Net Asset Value(s)

UK Mortgages Ltd - Net Asset Value(s)

PR Newswire

London, March 17

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 January 2021 NAV

The UKML NAV per share was calculated for January 2021 month end at 81.47 pence per share, a decrease of 0.32 pence per share.

As per the RNS dated 08 February 2021, the Company has agreed the sale of its two Coventry portfolios; Cornhill No.6 which completed on 25 February 2021 and Malt Hill No.2, subject to successful completion, on the interest payment date in May 2021.

When these sales were proposed to shareholders in late 2020, it was highlighted that an early realisation may result in a negative impact on the NAV. The improved execution that was actually achieved will reduce that impact, but not eradicate it. This impact will be reflected in several stages as the various components of the transactions are recognised in line with the Company’s accounting policy.

Firstly, whilst the sales have settlement dates in February and May respectively, the loss provision for these sales of the assets, versus their respective amortised cost valuations is the key driver for the decrease in this January NAV, which is partially offset by the regular monthly income generated by the Company’s investments.

Furthermore, both portfolios were hedged by interest rate swap transactions. The termination of these swaps is also expected to have a negative impact on the NAV, the quantum of which will be reflected in the monthly NAVs, for their respective terminations in February and May 2021.

As also previously announced, the net proceeds of these sales are expected to return in the region of £40,000,000 to be returned to shareholders in two tenders, the first of which will return £20,000,000 at 75p per Ordinary Share and take place at the Company’s Extraordinary General Meeting on the 23rd March. The impact of this first tender will be reflected in the March NAV. The second tender is expected to take place in June following the completion of the expected sale of Malt Hill No.2 at the end of May 2021 and will therefore most likely be reflected in the June NAV.

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) Limited

Andrew Bonham 44 (0)1481 745302

Date: 17 March 2021