Fair Oaks Income Limited Distribution Policy (9226Z)
20 Septiembre 2022 - 1:00AM
UK Regulatory
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RNS Number : 9226Z
Fair Oaks Income Limited
20 September 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 which forms part of
domestic law in the United Kingdom pursuant to The European Union
(Withdrawal) Act 2018, as amended by The Market Abuse (Amendment)
(EU Exit) Regulations 2019
20 September 2022
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)
Distribution Policy
The Board announces that it has resolved to enhance the
Company's aggregate distributions to holders of the 2021 Shares,
with the objective of being meaningfully accretive to 2021
Shareholders and positively influencing the discount to NAV and
trading liquidity of the 2021 Shares.
The Board has authorised:
-- Share buyback programme. The Board has resolved to commence
buybacks of 2021 Shares in the secondary market, initially for
aggregate consideration of up to $20 million (equivalent to c.47
million shares at current mid-market price) funded from the
Company's current material cash balance. It is also intended that
buybacks will be used by the Company on an ongoing basis, subject
to the level of the prevailing price relative to NAV.
-- Dividend guidance and additional resource for buyback
programme. The Board considers that, in addition to deploying
current cash to the buyback programme, it will be accretive to 2021
Shareholder value, for as long as the discount to NAV remains wide,
to direct a portion of net income into funding share buybacks
rather than fully distributing as dividend. The Board therefore
guides that it intends to declare future quarterly dividends on the
2021 Shares at a consistent rate of 2 US cents, equivalent to an
annual dividend yield of 17% on the current price, with any excess
net income available to fund share buybacks. Establishing a
consistent level of dividend provides greater certainty about
future income for existing and prospective shareholders; based on
the last quarter's portfolio cashflows the 2 US cents quarterly
dividend would have been healthily covered.
The Board and Investment Adviser believe that recent movements
in the market price of the 2021 Shares are not being driven by
fundamentals and intend through these measures to demonstrate the
Company's capital discipline and confidence in the Company's
cashflows and NAV. The effectiveness of the Company's evolved
distribution policy will be closely monitored and the Company will
update shareholders in due course.
Enquiries:
Fair Oaks Income Limited
Email: contact@fairoaksincome.com
Web: www.fairoaksincome.com
Fair Oaks Capital Limited
Investor Relations
DDI: +44 (0) 20 3034 0400
Email: ir@fairoakscap.com
Sanne Fund Services (Guernsey) Limited
Ben Le Prevost
DDI: +44 (0) 1481 755524
Email: Ben.LePrevost@sannegroup.com
Numis Securities Limited
Nathan Brown / Matt Goss, Investment Banking
DDI: +44 (0) 20 7260 1426/1642
Email: n.brown@numis.com / m.goss@numis.com
Liberum Capital Limited
Chris Clarke, Investment Banking
DDI: +44 (0) 20 3100 2190
Email: chris.clarke@liberum.com
LEI: 2138008KETEC1WM5YP90
Notes
As at 31 August 2022, the cash held in respect of the 2021
Shares was c.$27.1 million. This cash balance is pro-forma for the
dividend announced in August 2022 and excludes proportional
ownership of cash at the underlying Master Funds.
The Board retains absolute discretion as to the execution,
pricing and timing of any share buybacks, subject to the conditions
set out in the authority to execute share buybacks granted approved
at the Company's 2022 annual general meeting. In accordance with
that authority the maximum price paid in respect of any share
buyback will be 105% of the average middle-market price for the
five business days immediately before the purchase. Any shares
purchased by the Company will be held in treasury.
Shareholders should be aware that a repurchase of shares on any
trading day may represent a significant proportion of the daily
trading volume in the shares and could exceed 25 per cent of the
average daily trading volume of the preceding 20 business days.
The dividend guidance contained within this announcement
represents guidance only and not a profit forecast. This guidance
should not be taken as an indication of the Company's expected or
actual current or future results and there can be no assurance that
the level of dividend indicated will be paid.
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 FOIF II LP and FOMC III LP) 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.
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END
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