December 01, 2011

Alcentra Announces Intention to Launch New Closed Ended Investment Company


LONDON, 1 December 2011 — Alcentra Limited, one of Europe's leading sub investment grade asset managers and part of BNY Mellon Asset Management, has announced its intention to launch the Alcentra European Floating Rate Income Fund Limited in early 2012.

It is intended that Alcentra European Floating Rate Income Fund Limited (‘the Company'), a Guernsey closed ended investment company, will be listed on the Main Market of the London Stock Exchange. It is proposed that the Company will invest predominantly in senior secured loans and floating rate senior secured bonds issued by European corporates and the Company aims to produce a quarterly dividend of 5.5% per annum in the first year of full investment. It is intended that a significant proportion of the portfolio will be sourced at a discount to par, allowing the opportunity for capital gains and that no leverage will be used to achieve returns. GBP and EUR currency share classes will, subject to investor demand, be available at launch.

David Forbes-Nixon, chairman and chief executive officer of Alcentra Limited, commented: "We believe that current market conditions offer an extraordinary opportunity for investors. Since the global financial crisis in 2008, corporate balance sheets have strengthened and the leverage employed by sub-investment grade corporate borrowers in the United States and Europe has fallen. Yet the return on loans at new issue has risen over this period. We believe that lenders today are being paid more for taking less risk."

Forbes-Nixon continued: "We believe that Alcentra's scale has historically afforded it superior access to investments. The combination of strong credit skills and superior access should give us the opportunity to build a higher quality portfolio. We are now excited to launch the Alcentra European Floating Rate Income Fund Limited which will bring our global expertise as one of the world's top five largest active managers of sub-investment grade debt to investors seeking to benefit from what we believe is a compelling investment opportunity. The Company will aim to provide an attractive mix of steady dividends with some capital growth, combined with the downside protection of a secured asset class."

The intention is to raise at least £150 million. Once fully invested, it is expected that the portfolio will be diversified in approximately 60 investments across 15 industries, with no single borrower exposure of more than 5 percent. In addition, it is envisaged that capital will be deployed within 4 to 6 weeks of Admission and that the Company will calculate and publish its net asset value on a daily basis and will operate with effective discount controls. It is intended that the Company will have an efficient fee and cost structure, with an annual management fee of 0.7 per cent of the Company's net asset value per annum with no incentive or performance fee. Operating costs are not expected to exceed 0.30% and costs of issue to be borne by the Company will be limited to 2% of gross issue proceeds. Alcentra and affiliates are expected to invest at least €10 million in the Company.

Full details of the official announcement can be accessed at: www.aefrif.com

Alcentra Limited is an asset management group focused on the sub-investment grade capital markets. With assets under management of € 9bn in European assets, Alcentra Limited is one of Europe's leading institutional investors of secured loans. Alcentra Limited's deep, sector focused European credit team of 6 portfolio managers, supported by 11 credit analysts, has over 11 years experience in reviewing European credits. The global team of 55 employees oversees 47 funds and managed accounts on behalf of a global client base.

BNY Mellon Asset Management is one of the world's leading asset management organizations, encompassing BNY Mellon's affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.9 trillion in assets under custody and administration and $1.2 trillion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available at www.bnymellon.com and through Twitter@bnymellon.