Starwood European Real Estate Finance Ltd (SWEF)
SWEF: Half Yearly Report 30 June 2019
10-Sep-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Starwood European Real Estate Finance Limited
Interim Financial Report and Unaudited Condensed Consolidated Financial
Statements
for the six-month period from 1 January 2019 to 30 June 2019
Overview
Corporate Summary
PRINCIPAL ACTIVITIES AND INVESTMENT OBJECTIVE
The investment objective of Starwood European Real Estate Finance Limited
(the "Company"), together with its wholly owned subsidiaries Starfin Public
Holdco 1 Limited, Starfin Public Holdco 2 Limited, Starfin Lux S.à.r.l,
Starfin Lux 3 S.à.r.l and Starfin Lux 4 S.à.r.l (collectively the "Group")
is to provide its shareholders with regular dividends and an attractive
total return while limiting downside risk, through the origination,
execution, acquisition and servicing of a diversified portfolio of real
estate debt investments (including debt instruments) in the UK and the wider
European Union's internal market, focusing on Northern and Southern Europe.
Whilst investment opportunities in the secondary market are considered, the
Group's main focus is to originate direct primary real estate debt
investments.
The Group seeks to limit downside risk by focusing on secured debt with both
quality collateral and contractual protection. The typical loan term is
between three and seven years.
The Group aims to be appropriately diversified by geography, real estate
sector, loan type and counterparty. The Group pursues investments across the
commercial real estate debt asset class through senior loans, subordinated
loans and mezzanine loans, bridge loans, selected loan-on-loan financings
and other debt instruments.
STRUCTURE
The Company was incorporated with limited liability in Guernsey under the
Companies (Guernsey) Law, 2008, as amended, on 9 November 2012 with
registered number 55836, and has been authorised by the Guernsey Financial
Services Commission ("GFSC") as a registered closed-ended investment
company. The Company's ordinary shares were first admitted to the premium
segment of the UK Listing Authority's Official List and to trading on the
Main Market of the London Stock Exchange as part of its initial public
offering which completed on 17 December 2012. Further issues took place in
March 2013, April 2013, July 2015, September 2015, August 2016 and May 2019.
The issued capital during the period comprises the Company's Ordinary Shares
denominated in Sterling.
The Company makes its investments through Starfin Lux S.à.r.l (indirectly
wholly-owned via a 100% shareholding in Starfin Public Holdco 1 Limited),
Starfin Lux 3 S.à.r.l and Starfin Lux 4 S.à.r.l (both indirectly
wholly-owned via a 100% shareholding in Starfin Public Holdco 2 Limited).
The Investment Manager is Starwood European Finance Partners Limited (the
"Investment Manager"), a company incorporated in Guernsey with registered
number 55819 and regulated by the GFSC. The Investment Manager has appointed
Starwood Capital Europe Advisers, LLP (the "Investment Adviser"), an English
limited liability partnership authorised and regulated by the Financial
Conduct Authority, to provide investment advice, pursuant to an Investment
Advisory Agreement.
Chairman's Statement
Dear Shareholder,
I am delighted to present the Interim Financial Report and Unaudited
Condensed Consolidated Financial Statements of Starwood European Real Estate
Finance Limited (the "Group") for the period from 1 January 2019 to 30 June
2019.
INVESTMENT MOMENTUM
The table below summarises the new commitments made and repayments received
in the first six months of 2015 to 2019.
New Repayments & Net Increase in
Commitments Amortisation Commitments
H1 2015 GBP31.3m (GBP21.9m) GBP9.4m
H1 2016 GBP98.9m (GBP92.1m) GBP6.8m
H1 2017 GBP115.5m (GBP85.2m) GBP30.3m
H1 2018 GBP147.5m (GBP74.1m) GBP73.4m
H1 2019 GBP49.9m (GBP45.9m) GBP4.0m
The net increase in commitments during the first half of 2019, whilst still
positive, has been significantly lower than the last two years. The reason
for this is seen to be one of timing of transactions rather than an overall
reduction in activity for the reasons explained below.
? As we have reported in previous years, the first quarter is frequently
quiet in the real estate market and we have only tended to see high levels
of activity in the first quarter when deals which were in execution during
the previous year were then delayed. This year, no deals rolled over from
2018 and the first quarter was relatively subdued as a result.
? The Group has a number of transactions under review and two transactions
in execution which it hopes to close in the third quarter. If both
transactions close, this would mean that the level of commitments made would
be similar to the first half of 2018.
The Group also received a relatively low amount of repayments in the first
half of 2019. However, since the end of the second quarter, the following
repayments have been received:
? Mixed Use Development, UK - GBP8.8 million amortisation following the sale
of one of the properties in line with the business plan.
? Industrial Europe - EUR26.3 million amortisation following the sale of one
of the properties.
? Hotel, Barcelona, Spain - full repayment of EUR46 million following the
sale of the hotel.
With these repayments factored in, the repayment percentage for the first
seven months of the year is approximately 27 per cent of the loan book at
the beginning of the year. In a normal year, we expect 30-40 per cent of the
portfolio to repay on average but some years may be materially higher or
lower than the average. It is difficult to accurately predict the repayment
intention of borrowers as they execute their business plans, but we will
continue to closely monitor this throughout the second half in order to try
to minimise any potential cash drag from repayments.
NAV AND SHARE PRICE PERFORMANCE
The Group's performance has been stable. The Company's shares have generally
traded at a premium to its Net Asset Value, which averaged 2.6 per cent over
the past six months. Over the first half of this financial year, and after
the payment of dividends of 3.25 pence per share, the Company's Net Asset
Value per share has increased modestly from 102.66 pence to 102.82 pence per
share.
Towards the end of the first half, the Company's shares traded for a short
period of time at a small discount but, subsequent to that period, the
shares returned to trade at a small premium to NAV. The Board will continue
to monitor the price rating of the Company's shares to NAV.
OUTLOOK
The Investment Adviser has a number of opportunities currently under review
and the Company will continue to update Shareholders by way of the quarterly
fact sheets and investment updates when deals are completed.
The Company continues to target a dividend at an annualised rate of 6.5
pence per Ordinary Share and has declared a dividend of 1.625 pence per
Ordinary Share (6.5 pence annualised) for each of the first two quarters of
2019.
The United Kingdom's imminent departure from the European Union, with or
without an agreement may represent a potential threat to the UK economy as
well as wider Europe. On a cyclical view, national economies across Europe
appear to be heading at best towards lower growth and in some cases towards
recession. The potential impact of Brexit could have a further destabilising
effect.
To some extent the impact of an unsatisfactory UK exit from the EU has
already been priced into markets and forecasts, but significant headwinds
could arise should there be an unstructured settlement. It is extremely
difficult in the circumstances to anticipate the potential impact on
markets, so your Board is keeping a particularly watchful eye on the macro
position.
GOING CONCERN
Under the UK Corporate Governance Code and applicable regulations, the
Directors are required to satisfy themselves that it is reasonable to assume
that the Group is a going concern.
The Directors have undertaken a rigorous review of the Group's ability to
continue as a going concern including a review of the ongoing cash flows and
the level of cash balances as of the reporting date as well as forecasts of
future cash flows. After making enquiries of the Investment Manager and the
Administrator and having reassessed the principal risks, the Directors
considered it appropriate to adopt the going concern basis of accounting in
preparing the Interim Financial Report and Unaudited Condensed Consolidated
Financial Statements.
BOARD COMPOSITION AND DIVERSITY
The Board previously mentioned in the 2018 annual report that it is mindful
of the need to plan for succession and to implement it in a constructive
fashion that supports and builds on a cohesive Board. In view of the
approaching 9th year anniversary of the Company's IPO, the retirement
process for the existing Directors continues to be on track and as currently
envisaged, is anticipated to commence at the AGM of the Company in May 2020.
The Board will keep this succession plan under review and monitor its
progress with a particular focus on ensuring over time that each new
Director is equipped with the necessary skills, experience and knowledge.
The Board believes in the value and importance of diversity in the boardroom
and it continues to consider the recommendations of the Davies Report which
will be a key factor in its succession planning.
On behalf of the Board, I would like to close by thanking my fellow
Shareholders for their commitment and I look forward to updating you on the
Group's progress early next year.
Stephen Smith
Chairman
9 September 2019
Investment Manager's Report
CONTINUED INVESTMENT DEPLOYMENT
As at 30 June 2019, the Group had investments and commitments of GBP478.9
million as follows:
Sterling equivalent Sterling equivalent
balance(1) unfunded
commitment(1)
Hospitals, UK GBP25.0m -
Mixed Use Development, GBP11.1m GBP1.2m
South East UK
Regional Hotel GBP45.9m -
Portfolio, UK
Credit Linked Notes, UK GBP21.8m -
Real Estate
Hotel & Residential, UK GBP39.9m -
Office, Scotland GBP4.3m GBP0.7m
Total Sterling Loans GBP148.0m GBP1.9m
Logistics, Dublin, GBP13.0m -
Ireland
Hotel, Barcelona, Spain GBP41.3m -
Industrial Portfolio, GBP37.0m -
Central and Eastern
Europe
Three Shopping Centres, GBP33.0m GBP6.7m
Spain
Shopping Centre, Spain GBP15.2m -
Hotel, Dublin, Ireland GBP53.8m -
Residential, Dublin, GBP2.0m -
Ireland
Office, Paris, France GBP14.3m -
Hotel, Spain GBP26.2m GBP22.4m
Office & Hotel, Madrid GBP16.6m GBP0.9m
Mixed Portfolio, Central GBP46.6m -
and Northern Europe
Total Euro Loans GBP299.0m GBP30.0m
Total Portfolio GBP447.0m GBP31.9m
(1) Euro balances translated to sterling at period-end exchange rates.
