TIDMJAC
RNS Number : 9108J
Close Fund Mngmt Portfolios II PCC
06 July 2011
FOR IMMEDIATE RELEASE
6 July 2011
Close Fund Management Portfolios II PCC Limited (the
"Company")
- Japanese Accelerated Return Fund II (the "Cell")
In order to fulfil the investment objective for the Cell, the
Company for the account of the Cell holds seven Debt Securities,
including one issued by Glitnir Banki hf and one issued by
Kaupthing Bank hf. These Debt Securities have a nominal value of
GBP7,100,000 each and in aggregate account for approximately 30 per
cent of the total nominal value of the Cell's Debt Securities. In
the event of a default by an issuer of a Debt Security purchased by
the Company on behalf of the Cell, the Cell will rank as an
unsecured creditor in respect of sums due from the issuer of such
Debt Security. In such event, the Cell may (in respect of that Debt
Security) receive a lesser amount of money than the amount due
pursuant to the terms of the Debt Security, may actually receive
the money at a different time than would otherwise have been the
case and the amount received may be zero. Any losses will be borne
by the Cell and returns to Shareholders would be significantly
adversely affected.
The Winding-Up Boards for Glitnir Banki hf and Kaupthing Bank hf
asked all parties claiming debts of any sort or other rights to
submit claims by 26 November 2009 and 30 December 2009
respectively. Consequently the Company on behalf of the Cell
submitted claims to each of Glitnir Banki hf and Kaupthing Bank hf
for GBP12,780,000 in respect of each one of these Debt Securities,
such amounts being equal to the maximum redemption proceeds of
GBP1.80 per GBP1 nominal. The Winding-Up Committee of Kaupthing
Bank hf has written to the Company to advise it accepts ISK
1,356,668,000 of the claim (approximately equivalent to GBP7.4
million as at 30 June 2011). The Winding-Up Board of Glitnir Banki
hf has postponed a decision on the Company's claim until 31 August
2011.
Shareholders should be aware that it is likely that Kaupthing
Bank hf may not pay the Company on account of the Cell the full ISK
1,356,668,000 or, indeed, anything at all and that Glitnir Banki hf
may not pay the Company on account of the Cell the full amount
claimed or anything at all. Whilst recovery rates from issuers that
default vary, and in this case are currently unknown, the worst
case scenario would see the Cell receive nothing from either
institution at the maturity of the relevant Debt Securities. The
amounts claimed or accepted should not be considered forecasts of
the amounts which will be due from Kaupthing Bank hf or Glitnir
Banki hf on the maturity of the relevant Debt Securities, nor are
they a reflection of the net asset value per Cell Share. The
redemption proceeds per Cell Share per the Company's investment
objective for the Cell will not be known until after the end of the
life of the Cell when the closing value of the Nikkei 225 Index
(the "Index") on the End Date is known and may not be the amounts
claimed or accepted.
Any claims which are paid may be paid before or after the end of
the life of the Cell and in the case of early payment it may not be
possible to reinvest the proceeds in Debt securities which
replicate the investment characteristics of the original Debt
Securities. Any claims which are paid may be paid in currencies
other than Sterling and/or in forms other than cash. Any payments
received by the Company on account of the Cell may therefore be
subject to currency fluctuations and/or other market movements.
As the Index has closed down more than 50 per cent from its
Start Value (i.e. below 7,978.79) on an Index Business Day between
the Start Date and the End Date, an Index Barrier Breach has
occurred. In these circumstances, the amount which the Company for
the account of the Cell will be required to pay on behalf of the
Cell following the Index Barrier Breach will reduce its assets by
an amount which reflects the decline, if any, in the Index between
the Start Date and the End Date.
The official closing level of the Index as at 30 June 2011 was
9,816.09 . If the Index closed at this level on the End Date, the
redemption proceeds would be approximately 61 pence subject to
there being no counterparty default or any unforeseen
circumstances. In the event of both Glitnir Banki hf and Kaupthing
Bank hf defaulting and having a zero recovery rate and there being
no insolvency of any other issuer of Debt Securities held by the
Company or any other event of default or any unforeseen
circumstances, the redemption proceeds would be approximately 31
pence. If the Index were to fall by approximately a further 50.60
per cent to a level of approximately 4,852.19 as at the End Date,
the redemption proceeds of the Shares would be zero.
