Publication of Prospectus

RNS Number : 4128Z

NB Distressed Debt Invest. Fd. Ltd

06 March 2013

 



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

6 March 2013

NB Distressed Debt Investment Fund Limited Publication of Prospectus

The board of directors (the "Board") of NB Distressed Debt Investment Fund Limited (the "Company") today announces the publication of a prospectus (the "Prospectus") in connection with the proposed creation of an Extended Life Share Class which is subject to a New Investment Period ending 31 March 2015, the Conversion offer of Extended Life Shares to Eligible Ordinary Shareholders and Admission of Extended Life Shares.

Applications will be made to the London Stock Exchange and the CISX for the Extended Life Shares to be admitted to trading on the SFM and the CISX and to listing on the Official List of the CISX ("Admission").

To view the full document, please place the following URL into the address bar of your browser:

http://www.rns-pdf.londonstockexchange.com/rns/4128Z_-2013-3-6.pdf 

Overview

The Company's current investment period expires on 10 June 2013 following which the Company Portfolio is due to be placed into run-off with the proceeds (net of the fees and expenses) of realising the Company's investments being distributed to Ordinary Shareholders over the remaining life of the Company. However the Board, following discussions with the Investment Manager, is of the view that the distressed debt market remains an attractive investment opportunity in the medium term. Contrary to earlier expectations that the banking system would address its problem loans relatively rapidly, over US$1.9 trillion¹ of non-performing loans remain on global banks' balance sheets and banks have announced over US$2.0 trillion² of asset reduction targets. The Investment Managers believe that the banking system will face increasing pressure to purge these assets from their books going forward. Non-performing loan portfolios are expensive from a capital perspective, and with the introduction of Basel III, the minimum capital standards are going to increase in the future.

Accordingly, the Board, intends to enable Eligible Ordinary Shareholders to gain exposure to new opportunities in this asset class after 10 June 2013 by giving each Eligible Ordinary Shareholder the opportunity to convert all or part of its holding of Ordinary Shares into shares in an Extended Life Share Class which will be subject to an investment period ending on 31 March 2015. However those Shareholders who wish to remain invested on the basis of the Company's current investment period are able to do so by retaining their holding of Ordinary Shares.

The Proposal will only take effect if a minimum of 100 million Ordinary Shares elect to convert to Extended Life Shares.

1 Source: KPMG Global Debt Sales Survey 2012

2 Source: IMF Stability Report, April 2012

Extended Life Share Class

The Extended Life Shares will be subject to the New Investment Period such that until 31 March 2015 the Investment Managers will continue to seek new opportunities in which to invest any cash attributable to the Extended Life Shares following which the assets will be placed into run-off. In addition, the Extended Life Shares will be subject to a new capital return policy, a new discount control policy and an increased hurdle rate:

1)   Capital return policy

The Extended Life Shares will be subject to a new capital return policy pursuant to which the Company will seek to return to the holders of Extended Life Shares all capital profits arising from the exit of any assets attributable to the Extended Life Shares, at least every six months, with the first such distribution expected to be made for the period ending 31 December 2013.

2)   Discount control mechanism

The Board is committed to seeking to limit the level of the discount to Net Asset Value per Extended Life Share at which the Extended Life Shares may trade and therefore the Board is seeking to introduce a new discount control policy with respect to the Extended Life Shares. Subject to Board discretion and certain other conditions, including normal market conditions and available cash resources, and applicable law and regulations, if the Extended Life Shares trade at a price which is at a discount of more than 5 per cent. to the most recently published Net Asset Value per Extended Life Share, the Company intends to repurchase Extended Life Shares with a view to reducing the discount.

3)   Increased hurdle rate

The preferred return to Shareholders before any Performance Fee becomes payable to the Investment Manager will be raised, with effect from Admission, from 6 per cent. to 8 per cent. in respect of the Extended Life Share Class such that the Extended Life Share Hurdle Rate shall be 6 per cent. for the period from the IPO to Admission and shall be 8 per cent. thereafter.

Conversion

All Eligible Ordinary Shareholders will be given the opportunity to elect to convert all or part of their holding of Ordinary Shares into Extended Life Shares. Enclosed in the Prospectus is a Conversion Notice for use by Ordinary Shareholders who hold Shares in certificated form in connection with the Proposals. Ordinary Shareholders who hold their share in uncertificated form should send a TTE Instruction to Euroclear.