Between 1 January 2019 to 30 June 2019, the following significant investment
activity occurred (included in the table above):
NEW LOAN: OFFICE, SCOTLAND:
On 24 April 2019 the Group committed to provide a GBP5 million whole loan on
an office in Scotland of which GBP4.3 million has been funded to date.
NEW LOAN: MIXED PORTFOLIO, CENTRAL AND NORTHERN EUROPE:
On 10 May 2019 the Group committed to participate in the funding of a EUR104
million mezzanine loan secured by a diversified portfolio of assets located
in the Netherlands, Germany and Finland. Starwood Property Trust, Inc
(through a wholly owned subsidiary) is participating in 50 per cent of the
mezzanine loan amount, with the Group funding the balance amounting to a net
commitment of EUR52 million. The portfolio is comprised of 165 assets and
provides strong diversification in terms of tenant base, location and asset
class. The loan has a term of 3 years with two, 1-year extension options and
the Group expects to earn an attractive risk-adjusted return in line with
its stated investment strategy.
REPAYMENT: VARDE PARTNERS MIXED PORTFOLIO, UK:
The remaining balance of GBP1.0 million was repaid at the January 2019
interest payment date following completion of the borrower's business plan.
REPAYMENT: STUDENT ACCOMMODATION, DUBLIN, IRELAND:
The loan of EUR10.6 million was repaid on 1 March 2019 following successful
completion of the borrower's business plan.
FINAL REPAYMENT: SCHOOL, DUBLIN, IRELAND:
On 8 May 2019 the Group received full repayment of EUR18.85 million on the
loan to an Irish School following completion of the borrower's business
plan.
During the period the Group continued to receive unscheduled amortisation on
other loans as borrowers continue to execute their business plans, in
particular on the following loans:
? Mixed Use Development, South East UK - GBP3.1 million
? Industrial Portfolio, Central and Eastern Europe - EUR9.4 million
? Residential, Dublin, Ireland - EUR7.5 million
? Hotel & Residential, UK - GBP1.3 million
The Group also advanced GBP14.6 million to borrowers to which it has
outstanding commitments.
PORTFOLIO STATISTICS
As at 30 June 2019, the portfolio was invested in line with the Group's
investment policy. The key portfolio statistics are as summarised below.
Number of investments 17
Percentage of portfolio currently invested in floating 81.8%
rate loans
Invested Loan Portfolio unlevered annualised total 7.2%
return(1)
Invested Loan Portfolio levered annualised total 7.4%
return(2)
Weighted average portfolio LTV - to Group first GBP(3) 23.0%
Weighted average portfolio LTV - to Group last GBP(3) 64.7%
Average loan term (stated maturity at inception) 4.0 years
Average remaining loan term 2.8 years
Net Asset Value GBP424.9m
Amount drawn under Revolving Credit Facilities (GBP45.9m)
(excluding accrued interest)
Loans advanced (including accrued income) GBP428.6m
Financial assets held at fair value through profit or GBP21.9m
loss (including associated accrued income)
Cash GBP28.0m
Other net assets/ (liabilities) (including hedges) (GBP7.7m)
Origination Fees - first 6 months GBP0.4m
Origination Fees - last 12 months GBP0.8m
Management Fees - first 6 months GBP1.4m
Management Fees - last 12 months GBP2.9m
(1) The unlevered annualised total return is calculated on amounts
outstanding at the reporting date, excluding undrawn commitments, and
assuming all drawn loans are outstanding for the full contractual term. 14
of the loans are floating rate (partially or in whole and some with floors)
and returns are based on an assumed profile for future interbank rates, but
the actual rate received may be higher or lower. Calculated only on amounts
funded at the reporting date and excluding committed amounts (but including
commitment fees) and excluding uninvested cash. The calculation is stated
after deducting the origination fee payable to the Investment Manager.
(2) The levered annualised total return is calculated as per the unlevered
return but takes into account the amount of net leverage in the Group and
the cost of that leverage at current LIBOR/EURIBOR.
(3) LTV to Group last GBP means the percentage which the total loan drawn less
any amortisation received to date (when aggregated with any other
indebtedness ranking alongside and/or senior to it) bears to the market
value determined by the last formal lender valuation received by the
reporting date. LTV to first Group GBP means the starting point of the loan to
value range of the loans drawn (when aggregated with any other indebtedness
ranking senior to it). For development projects the calculation includes the
total facility available and is calculated against the assumed market value
on completion of the relevant project.
Reported returns have fallen from the year end from 7.4 per cent to 7.2 per
cent unlevered, and from 8.0 per cent to 7.4 per cent levered. We would
expect the levered returns to increase as the loans in execution are funded
and further leverage is used for the loan portfolio.
In addition to this, the simplified way in which the annual return is
presented does lead to the returns being an estimate at any point in time.
The following items enhance the actual returns achieved:
? In the quoted return, we amortise all one-off fees (such as arrangement
and exit fees) over the contractual life of the loan which is currently an
average of four years for the portfolio. However, it has been our experience
that loans tend to repay after approximately 2.5 years and as such these
fees are actually amortised over a shorter period.
? Many loans benefit from prepayment provisions which mean that if they are
repaid before the end of the protected period, additional interest or fees
become due. As we quote the return based on the contractual life of the
loan, these returns cannot be forecast in the return.
? The quoted return excludes the impact of any foreign exchange gains /
losses on Euro loans. We do not forecast this as the loans are often repaid
early and the gain / loss may be different than this once hedge positions
are settled.
The above three upsides to quoted returns are not incorporated in the gross
levered yield of 7.4 per cent as they are not guaranteed to occur, are
difficult to forecast accurately and to incorporate them could overstate the
expected return. However, these have and we expect these to continue to
provide an enhancement to the quoted levels of return going forward although
the levels of this enhancement may vary depending on when the loans repay
versus contractual maturity, the level of prepayment protection and the
shape of the Sterling-Euro forward curve. Over the life of the Company to
date, we have experienced, on average, an enhancement of 0.63 percentage
points from prepayments and one-off fees when loans repay, and we expect the
pick up on foreign exchange to be in excess of 1 percentage point.
Finally, the Group maintains a dividend reserve to ensure that it can
maintain a stable dividend during periods where modest leverage or cash drag
can temporarily lower returns due to the timing of new loans and repayments.
The maturity profile of investments as at 30 June 2019 is shown below.
Remaining years to contractual Principal value % of invested
maturity(1) of loans portfolio
0 to 1 years GBP50.1m 11.2%
1 to 2 years GBP116.7m 26.1%
2 to 3 years GBP111.0m 24.8%
3 to 5 years GBP144.2m 32.3%
5 to 10 years GBP25.0m 5.6%
(1) Excludes any permitted extensions. Note that borrowers may elect to
repay loans before contractual maturity.
The Board considers that the Group is engaged in a single segment of
business, being the provision of a diversified portfolio of real estate
backed loans. The analysis presented in this report is presented to
demonstrate the level of diversification achieved within that single
segment. The Board does not believe that the Group's investments constitute
separate operating segments.
HEDGING POLICY
The Group has the majority of its investments currently denominated in Euros
(although this can change over time) and is a Sterling denominated group.
The Group is therefore subject to the risk that exchange rates move
unfavourably and that a) foreign exchange losses on the loan principal are
incurred and b) that interest payments received are lower than anticipated
when converted back to Sterling and therefore returns are lower than the
underwritten returns.
The Group manages this risk by entering into forward contracts to hedge the
currency risk. All non-Sterling loan principal is hedged back to Sterling to
the maturity date of the loan (unless it was funded using the revolving
credit facilities in which case it will have a natural hedge). Interest
payments are generally hedged for the period for which prepayment protection
is in place. However, the risk remains that loans are repaid earlier than
anticipated and forward contracts need to be broken early. In these
circumstances the forward curve may have moved since the forward contracts
were placed which can impact the rate received. In addition, if the loan
repays after the prepayment protection, interest after the prepayment
protected period may be received at a lower rate than anticipated leading to
lower returns for that period. Conversely the rate could have improved and
returns may increase.
MARKET SUMMARY AND INVESTMENT OUTLOOK
2019 has seen slower volumes in the commercial real estate market in Europe.
According to BNP Real Estate total investment volumes for the first half of
2019 were EUR101.7billion which is 13 per cent lower than in the same period
in 2018. The average hides different situations across the different cities.
In London, Brexit uncertainties have brought volumes down by more than the
average at 39 per cent lower than last year with less stock being brought to
market. Germany's big markets outside of Berlin were down significantly with
Munich, Frankfurt and Hamburg down 46 per cent, 34 per cent and 49 per cent
respectively. Hot markets included Milan, Berlin and Madrid, where investors
are anticipating tight markets and strong rental growth potential, were up
56 per cent, 104 per cent and 67 per cent respectively.
