CVC.COM
=

Distribution Policy Change

Distribution Policy Change

RNS Number : 3757W
CVC Credit Partners European Opps.
23 April 2021

RNS Announcement

23 April 2021

CVC Credit Partners European Opportunities Limited (the "Company")

(a closed-ended investment company incorporated in Jersey with registration number 112635)
Registered Office: IFC 1, The Esplanade, St Helier, Jersey, JE1 4BP

Distribution Policy and Investment Vehicle Management Fee

The information contained within this announcement constitutes inside information.

Key Highlights:

  • Dividend increased to 5 pence per Sterling Share / 5 cents per Euro Share for the next 12 months. The revised policy reflects a yield of approximately 5% based on the current prices of both the Company's Sterling and Euro shares
  • The management fee payable in respect of CVC European Credit Opportunities S.à r.l. (the "Investment Vehicle") (the "Investment Vehicle Management Fee") reduced to an annual rate of 0.9% of net asset value, with a tiered fee structure put in place to support future reductions based on growth in the Investment Vehicle's total aggregate AUM
  • Updated distribution policy reflective of the Company's strong performance and growth opportunity present across European corporate credit
  • Positions the Company strongly to capitalise on investor demand for income-generating, stable and decorrelated investments in a low-yield environment

Distribution Policy

During 2020, the Company made changes to its distribution policy to reflect the enhanced level of market risk evident during Q2/2020, and also to reflect improving conditions during the latter part of the year. These changes led to an increase in dividends (from 4 pence per Sterling Share / 4 cents per Euro Share to 4.5 pence per Sterling Share / 4.5 cents per Euro Share respectively) such that the current policy reflects a yield of approximately 4.5% based on the current prices of both the Company's Sterling and Euro Shares.

As noted in the Company's annual financial report for the year ended 31 December 2020, the board of directors of the Company (the "Board") has been in the process of conducting a review of the Company's dividend policy with the manager of the Investment Vehicle, CVC Credit Partners Investment Management Limited (the "Investment Vehicle Manager"), with a key focus being the determination of a stable level of dividends that, based on current market conditions and the expected cash yield, could reasonably be declared without recourse to capital for a forward looking period of 12 months.

Following completion of this review, the Board is pleased to announce that the Company will be increasing its annual dividend by 0.5 pence per Sterling Share / 0.5 cents per Euro Share to 5 pence per Sterling Share / 5 cents per Euro Share, with effect from the dividend payments for quarter ended 30 June 2021, to be paid in Q3 2021. The revised policy reflects a yield of approximately 5% based on the current prices of both, the Company's Sterling and Euro Shares.

Investment Vehicle Management Fee

The Board is also pleased to announce a reduction in the Investment Vehicle Management Fee, which will be reduced by 0.1% from 1% to 0.9% per annum of net asset value, effective 1 May 2021. The revised fee structure offers scope for further step-down reductions based on the Investment Vehicle's total aggregate AUM.

Ratchets resulting in further fee reductions are included if the Investment Vehicle's total aggregate AUM increases to €500 million, €750 million and €1 billion. As each of these thresholds is met, the Investment Vehicle Management Fee will be reduced by a further 5 basis points, capped at 0.75% per annum of net asset value if the Investment Vehicle's total aggregate AUM increases to €1 billion or more. The Investment Vehicle Management Fee is subject to future increases should one of the thresholds be met and subsequently the Investment Vehicle's total aggregate AUM decreases below the threshold (for example, due to investor redemptions).

The inclusion in the fee structure of mechanisms for further step-down reductions subject to the growth in the Investment Vehicle's total aggregate AUM, reflects the growth ambitions of the Board and Investment Vehicle Manager for the Investment Vehicle following conversations with prospective investors. As such, a more competitive fee structure has been implemented to capitalise on the Company's strong performance over multiple years and the continued opportunity present across European senior secured loans and other sub-investment grade corporate credit.