Ordinary Shareholders who do not submit a valid Conversion Notice or TTE Instruction with respect to all or part of their holding of Ordinary Shares will not receive any Extended Life Shares and will retain their holding of Ordinary Shares.

Class Meeting of Ordinary Shareholders

In order to implement the Proposals it is necessary to amend the Articles. Accordingly, prior approval of the Ordinary Shareholders by an ordinary resolution passed at a general meeting of the Ordinary Shareholders (the "Class Meeting") will be required. Notice is included within the Prospectus of the Class Meeting to be held at BNP Paribas House, St. Julian's Avenue, St. Peter Port, Guernsey, GY1 1WA, on 8 April 2013 at 1030 hours.

Timetable

The proposed timetable in respect of the Admission of shares in the Extended Life Share Class is as follows:

Latest time and date for receipt of Conversion Notice	1030 hours on 5 April 2013
Latest time and date for receipt of Proxy Forms	1030 hours on 5 April 2013
Class Meeting	1030 hours on 8 April 2013
Result of the Class Meeting and Conversion announced	8 April 2013
Effective Date	9 April 2013
Admission to listing and trading on the Official List of the CISX	0800 hours on 9 April 2013
Admission to trading and unconditional dealings commence on the SFM	0800 hours on 9 April 2013

Oriel Securities Limited is acting as Financial Adviser and Corporate Broker on the transaction.

Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Prospectus. The Prospectus has been approved by the UK Listing Authority.

Copies of the Prospectus will shortly be available for inspection at the Document Viewing Facility, the Financial Services Authority, 25 North Colonnade, Canary Wharf, London E14 5HS.

For further information, please contact:

Neuberger Berman Europe Limited Damian Holland Anji Stewart	[phone]
Oriel Securities Limited Joe Winkley Neil Langford	[phone]

IMPORTANT INFORMATION 

This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any share in the Company or securities in any other entity, in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. This announcement does not constitute a recommendation regarding any securities.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of the information in the prospectus published by the Company in connection with the admission of the new shares of the Company to the Official List of the Channel Islands Stock Exchange and to trading on the London Stock Exchange plc's Specialist Fund Market (the "Prospectus"). Copies of the Prospectus are available from the Company's registered office.

The promotion of the Company and the distribution of this announcement in the United Kingdom is restricted by law. Accordingly, this announcement is only addressed to, and directed at (a) persons outside the European Economic Area to whom it is lawful to communicate, and (b) persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors").  For the purposes of this provision, the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each member state of the European Economic Area which has implemented the Prospectus Directive.  In addition, in the United Kingdom, this announcement is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons").  Any investment or investment activity to which this announcement relates is available only to and will only be engaged in with such persons.  This announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors.

This announcement, and the information contained therein, is not for viewing, release, distribution or publication in or into, and will not be made available to any national, resident or citizen of, any jurisdiction where applicable laws prohibit its release, distribution or publication. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes must inform themselves about, and observe, any such restrictions. Any failure to comply with the restrictions may constitute a violation of the laws of those jurisdictions.

The shares issued and/or to be issued by the Company (the "Securities") have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The Securities may not be offered, sold, resold, pledged, delivered, distributed or otherwise transferred, directly or indirectly, into or within the United States, or to, or for the account or benefit of, US persons (as defined in Regulation Sunder the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States, and in a manner which would not require the Company to register under the Investment Company Act. No public offering of the Securities is being made in the United States. The Company has not been and will not be registered under the US Investment Company Act of1940 (the "Investment Company Act") and, as such, holders of the Securities will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the Securities may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act.

All investments are subject to risk, including the loss of the principal amount invested. Past performance is no guarantee of future returns. All investments to be held by the Company involve a substantial degree of risk, including the risk of total loss. You should always seek expert legal, financial, tax and other professional advice before making any investment decision.

Neither the Company, Neuberger Berman Europe Limited, Oriel Securities Limited, their respective affiliates nor any other person (including without limitation, the directors, officers, employees, partners, agents, representatives, members and advisers of the Company, Neuberger Berman Europe Limited, Oriel Securities Limited and their respective affiliates) undertakes any obligation to update or revise any statement made in this announcement (including, without limitation, any forward looking statements), whether as a result of new information, future events or otherwise.

The information in this announcement contains forward looking statements. Any statement other than a statement of historical fact is a forward looking statement. Actual results may differ materially from those expressed or implied by any forward looking statement. You should not place undue reliance on any forward looking statement, which speaks only as of the date hereof.

 

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