Increased expectations of further rate cuts and quantitative easing has
driven asset pricing across the board. Investors were already expecting the
ECB to supply fresh monetary stimulus to help alleviate the ongoing economic
stress within the region and the nomination of the International Monetary
Fund's Christine Lagarde to be the next ECB president has raised
expectations of continued loosening monetary policy. The EUR interest rate
curve has significantly flattened so now the 5-year swap is lower than
3-month EURIBOR at -63 basis points in the middle of August. Government bond
yields have continued to push down with all European 2-year sovereign debt
now yielding negative returns and with German 10-year bonds having yielded
as low as -0.7 per cent in August. Even peripheral European debt such as
Portugal and Greece is trading at significantly lower yields than in recent
years. Greek 10-year bonds have priced almost as tight as at 2 per cent
having been almost 20 per cent in 2016 and Portugal has traded at 0.1 per
cent at points during August versus over 4.4 per cent just 18 months ago.
With low asset yields we have seen increased formation of lower priced debt
funds and direct investing by insurance companies and pension funds in more
vanilla senior commercial real estate debt as an alternative for sovereign
and corporate bonds. Insurance companies such as Axa and Allianz have been
expanding their senior commercial real estate lending strategies and we are
seeing some new players with similar mandates emerging. We have also seen
good pricing on the two recent CMBS issuances with Morgan Stanley's Eos
(European Loan Conduit No. 35) pricing at a blended 137 bps over EURIBOR for
a 58.7 per cent Note to Value ("NTV") and Goldman and CA-CIB's cold storage
securitisation pricing at 184 bps over LIBOR for a 65.2 per cent NTV.
For other types of alternate lenders there have been a mixed bag of results.
Lendy, a peer to peer lender making small property loans was put into
administration in May after issues on its loan book including a reported 66
per cent of loans past due as of late 2018. Funding Circle, which makes
small business loans, recently reported the tougher lending criteria it was
imposing would halve its expected revenue growth for 2019. The FCA has
increased regulation in the space with investors no longer be able to put
more than 10 per cent of their investable assets into peer to peer lending
and another part of the new rules is the introduction of an appropriateness
test for investors that considers a client's knowledge and experience of
peer to peer lending. In better news, Lendinvest which provides a variety of
property finance has successfully completed its first securitisation. We
have also seen varied fortunes for the challenger banks. Oaknorth appears to
be doing well having grown its total loan book 160 per cent in a year to
GBP2.2 billion and with new commercial development loans as large as GBP60
million reported. Meanwhile fellow challenger bank Metro has had issues with
its loan book having announced it had been miscategorising the
risk-weightings for a large number of its loans when working out how much
capital it needed to protect against losses, which has led to reports of
weakened investor and customer confidence and to a new capital raise in May.
On the UK residential side, London peaked in 2014 and according to Savills
as a whole the prime central London market has fallen 19.4 per cent in
sterling terms between June 2014 and the end of the first quarter of 2019.
The second quarter saw a return to positive house price appreciation in
London with the Nationwide reporting a 0.6 per cent quarter on quarter
growth. Across the UK market as a whole, the RICs residential survey is
reporting a more stable picture. In July the survey reported the second
consecutive month of increased new buyer enquiries, however, sales volumes
are down slightly in July, having been up slightly in June. For the parts of
the market that attract high proportions of international buyers the
continued devaluation of sterling means that foreign buyers denominated in
USD, EUR and RMB currencies are viewing the all-in discount from peak as
especially attractive in their domestic currency.
As we have commented in recent factsheets, the market for UK retail debt is
yet to settle. The refinancing of the GBP750 million Westfield Stratford CMBS
has gone well given the quality of the asset and a low LTV and high debt
yield. The new bonds were issued in July and priced at Gilts+100bps.
According to Debtwire the market may be tested again soon with Intu reported
to be looking at a refinancing of GBP1 billion of debt secured by the Trafford
Centre and a potential CMBS of a GBP150 million Deutsche bank loan secured by
the intu Derby shopping centre. It will be an interesting test of sentiment
to the sector to follow the progress of the refinancing of these very high
profile assets over the coming months.
The UK continues to suffer from Brexit uncertainties with a clear message
from Boris Johnson around his intention to come out of Europe on the 31st
October 2019 with or without a deal which raises the probability of an
intentional or unintentional no deal Brexit. This outcome would no doubt
create increased challenges and uncertainties around many aspects of the UK
market including real estate and real estate debt. In a down market for real
estate, real estate credit will benefit from the equity cushion between
starting values of the underlying collateral and the lending basis.
Uncertainties or shocks may also create openings for the Company to
opportunistically make new investments on a good risk / return basis.
RELATED PARTY TRANSACTIONS
Related party disclosures are given in note 13 to the Unaudited Condensed
Consolidated Financial Statements.
FORWARD LOOKING STATEMENTS
Certain statements in this interim report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations
will prove to have been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements.
The Group undertakes no obligation to update any forward-looking statements
whether as a result of new information, future events or otherwise.
Starwood European Finance Partners Limited
Investment Manager
9 September 2019
Principal Risks
PRINCIPAL RISKS FOR THE REMAINING SIX MONTHS OF THE YEAR TO 31 DECEMBER 2019
The Directors note the introduction of the 2018 UK Corporate Governance Code
(the "2018 Code") which applies to the Group for its financial year
beginning 1 January 2019. As part of the 2018 Code, the Board is required to
consider the Group's impact on environmental, social and governance (the
"ESG") factors. The Board will report on its compliance with the 2018 Code
in the 2019 Annual Report.
The principal risks assessed by the Board relating to the Group were
disclosed in the Annual Report and Audited Consolidated Financial Statements
for the period to 31 December 2018. The Board and Investment Manager have
reassessed the principal risks and do not consider these risks to have
changed. Therefore, the following are the principal risks assessed by the
Board and the Investment Manager as relating to the Group for the remaining
six months of the year to 31 December 2019:
? The Group's targeted returns are based on estimates and assumptions that
are inherently subject to significant business and economic uncertainties
and contingencies, and the actual rate of return may be materially lower
than the targeted returns. In addition, the pace of investment has in the
past and may in the future be slower than expected, or principal may be
repaid earlier than anticipated, causing the return on affected investments
to be less than expected. In addition, if repayments are not promptly
re-invested this may result in cash drag which may lower portfolio returns.
As a result, the level of dividends to be paid by the Company may fluctuate
and there is no guarantee that any such dividends will be paid. As a
consequence, the shares may trade at a discount to NAV per share and
Shareholders may be unable to realise their investments through the
secondary market at NAV per share;
? The Group is subject to the risk that the loan income and income from the
cash and cash equivalents will fluctuate due to movements in interbank
rates;
? The Group has the majority of its investments currently denominated in
Euros and is subject to the risk that the exchange rates move unfavourably
and that a) foreign exchange losses on the loan principal are incurred and
b) that interest payments received are lower than anticipated when converted
back to Sterling and therefore returns are lower than the underwritten
returns. All non-Sterling loan principal is hedged back to Sterling to the
maturity date of the loan (except where drawn in Euros on the revolving
credit facilities). Interest payments are hedged for the period for which
prepayment protection is in place. However, the risk remains that loans are
repaid earlier than anticipated and forward contracts need to be broken
early. In these circumstances the forward curve may have moved since the
forward contracts were placed which can impact the rate received. In
addition, if the loan repays after the prepayment protection, interest after
the prepayment protected period may be received at a lower rate than
anticipated leading to lower returns for that period. Conversely the rate
could have improved, and returns may increase. As a consequence of the
hedging strategy employed as outlined above, the Group is subject to the
risk that it will need to post cash collateral against the mark to market on
foreign exchange hedges which could lead to liquidity issues or leave the
Group unable to hedge new non-Sterling investments;
? The Group's investments are comprised principally of debt investments in
the UK, and the wider European Union's internal market and it is therefore
exposed to economic movements and changes in these markets. Any
deterioration in the global, UK or European economy could have a significant
adverse effect on the activities of the Group and may result in significant
loan defaults or impairments. In the event of a default the Group is
generally entitled to enforce security, but the process may be expensive and
lengthy, and the outcome is dependent on sufficient capital being available
to meet the borrower's obligations. Some of the investments made would rank
behind senior debt tranches for repayment in the event that a borrower
defaults, with the consequence of greater risk of partial or total loss. In
addition, repayment of loans could be subject to the available of
refinancing options, including the availability of senior and subordinated
debt and is also subject to the underlying value of the real estate
collateral at the date of maturity;
? The United Kingdom's imminent departure from the European Union, with or
without an agreement, represents a potential threat to the UK economy as
well as wider Europe. On a cyclical view, national economies across Europe
appear to be heading at best towards lower growth and in some cases towards
recession. The potential impact of Brexit could have a further destabilising
e?ect. To some extent the potential impact of an unsatisfactory UK exit from
the EU has already been priced into markets and forecasts, but significant
headwinds could arise should there be an unstructured settlement; and
? The Group is subject to the risk that a borrower could be unable or
unwilling to meet a commitment that it has entered into with the Group as
outlined above. As a consequence of this, the Group could breach the
covenants of its revolving credit facilities and fall into default.
