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CQS Rig Finance Fund Ltd (RIG)

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Wednesday 21 September, 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
August 2011 is now available on the Company's website (
and includes further information on the top ten investments and outstanding

August was characterised by severe risk aversion across markets. There were
extreme downward moves and intra-month volatility in credit and equity. The S&P
500 Index plummeted over the first few days of the month as Standard and Poor's
downgraded the US top AAA credit rating to AA+ for the first time ever, citing
concerns over the budget deficit. This, along with the continuing lack of
certainty over the solution for the European peripheral debt crisis and weak
macro economic data from both sides of the Atlantic, pushed the EuroStoxx 50
Index 13.7% lower and the Merrill Lynch Euro High Yield Credit Index down 6.3%.
The price of Brent Crude remained resilient, falling 2% to close at $114 per
barrel. Against this backdrop, the Company's NAV performed well falling less
than one per cent. to 28.33 pence at the month-end. A large number of bonds in
the portfolio were marked down during the month, in line with the wider high-
yield credit markets. Losses were partially offset by profits on two positions.

Aker Drilling AS bonds rallied ten points from 96 to 106 as Transocean announced
an all cash voluntary offer to acquire Aker Drilling AS for NOK 26.50 per share.
The Company held both of the bonds (11% fixed and FRN NIBOR+790) which were
acquired at new issue at par value and added to in the secondary market at a
price of 96, as well as a small amount of the equity purchased at NOK 16.4 per
share. The offer period ends on 23 September, following which we expect more
clarity around what will happen to the outstanding bonds. The Transocean offer
was viewed very positively by market participants in terms of value support for
ultra-deepwater (UDW) rig prices. It also provided evidence that larger rig
contractors are looking to renew fleets and are pursuing acquisitions as an
alternative to new-builds. This, along with the current high oil price and
resilient day-rate levels for new UDW and high-specification jack-up rigs, bodes
well for other bonds held by the Company in smaller rig companies with newer

Profits were also seen on the PetroRig III bonds. This is a legacy position
nearing the end of the workout process and recovery estimates were upgraded over
the course of the month. Confirmation was also received during the month of the
final payment in the Remedial Offshore bonds. The Company received $4.1m in cash
in early September.

Given that a large majority of the portfolio is now invested in income-
generating assets, the Company announced a return to regular dividend payments.
For further information please refer to the RNS announcement dated 9 September
2011, which may be viewed on the Company's website. With the aim of providing
more information to investors on the underlying portfolio, some changes have
been made to the presentation of the data in the Monthly Fact Sheet. Notably the
top 10 positions are now listed in order of decreasing market value and the
seniority of the bonds is stated in the last column of the table. The net cash
level held in the fund as well as an estimate of the weighted average gross
redemption yield have also been added in the Summary Statistics section.

For further information, please contact:

Tom Daish
Corporate Secretariat
Kleinwort Benson (Channel Islands) Fund Services Limited
01481 727111

Richard Johnson
Director, Corporate Finance
Arbuthnot Securities
020 7012 2000

All market data sourced from Bloomberg

This announcement is distributed by Thomson Reuters on behalf of 
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(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