Richard Boléat, Chairman of CVC Credit Partners European Opportunities Limited, said: "We are pleased to announce these changes to the Company's distribution policy and management fees, which were taken after extensive consultation with the Investment Vehicle Manager. The dividend target has been placed at a level approaching that which prevailed before the onset of the Covid-19 pandemic, which caused significant volatility across European credit markets. Today's announcement demonstrates how strongly the Company has responded since Q2 2020 and is reflective of our positive outlook moving forward."

Pieter Staelens, Managing Director and Portfolio Manager at CVC Credit Partners Investment Management Limited, Investment Vehicle Manager, said: "We continue to see significant opportunity across the spectrum of European corporate credit and our flexible investment strategy allows us to rotate the portfolio to capture the most attractive risk-adjusted returns. During Q1, this has enabled us to deploy over €70m in opportunistic credit investments, which should continue to generate both income and capital upside in the near and medium term."

The person responsible for arranging for the release of this announcement on behalf of the Company is Melissa Le Cheminant of BNP Paribas Securities Services S.C.A., Jersey Branch, Company Secretary.

Past performance cannot be relied on as a guide to future performance.

Contacts

CVC Credit Partners European Opportunities Limited:+44 (0)1534 625522
Richard Boléat

BNP Paribas Securities Services S.C.A., Jersey Branch+44 (0)1534 813873 / 709178

Media Enquiries

Prosek Partners

Henrietta Dehn / Ryan Smith pro-ccpeol@prosek.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
MSCBLLLLFZLFBBF

Important disclaimer and terms of use

These written materials are not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, South Africa or Japan or to "U.S. persons" as defined in Regulation S under the US Securities Act ("US Persons"). The information contained herein does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States, Australia, Canada, South Africa or Japan or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act") and, as such, holders of the Company’s securities will not be entitled to the benefits of the Investment Company Act. The securities discussed herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons absent registration or an exemption from registration under the US Securities Act in a manner that would not require the Company to register under the Investment Company Act. No public offering of securities will be made in the United States. No securities may be offered or sold, directly or indirectly, into the United States or to US Persons absent registration or an exemption from registration under the US Securities Act and in a manner that would not require the Company to register under the Investment Company Act.

In addition, in the United Kingdom, these materials on this website are only being distributed to and are only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom they may lawfully be communicated, falling within Article 49(2)(a) to (e) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as "relevant persons"). Securities to which the materials relate are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on the materials or any of their contents.

Any communication on this website is only addressed to and is only directed at persons in any member state of the European Economic Area ("EEA Member State") where any required notification or registration for "marketing" as that term is defined in Article 4(1)(x) of Directive 2011/61/EU on alternative investment fund managers ("AIFMD") has been made and who are both:

  1. "qualified investors" in that Member State within the meaning of Article 2(e) of EU Prospectus Regulation (EU/2017/1129), as amended, including any relevant implementing measure in EEA Member State which has implemented the EU Prospectus Regulation; and
  2. "professional investors" in that EEA Member State within the meaning of Article 4(1)(ag) AIFMD.

A list of EEA Member States in which a notification or registration has been made for marketing to professional investors under AIFMD is available on request.

This website should not be accessed by persons in any EEA Member State who are "retail investors" within the meaning of Article 4(1)(aj) of the AIFMD ("retail investors").

Access to electronic versions of these materials is being made available on the webpage in good faith and for information purposes only. Making press announcements and other documents relating to any offering of securities available in electronic format does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for securities, nor does it constitute a recommendation by any party to sell or buy securities.

By clicking on the "Accept" button, I confirm, represent, warrant and agree that:

I am not a US Person or located in the United States, Australia, Canada, South Africa or Japan or any other jurisdiction where to proceed to view the materials on this webpage would constitute a breach of securities law in that jurisdiction, and I confirm that I am permitted to view electronic versions of these materials; I will not forward, transmit or show the materials contained in this webpage to any US Person or person located in, or a resident of, the United States, Australia, Canada, South Africa or Japan or any other jurisdiction where it would be unlawful to do so; and I have read and understood the disclaimer set out above and will read carefully any additional disclaimers or important notices attaching to or forming part of the materials or information on this website. I understand that this may affect my rights, and I agree to be bound by their terms.

I am not a retail investor located in an EEA Member state.