Governance
Board of Directors
STEPHEN SMITH | Non-executive Chairman - Chairman of the Board
Stephen is Chairman of the The PRS REIT which currently trades on the SFS of
the London Stock Exchange. He is also Chairman of AEW UK Long Lease REIT plc
which trades on the Main Market of the London Stock Exchange. Previously, he
was the Chief Investment Officer of British Land Company PLC, the FTSE 100
real estate investment trust from January 2010 to March 2013 with
responsibility for the group's property and investment strategy. He was
formerly Global Head of Asset Management and Transactions at AXA Real Estate
Investment Managers, where he was responsible for the asset management of a
portfolio of more than EUR40 billion on behalf of life funds, listed
property vehicles, unit linked and closed end funds. Prior to joining AXA in
1999 he was Managing Director at Sun Life Properties for five years. Stephen
is a UK resident.
JONATHAN BRIDEL | Non-executive Director - Management Engagement Committee
Chairman
Jonathan is currently a non-executive Chairman or director of listed and
unlisted companies comprised mainly of investment funds and investment
managers. These include The Renewables Infrastructure Group Limited (FTSE
250), Sequoia Economic Infrastructure Income Fund Limited (FTSE 250) and SME
Credit Realisation Fund Limited (formerly Funding Circle SME Income Fund
Limited) which are listed on the main market of the London Stock Exchange,
DP Aircraft I Limited and Fair Oaks Income Fund Limited. He was previously
Managing Director of Royal Bank of Canada's investment business in the
Channel Islands. Prior to this, after working at Price Waterhouse Corporate
Finance in London, Jonathan served in senior management positions in the
British Isles and Australia in banking, specialising in credit and in
private businesses as Chief Financial Officer. Graduating from the
University of Durham with a degree of Master of Business Administration in
1988, Jonathan also holds qualifications from the Institute of Chartered
Accountants in England and Wales where he is a Fellow, the Chartered
Institute of Marketing and the Australian Institute of Company Directors.
Jonathan is a Chartered Marketer and a member of the Chartered Institute of
Marketing, a Chartered Director and Fellow of the Institute of Directors and
a Chartered Fellow of the Chartered Institute for Securities and Investment.
Jonathan is a resident of Guernsey.
JOHN WHITTLE | Non-executive Director - Audit Committee Chairman
John is a Fellow of the Institute of Chartered Accountants in England and
Wales and holds the Institute of Directors Diploma in Company Direction. He
is a non-executive Director of International Public Partnerships Limited
(FTSE 250), India Capital Growth Fund Limited (listed on main market LSE),
Globalworth Real Estate Investments Limited, GLI Finance Ltd and Aberdeen
Frontier Markets Investment Company Limited (all listed on AIM), Chenavari
Toro Income Fund Limited (listed on SFS), and also acts as non-executive
Director to several other Guernsey investment funds. He was previously
Finance Director of Close Fund Services, a large independent fund
administrator, where he successfully initiated a restructuring of client
financial reporting services and was a key member of the business transition
team. Prior to moving to Guernsey he was at PriceWaterhouse in London before
embarking on a career in business services, predominantly telecoms. He
co-led the business turnaround of Talkland International (which became
Vodafone Retail) and was directly responsible for the strategic shift into
retail distribution and its subsequent implementation; he subsequently
worked on the private equity acquisition of Ora Telecom. John is also a
resident of Guernsey.
Statement of Directors' Responsibilities
To the best of their knowledge, the Directors of Starwood European Real
Estate Finance Limited confirm that:
1. The Unaudited Condensed Consolidated Financial Statements have been
prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted
by the European Union as required by DTR 4.2.4 R; and
2. The Interim Financial Report, comprising of the Chairman's Statement and
the Investment Manager's Report, meets the requirements of an interim
management report and includes a fair review of information required by:
(i) DTR 4.2.7R of the UK Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six
months and their impact on the Unaudited Condensed Consolidated Financial
Statements, and a description of the principal risks and uncertainties for
the remaining six months of the year; and
(ii) DTR 4.2.8R of the UK Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months and that
have materially affected the financial position or performance of the
Company during that period, and any material changes in the related party
transactions disclosed in the last Annual Report.
By order of the Board
For Starwood European Real Estate Finance Limited
Stephen Smith John Whittle
Chairman Director
9 September 2019 9 September 2019
Financial Statements
Independent Review Report to Starwood European Real Estate Finance Limited
OUR CONCLUSION
We have reviewed the accompanying condensed consolidated interim financial
information of Starwood European Real Estate Finance Limited (the "Company")
and its subsidiaries (together the "Group") as of 30 June 2019. Based on our
review, nothing has come to our attention that causes us to believe that the
accompanying condensed consolidated interim financial information is not
prepared, in all material respects, in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the Disclosure Guidance and Transparency Rules sourcebook
of the United Kingdom's Financial Conduct Authority.
WHAT WE HAVE REVIEWED
The accompanying condensed consolidated interim financial information
comprise:
? The unaudited condensed consolidated statement of financial position as of
30 June 2019;
? the unaudited condensed consolidated statement of comprehensive income for
the six-month period then ended;
? the unaudited condensed consolidated statement of changes in equity for
the six-month period then ended;
? the unaudited condensed consolidated statement of cash flows for the
six-month period then ended; and
? the notes, comprising a summary of significant accounting policies and
other explanatory information.
The condensed consolidated interim financial information has been prepared
in accordance with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
OUR RESPONSIBILITIES AND THOSE OF THE DIRECTORS
The Directors are responsible for the preparation and presentation of this
condensed consolidated interim financial information in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on this condensed consolidated
interim financial information based on our review. This report, including
the conclusion, has been prepared for and only for the Company for the
purpose of complying with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
SCOPE OF REVIEW
We conducted our review in accordance with International Standard on Review
Engagements 2410, 'Review of interim financial information performed by the
independent auditor of the entity' issued by the International Auditing and
Assurance Standards Board. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information contained in the Interim Financial Report
and Unaudited Condensed Consolidated Financial Statements and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the interim financial statements.
PricewaterhouseCoopers CI LLP
Chartered Accountants,
Guernsey, Channel Islands
9 September 2019
(a) The maintenance and integrity of the Starwood European Real Estate
Finance Limited website is the responsibility of the directors; the work
carried out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any changes that
may have occurred to the financial statements since they were initially
presented on the website.
(b) Legislation in Guernsey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Unaudited Condensed Consolidated Statement of Comprehensive Income
for the period ended 30 June 2019
Notes 1 January 1 January 1 January
2019 to 2018 to 2018 to
30 June 2019 30 June 2018 31 December
GBP GBP 2018
GBP
(unaudited) (unaudited) (audited)
Income
Income from loans 5 13,687,862 14,363,129 30,137,174
advanced
Net changes in 11 1,164,657 850,117 2,018,771
fair value of
financial assets
at fair value
through profit or
loss
Income from cash 1 21,204 21,205
and cash
equivalents
Total income from 14,852,520 15,234,450 32,177,150
investments
Expenses
Investment 13 1,476,340 1,415,286 2,858,556
management fees
Credit facility 544,084 489,960 1,074,308
interest
Credit facility 196,689 240,143 439,950
amortisation of
fees
Credit facility 229,821 232,228 470,700
commitment fees
Administration 169,147 179,047 356,409
fees
Audit and 125,156 160,034 249,500
non-audit fees
Other expenses 77,393 114,384 287,663
Legal and 127,005 88,895 196,806
professional fees
Directors' fees 13 70,167 71,541 141,821
and expenses
Broker's fees and 167 50,749 75,749
expenses
Agency fees 10,936 5,446 16,506
Net foreign (1,003,676) 676,718 (234,453)
exchange (gains)
/ losses
Total operating 2,023,229 3,724,431 5,933,515
expenses
Operating profit 12,829,291 11,510,019 26,243,635
for the period /
year before tax
Taxation 12 23,939 1,901 68,068
Operating profit 12,805,352 11,508,118 26,175,567
for the period /
year
Other
comprehensive
income
Items that may be
reclassified to
profit or loss
Exchange (3,142) 54,644 54,740
differences on
translation of
foreign
operations
Other (3,142) 54,644 54,740
comprehensive
income for the
period / year
Total 12,802,210 11,562,762 26,230,307
comprehensive
income for the
period / year
Weighted average 3 384,938,735 375,019,398 375,019,398
number of shares
in issue
