22nd Jun 2015 08:58
LONDON (Alliance News) - Fair Oaks Income Fund Ltd Monday said it is considering an equity fundraising after the master fund into which it invests agreed to invest in a new collateralized loan obligation backed by a portfolio of US broadly syndicated, secured loans.
Fair Oaks Income Fund LP, the master fund, agreed to invest in USD26.4 million notional of equity notes, equivalent to three quarters of the total equity of Neuberger Berman CLO XIX.
The CLO's portfolio is managed by Neuberger Berman Fixed Income LLC, part of asset management firm Neuberger Berman LLC.
"This CLO's current target portfolio has a principal value of USD400 million across an expected 160 unique bank loan issuers, with an expected weighted average exposure per issuer of approximately 0.6%," Fair Oaks Income Fund said in a statement.
The general partner of the master fund has estimated that the potential total return for the investment is between 14% and 16% per annum, the company said.
"After this investment, the company will be 90% invested. In light of the current cash balance and the shareholder authorities granted at the recent annual general meeting and the continuing deployment into attractive investments, the company is considering its options to issue ordinary or C shares. It is expected that any new shares would be issued on terms comparable to recent issues by the company," Fair Oaks Income Fund said in a statement.
Fair Oaks Income Fund shares were untraded on Monday morning in London. The stock last traded at USD1.02.
By Samuel Agini; [email protected]; @samuelagini
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