Portfolio Update (4698V)

TIDMTLI

RNS Number : 4698V

Alternative Asset Opps PCC Ltd

12 January 2012

The Board of Alternative Asset Opportunities PCC Limited met some of the larger shareholders on 19th December 2011 for an update on the Company's progress. Topics for discussion included the FSA's proposal to ban the marketing of traded life settlements or related products to retail investors, the disappointing mortality experience to date, progress with policy sales and future financing arrangements.

A. On the first subject, the Company has not marketed itself directly to retail investors in the UK, and its shareholders are predominantly institutional. In addition, as a closed-ended vehicle, the Company is not exposed to the risks of mis-pricing that may affect an open-ended vehicle. Finally, the Company's investment manager, SL Investment Management Limited, has not seen any evidence that the FSA's announcement has affected the secondary market for traded life policies, which remains predominantly based in the US.

As to the mortality experience, there are no further maturities to report, beyond those referred to in the annual report for the year ended 30(th) June 2011. This remains disappointing, but recent LE revisions have broadly supported the Company's current assumptions as to LE, and indeed have had a positive impact, as seen in the statement of net asset value for 30(th) November 2011.

B. The annual report noted the Board's intention to dispose of some policies as and when suitable opportunities arise, and the Board is now in a position to report some progress on this. Sale contracts have been exchanged with two counterparties for the sale of five policies, which upon completion will realise some $6 million, while negotiations are at an advanced stage with a third counterparty over the sale of policies with a value of approximately $1 million. The Board is pleased to report that this has been achieved without any significant impact on the net asset value per share. A further batch of policies is currently being offered to the market, but it is too early to say what the result of this exercise will be, and further announcements will follow in due course. In broad terms the Board's current policy is to raise in the region of $10 million through policy sales.

The sales programme has shown that there are several bidders in the marketplace willing to pay reasonable prices for policies of the type owned by the Company.

C. Following a further draw-down under the Company's existing loan agreement with Allied Irish Banks, current borrowings amount to $25.2 million. This does not take account of any of the above policy sales, or proposed sales, nor does it reflect the $11.8 million payable on 30(th) March 2012 to AIB in settlement of the Company's forward FX contracts. The sales envisaged are intended largely to fund this payment and to keep gearing stable.

The present loan agreement expires on 30(th) March 2012, and in December the Company submitted a request to AIB to extend the agreement for a further twelve months. This request recognises the above settlement requirements, as well as actual and proposed policy sales, and would provide the Company with the necessary funding to cover premium payments. It is too early to comment on progress with this request: it is in any event a drawn-out process, ultimately requiring the approval of the Central Bank of Ireland.

The Board will continue to monitor the above issues and report on developments to shareholders, as appropriate.

Enquiries:

P W I Ingram

Company Secretary

Tel: 020 7065 1467

12 January 2012

This information is provided by RNS

The company news service from the London Stock Exchange

END

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