Update on Investment Manager and strategy review

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, nor as to the terms on which any offer will be made

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

14 August 2020

Pollen Street Secured Lending plc ("PSSL" or the "Company")

Update on Investment Manager and strategy review

As announced on 25 February 2020, the Board of PSSL has served 12 months' notice on the Investment Manager, PSC Credit Holdings LLP, to terminate the Investment Management Agreement ("IMA"). The Board has progressed discussions with a number of potential replacement investment managers and has now concluded on the preferred successor. The Board announces that it has today entered into an interim advisory agreement with Waterfall Asset Management, LLC ("Waterfall"), the preferred successor, for the provision of advisory services which includes providing the Board with proposals for the transfer of the management of the Company's portfolio of investments to a replacement investment manager. It is expected that Waterfall will be confirmed and appointed as the replacement investment manager as soon as practicable. Waterfall is a well-qualified and experienced investment manager with considerable expertise in the alternative credit sector. Its selection as the preferred replacement investment manager follows a competitive process in which the Board received a number of high quality proposals and conducted detailed discussions and negotiations with candidates which saw Waterfall produce the most compelling proposal. The Board expects the current Investment Manager to co-operate fully with the transition and ensure an orderly handover.

As previously announced, the Board continues to review all options in the event that the possible cash offer by funds advised by Waterfall for the entire issued, and to be issued, share capital of PSSL (the "Waterfall Possible Offer") does not proceed and shareholders' attention is drawn to the announcement made on 7 August 2020 generally and including in relation to the approach received from Honeycomb Investment Trust plc ("HIT") (the "Honeycomb Possible Offer"). The Board also notes the further announcement released by HIT today. The Board continues to believe that a recommendable cash offer from Waterfall would represent the best outcome for shareholders and it does not believe the Honeycomb Possible Offer compares favourably in value or liquidity terms. The Board also notes that the Company's largest shareholder, Invesco Asset Management Limited, has agreed a further extension of its irrevocable undertaking to 21 October 2020. In the event that a recommended binding offer is not put forward to the Company's shareholders for consideration, the Board is likely to recommend a change of investment policy to provide for an orderly run-off of the Company's portfolio and return of capital to shareholders. The Board believes that the expected appointment of Waterfall as investment manager will facilitate a transparent run-off process at materially lower management and performance fees than under the existing IMA. Waterfall has confirmed that its proposed investment management agreement would be terminable on 30 days' notice with no additional compensation in the event of a completed offer for the duration of the current Offer Period. In addition, for the period to 31 March 2021, Waterfall has confirmed that its aggregate fees would be capped at £2 million in any event including in the event of termination following a completed offer by any party before 31 March 2021. The Board believes that Waterfall's appointment would also materially increase the likelihood that a firm all cash offer will be brought to the table for shareholders to consider.

Any change to the Company's investment policy will be subject to shareholder approval and the Board will be continuing to consult with shareholders on this and related matters.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on PSSL's website (www.pollenstreetsecuredlending.com/investor-announcements).

The Company remains in an "Offer Period" as defined in the Code. Accordingly, the dealing disclosure requirements listed below will apply.

This announcement has been made with the consent of Waterfall and without the consent of Honeycomb Investment Trust plc. Further announcements will be made as and when appropriate.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Disclaimer

Smith Square Partners LLP, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for PSSL and for no one else in connection with the possible offers and will not be responsible to anyone other than PSSL for providing the protections afforded to its clients or for providing advice in connection with the possible offers referred to in this announcement.

Liberum Capital Limited ("Liberum") is appointed as Corporate Broker to both PSSL and Honeycomb Investment Trust plc. In relation to the potential offers for PSSL, Liberum is acting exclusively for PSSL. Nonetheless, by virtue of Liberum acting as Corporate Broker to both PSSL and Honeycomb Investment Trust plc, Liberum is treated as connected to both PSSL and Honeycomb Investment Trust plc for the purposes of the Code.

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Code, PSSL confirms that as at the close of business on 13 August 2020 its issued share capital consisted of 73,737,700 ordinary shares of £0.01 each (excluding shares held in treasury). The International Securities Identification Number for PSSL's ordinary shares is GB00BLP57Y95.

LEI number

PSSL's LEI number is 213800P4S1KTTPIB9T76.

Publication of this announcement

A copy of this announcement will be made available subject to certain restrictions relating to persons resident in restricted jurisdictions on the Company's website no later than 12 noon on 17 August 2020 (www.pollenstreetsecuredlending.com/investor-announcements).

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Notes to editors:

Waterfall is an SEC-registered institutional asset manager focused on structured credit (asset-backed securities and loans) and private equity investments with approximately $7.8 billion in assets under management as of 30 June 2020. Waterfall was founded in 2005 and benefits from a global presence, with offices in USA, UK and Ireland. Waterfall currently runs primarily three investment strategies: high-yield asset-backed securities, loan opportunity strategy and small-balance commercial loans.