Basic and diluted 3 3.33 3.07 6.98
earnings per
Ordinary Share
(pence)
Unaudited Condensed Consolidated Statement of Financial Position
as at 30 June 2019
Notes As at As at As at
30 June 30 June 2018 31 December
2019 GBP 2018
GBP GBP
(unaudited) (unaudited) (audited)
Assets
Cash and cash 4 27,959,950 8,730,655 28,248,515
equivalents
Other receivables 12,198 13,411 28,935
and prepayments
Credit facilities 8 1,015,582 1,224,205 1,212,271
capitalised cost
Financial assets 6 21,879,086 21,878,430 21,886,335
at fair value
through profit or
loss
Loans advanced 5 428,636,053 412,109,232 413,444,410
Total assets 479,502,869 443,955,933 464,820,466
Liabilities
Financial 6 7,216,743 6,010,773 8,781,432
liabilities at
fair value
through profit or
loss
Credit facilities 8 46,012,226 54,098,366 68,977,214
Trade and other 7 1,391,059 1,332,626 2,068,238
payables
Total liabilities 54,620,028 61,441,765 79,826,884
Net assets 424,882,841 382,514,168 384,993,582
Capital and
reserves
Share capital 411,205,161 371,929,982 371,929,982
Retained earnings 13,623,598 10,527,058 13,006,376
Translation 54,082 57,128 57,224
reserves
Total equity 424,882,841 382,514,168 384,993,582
Number of 413,219,398 375,019,398 375,019,398
Ordinary Shares
in issue
Net asset value 102.82 102.00 102.66
per Ordinary
Share (pence)
These Unaudited Condensed Consolidated Financial Statements were approved
and authorised for issue by the Board of Directors on 9 September 2019, and
signed on its behalf by:
Stephen Smith John Whittle
Chairman Director
Unaudited Condensed Consolidated Statement of Changes in Equity
for the period ended 30 June 2019
Period ended Share Retained Translation Total
30 June 2019 capital earnings reserve
GBP GBP GBP
equity
GBP
(unaudited) (unaudited) (unaudited) (unaudited)
Balance at 1 371,929,982 13,006,376 57,224 384,993,582
January 2019
Issue of share 40,014,500 - - 40,014,500
capital
Cost of issues (739,321) - - (739,321)
Dividends paid - (12,188,130) - (12,188,130)
Operating - 12,805,352 - 12,805,352
profit for the
period
Other
comprehensive
income:
Other - - (3,142) (3,142)
comprehensive
income for the
period
Balance at 30 411,205,161 13,623,598 54,082 424,882,841
June 2019
Period ended Share Retained Translation Total
30 June 2018 capital earnings reserve equity
GBP GBP GBP GBP
(unaudited) (unaudited) (unaudited) (unaudited)
Balance at 1 371,929,982 11,207,070 2,484 383,139,536
January 2018
Dividends paid - (12,188,130) - (12,188,130)
Operating - 11,508,118 - 11,508,118
profit and
total
comprehensive
income
Other
comprehensive
income:
Other - - 54,644 54,644
comprehensive
income for the
period
Balance at 30 371,929,982 10,527,058 57,128 382,514,168
June 2018
Year ended 31 Share Retained Translation Total
December 2018 capital earnings reserve equity
GBP GBP GBP GBP
(audited) (audited) (audited) (audited)
Balance at 1 371,929,982 11,207,070 2,484 383,139,536
January 2018
Dividends paid - (24,376,261) - (24,376,261)
Operating - 26,175,567 - 26,175,567
profit for the
year
Other
comprehensive
income:
Other - - 54,740 54,740
comprehensive
income for the
year
Balance at 31 371,929,982 13,006,376 57,224 384,993,582
December 2018
Unaudited Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2019
1 January 2019 1 January 2018 1 January
to to 2018 to
30 June 2019 30 June 2018 31 December
2018
GBP GBP GBP
(unaudited) (unaudited) (audited)
Operating
activities:
Operating profit 12,805,352 11,508,118 26,175,567
for the period /
year
Adjustments
Income from (13,687,862) (14,363,129) (30,137,174)
loans advanced
Net changes in (1,164,657) (850,117) (2,018,771)
fair value of
financial assets
at fair value
through profit
or loss
Income on cash (1) (21,204) (21,205)
and cash
equivalents
Decrease / 16,737 (12,787) (152,366)
(increase) in
prepayments and
receivables and
capitalised
costs
Decrease in 58,459 68,638 50,302
trade and other
payables
Net unrealised (1,564,689) (715,495) 2,055,164
(gains) / losses
on foreign
exchange
derivatives
Net foreign 1,229,975 402,449 (4,750,126)
exchange losses
/ (gains)
Other non-cash (81,044) - -
items
Credit facility 544,084 489,960 1,074,308
interest
Credit facility 196,689 240,143 439,950
amortisation of
fees
Credit facility 229,821 232,228 470,700
commitment fees
Corporate taxes (45,624) - (4,217)
paid
(1,462,760) (3,021,196) (6,817,868)
Loans advanced1 (62,553,702) (114,786,936) (172,359,770)
Loan repayments 45,895,750 74,091,183 137,158,115
and amortisation
Arrangement fees - 347,490 347,490
received (not
withheld from
proceeds)
Origination fees (683,328) (1,382,544) (1,509,923)
paid2
Interest, 13,998,212 13,420,672 29,398,155
commitment and
exit fee income
from loans
advanced
Interest 1,171,906 1,084,507 2,245,256
received on
Credit Linked
Notes
Net cash outflow (3,633,922) (30,246,824) (11,538,545)
from operating
activities
Cash flows from
investing
activities
Interest income 1 21,204 21,205
from cash and
cash equivalents
Net cash inflow 1 21,204 21,205
from investing
activities
Cash flows from
financing
activities
Share issue 40,014,500 - -
proceeds
received
Cost of share (739,321) - -
issues
Credit facility - (420,567) (420,567)
arrangement fees
and expenses
paid
Proceeds under 37,075,890 64,862,862 129,546,670
credit facility
Repayments under (60,213,500) (24,278,000) (75,603,281)
credit facility
Credit facility (566,047) (372,806) (924,480)
interest paid
Credit facility (216,232) (259,914) (494,779)
commitment fees
paid
Dividends paid (12,188,130) (12,188,130) (24,376,261)
Net cash inflow 3,167,160 27,343,445 27,727,302
from financing
activities
Net (decrease) / (466,761) (2,882,175) 16,209,962
increase in cash
and cash
equivalents
Cash and cash 28,248,515 11,750,356 11,750,356
equivalents at
the start of the
period / year
Net foreign 178,196 (137,526) 288,197
exchange gains /
(losses) on cash
and cash
equivalents
Cash and cash 27,959,950 8,730,655 28,248,515
equivalents at
the end of the
period / year
1 Net of arrangement fees of GBP335,994 (30 June 2018: GBP1,771,375; 31 December
2018: GBP2,396,173) withheld.
2 Including CLNs origination fees of GBPnil (30 June 2018: GBP288,150; 31
December 2018: GBP288,150).
Notes to the Unaudited Condensed Consolidated Financial Statements
for the period ended 30 June 2019
1. GENERAL INFORMATION
The Company is a close-ended investment company incorporated in Guernsey.
The Unaudited Condensed Consolidated Financial Statements comprise the
Financial Statements of the Company, Starfin Public Holdco 1 Limited (the
"Holdco 1"), Starfin Public Holdco 2 Limited (the "Holdco 2"), Starfin Lux
S.à.r.l ("Luxco"), Starfin Lux 3 S.à.r.l ("Luxco 3") and Starfin Lux 4
S.à.r.l ("Luxco 4") (together the "Group") as at 30 June 2019.
2. BASIS OF PREPARATION AND PRINCIPAL ACCOUNTING POLICIES
The Company has prepared these Unaudited Condensed Consolidated Financial
Statements on a going concern basis in accordance with International
Accounting Standard 34, "Interim Financial Reporting", as adopted by the
European Union and the Disclosure Guidance and Transparency Rules sourcebook
of the United Kingdom's Financial Conduct Authority. This Interim Financial
Report does not comprise statutory Financial Statements within the meaning
of the Companies (Guernsey) Law, 2008, and should be read in conjunction
with the Consolidated Financial Statements of the Group as at and for the
year ended 31 December 2018, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the European
Union. The statutory Financial Statements for the year ended 31 December
2018 were approved by the Board of Directors on 25 March 2019. The opinion
of the Auditor on those Financial Statements was unqualified and did not
contain an emphasis of matter. This Interim Financial Report and Unaudited
Condensed Consolidated Financial Statements for the period ended 30 June
2019 has been reviewed by the Auditor but not audited.
There are a number of new and amended accounting standards and
interpretations that became applicable for annual reporting periods
commencing on or after 1 January 2019.
These amendments have not had a significant impact on these Unaudited
Condensed Consolidated Financial Statements and therefore the additional
disclosures associated with first time adoption have not been made.
The preparation of the Unaudited Condensed Consolidated Financial Statements
requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of
assets and liabilities, income and expenses. Actual results may differ from
these estimates.
In preparing these Unaudited Condensed Consolidated Financial Statements,
the significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those that applied to the Annual Consolidated Financial Statements
for the year ended 31 December 2018.
3. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
The calculation of basic earnings per Ordinary Share is based on the
operating profit of GBP12,805,352 (30 June 2018: GBP11,508,118 and 31 December
2018: GBP26,175,567) and on the weighted average number of Ordinary Shares in
issue at 30 June 2019 of 384,938,735 (30 June 2018: 375,019,398 and 31
December 2018: 375,019,398).
The calculation of NAV per Ordinary Share is based on a NAV of GBP424,882,841
(30 June 2018: GBP382,514,168 and 31 December 2018: GBP384,993,582) and the
actual number of Ordinary Shares in issue at 30 June 2019 of 413,219,398 (30
June 2018: 375,019,398 and 31 December 2018: 375,019,398).
4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise the following:
30 June 2019 30 June 2018 31 December 2018
GBP GBP GBP
Cash at bank 27,959,950 8,730,655 28,248,515
27,959,950 8,730,655 28,248,515
Cash and cash equivalents comprises cash and short-term deposits held with
various banking institutions with original maturities of three months or
less. The carrying amount of these assets approximates their fair value.
