NBDG Nb Distressed Debt Investment Fund Limited

 
TIDMNBDG 
 
 
   NB Distressed Debt Investment Fund Limited 
 
   Portfolio Update - Global Shares 
 
   NB Distressed Debt Investment Fund Limited ("NBDDIF") is a 
Guernsey-incorporated closed-ended investment company that launched in 
June 2010. NBDDIF's primary objective is to provide investors with 
attractive risk-adjusted returns through long-biased, opportunistic 
stressed, distressed and special situation credit-related investments 
while seeking to limit downside risk. 
 
   NBDDIF owns holdings diversified across distressed, stressed and special 
situations investments, with a focus on senior debt backed by hard 
assets. The portfolio is managed by the Distressed Debt team at 
Neuberger Berman, which sits within what we believe is one of the 
largest and most experienced non-investment grade credit teams in the 
industry. 
 
   The New Global Share Class ("NBDG") was created in March 2014 and aims 
to capture the growing opportunity in distressed debt globally. NBDG is 
subject to an investment period ending on 31 March 2017, following which 
the assets will be placed into run-off. 
 
   The New Global Shares are one of three classes of shares in NBDDIF. The 
other classes are the Ordinary Share Class and the Extended Life Share 
Class. The Ordinary Share Class is subject to an investment period which 
ended on 10 June 2013 and the Extended Life Share Class is subject to an 
investment period which will end on 31 March 2015. Separate factsheets 
are produced for those classes. 
 
   Summary 
 
   The fourth quarter proved challenging from a mark-to-market perspective. 
However, we remain optimistic about the long-term return potential of 
the distressed market. In the fourth quarter of 2014 we exited two 
positions which contributed positively to NAV.  We see significant 
upside potential in the existing portfolio, which we expect to realise 
as we restructure and exit investments. We also believe the pipeline of 
distressed debt opportunities remains compelling in our sectors and 
geographies of interest. 
 
   Portfolio 
 
   As at 31 December 2014, we had deployed approximately 70.5% of NBDG's 
capital. NBDG had investments in 27 names across 11 industries. The 
largest sector concentrations were in lodging & casinos, power 
generation, surface transportation and shipping.  Our level of 
deployment did not materially increase during the quarter, as we were 
selective in making new investments in a dislocated market.  However, we 
did add new positions in the shipping and oil & gas sectors.  We also 
added incremental exposure to existing names in the real estate, power 
generation and industrial sectors. 
 
   NBDG's NAV per share decreased 4.5% in the fourth quarter of 2014, to 
GBP 89.95 from GBP 94.18 per share. The primary drivers of NBDG's NAV 
decrease were secondary market price declines of acquired assets. The 
market environment for distressed debt was challenging in the fourth 
quarter, as indicated by the HFRI Distressed/Restructuring Index(1) 
which declined 3.6% in the quarter. During the fourth quarter of 2014 we 
saw the first two exits of NBDG, which both added positively to NAV and 
are described in detail below. We are working towards key restructuring 
milestones on our existing investments, which we anticipate can 
ultimately result in profitable exits. 
 
   Market Update(2) 
 
   We continue to believe the pipeline of distressed debt opportunities in 
real estate, transportation and energy debt is compelling. EU banks in 
particular increased their disposal of European and U.S. loans and 
assets to EUR64 billion in 2013, versus EUR46 billion in 2012, EUR36 
billion in 2011 and EUR11 billion in 2010. EUR67 billion of debt sales 
have occurred in the first nine months of 2014, on a run-rate to exceed 
EUR89 billion for the full year. However, over EUR1 trillion of 
non-performing loans remain on EU banks' balance sheets. We believe that 
the European regulatory environment may continue to facilitate further 
recognition and disposal of distressed loans.  Additionally, the recent 
volatility in energy markets has presented new opportunities in the U.S. 
 
   Exits 
 
   In the fourth quarter we saw two exits in NBDG.  These exits generated 
approximately GBP0.6 million of total income and gains for NBDG. 
 
   Investment 1: We purchased $3.0 million face value of trade claims at 
37% of par of a shipping company which had entered insolvency 
proceedings.  Pursuant to a plan of restructuring, the trade claims were 
expected to be exchanged for new debt and post-reorganization equity. 
At the time of purchase, we believed that the trade claim purchase price 
represented a discount relative to the expected value of 
post-reorganization securities.  Subsequent to the restructuring, we 
sold the post-reorganization equity and debt in the secondary market. 
Total income from this investment was GBP0.2 million. 
 
   Investment 2: We purchased $6.4 million face value of term loans at 83% 
of par, secured by petroleum tanker ships.  At the time of our purchase, 
we believed that our purchase price represented a significant discount 
relative to the value of the collateral.  Subsequent to our purchase, 
the equity sponsor agreed to purchase our debt at a premium to our cost 
basis.  Total income from this investment was GBP0.4 million. 
 
   Data as at December 31, 2014 unless otherwise noted. Past performance is 
not indicative of future returns. All comments unless otherwise stated 
relate to NBDG. 
 
   1.  The HFRI Distressed/Restructuring Index reflects distressed 
restructuring strategies which employ an investment process focused on 
corporate fixed income instruments, primarily on corporate credit 
instruments of companies trading at significant discounts to their value 
at issuance or obliged (par value) at maturity as a result of either 
formal bankruptcy proceeding or financial market perception of near term 
proceedings (provided by Hedge Fund Research, Inc.). 
 
   2.  Source:  Data from PWC dated July 2014 and December 2014. 
 
   -ENDS- 
 
   For further information please contact: 
 
   Neuberger Berman Europe Limited                              +44 (0)20 
3214 9000 
 
   Damian Holland 
 
   Financial Dynamics                                                           +44 (0)20 7269 7297 
 
 
   Neil Doyle 
 
   Ed Berry 
 
   Laura Ewart 
 
 
 
   An accompanying factsheet on the information provided above can be found 
on the Company's website www.nbddif.com. Neither the contents of the 
Company's website nor the contents of any website accessible from 
hyperlinks on the Company's website (or any other website) is 
incorporated into, or forms part of, this announcement. 
 
   This announcement is distributed by NASDAQ OMX Corporate Solutions on 
behalf of NASDAQ OMX Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: NB DISTRESSED DEBT INVESTMENT FUND LIMITED RED ORD NPV via 
Globenewswire 
 
   HUG#1892618 
 
 
  http://www.nbddif.com/ 
 

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