M&G Credit Income Investment Trust plc

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are

in any doubt about the action you should take, you are recommended to seek your own

ﬁnancial advice immediately from an independent ﬁnancial adviser who is authorised under

the Financial Services and Markets Act 2000 (as amended) (‘‘FSMA’’) if you are in the United

Kingdom, or from another appropriately authorised independent ﬁnancial adviser if you are

in a territory outside the United Kingdom.

This document, which comprises a prospectus relating to M&G Credit Income Investment Trust plc

(the ‘‘Company’’) prepared in accordance with the Prospectus Rules has been approved by the

Financial Conduct Authority (the ‘‘FCA’’) and has been delivered to the FCA in accordance with

Rule 3.2 of the Prospectus Rules. This document has been made available to the public as

required by the Prospectus Rules.

Applications will be made to the UK Listing Authority and the London Stock Exchange for all of the

Ordinary Shares (issued and to be issued) in connection with the Initial Issue to be admitted to the

premium segment of the Ofﬁcial List and to trading on the premium segment of the London Stock

Exchange’s main market. Applications will be made for all of the Shares of the Company issued

pursuant to each Subsequent Placing under the Placing Programme to be admitted to the premium

segment of the Ofﬁcial List and to trading on the premium segment of the London Stock

Exchange’s main market. It is expected that Initial Admission of the Ordinary Shares to be issued

under the Initial Issue will become effective and that unconditional dealings will commence in the

Ordinary Shares at 8.00 a.m. on 14 November 2018. It is expected that Admissions pursuant to

Subsequent Placings under the Placing Programme will become effective and dealings will

commence between 15 November 2018 and 25 September 2019. No application has been made

or is currently intended to be made for the Shares to be admitted to listing or trading on any other

stock exchange.

The Company and each of the Directors, whose names appear on page 46 of this document,

accept responsibility for the information contained in this document. To the best of the knowledge

and belief of the Company and the Directors (who have taken all reasonable care to ensure that

such is the case), the information contained in this document is in accordance with the facts and

does not omit anything likely to affect the import of such information.

Prospective investors shoul d read the entire document and, in particular, the section

headed ‘‘Risk Factors’’ on pages 20 to 36 of this document when considering an investment

in the Company.

M&G CREDIT INCOME INVESTMENT TRUST PLC

(Incorporated in England and Wales with registered number 11469317 and registered as

an investment company under section 833 of the Companies Act)

Initial Placing, Offer for Subscription and Intermediaries Offer for a target issue in

excess of 250 million Ordinary Shares at 100 pence per Ordinary Share

Placing Programme for up to 400 million Ordinary Shares and/or C Shares

Admission to the premium segment of the Ofﬁcial List and to trading on the

premium segment of the London Stock Exchange’s main market

Investment Manager

M&G ALTERNATIVES INVESTMENT MANAGEMENT LIMITED

Sponsor, Financial Adviser, Bookrunner and Intermediaries Offer Adviser

WINTERFLOOD SECURITIES LIMITED

Winterﬂood Securities Limited (‘‘Winterﬂood Securities’’), which is authorised and regulated in the

United Kingdom by the Financial Conduct Authority, is acting exclusively, through its division

Winterﬂood Investment Trusts, as sponsor, ﬁnancial adviser, bookrunner and Intermediaries Offer

Adviser for the Company and for no one else in relation to Admission of any Shares, the Initial

Issue, the Placing Programme and the other arrangements referred to in this document.

Winterﬂood Securities will not regard any other person (whether or not a recipient of this

document) as its client in relation to Admission of any Shares, the Initial Issue, the Placing

Programme and the other arrangements referred to in this document and will not be responsible to

anyone other than the Company for providing the protections afforded to its clients or for providing

any advice in relation to Admission of any Shares, the Initial Issue, the Placing Programme, the

contents of this document or any transaction or arrangement referred to in this document.

Apart from the responsibilities and liabilities, if any, which may be imposed on Winterﬂood

Securities by FSMA or the regulatory regime established thereunder, Winterﬂood Securities does

not make any representation, express or implied, in relation to, nor accepts any responsibility

whatsoever for, the contents of this document or any other statement made or purported to be

made by it or on its behalf in connection with the Company, the Shares, Admission of any Shares,

the Initial Issue or the Placing Programme. Winterﬂood Securities (and its afﬁliates) accordingly, to

the fullest extent permissible by law, disclaims all and any responsibility or liability (save for

statutory liability), whether arising in tort, contract or otherwise which it might otherwise have in

respect of the contents of this document or any other statement made or purported to be made by

it or on its behalf in connection with the Company, the Shares, Admission of any Shares, the Initial

Issue or the Placing Programme.

