20 December 2022

NB Global Monthly Income Fund Limited

(the "Company")

Publication of Circular in relation to the proposed Managed Wind-down of the Company and return of capital to Shareholders

Further to the announcement on 21 November 2022, the Board of NB Global Monthly Income Fund Limited (the "Company") has today published a circular to Shareholders (the "Circular") in relation to recommended proposals for a Managed Wind-down of the Company and related matters.

The Circular includes a notice of an extraordinary general meeting ("EGM") to be held at 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL at 11 a.m. on 27 January 2023. Resolutions will be put to the Company's shareholders to seek their approval at the EGM. Definitions in this announcement shall take the same meaning as in the Circular.

Introduction

As announced by the Company on 21 November 2022, following a review of the Company's strategy and prospects, the Board decided not to implement the Company's semi-annual cash exit facility in December 2022 (the "December Cash Exit"). The Board anticipated that participation in the December Cash Exit offer would likely result in the Company's net asset value ("NAV") falling below £150 million, rendering the Company, in the opinion of the Board, sub-scale. It has therefore decided instead to put forward proposals to realise the Company's Portfolio in an orderly manner and distribute the realisation proceeds to Shareholders over time (the "Managed Wind-down").

Further details of these proposals, which require Shareholder approval, are set out in the Circular posted to Shareholders today and this should be read in full by Shareholders before voting on the proposals.

Extraordinary General Meeting

The purpose of the Circular is to convene an EGM at which the Board proposes to seek Shareholder approval to:

(i)      amend the Company's Investment Objective and Policy; and

(ii)     amend the articles of incorporation of the Company (the "Articles") to allow for the realisation proceeds of selling assets in accordance with the Managed Wind-down to be distributed to Shareholders by way of pro rata compulsory redemptions of Shares,

(together, the "Proposals").

The EGM will be held at 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL at 11 a.m. on 27 January 2023, to seek Shareholder approval of the Proposals, in accordance with applicable law.

Overview of the Managed Wind-down and proposed change to the Company's Investment Objective and Policy

Proposed Managed Wind-Down

The Board proposes to implement the Managed Wind-down by realising the assets comprised in the Portfolio in an orderly manner and to make capital distributions to Shareholders during the wind-down period as and when sufficient cash is realised to make it economically expedient to make a distribution. At an appropriate point in the future, further proposals to place the Company into liquidation will be put to Shareholders.

Having consulted the Investment Manager, it is expected that as the Company's portfolio consists of both liquid and less liquid assets, it will take varied time periods to realise assets in an orderly manner with a view to maintaining Shareholder value. Based on current and anticipated market conditions, the Investment Manager anticipates that the process of realising the most illiquid assets in the Company's portfolio could require a period of up to 24 months.

The table below, which excludes equity holdings and cash, provides an overview of the Company's portfolio composition as of 16 December 2022, including applicable asset rating, time to maturity and the approximate percentage of total portfolio market value that each asset comprises:

Asset Class Breakdown

The following table, which excludes equity holdings and cash, further shows a percentage breakdown of the market value as of 16 December 2022 of the Company's portfolio by currency:

Currency Breakdown

New Articles

It is proposed that in order to enable the Company to implement the Proposals, a new Article 50A is inserted in the Articles (the "Amended Articles"). This will permit the Directors, at their sole discretion, to compulsorily redeem Shares pro rata on an ongoing basis in order to return capital to Shareholders.

Investment Objective and Policy

In order for the Company to follow the Managed Wind-down process set out in this Circular, it is necessary to amend the Company's Investment Objective and Policy. If the Proposals are approved, the Company's revised Investment Objective and Policy will be as set out below.

"Investment Objective

The Company's investment objective is to realise all existing assets in the Company's portfolio in an orderly manner.

Investment Policy

The Company will pursue its investment objective by effecting an orderly realisation of its assets and making timely returns of capital to Shareholders, by way of several capital distributions. The Company will aim to effect the sale of its assets, including both liquid and less liquid assets, in a manner that will maintain Shareholder value.

The Company will cease to make any new investments or to undertake capital expenditure except where, in the opinion of the Board and the Investment Manager:

·      the investment is a follow-on investment made in connection with an existing asset in order to comply with the Company's pre-existing obligations; or

·      failure to make the follow-on investment may result in a breach of contract or applicable law or regulation by the Company; or

·      the investment is considered necessary to protect or enhance the value of any existing investments or to facilitate orderly disposals.

Any cash received by the Company as part of the realisation process, but prior to its distribution to Shareholders, will be held by the Company as cash on deposit and/or as cash equivalents.

Borrowing and derivatives

The Company will not undertake borrowing other than for short-term working capital purposes. The Company may use derivatives for hedging as well as for efficient portfolio management, including managing currency risks between cash flows from its assets and Sterling, being the currency of the Shares.

Changes to the Company's investment policy

Any material change to the Company's investment policy will be made only with the approval of the Shareholders."

Compulsory Redemption Mechanism

Shareholders should expect that, under the terms of the Managed Wind-down, the Board and the Investment Manager will be committed to distributing as much of the available cash from the realisation of assets as soon as reasonably practicable having regard to cost efficiency and working capital requirements. Accordingly, Shareholders should expect that redemptions will be made regularly but, in order to minimise the administrative burden, not necessarily as soon as cash becomes available.

