The content on this page and any materials about the Senior Secured Loan product are targeted to experienced investors who have sufficient investment knowledge to understand the product and underlying risks.

About this trust

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  • Investment style:Income
  • Sector:
  • Asset class:
  • Benchmark:
  • Fund Size:-
  • Share price:
  • Net asset value*:
  • Discount(-)/

Source: J.P. Morgan Asset Management. Share price updates every 15 minutes, current update as at
*All other figures shown are as at close of business on 19/12/2014.

Investment objective

To provide shareholders with a high level of income with a secondary objective of capital appreciation.

Company highlights

  • Investment objective is to provide a high level of income with a secondary objective of capital appreciation
  • Diversified portfolio of mainly secured loans, together with junior loans and high yield bonds, including stressed debt of mainly US and Canadian companies
  • Target dividend of 5 pence in first financial period ending 31 January 2015
  • Floating rate coupons can benefit investors in a rising rate environment and can help to mitigate inflation risk

The targets and aims provided above are the Investment Manager's targets and aims only and are not necessarily part of the Fund's investment objectives and policies as stated in the prospectus. There is no guarantee that these will be achieved.

When the interest coupon (or interest payment) is based on a reference rate, such as the London Interbank Offered Rate ('LIBOR'), plus a fixed spread. For example LIBOR + 2.50%. Floating rate coupons typically reset every three months so the interest coupon fluctuates based on changes in short-term interest rates. Generally, when interest rates go up (down) the reference rate (and in turn the interest coupon) will go up (down) and the value of the principal (the amount borrowed and due to be returned to the lender) remains constant in the absence of deteriorating credit fundamentals.

What are secured loans?

Secured loans are loans generally made to non-investment grade borrowers. They are typically senior instruments, secured by a substantial proportion of the borrower's assets, and rank ahead of junior loans and unsecured debt in the corporate capital structure.

Debt that ranks behind (or is 'subordinate' to) other forms of debt in a company's capital structure in the event of liquidation or bankruptcy, but ranks higher than common equity or preferred equity.
Equity that ranks higher to common equity in a company's capital structure in the event of liquidation or bankruptcy and (generally) in the payment of dividends, but ranks lower than other forms of debt.
Equity in a company attributable to common (or ordinary) shareholders. Ranks behind debt and preferred equity in a company's capital structure in the event of liquidation or bankruptcy.

Secured loans are typically structured, arranged and administered by one or several commercial or investment banks.

They are then sold to other banks or institutional investors such as the Company who invest in them for their unique attributes.

Companies issue loans to supplement capital structure or to refinance existing debt obligations.

Source: J.P. Morgan. For illustrative purposes only.

Key attributes

  • Short term tactical gearing up to 20 per cent. of Net Asset Value (NAV)
  • Management fee of 75bps on lower of NAV and market capitalisation
  • Buyback powers of 14.99 per cent up to 50 per cent. redemption offer if discount exceeds 5 per cent on average over a 3 month period to financial year end on 31 January each year
  • Continuation vote at an AGM to be held in 2017 and every 3rd AGM thereafter
  • No performance fee

What are some of the risks?