Statement re 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 February 2012 is now available on the Company's website (www.cqsrigfinance.com) and includes further information on the top ten investments and outstanding borrowings.
Risky assets continued an upward trend in February as new austerity measures were passed in Greece and the German parliament voted in favour of the 130bn Greek bailout package.
Investor confidence was also buoyed by the second round of liquidity provision by the European Central Bank through its Long Term Refinancing Operation and positive economic data from the US. The S&P 500 Index closed up 4% and the price of Brent Crude rose 10% to close the month over $121 per barrel, due in part to increased political tension surrounding Iran.
The Company's NAV per share rose 1.1% during the month from 33.26p to 33.63p with profits across several strategies. Polarcus Ltd. announced several pieces of contract news during the month including a Letter of Intent from Shell Kanumas A/S for a nominal 8,500 sq. km 3D seismic acquisition project offshore Greenland. The project will commence in the third quarter 2012 using Polarcus' high specification Ice Class vessels. The Company owns the 1st lien secured convertible bonds which were marked up 10 points over the course of the month.
Chloe Marine's drillship 'Deepsea Metro II' arrived in Brazil on 15 February after its journey from Cape Town. The drillship will now undergo acceptance testing and certification before commencing its three-year commitment with Petrobras SA. The Company owns the Chloe Marine 2nd lien bonds which were marked up three points.
The steady stream of new issuance continued during February enabling the Company to further diversify its investment portfolio while maintaining a Gross Redemption Yield of just above 10%.
There were two new deals of note. Aban Offshore Ltd. issued a $240m 1st lien senior secured bond maturing in March 2015. The bonds pay a coupon of 14.25% and 10% of the notional amortises after two years, thereby reducing the refinancing risk at maturity. The security package includes a 1st lien mortgage over two high-specification jack-up rigs which were delivered from PPL shipyard Singapore in 2008 and Keppel Fels shipyard in 2009. Pacific Drilling SA issued a $300m bond paying 8.25% coupon maturing in February 2015. Pacific Drilling is a pure ultra-deepwater player with a fleet of six modern drillships, including 2 new builds with delivery due in 2013. The bond is unsecured but benefits from strong covenants restricting the average amount of secured or unsecured indebtedness to not more than $475m per vessel. The Company subscribed for and was allocated amounts in both of the new deals.
The bullish sentiment persists for the outlook for deepwater day rates. In its fourth quarter 2011 results issued in February, North Atlantic Drilling Ltd. commented that "Oil companies have shown interest in committing early to secure drilling capacity, also for drilling programmes planned well into the future. As a result, all current available rig capacity has been absorbed at attractive day rates. Farm outs of modern floaters are currently priced in excess of $600,000 per day."
This was confirmed in March as Transocean Inc. announced new contracts and higher day rates for several of its rigs. The ultra-deepwater drillship 'Deepwater Expedition' led the fleet with a two-year contract commencing December 2012 at an initial day rate of $650,000. Additionally, the contract includes three priced eight-month option periods.
This increase in day rates bodes very well for the Company's investment portfolio.
For further information, please contact:
Kleinwort Benson (Channel Islands) Fund Services Limited
01481 710 607
Alastair Moreton/Hannah Young
NOMAD and Broker
Westhouse Securities Limited
020 7601 6118
All market data sourced from Bloomberg unless otherwise stated.
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Source: CQS Rig Finance Fund Ltd via Thomson Reuters ONE