Under the Proposals, the return of cash to Shareholders pursuant to the Managed Wind-down will be effected through the compulsory redemptions of Shares in volumes and on dates to be determined at the Directors' sole discretion. Shares will be redeemed from all Shareholders pro rata to their existing holdings of Shares on the relevant record date for any given Redemption Date. The Directors will be authorised to make such redemptions under the Amended Articles.

Under current UK taxation law and practice, redemptions of Shares will constitute a disposal for the purposes of UK capital gains tax. Further details of the tax consequences of the Proposals are set out in the Circular.

Dividends

If the Proposals are approved at the EGM, the Company will move to paying dividends on a quarterly rather than monthly basis, with the first such dividend being paid in relation to the period ending 31 March 2023. The Board intends to pay quarterly dividends where there is sufficient net income to do so. As the Managed Wind-down progresses, the Board anticipates that the income from the Portfolio will gradually reduce. As a result of this reduction, the Company may have insufficient net income to pay dividends.

It is the Board's intention that the dividend to be distributed in respect of January 2023 will be paid at the current dividend target rate for 2022, which equates to £0.0054 per share paid monthly.

Listing during the Managed Wind-down

The Board intends to maintain the Company's listing and the trading of its Shares on the Main Market of the LSE for as long as the Directors believe to be practicable during the Managed Wind-down period, subject to the ability of the Company to continue to comply with its obligations under the Listing Rules (including the obligation to ensure that a sufficient number of its Shares are in public hands (as such phrase is used in current Listing Rule 6.1.19(3) R)).

The Board believes that maintaining the Company's listing is in the best interests of Shareholders for the following reasons: 

·      the listing will allow the Shares to remain eligible for ISAs and SIPPs;

·      the listing will allow for the maintenance of a daily market price in the Shares, as required by certain Shareholders;

·      maintaining the listing enables certain Shareholders to continue to meet their own investment restrictions, for example where they are required to hold listed securities or instruments with daily liquidity; and

·      maintaining the listing allows continued trading, which allows opportunities for secondary market sales prior to the conclusion of the Managed Wind-down.

There are, however, significant costs to the Company in maintaining the listing. The cost efficiency of retaining the Company's listing will continue to be monitored and reviewed by the Board on an ongoing basis. The Board may propose a cancellation of the Company's listing before it ceases to comply with the Listing Rules, although any such proposal will be subject to the approval of Shareholders.

In the event that the Company can no longer satisfy the continuing obligations for listing set out in the Listing Rules (including if the percentage of Shares held in public hands falls below 10 per cent. of the total number of issued Shares), the Directors shall immediately notify the FCA, which may suspend the listing of the Shares pursuant to Listing Rule 5. Following Shareholder approval, the listing will then be cancelled.

NAV Reporting

During the Managed Wind-down period, the Company intends to continue to publish the NAV per Share on a daily basis, but will keep this under review in light of the diminishing size of the Company and the costs of preparing daily NAVs. It is also proposed that if the Proposals are approved by Shareholders, the Company will cease publishing monthly factsheets and instead publish ad hoc portfolio data during the Managed Wind-down as appropriate.

Liquidation

At an appropriate point in the future, subject to the implementation of the Proposals, the Board will propose the appointment of a liquidator which will require a further extraordinary general meeting. The Board's assessment of the correct juncture to propose liquidation will be driven, inter alia, by an assessment of whether it is viable for the Company to continue operating following the principal Managed Wind-down redemption distributions. Following the required extraordinary general meeting to implement a liquidation process, the remaining assets of the Company will be realised and returned to Shareholders net of costs.

Management Fees

On the basis that the Proposals are approved by Shareholders at the EGM, during the Managed Wind-down period, the Investment Manager will reduce its applicable investment management fee by 7.5 basis points until 50% of the Company's assets by market value held as at the date of the EGM have been realised and thereafter the Investment Manager will reduce its applicable investment management fee by a further 7.5 basis points until all of the Company's assets have been realised. The Company and the Investment Manager will enter into an amendment agreement in respect of the amended and restated investment management agreement dated 16 July 2014, as amended, to reflect this change. The Investment Manager will continue to review its fees together with the Board every six months during the course of the Managed Wind-down period.

Expected Timetable

The anticipated dates and sequence of events relating to the implementation of the Proposals are set out below:

Each of the times and dates in the expected timetable of events may be extended or brought forward without notice. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through an RIS provider. All references are to London time unless otherwise stated.

* Please note that the latest time for receipt of the Proxy Appointments is not less than 48 hours prior to the time allotted for the meeting.

Resolutions and Shareholder Approval

The Proposals are subject to the approval of Shareholders, and the notice convening the EGM at which the Resolutions to approve the Proposals will be considered is set out in the Circular.

Resolution 1, which will be proposed as an Ordinary Resolution, seeks authority to amend the Investment Objective and Policy of the Company. Resolution 2, which will be proposed as a Special Resolution, seeks authority to incorporate a new Article 50(A) and new definitions in the Company's articles of incorporation. Resolution 1 and Resolution 2 are interconditional.

Enquiries:

LEI: 549300P4FSBHZFALLG04