5. LOANS ADVANCED
30 June 30 June 2018 31 December
2019 2018
GBP GBP GBP
UK
Regional Hotel 46,690,942 46,747,493 46,752,485
Portfolio, UK
Hotel and Residential, 39,863,705 ? 34,532,132
UK
Hospitals, UK 25,341,644 25,351,156 25,346,479
Industrial Portfolio, ? 19,070,180 -
UK
Mixed Use Development, 12,282,913 12,932,216 14,927,500
South East UK
Varde Partners Mixed - 3,058,045 981,502
Portfolio, UK
Office, Scotland 4,305,664 ? -
Ireland
Hotel, Dublin, Ireland 54,173,151 53,372,166 54,458,838
School, Dublin - 16,967,038 17,319,861
Logistics, Dublin 13,035,099 12,970,152 13,168,789
Student Accommodation, - 9,402,404 9,667,282
Dublin
Residential Portfolio, - 6,869,245 -
Dublin
Residential, Dublin 2,147,252 4,029,496 6,931,790
Spain
Hotel, Barcelona 41,483,446 40,887,310 41,697,630
Three Shopping Centres, 32,602,374 31,045,447 31,527,080
Spain
Hotel, Spain 25,604,236 24,210,649 23,394,315
Office and Hotel, 16,624,145 - 16,712,680
Madrid
Shopping Centre, Spain 15,374,244 11,162,015 15,357,522
France
Office, Paris 14,512,426 23,232,265 14,653,866
Industrial Portfolio, - 13,146,683 -
Paris
Rest of Europe
Mixed Portfolio, 47,194,411 - -
Central and Northern
Europe
Industrial Portfolio, 37,400,401 57,655,272 46,014,659
Central and East Europe
428,636,053 412,109,232 413,444,410
No element of loans advanced are past due or impaired. For further
information and the associated risks see the Investment Manager's Report.
The table below reconciles the movement of the carrying value of loans
advanced in the period / year:
30 June 2019 30 June 2018 31 December
2018
GBP GBP GBP
Loans advanced at the 413,444,410 369,955,983 369,955,983
start of the period /
year
Loans advanced 62,495,181 116,558,311 175,161,798
Loans repaid (45,895,750) (74,091,183) (137,158,115)
Arrangement fees (335,994) (1,771,375) (2,396,173)
earned
Commitment fees earned (327,239) (135,670) (575,559)
Exit fees earned (602,557) (1,071,217) (2,730,382)
Origination fees paid 373,953 1,106,714 1,543,468
Effective interest 13,687,862 14,363,129 30,137,174
income earned
Interest payments (13,055,677) (12,213,785) (26,092,214)
received / accrued
Foreign exchange (1,148,136) (591,675) 5,598,430
(losses) / gains
Loans advanced at the 428,636,053 412,109,232 413,444,410
end of the period /
year
Loans advanced at fair 439,874,981 425,785,582 426,379,370
value
For further information on the fair value of loans advanced, refer to note
11.
6. FINANCIAL ASSETS AND FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT
OR LOSS
Financial assets at fair value through profit or loss comprise currency
forward contracts which represent contractual obligations to purchase one
currency and sell another currency on a future date at a specified price and
financial instruments designated at fair value through profit or loss which
are debt securities that are managed by the Group and their performance is
evaluated on a fair value basis.
The underlying instruments of currency forwards become favourable (assets)
or unfavourable (liabilities) as a result of fluctuations of foreign
exchange rates relative to their terms. The aggregate contractual or
notional amount of derivative financial instruments, the extent to which
instruments are favourable or unfavourable, and thus the aggregate fair
values of derivative financial assets and liabilities, can fluctuate
significantly from time to time. The foreign exchange derivatives are
subject to offsetting, enforceable master netting agreements for per each
counterparty.
The fair value of financial assets and liabilities at fair value through
profit or loss are set out below:
Notional Fair values Total
contract
amount1
30 June 2019 Assets Liabilities
GBP GBP GBP GBP
Investments at
fair value
through profit
or loss
Credit Linked N/A 21,879,086 - 21,879,08
Notes, UK Real 6
Estate
Total - 21,879,086 - 21,879,08
6
Foreign exchange
derivatives
Currency
forwards:
Lloyds Bank plc 296,802,700 351,983 (7,552,757) (7,200,77
4)
Goldman Sachs 953,750 - (15,969) (15,969)
Total 297,756,450 351,983 (7,568,726) (7,216,74
3)
Notional Fair values Total
contract
amount1
30 June 2018 Assets Liabilities
GBP GBP GBP GBP
Investments at
fair value
through profit
or loss
Credit Linked N/A 21,878,430 - 21,878,43
Notes, UK Real 0
Estate
Total - 21,878,430 - 21,878,43
0
Foreign exchange
derivatives
Currency
forwards:
Lloyds Bank plc 265,658,802 67,297 (6,061,845) (5,994,54
8)
Goldman Sachs 940,988 - (16,225) (16,225)
Total 266,599,790 67,297 (6,078,070) (6,010,77
3)
Notional Fair values Total
contract
amount1
GBP
31 December 2018 Assets Liabilities
GBP GBP GBP
Investments at
fair value
through profit
or loss
Credit Linked N/A 21,886,335 - 21,886,33
Notes, UK Real 5
Estate
Total - 21,886,335 - 21,886,33
5
Foreign exchange
derivatives
Currency
forwards:
Lloyds Bank plc 263,815,899 50,055 (8,803,266) (8,753,21
1)
Goldman Sachs 959,174 - (28,221) (28,221)
Total 264,775,073 50,055 (8,831,487) (8,781,43
2)
1 Euro amounts are translated at the period / year end exchange rate
7. TRADE AND OTHER PAYABLES
30 June 2019 30 June 2018 31 December
2018
GBP GBP GBP
Investment management 767,529 712,064 723,652
fees payable
Refinancing and 231,605 300,166 239,081
restructuring fees
payable
Audit fees payable 156,779 180,729 95,943
Commitment fees payable 95,162 79,293 82,900
Administration fees 85,816 60,374 74,360
payable
Tax provision 41,429 - 64,401
Prepaid interest 12,739 - -
received
Accrued expenses - - 60,196
Legal and professional - - 12,475
fees payable
Loan amounts payable - - 405,855
Origination fees payable - - 309,375
1,391,059 1,332,626 2,068,238
8. CREDIT FACILITIES
The Group utilises revolving credit facilities (EUR and GBP). Under its
investment policy, the Group is limited to borrowing an amount equivalent to
a maximum of 30 per cent of its NAV at the time of drawdown, of which a
maximum of 20 per cent can be longer term borrowings. In calculating the
Group's borrowings for this purpose, any liabilities incurred under the
Group's foreign exchange hedging arrangements shall be disregarded.
As at 30 June 2019 an amount of GBP45,878,046 (30 June 2018: GBP53,972,800 and
31 December 2018: GBP68,818,554) was drawn and interest of GBP134,180 (30 June
2018: GBP125,566 and 31 December 2018: GBP158,660) was payable.
The revolving credit facilities capitalised costs are directly attributable
costs incurred in relation to the establishment of the credit loan
facilities.
The changes in liabilities arising from financing activities are shown in
the table below.
30 June 2019 30 June 2018 31 December
2018
GBP GBP GBP
Borrowings at the 68,977,214 13,338,329 13,338,329
start of the period
/year
Proceeds during the 37,075,890 65,295,600 129,979,408
period/year
Repayment during the (60,213,500) (24,278,000) (75,603,281)
period/year
Arrangement fees - 432,738 432,738
payable
Arrangement fees - (432,738) (432,738)
retained
Interest expense 544,084 489,960 1,074,308
recognised for the
period/year
Interest paid during (566,047) (372,806) (924,480)
the period/year
Foreign exchange and 194,585 (374,717) 1,112,930
translation movements
Borrowings at the end 46,012,226 54,098,366 68,977,214
of the period/year
9. DIVIDS
Dividends will be declared by the Directors and paid in compliance with the
solvency test prescribed by Guernsey law. Under Guernsey law, companies can
pay dividends in excess of accounting profit provided they satisfy the
solvency test prescribed by the Companies (Guernsey) Law, 2008. The solvency
test considers whether a company is able to pay its debts when they fall
due, and whether the value of a company's assets is greater than its
liabilities. The Company passed the solvency test for each dividend paid.
Subject to market conditions, the financial position of the Company and the
investment outlook, it is the Directors' intention to continue to pay
quarterly dividends to Shareholders (for more information see Chairman's
Statement).
The Company paid the following dividends in respect of the period to 30 June
2019:
Dividend rate per Net dividend Payment
Share (pence) paid (GBP) date
Period to:
31 March 2019 1.625 6,094,065 24 May 2019
After the end of the period, the Directors declared a dividend in respect of
the financial period ended 30 June 2019 of 1.625 pence per share which was
paid on 30 August 2019 to Shareholders on the register on 2 August 2019.
The Company paid the following dividends in respect of the year to 31
December 2018:
Dividend rate per Net dividend Payment date
Share (pence) paid (GBP)
Period to:
31 March 2018 1.625 6,094,065 17 May 2018
30 June 2018 1.625 6,094,065 31 August 2018
30 September 1.625 6,094,065 16 November 2018
2018
31 December 2018 1.625 6,094,065 22 February 2019
10. RISK MANAGEMENT POLICIES AND PROCEDURES
The Group through its investment in whole loans, subordinated loans,
mezzanine loans, bridge loans, loan-on-loan financings and other debt
instruments is exposed to a variety of financial risks, including market
risk (including currency risk and interest rate risk), credit risk and
liquidity risk. The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group's financial performance.
