16th Jan 2015 08:39
LONDON (Alliance News) - Fair Oaks Income Fund Ltd Friday declared a dividend of 4.25 US cents per share as it revealed that it will change the frequency of future payments to shareholders to pay dividends every month instead of on a quarterly basis.
In a statement, Fair Oaks Income Fund said the dividend, which is payable for the time since it went public last June to the end of 2014, represents an annualised yield of 7.7% at the initial public offering price of USD1.00 per share, ahead of the target published in its prospectus for the ramp-up period of at least 5%.
Fair Oaks Income Fund shares were up 1.7% at USD1.06 inside one hour of the market open on Friday.
The fund seeks exposure to US and European collateralized loan obligations, which are securitization vehicles backed predominantly by commercial loans, 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.
Fair Oaks Income Fund said its first monthly dividend will be paid for January, with shareholders to receive payment in mid to late February.
On the basis of current income projections, the fund plans to declare eleven monthly dividends of a minimum of 0.7 US cents per share, though it cautioned that this is a target and not a profit forecast, and a larger twelfth interim dividend that should result in "substantially all" net income generated in 2015 being distributed to shareholders.
The fund said it will will continue to target an annual net total return of 12% to 14% over the planned life of the master fund, Fair Oaks Income Fund LP, into which it invests. It expects dividends to be the "principal element" of the return to shareholders.
"The master fund has been able to ramp up its investments effectively taking advantage of market opportunities and Fair Oaks Capital's strong sourcing abilities," Claudio Albanese, chairman, said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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