Interim Management Statement

RNS Number : 2478C

Henderson Diversified Income Ltd

28 August 2008

 



HENDERSON DIVERSIFIED INCOME LIMITED

28 AUGUST 2008 

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement 

Review of the period from 1 May 2008 to 31 July 2008 

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Review: Following the successful doubling the size of the company through an institutional share placing in late May, the new monies were invested swiftly with the effect of reducing the overall secured loan exposure marginally, whilst  increasing the investment grade bond weighting at the expense of the high yield bond exposure. That investment was achieved at attractive prices and we believe we have locked into some cheap assets at considerable yields.  We remain confident of achieving our distribution objectives. The post Bear Stearns rally faded in mid May when Mr Trichet, the Chairman of the European Central Bank, stated that European interest rates would need to rise to conquer inflation.  This had a negative effect on all risk assets with equities hitting new lows in mid July.  Bond and loan markets, although better positioned in a technical sense, drifted against such a backdrop and consequently the NAV fell over the three month period under review.  The economic outlook continues to worsen with growing concerns over stagflation.  The recent declines in the oil price and commodities are welcome as these should suppress inflation and eventually lead to interest rate cuts in the UK and Europe which should aid economic recovery.

Material Events/Transactions: On 23 May 2008 the Company allotted 43,140,877 ordinary shares in the Company at a price of 89.05 pence per share representing the net asset value per share in the Company as at 21 May 2008 plus 2 per cent to reflect the costs of issuing the Shares. Following the admission of the Shares to the Official List on 29 May 2008 there were 83,640,877 shares in the Company in issue.

Dividends: a third interim dividend of 3.40p per ordinary Share, in respect of the period ended 30 April 2008, was paid on 20 June 2008 to holders registered on 23 May 2008. In light of the announcement by the Board on 2 May 2008 regarding the placing of new shares in the Company, this third interim dividend not only included the income earned in respect of the three months ended 30 April 2008 but also an amount to cover the distributable income then forecast to be earned by the Company during May, thereby ensuring that the level of distributable income available to existing shareholders would be unaffected by the placing of new shares.

Consequently, the fourth and fifth interim dividends are only to include income earned in the five month period to the end of the financial year on 31 October 2008.

A fourth interim dividend of 1.00p per ordinary Share, in respect of the period ended 31 July 2008, was declared on 28 August 2008 and will be paid on 30 September 2008 to holders registered on 12 September 2008.

Premium:  the share price premium to net asset value increased over the period from 4.1% to 5.9%.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 July 2008 

	1 month	3 months	Since launch
Net Asset Value Total Return per ordinary share	-2.95	0.48	-9.22
Share price per ordinary share	-1.66	1.77	-7.38

The Fund was Launched in July 2007

Source: Datastream

Financial Position 

	at 31 July 2008	at 30 April 2008
Net assets	£70m	£36m
Net asset value (cum income)	84.0p	89.1p
Ordinary share price	89.0p	90.8p
Premium	+5.9%	+4.1%
Gearing	5%	13%
Yield	7.7%	7.7%
Total Expense Ratio	1.97%	1.97%

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 31 Jul 2008	at 30 Apr 2008
Henderson Cash Fund	U.K.	12.3	0.0
Morgan Stanley 7.5% GMTN 2011	U.K.	2.1	0.0
British Vita (Secured loan term B & C)	U.S.A.	2.1	0.0
Argon Capital 8.162% Perpetual	U.K.	2.1	2.0
Iglo Birdseye (Secured loan term B& C)	Germany	2.0	0.0
Casema (Secured loan term B & C)	France	2.0	3.4
European Directories (Secured loan term C)	Netherlands	2.0	0.0
Almatis (Secured loan term B& C)	Germany	2.0	0.0
AZ Electronics (Secured loan term B & C)	Luxembourg	2.0	3.5
Kabel (Secured loan term B& C)	Germany	2.0	1.7

Sector Breakdown	% at 31 July 2008	% at 30 April 2008
Secured Loans	73.1	77.8
High Yield Corporate Bonds	6.4	15.7
Investment Grade Bonds	20.4	6.5
Credit Default Swaps	0.1	0.0

The objective of Henderson Diversified Income Limited is to provide Shareholders with a high level of income and capital growth over the long term.

The Company aims to deliver these objectives for Shareholders by investing selectively across the full spectrum of fixed income asset classes including, but not limited to, secured loans, asset-backed

securities, investment grade corporate bonds, high yield corporate bonds, unrated bonds, gilts, preference

and selective high yield equity shares, hybrid securities, convertible bonds and floating rate notes.

Further information on the Company, including an up to date NAV and share price information, can be found at http://www.itshenderson.com/

For further information, please contact:

Jeremy Hamon Company Secretary Telephone: [phone]	James de Sausmarez Head of Investment Trusts Henderson Global Investors Telephone: [phone]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

- ENDS -

 

END

 

 

IMSILFFETVITFIT