Payoff Profile
The tables below illustrate how the redemption proceeds of the
Shares might vary for different ending levels of the Index (1)
subject to there being no counterparty default or any unforeseen
circumstances, and (2) on the assumption of zero recovery in the
event of default of the Debt Securities issued by Glitnir Banki hf
and Kaupthing Bank hf and there being no insolvency of any other
issuer of Debt Securities held by the Company or any other event of
default or any unforeseen circumstances
Final Nikkei 225 Final Capital Final Capital
Index* Entitlement (1) Entitlement (2)
0 0 0
500 3 0
1,000 6 0
1,500 9 0
2,000 12 0
2,500 15 0
3,000 18 0
3,500 21 0
4,000 25 0
4,500 28 0
5,000 31 0
5,500 34 4
6,000 37 7
6,500 40 10
7,000 43 13
7,500 46 16
8,000 50 19
8,500 53 22
9,000 56 25
9,500 59 29
10,000 62 32
10,500 65 35
11,000 68 38
11,500 72 41
12,000 75 44
12,500 78 47
13,000 81 51
13,500 84 54
14,000 87 57
14,500 90 60
15,000 93 63
15,500 97 66
16,000 101 70
16,500 116 81
17,000 132 92
17,500 148 103
18,000 163 114
18,500 179 125
19,000 180 125
* As at 21 December 2011
(1) Subject to there being no counterparty default or any
unforeseen circumstances
(2) The table contemplates default and zero recovery in respect
of the Debt Securities issued by Glitnir Banki hf and Kaupthing
Bank hf. The redemption proceeds set out in this table is an
example only and not a forecast of actual payments and is subject
to there being no insolvency of any other issuer of Debt Securities
held by the Company or any other event of default or any unforeseen
circumstances. The attention of shareholders is drawn to the
section headed "Risk Factors" in the Prospectus.
Defined terms in this announcement shall have the meaning
assigned to them in the Prospectus.
As at 30 June 2011 the investments held by the Company for the
account of the Cell were:
NOMINAL
DEBT SECURITIES PORTFOLIO HOLDINGS
GBP
Abbey National Treasury Services Plc EMTN 11
January 2012 4,200,000
Glitnir Banki EMTN 11 January 2012 7,100,000
HBOS Treasury Services EMTN 11 January 2012 7,100.000
Irish Life & Permanent EMTN 11 January 2012 7,100,000
Kaupthing hf EMTN 11 January 2012 7,100,000
KBC IFIMA EMTN 11 January 2012 7,100,000
Royal Bank of Scotland EMTN 11 January 2012 7,000,000
TOTAL
GBP
46,700,000
The Company has also sold for the account of the Cell a Put
option with a notional amount of GBP46,700,000. The performance of
the Put option is linked to the performance of the Index. At an
Index value of 15,957.57 or above at the close of business on 21
December 2011, the Put option will be worth GBPNil at maturity. If
the Index is below 15,957.57 at 21 December 2011, the Put option
will be worth at maturity a percentage of the notional value, being
GBP46,700,000, equivalent to the percentage fall in the level of
the Index over the Calculation Period.
There are currently 46,700,000 Shares in issue.
Capital at Risk Products
The Company has been advised that the Company is a Capital at
Risk Product as defined by the Financial Services Authority (FSA).
Investors should refer to the FSA factsheet, which is available
at
www.moneymadeclear.fsa.gov.uk/products/investments/types/pooled/structur
ed_products.html
The return of capital invested at the end of the investment
period is not guaranteed and therefore the investor may get back
less than was originally invested. Investors should not enter into
a transaction to purchase Shares unless they are prepared to lose
some or all of the money they have invested.
They should satisfy themselves that the Shares are suitable for
them in the light of their circumstances and financial position,
and if in any doubt they should seek professional advice. Investors
may only achieve the rate of return advertised over a set period
and the return may depend on specific conditions being met.
This data has been provided by Close Investments Limited. Close
Investments Limited may source data from third party data providers
such as, but not limited to, Bloomberg. Close Investments Limited
accepts no responsibility or liability for the accuracy of data
sourced from such third parties. All data in this document has been
procured and may have been acted upon by Close Investments Limited
for its own purpose. The results are being made available to you
for information purposes only and incidentally. This data is
provided purely for information purposes only and should not be
relied upon.
For further information contact:
Anson Fund Managers Limited
Secretary
Tel: 01481 722260
E&OE - In transmission
This information is provided by RNS
The company news service from the London Stock Exchange
END
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