TIDMCEAF
RNS Number : 5111G
Close European Accelerated Fund Ltd
12 May 2011
FOR IMMEDIATE RELEASE
12 May 2011
Close European Accelerated Fund Limited (the "Company")
In order to fulfil its investment objective, the Company
purchased seven Debt Securities, including one issued by Glitnir
Banki hf and one issued by Kaupthing Bank hf. These two Debt
Securities have a nominal value of GBP6,000,000 each and in
aggregate account for approximately 30 per cent of the total
nominal value of the Company's Debt Securities. In the event of a
default by an issuer of a Debt Security purchased by the Company,
the Company will rank as an unsecured creditor in respect of sums
due from the issuer of such Debt Security. In such event, the
Company may (in respect of that Debt Security) receive a lesser
amount of money than the amount due pursuant to the terms of the
Debt Security, may actually receive the money at a different time
than would otherwise have been the case and the amount received may
be zero. Any losses will be borne by the Company and returns to
Shareholders would be significantly adversely affected.
The Winding-Up Boards for Glitnir Banki hf and Kaupthing Bank hf
asked all parties claiming debts of any sort or other rights to
submit claims by 26 November 2009 and 30 December 2009
respectively. Consequently the Company submitted claim forms to
each of Glitnir Banki hf and Kaupthing Bank hf, claiming
GBP10,050,000 in respect of each one of these Debt Securities, such
amounts being equal to the maximum redemption proceeds of GBP1.675
per GBP1 nominal. The Winding-Up Committee of Kaupthing Bank hf has
written to the Company to advise it accepts ISK 1,125,075,218 of
the claim. The Winding-Up Board of Glitnir Banki hf has postponed a
decision on the Company's claim until 14 April 2011.
Shareholders should be aware that it is likely that Kaupthing
Bank hf may not pay the Company the full ISK 1,125,075,218 or,
indeed, anything at all and that Glitnir Banki hf may not pay the
Company the full amount claimed or anything at all. Whilst recovery
rates from issuers that default vary, and in this case are
currently unknown, the worst case scenario would see the Company
receive nothing from either institution at the maturity of the
relevant Debt Securities. The amounts claimed or accepted should
not be considered forecasts of the amounts which will be due from
Kaupthing Bank hf or Glitnir Banki hf on the maturity of the
relevant Debt Securities, nor are they a reflection of the net
asset value per Share. The redemption proceeds per Share as per the
Company's investment objective will not be known until after the
end of the life of the Company when the closing value of the Dow
Jones Eurostoxx 50 Index (the "Index") on the End Date is known and
may not be the amounts claimed or accepted.
Any claims which are paid may be paid before or after the end of
the life of the Company and in the case of early payment it may not
be possible to reinvest the proceeds in Debt securities which
replicate the investment characteristics of the original Debt
Securities. Any claims which are paid may be paid in currencies
other than Sterling and/or in forms other than cash. Any payments
received by the Company may therefore be subject to currency
fluctuations and/or other market movements.
Index Barrier
If the Index has closed down more than 50 per cent from its
Start Value (i.e. below 1,651.49) on any Index Business Day between
the Start Date and the End Date then an Index Barrier Breach will
have occurred. In these circumstances, the amount which the Company
will be required to pay following the Index Barrier Breach will
reduce its assets by an amount which reflects the decline, if any,
in the Index between the Start Date and the End Date. As at the
date of this announcement, an Index Barrier Breach has not
occurred.
As at 28 April 2011
The official closing level of the Index as at 28 April 2011 was
3,005.33 . If the Index closed at this level on the End Date and an
Index Barrier Breach has not occurred, the redemption proceeds
would be 100 pence subject to there being no counterparty default
or any unforeseen circumstances, and in the event of both Glitnir
Banki hf and Kaupthing Bank hf defaulting and having a zero
recovery rate and there being no insolvency of any other issuer of
Debt Securities held by the Company or any other event of default
or any unforeseen circumstances, the redemption proceeds would be
approximately 69.50 pence, and if the Index were to fall by
approximately a further 66.70 per cent to a level of approximately
1,002 as at the End Date, the redemption proceeds of the Shares
would be zero.
Payoff Profile
The tables below illustrate how the redemption proceeds of the
Shares might vary for different ending levels of the Index (1)
subject to there being no counterparty default or any unforeseen
circumstances, and (2) on the assumption of zero recovery in the
event of default of the Debt Securities issued by Glitnir Banki hf
and Kaupthing Bank hf and there being no insolvency of any other
issuer of Debt Securities held by the Company or any other event of
default or any unforeseen circumstances.