The Directors monitor and measure the overall risk bearing capacity in
relation to the aggregate risk exposure across all risk types and
activities. Even though the risks detailed in the Annual Report and
Financial Statements for the year ended 31 December 2018 still remain
appropriate, further information regarding these risk policies are outlined
below:
(i) Market risk
Market risk includes market price risk, currency risk and interest rate
risk. If a borrower defaults on a loan and the real estate market enters a
downturn it could materially and adversely affect the value of the
collateral over which loans are secured. However, this risk is considered by
the Board to constitute credit risk as it relates to the borrower defaulting
on the loan and not directly to any movements in the real estate market. The
Group's exposure to market price risk arises from Credit Linked Notes held
by the Group and classified as assets at fair value through profit or loss.
The Investment Manager regularly monitors the fair value of Credit Linked
Notes and no specific hedging activities are undertaken in relation to this
investment.
The Investment Manager moderates market risk through a careful selection of
loans within specified limits. The Group's overall market position is
monitored by the Investment Manager and is reviewed by the Board of
Directors on an ongoing basis.
a) Currency risk
The Group, via the subsidiaries, operates across Europe and invests in loans
that are denominated in currencies other than the functional currency of the
Company. Consequently, the Group is exposed to risks arising from foreign
exchange rate fluctuations in respect of these loans and other assets and
liabilities which relate to currency flows from revenues and expenses.
Exposure to foreign currency risk is hedged and monitored by the Investment
Manager on an ongoing basis and is reported to the Board accordingly.
b) Interest rate risk
Interest rate risk is the risk that the value of financial instruments and
related income from loans advanced and cash and cash equivalents will
fluctuate due to changes in market interest rates.
The majority of the Group's financial assets are loans advanced at amortised
cost, credit linked notes, receivables and cash and cash equivalents. The
Group's investments have some exposure to interest rate risk which is
limited to interest earned on cash deposits, credit linked notes and
floating interbank rate exposure for investments designated as loans
advanced. Loans advanced have been structured to include a combination of
fixed and floating interest rates to reduce the overall impact of interest
rate movements. Further protection is provided by including interbank rate
floors and preventing interest rates from falling below certain levels.
(ii) Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in
full when due. The Group's main credit risk exposure is in the investment
portfolio, shown as loans advanced at amortised cost and credit linked notes
designated at fair value through profit or loss, where the Group invests in
whole loans and also subordinated and mezzanine debt which rank behind
senior debt for repayment in the event that a borrower defaults. There is a
spread concentration of risk as at 30 June 2019 due to several loans being
advanced since inception. There is also credit risk in respect of other
financial assets as a portion of the Group's assets are cash and cash
equivalents or accrued interest. The banks used to hold cash and cash
equivalents have been diversified to spread the credit risk to which the
Group is exposed. The Group also has credit risk exposure in its derivative
financial instruments which is diversified between hedge providers in order
to spread credit risk to which the Group is exposed.
With respect to the credit linked notes designated at fair value through
profit or loss, the Group holds junior notes linked to the performance of a
portfolio of high-quality UK real estate loans owned by a major commercial
bank. The transaction is structured as a synthetic securitisation with risk
transfer from the bank to the Group achieved via the purchase of credit
protection by the bank on the most junior tranches. The credit risk to the
Group is the risk that one of the underlying borrowers defaults on their
loan and the Group is required to make a payment under the credit protection
agreement. Despite the different way in which the transaction has been
structured the Group considers the risks to be fundamentally the same as any
other junior loan in the portfolio and monitors and manages this risk in the
same way as the other loans advanced by the Group.
The total exposure to credit risk arises from default of the counterparty
and the carrying amounts of financial assets best represent the maximum
credit risk exposure at the end of the reporting period. As at 30 June 2019,
the maximum credit risk exposure was GBP478,475,089 (30 June 2018:
GBP442,718,317 and 31 December 2018: GBP463,579,260).
The Investment Manager has adopted procedures to reduce credit risk exposure
by conducting credit analysis of the counterparties, their business and
reputation which is monitored on an ongoing basis. After the advancing of a
loan a dedicated debt asset manager employed by the Investment Adviser
monitors ongoing credit risk and reports to the Investment Manager, with
quarterly updates also provided to the Board. The debt asset manager
routinely stresses and analyses the profile of the Group's underlying risk
in terms of exposure to significant tenants, performance of asset management
teams and property managers against specific milestones that are typically
agreed at the time of the original loan underwriting, forecasting headroom
against covenants, reviewing market data and forecast economic trends to
benchmark borrower performance and to assist in identifying potential future
stress points. Periodic physical inspections of assets that form part of the
Group's security are also completed in addition to monitoring the identified
capital expenditure requirements against actual borrower investment.
The Group measures credit risk and expected credit losses using probability
of default, exposure at default and loss given default. The Directors
consider both historical analysis and forward looking information in
determining any expected credit loss. The Directors consider the loss given
default to be close to zero as all loans are the subject of very detailed
underwriting, including the testing of resilience to aggressive downside
scenarios with respect to the loan specifics, the market and general macro
changes. In addition to this, all loans have very robust covenants in place,
strong security packages and significant loan-to-value headroom. As a
result, no loss allowance has been recognised based on 12-month expected
credit losses as any such impairment would be wholly insignificant to the
Group. All loans advanced are in Stage 1 as there has not been a significant
change in counterparty credit risk since 31 December 2018 or inception.
(iii) Liquidity risk
Liquidity risk is the risk that the Group will not have sufficient resources
available to meet its liabilities as they fall due. The Group's loans
advanced are illiquid and may be difficult or impossible to realise for cash
at short notice.
The Group manages its liquidity risk through short term and long-term cash
flow forecasts to ensure it is able to meet its obligations. In addition,
the Company is permitted to borrow up to 30 per cent of NAV and has entered
into revolving credit facilities totalling GBP114,000,000 of which GBP46,012,226
(including accrued interest) was drawn on 30 June 2019 (30 June 2018:
GBP54,098,366 and 31 December 2018: GBP68,977,214).
As at 30 June 2019, the Group had GBP27,959,950 (30 June 2018: GBP8,730,655 and
31 December 2018: GBP28,248,515) available in cash and GBP1,391,059 (30 June
2018: GBP1,332,626 and 31 December 2018: GBP2,068,238) trade payables. The
Directors considered this to be sufficient cash available, together with the
undrawn facilities on the credit facilities, to meet the Group's liabilities
and unfunded commitments.
11. FAIR VALUE MEASUREMENT
IFRS 13 requires the Company to classify fair value measurements using a
fair value hierarchy that reflects the significance of the inputs used in
making the measurements. The fair value hierarchy has the following levels:
(i) Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1);
(ii) Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices including interest rates, yield
curves, volatilities, prepayment rates, credit risks and default rates) or
other market corroborated inputs (level 2); and
(iii) Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
The following table analyses within the fair value hierarchy the Group's
financial assets and liabilities (by class) measured at fair value:
30 June 2019 Level 1 Level Level Total
2 3
GBP GBP GBP GBP
Assets
Financial assets - - 21,879 21,87
at fair value ,086 9,086
through profit or
loss
Total - - 21,879 21,87
,086 9,086
Liabilities
Derivative - (7,216 - (7,21
liabilities ,743) 6,743
)
Total - (7,216 - (7,21
,743) 6,743
)
30 June 2018 Level 1 Level Level Total
2 3
GBP GBP GBP GBP
Assets
Financial assets at fair value - - 21,878 21,87
through profit or loss ,430 8,430
Total - - 21,878 21,87
,430 8,430
Liabilities
Derivative liabilities - (6,010 - (6,01
,773) 0,773
)
Total - (6,010 - (6,01
,773) 0,773
)
31 December 2018 Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Assets
Financial assets at - - 21,886,335 21,886,335
fair value through
profit or loss
Total - - 21,886,335 21,886,335
Liabilities
Derivative - (8,781,432) - (8,781,432)
liabilities
Total - (8,781,432) - (8,781,432)
There have been no transfers between levels for the period ended 30 June
2019 (30 June 2018: GBPnil and 31 December 2018: GBPnil).
Investments classified within Level 3 consist of Credit Linked Notes
("CLNs"). The fair value of the CLNs is determined by the Investment Adviser
using a discounted cash flow valuation model. The main inputs into the
valuation model for the CLNs are discount rates, market risk factors,
probabilities of default, expected credit loss levels and cash flow
forecasts. The Investment Adviser also considers the original transaction
price and recent transactions of comparable instruments (where available),
the credit quality on the underlying reference portfolios and adjusts the
valuation model as deemed necessary.
The Directors are responsible for considering the methodology and
assumptions used by the Investment Adviser and for approving the fair values
reported at the financial period end.
The movement in level 3 instruments are presented in the table below.
