The Board of NB Distressed Debt has announced that it is curtailing its buy-back programme on the Global and Extended Life shares. At the time of writing, the Global shares have fallen by 4.0% today and the extended Life shares by 3.7%.
1) with respect to the Global shares they said:
“The discount control policy in relation to the New Global Shares states that if the New Global Shares trade, on average over the last three calendar months, at a price which is a discount of more than 5 per cent. to the most recently published net asset value per New Global Share, the Company intends, subject to normal market conditions and available cash resources, to repurchase New Global Shares, with a view to reducing the discount.
In light of ongoing market conditions in the distressed debt sector and potential year end purchasing opportunities, the board of the Company is reviewing its buyback programme, during which time the Company does not intend to undertake further market purchases of New Global Shares until further notice. The Board will continue to review the buyback programme as market conditions develop.”
2) with respect to the Extended Life shares they said:
“The discount control policy in relation to the Extended Life Shares states that the Board is committed to seeking to limit the level of discount to Net Asset Value per Extended Life Share at which those shares trade. If the Extended Life Shares trade at a price which represents a discount of more than 5 per cent. to the most recently published net asset value per Extended Life Share, the Company intends, subject to normal market conditions and available cash resources, to repurchase Extended Life Shares with a view to reducing the discount.
In light of ongoing challenging market conditions in the distressed debt sector and the existing capital distribution in progress, the board of the Company is reviewing its buyback programme, during which time the Company does not intend to undertake further market purchases of Extended Life Shares until further notice. The Board will continue to review the buyback programme as market conditions develop.
For the avoidance of doubt, the Company will continue to distribute net proceeds from the realisation of the Company’s investments attributable to the Extended Life Shares at such times and in such amounts as the Board shall determine. Such distributions will be made to Extended Life Shareholders pro rata to their respective holdings of Extended Life Shares. During 2015, the Company returned approximately $65m to Extended Life Shareholders through such returns of capital.”
Update 12 January 2016
The Board has now reversed its decision – “On 15 December 2015, NB Distressed Debt Investment Fund Limited (the “Company”) announced that, in light of challenging market conditions, it was reviewing its buyback programme during which time it did not intend to undertake further market purchases of Extended Life Shares. The Board notes that the discount to net asset value on the Extended Life Shares has widened since this date.
The Company has now concluded its review and the Board announces that it intends to resume market purchases of the Extended Life Shares at its discretion. The Board will continue to monitor the market conditions in the distressed debt sector and intends to use available cash resources to reach a balance between undertaking share buybacks, to address any imbalance between the supply of and demand for such shares, and returning capital at net asset value to all shareholders by way of capital redemptions.”
NBDG / NBDX : NB Distressed Debt curtails buy-back programme