Net Asset Value

UK Mortgages Ltd - Net Asset Value

PR Newswire

London, November 13

UK MORTGAGES LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 60440)

LEI 549300388LT7VTHCIT59

Final Net Asset Value

UKML RNS: Commentary accompanying UK Mortgages Limited August 2020 NAV

The UKML NAV per share was calculated for August 2020 month end at 81.02 pence per share, an increase of 0.61 pence per share.

As part of the year-end reporting and audit process, the Company’s IFRS 9 Expected Credit Loss (ECL) provisioning methodology was significantly revised, moving from a series of portfolio level assumptions to a far more granular loan-by-loan level analysis and stress testing process, along with newly developed additional stresses to incorporate the introduction of mortgage payment holidays in the UK following the Covid-19 outbreak. This resulted in an increased provision of approximately £1m which was incorporated into the NAV for June 2020. Subsequently it was identified that the change in methodology, also captured an element of loss assumption that had previously been included in the amortised cost valuation, essentially creating duplication and this is now being corrected. As a result of this and model adjustments identified in our audit a further ECL provision of approximately £0.5m has been made, but this has been more than offset by a £1.8m increase from the removal of the duplication.

Additionally, the increase in NAV was driven by the income earned from the Company’s underlying investments.

Following the refinancing of the Oat Hill No.1 transaction at the end of August, the Company completed the repurchase of c. 41m shares during September using capital released from the refinancing as planned. As these shares were purchased at a discount, this will result in uplift in NAV, estimated at approximately 2.24 pence per share which will be reflected in next month’s NAV for September.

Meanwhile, the Company’s investments continue to perform in line with expectations.

More details will be available in the Company’s next factsheet to be published shortly.

Enquiries:Northern Trust International Fund Administration Services (Guernsey) LimitedAndrew Bonham 44 (0)1481 745302

Date: 13 November 2020