30 June 30 June 2018 31 December
2019 2018
GBP GBP GBP
Balance at the start of 21,886,335 22,112,820 22,112,820
the period / year
Disposals - - -
Acquisitions - - -
Cash interest received (1,171,906) (1,084,507) (2,245,256)
Net gains / (losses) 1,164,657 850,117 2,018,771
recognised in profit or
loss(1)
Balance at the end of 21,879,086 21,878,430 21,886,335
the period / year
Changes in unrealised - - -
gains or losses for
Level 3 assets held at
period/ year end and
included in other net
changes in fair value of
financial assets at fair
value through profit or
loss
1 The net gains for the period ended 30 June 2019 comprise of GBP1,164,657
interest income on CLNs (30 June 2018: GBP1,138,267 of interest income on CLNs
net of GBP288,150 origination fees and 31 December 2018: GBP2,306,921 of
interest income on CLNs net of GBP288,150 origination fees subsequently
expensed).
The following table summarises within the fair value hierarchy the Group's
assets and liabilities (by class) not measured at fair value at 30 June 2019
but for which fair value is disclosed:
Level 1 Level 2 Level 3 Total Total
fair carrying
values amount
GBP GBP GBP GBP GBP
Assets
Cash and cash - 27,959,950 - 27,959,95 27,959,95
equivalents 0 0
Other - 12,198 - 12,198 12,198
receivables and
prepayments
Loans advanced - - 439,874,9 439,874,9 428,636,0
81 81 53
Total - 27,972,148 439,874,9 467,847,1 456,608,2
81 29 01
Liabilities
Trade and other - 1,391,059 - 1,391,059 1,391,059
payables
Credit - 46,012,226 - 46,012,22 46,012,22
facilities 6 6
Total - 47,403,285 - 47,403,28 47,403,28
5 5
The following table summarises within the fair value hierarchy the Group's
assets and liabilities (by class) not measured at fair value at 30 June 2018
but for which fair value is disclosed:
Level 1 Level 2 Level 3 Total Total
fair carrying
values amount
GBP GBP GBP GBP GBP
Assets
Cash and cash - 8,730,655 - 8,730,655 8,730,655
equivalents
Other - 13,411 - 13,411 13,411
receivables and
prepayments
Loans advanced - - 425,785,5 425,785,5 412,109,2
82 82 32
Total - 8,744,066 425,785,5 434,529,6 420,853,2
82 48 98
Liabilities
Trade and other - 1,332,626 - 1,332,626 1,332,626
payables
Credit - 54,098,366 - 54,098,36 54,098,36
facilities 6 6
Total - 55,430,992 - 55,430,99 55,430,99
2 2
The following table summarises within the fair value hierarchy the Group's
assets and liabilities (by class) not measured at fair value at 31 December
2018 but for which fair value is disclosed:
Level 1 Level 2 Level 3 Total
Total carrying
fair amount
values
GBP GBP GBP GBP GBP
Assets
Cash and cash - 28,248,515 - 28,248,51 28,248,51
equivalents 5 5
Other - 28,935 - 28,935 28,935
receivables and
prepayments
Loans advanced - - 426,379,3 426,379,3 413,444,4
70 70 10
Total - 28,277,450 426,379,3 454,656,8 441,721,8
70 20 60
Liabilities
Trade and other - 2,068,238 - 2,068,238 2,068,238
payables
Credit - 68,977,214 - 68,977,21 68,977,21
facilities 4 4
Total - 71,045,452 - 71,045,45 71,045,45
2 2
The carrying values of the assets and liabilities included in the above
table are considered to approximate their fair values, except for loans
advanced. The fair value of loans advanced has been determined by
discounting the expected cash flows using a discounted cash flow model. For
the avoidance of doubt, the Group carries its loans advanced at amortised
cost in the Financial Statements.
Cash and cash equivalents include cash at hand and fixed deposits held with
banks. Other receivables and prepayments include the contractual amounts and
obligations due to the Group and consideration for advance payments made by
the Group. Credit facilities and trade and other payables represent the
contractual amounts and obligations due by the Group for contractual
payments.
12. TAXATION
The Company is exempt from Guernsey taxation under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989 for which it pays an annual fee of GBP1,200.
The Luxembourg indirect subsidiaries of the Company are subject to the
applicable tax regulations in Luxembourg.
The Luxco had no operating gains on ordinary activities before taxation and
is therefore subject to the Luxembourg minimum corporate income taxation at
EUR4,815 (2018: EUR3,810). The Luxco 3 and Luxco 4 are subject to Corporate
Income Tax and Municipal Business Tax based on a margin calculated on an
arm's- length principle. The effective tax rate in Luxembourg during the
reporting period was 26.01% (2018: 26.01%).
13. RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions.
The tables below summarise the outstanding balances and transactions which
occurred with related parties
Outstanding at Outstanding at Outstanding at
30 30 31
June 2019 June 2018 December 2018
GBP GBP GBP
Investment
Manager
Investment 767,529 712,064 723,652
management fees
payable
Origination - - 309,375
fees payable
Expenses - - 60,196
For the For the For the year
period ended period ended ended
30 June 2019 30 June 2018 31 December
2018
GBP GBP GBP
Directors' fees and
expenses paid
Stephen Smith 25,000 25,000 50,000
John Whittle 22,500 22,500 45,000
Jonathan Bridel 21,250 21,250 42,500
Expenses paid 1,417 2,791 4,321
Investment Manager
Investment management 1,476,340 1,415,286 2,858,556
fees earned
Origination fees 373,953 1,106,714 1,543,468
Expenses 91,912 49,717 175,531
The tables below summarise the dividends paid to and number of Company's
shares held by related parties.
Dividends paid Dividends paid Dividends paid
for for for
the period the period the year ended
ended ended
30 June 2019 30 June 2018 31 December 2018
GBP GBP GBP
Starwood 297,050 297,050 594,100
Property Trust
Inc.
SCG Starfin 74,262 74,262 148,525
Investor LP
Stephen Smith 2,565 2,565 5,130
John Whittle 386 386 771
Jonathan Bridel 386 386 771
As at As at As at
30 June 2019 30 June 2018 31 December
2018
Number of Number of Number of
shares shares shares
Starwood Property 9,140,000 9,140,000 9,140,000
Trust Inc.
SCG Starfin 2,285,000 2,285,000 2,285,000
Investor LP
Stephen Smith 78,929 78,929 78,929
John Whittle 11,866 11,866 11,866
Jonathan Bridel 11,866 11,866 11,866
Other
The Group continues to participate in a number of loans in which Starwood
Property Trust, Inc. ("STWD") acted as a co-lender, as summarised in the
table below.
Loan
Mixed Use Development, South East UK
Hotel and Residential, UK
Credit Linked Notes, UK Real Estate
Hotel, Spain
Mixed Portfolio, Central and Northern Europe
14. EVENTS AFTER THE REPORTING PERIOD
The following significant cash amounts have been funded since the period
end, up to the date of publication of this report:
Local Currency
Three Shopping Centres, Spain EUR1,048,878
The following significant loan amortisation (both scheduled and unscheduled)
has been received since the period end, up to the date of publication of
this report:
Local Currency
Industrial Portfolio, Central and Eastern Europe EUR26,282,936
Mixed Use Development, South East UK GBP8,789,620
The following new commitments have been made since the period end, up to the
date of publication of this report:
Local Currency
Office Building, London GBP12,450,000
The following loans have been repaid in full since the period end, up to the
date of publication of this report:
Local Currency
Hotel, Barcelona EUR46,000,000
Subsequently to reporting date, the Group repaid EUR6 million under Morgan
Stanley credit facility and EUR17 million under Lloyds credit facility. At
the date of publication of this report the amount drawn under each facility
are:
Lloyds Facility: EURnil million
Morgan Stanley Facility: EUR28 million
On 24 July 2019 the Company declared a dividend of 1.625 pence per Ordinary
share payable to shareholders on the register on 2 August 2019.
Further Information
Corporate Information
Directors
Stephen Smith (Non-executive Chairman)
Jonathan Bridel (Non-executive Director)
John Whittle (Non-executive Director)
(all care of the registered office)
Investment Manager
Starwood European Finance
Partners Limited
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Solicitors to the Company
(as to English law and U.S. securities law)
Norton Rose LLP
3 More London Riverside
London
SE1 2AQ
United Kingdom
Registrar
Computershare Investor Services (Guernsey) Limited
3rd Floor
Natwest House
Le Truchot
St Peter Port
Guernsey
GY1 1WD
Sole Broker
Stifel Nicolaus Europe Limited trading as Stifel
150 Cheapside
London
EC2V 6ET
United Kingdom
Administrator, Designated Manager and Company Secretary
Apex Fund and Corporate Services
(Guernsey) (formerly Ipes (Guernsey) Limited)
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Registered Office
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Investment Adviser
Starwood Capital Europe Advisers, LLP
2nd Floor
One Eagle Place
St. James's
London
SW1Y 6AF
United Kingdom
Advocates to the Company (as to Guernsey law)
Carey Olsen
PO Box 98
Carey House, Les Banques St Peter Port
Guernsey
GY1 4HP
Independent Auditor
PricewaterhouseCoopers CI LLP
Royal Bank Place
1 Glategny Esplanade
St Peter Port
Guernsey
GY1 4ND
Principal Bankers
Barclays Private Clients International Limited
PO Box 41
Le Marchant House
St Peter Port
Guernsey
GY1 3BE
Website:
www.starwoodeuropeanfinance.com
ISIN: GG00B79WC100
Category Code: IR
TIDM: SWEF
LEI Code: 5493004YMVUQ9Z7JGZ50
Sequence No.: 19488
EQS News ID: 870861
End of Announcement EQS News Service
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