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CQS Rig Finance Fund Ltd (RIG)

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Wednesday 19 January, 2011

CQS Rig Finance Fund Ltd

Monthly Shareholder Fact Sheet

                          CQS RIG FINANCE FUND LIMITED
                         Monthly Shareholder Fact Sheet

CQS  Rig Finance Fund Limited (the "Company"), a closed-ended investment company
incorporated in Guernsey, is pleased to announce that its Monthly Fact Sheet for
December  2010 is now available on the Company's website (
and includes information on the top ten investments and outstanding borrowings.

Credit  and equity markets moved higher in  December in the run up to Christmas.
The  S&P 500 Index posted  impressive gains of  6.5% over the month  to make new
year-to-date  highs. Better-than-expected  economic data  and earnings forecasts
fueled  optimism for stocks which rose  to pre-Lehman bankruptcy levels. The oil
price  followed a similar trend  rising 8% to close the  year around the $91 per
barrel  mark. The  Company's final  NAV per  share closed  up 1.2% at the end of
December  2010 at 28.25 pence against 27.78 pence at the end of the prior month.
This was reflected by a number of small gains across several positions but there
were no stand out large moves.

It  was a relatively  quiet month for  trading due to  the run up to the holiday
season.  There were, however, some pieces of  news relevant to the portfolio and
some  general  research  views  on  the  2011 outlook worth mentioning. Barclays
Capital,  in  'The  Original  E&P  Spending  Survey'  released  during December,
predicted  an 11% increase in  2011 global Exploration &  Production spending to
$490bn,  driven by investments  in Brazil, South-East  Asia, the Middle East and
North Africa. In addition, CNOOC Limited, one of China's largest state-owned oil
companies,  announced that  it plans  to spend  almost £100bn buying foreign oil
groups  and investing  in new  production over  the next five years (Bloomberg).
This,  coupled with the continuing wave of  new-build rig orders, bodes well for
the sector in 2011.

Turning  to news flow on the portfolio  names, Vantage Drilling Co was awarded a
contract  for its premium jack-up  unit 'Topaz Driller' for  the campaign in the
Malay  Basin  starting  in  Q3  2011. The  work  covers up to three wells with a
potential  duration  of  up  to  seven  months  per  well.  In addition, Vantage
management   contracts   for  the  two  SeaDragon  semi-submersible  rigs  under
construction  at Jurong  shipyard were  terminated following  the sale  of these
vessels to Seadrill.

The  harsh environment, mid-water rig 'COSL Pioneer'  secured a one year (+ four
year  options) contract with Statoil ASA in  Norway. This rig forms the security
for the Offrig 9.75% bonds held in the portfolio.

Following  problems with the risers and BOP  in October and November, RDS Ultra-
Deepwater  Limited announced that it had  operated its rig satisfactorily during
December with 88.7% of uptime.

There  was a  new bond  issue during  the month  as Sevan Marine ASA completed a
placement  of NOK700m. The  bond has a  term of four  years, carries an interest
rate  of  14.00% and  is  callable  at  107. The Company subscribed for, and was
allocated,  a small amount  of the new  issue. Sevan also  announced that it had
secured  commitments, subject to  documentation and conditions  precedent, for a
$480m Senior Debt Facility for the Sevan Driller unit. Net proceeds will be used
to  repay the existing 1st and  2nd lien financing on the  Sevan Driller and for
general corporate purposes.

For further information, please contact:

Lynette Le Provost
Corporate Secretariat
Kleinwort Benson (Channel Islands) Fund Services Limited
01481 727111

Hugh Field
Director, Corporate Finance
Arbuthnot Securities
020 7012 2000

All market data sourced from Bloomberg

This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
Source: CQS Rig Finance Fund Ltd via Thomson Reuters ONE