If Dow Jones EuroStoxx If Dow Jones EuroStoxx
50 50
Index never closes below
1,651.49+ Index closed below 1,651.49+
Final
EuroStoxx Redemption Redemption Redemption Redemption
50 Index* Proceeds (1) Proceeds (2) Proceeds (1) Proceeds (2)
0 0.0 0.0
100 3.0 0.0
200 6.0 0.0
300 9.0 0.0
400 12.0 0.0
500 15.0 0.0
600 18.0 0.0
700 21.0 0.0
800 24.0 0.0
900 27.0 0.0
1,000 30.0 0.0
1,100 33.0 2.5
1,200 36.0 5.5
1,300 39.0 9.0
1,400 42.0 12.0
1,500 45.0 15.0
1,600 48.0 18.0
1,700 100.0 69.5 51.0 21.0
1,800 100.0 69.5 54.0 24.0
1,900 100.0 69.5 57.5 27.0
2,000 100.0 69.5 60.5 30.0
2,100 100.0 69.5 63.5 33.0
2,200 100.0 69.5 66.5 36.0
2,300 100.0 69.5 69.5 39.0
2,400 100.0 69.5 72.5 42.0
2,500 100.0 69.5 75.5 45.0
2,600 100.0 69.5 78.5 48.0
2,700 100.0 69.5 81.5 51.0
2,800 100.0 69.5 84.5 54.0
2,900 100.0 69.5 87.5 57.0
3,000 100.0 69.5 90.5 60.0
3,100 100.0 69.5 93.5 63.5
3,200 100.0 69.5 96.5 66.5
3,300 100.0 69.5 99.5 69.5
3,400 114.5 79.5 114.5 79.5
3,500 129.5 90.0 129.5 90.0
3,600 144.5 100.5 144.5 100.5
3,700 160.0 111.5 160.0 111.5
3,800 167.5 116.5 167.5 116.5
3,900 167.5 116.5 167.5 116.5
* As at 26 July 2011
+ On any day from 26 July 2005 to 26 July 2011
(1) Subject to there being no counterparty default or any
unforeseen circumstances
(2) The table contemplates default and zero recovery in respect
of the Debt Securities issued by Glitnir Banki hf and Kaupthing
Bank hf. The redemption proceeds set out in this table is an
example only and not a forecast of actual payments and is subject
to there being no insolvency of any other issuer of Debt Securities
held by the Company or any other event of default or any unforeseen
circumstances. The attention of shareholders is drawn to the
section headed "Risk Factors" in the Prospectus.
Defined terms in this announcement shall have the meaning
assigned to them in the Prospectus.
As at 28 April 2011 the investments held by the Company
were:
NOMINAL
DEBT SECURITIES PORTFOLIO HOLDINGS
GBP
BNP Paribas EMTN 28 July 2011 6,000,000
Caixa Geral de Depositas EMTN 28 July 2011 6,000,000
Erste Bank EMTN 28 July 2011 6,000,000
Glitnir Banki hf EMTN 28 July 2011 6,000,000
Kaupthing Bank hf EMTN 28 July 2011 6,000,000
KBC IFIMA EMTN 28 July 2011 6,000,000
RBS EMTN 28 July 2011 3,550,000
TOTAL
GBP
39,550,000
The Company has also sold a Put option with a notional amount of
GBP39,550,000. The performance of the Put option is linked to the
performance of the Index. At an Index value of 3,302.98 or above at
the close of business on 26 July 2011, or if the Index has never
closed below 1,651.49 during the calculation period from 26 July
2005 to 26 July 2011 (the "Calculation Period"), the Put option
will be worth GBPNil at maturity. If the Index has closed below
1,651.49 over the Calculation Period and the Index is still below
3,302.98 at 26 July 2011, the Put option will be worth at maturity
a percentage of the notional value, being GBP39,550,000, equivalent
to the percentage fall in the level of the Index over the
Calculation Period. As at the date of this announcement the Index
has not closed below 1,651.49 during the Calculation Period.
There are currently 39,550,000 Shares in issue.
Capital at Risk Products
The Company has been advised that the Company is a Capital at
Risk Product as defined by the Financial Services Authority (FSA).
Investors should refer to the FSA factsheet, which is available
at
www.moneymadeclear.fsa.gov.uk/products/investments/types/pooled/structur
ed_products.html
The return of capital invested at the end of the investment
period is not guaranteed and therefore the investor may get back
less than was originally invested. Investors should not enter into
a transaction to purchase Shares unless they are prepared to lose
some or all of the money they have invested.
They should satisfy themselves that the Shares are suitable for
them in the light of their circumstances and financial position,
and if in any doubt they should seek professional advice. Investors
may only achieve the rate of return advertised over a set period
and the return may depend on specific conditions being met.
( ) This data has been provided by Close Investments Limited.
Close Investments Limited may source data from third party data
providers such as, but not limited to, Bloomberg. Close Investments
Limited accepts no responsibility or liability for the accuracy of
data sourced from such third parties. All data in this document has
been procured and may have been acted upon by Close Investments
Limited for its own purpose. The results are being made available
to you for information purposes only and incidentally. This data is
provided purely for information purposes only and should not be
relied upon.
For further information contact:
Anson Fund Managers Limited
Secretary
Tel: 01481 722260
E&OE - in transmission
This information is provided by RNS
The company news service from the London Stock Exchange
END
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