Department for Business, Energy and Industrial Strategy ("BEIS") - the British Business Bank's ("BBB") sole shareholder - will provide up to GBP150 million of funding via a senior, floating rate, loan. The Company will participate in the transaction by way of a junior investment. Subject to prevailing market conditions, the Company may consider refinancing the facility via public ABS markets to enhance returns further.

It is intended that funding will be drawn down to replace the Company's existing facilities as they are scheduled to amortise over the coming years, in line with the Company's stated policy to operate with leverage limited at 50% of NAV.

Richard Boleat, Chairman of the Company commented: "The Board welcomes this opportunity to work alongside the BBB to help achieve one of its key goals of increasing lending to the real economy by utilising an efficient transmission mechanism for stimulating lending to SME borrowers, whilst securing ongoing access to financing for shareholders."

In accordance with LR11.1.10, the Board also announces that it has entered into a related party transaction in the form of a new services agreement with Funding Circle Global Partners Limited ("FCGPL"), described in further detail below.

CONTACTS

Richard Boleat, Chairman

[phone]

[e-mail]

Sanne Group (Guernsey) Limited

Secretary and Administrator

[e-mail]

[phone]

PR Agency and Media Contact

TB Cardew

Tom Allison, Emma Crawshaw, Alycia MacAskill

[e-mail]

Numis Securities Limited

Nathan Brown, George Shiel

[phone]

[e-mail]

Investor Relations

[e-mail]

Website

www.fcincomefund.com

FURTHER INFORMATION

Capitalised terms used in this announcement shall have the meaning given to them in the Company's prospectus dated 29 August 2018 (the "Prospectus") (unless the context otherwise requires).

Transaction with BBB

The Company will invest in the BBB Transaction indirectly via UK IrishCo 2 which will retain a junior interest in the BBB Transaction SPV.

It is intended that UK IrishCo 2 will enter into an interest rate swap in relation to the senior loan. It is expected that the facility will be drawn down over a period of up to 18 months, after which there will be a reinvestment period of a further 18 months before the facility begins to amortise monthly, with principal repayment in relation to the Company's investment sequential to the senior loan. The facility comes with a 12-year legal maturity. UK IrishCo 2 will be consolidated by the Company for accounting purposes.

In approving the Company's participation in the BBB Transaction, the Board have satisfied themselves that the terms of the BBB Transaction are such that the Company's indirect investment in the BBB Transaction will not result in a breach, on a "look-through" basis, of the Investment Policy or any Portfolio Limits. As this indirect investment in Credit Assets may be made alongside third party participants, the Investment Policy and any Portfolio Limits will be applied to the relevant indirect investments on a pro rata basis, proportionate to the Company's indirect interest in the underlying Credit Assets.

RELATED PARTY TRANSACTION

Pursuant to LR 11.1.10, the Company discloses it has entered into a services agreement with Funding Circle Global Partners Limited ("FCGPL"). The terms of this agreement substantially replicate and replace those previously entered into by the Company and Funding Circle Limited, as detailed in the Company's prospectus published on 29 August 2018, as well as additionally providing for advisory services from FCGPL to the Company in relation to possible exits (whether by sale or otherwise) of all or part of the Company's interest in Leveraged Transactions. In consideration for the performance of these exit services, FCGPL may be paid a fee of up to 0.25% of the total value of the Leveraged Transaction to which the exit relates, in such proportions that the parties to the relevant exit agree, (each, an "Exit Fee") provided that the aggregate Exit Fees payable by the Company in respect of any 12 month period shall not exceed 0.25% of NAV.

DEALING CODES

The ISIN number of the Ordinary Shares is GG00BYYJCZ96, the SEDOL code is BYYJCZ9 and the TIDM is FCIF.

The ISIN number of the first class of C Share to be issued pursuant to the Share Issuance Programme will be GG00BG5KMP50, the SEDOL code will be BG5KMP5 and the TIDM will be FCIC.

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.

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

This announcement contains "forward-looking" statements, beliefs or opinions. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company and all of which are based on its directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "projects", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events, assumptions or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Board or the Company with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business concerning, amongst other things, the financial performance, liquidity, prospects, growth and strategies of the Company. These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement. Nothing in this announcement is, or should be relied on as, a promise or representation as to the future. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Rules and Transparency Rules of the FCA. No statement in this announcement is intended as a forecast or profit estimate.

Neither this announcement nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"), or distributed, directly or indirectly, in the United States or to US Persons (as such term is defined in Regulation S under the US Securities Act of 1933, as amended (the "Securities Act"). Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into Australia, Canada, Japan or South Africa or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for securities in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

Any securities mentioned in this announcement have not been and will not registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

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 [e-mail] or visit www.rns.com.

END

MSCUBOBRWVAAUAA

(END) Dow Jones Newswires

November 27, 2018 12:41 ET (17:41 GMT)