The Offer for Subscription and the Intermediaries Offer will remain open until 1.00 p.m. on

7 November 2018 and the Initial Placing will remain open until 2.00 p.m. on 8 November 2018.

Persons wishing to participate in the Offer for Subscription should complete the Application Form

set out in Appendix 1 to this document and the Tax Residency Self-Certiﬁcation Form set out in

Appendix 2 to this document. To be valid, Application Forms and Tax Residency Self-Certiﬁcation

Forms must be completed and returned with the appropriate remittance by post to the Receiving

Agent, Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham,

Kent BR3 4TU so as to be received no later than 1.00 p.m. on 7 November 2018.

Investors should rely only on the information contained in this document. No person has been

authorised to give any information or make any representations in relation to the Company other

than those contained in this document and, if given or made, such information or representations

must not be relied upon as having been so authorised by the Company, the Investment Manager

or Winterﬂood Securities. Without prejudice to the Company’s obligations under the Prospectus

Rules, the Listing Rules, the Disclosure Guidance and Transparency Rules and MAR, neither the

delivery of this document nor any subscription for or purchase of Shares pursuant to the Initial

Issue and/or the Placing Programme, under any circumstances, creates any implication that there

has been no change in the affairs of the Company since, or that the information contained herein

is correct at any time subsequent to, the date of this document.

Winterﬂood Securities and its afﬁliates may have engaged in transactions with, and provided

various investment banking, ﬁnancial advisory and other services for, the Company and/or the

Investment Manager, for which they would have received customary fees. Winterﬂood Securities

and its afﬁliates may provide such services to the Company and/or the Investment Manager and

any of their respective afﬁliates in the future.

In connection with the Initial Issue and/or Subsequent Placings, Winterﬂood Securities and any of

its afﬁliates, acting as investors for its or their own accounts, may subscribe for or purchase

Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their

own account(s) in the Shares and other securities of the Company or related investments in

connection with the Initial Issue and/or Subsequent Placings or otherwise. Accordingly, references

in this document to Shares being issued, offered, acquired, subscribed or otherwise dealt with,

should be read as including any issue or offer to, acquisition of, or subscription or dealing by

Winterﬂood Securities and any of its afﬁliates acting as an investor for its or their own account(s).

Neither Winterﬂood Securities nor any of its afﬁliates intends to disclose the extent of any such

investment or transactions otherwise than in accordance with any legal or regulatory obligation to

do so. In addition, Winterﬂood Securities may enter into ﬁnancing arrangements with investors,

such as share swap arrangements or lending arrangements in connection with which Winterﬂood

Securities may from time to time acquire, hold or dispose of shareholdings in the Company.

The contents of this document are not to be construed as legal, ﬁnancial, business, investment or

tax advice. Investors should consult their own legal adviser, ﬁnancial adviser or tax adviser for

legal, ﬁnancial, business, investment or tax advice. Investors must inform themselves as to: (a) the

legal requirements within their own countries for the purchase, holding, transfer, redemption or

other disposal of Shares; (b) any foreign exchange restrictions applicable to the purchase, holding,

transfer or other disposal of Shares which they might encounter; and (c) the income and other tax

consequences which may apply in their own countries as a result of the purchase, holding, transfer

or other disposal of, or subscription for Shares. Investors must rely on their own representatives,

including their own legal advisers and accountants, as to legal, ﬁnancial, business, investment, tax,

or any other related matters concerning the Company and an investment therein. None of the

Company, the Investment Manager or Winterﬂood Securities nor any of their respective

representatives is making any representation to any offeree or purchaser of Shares regarding the

legality of an investment in the Shares by such offeree or purchaser under the laws applicable to

such offeree or purchaser.

Notice to U.S. and other overseas investors

This document may not be used for the purpose of, and does not constitute, an offer or solicitation

by anyone in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful

or not authorised or to any person to whom it is unlawful to make such offer or solicitation.

This document is not being sent to investors with registered addresses in the United States,

Canada, Australia, the Republic of South Africa or Japan, and does not constitute an offer to sell,

or the solicitation of an offer to buy, Shares in any jurisdiction in which such offer or solicitation is

unlawful or would impose any unfulﬁlled registration, qualiﬁcation, publication or approval

requirements on the Company or Winterﬂood. In particular, this document is not for release,

publication or distribution in or into the United States, Canada, Australia, the Republic of South

Africa or Japan.

The Shares have not been and will not be registered under the U.S. Securities Act of 1933, as

amended (the ‘‘U.S. Securities Act’’) or with any securities regulatory authority of any state or

other jurisdiction of the United States and the Shares may not be offered, sold, exercised, resold,

transferred or delivered, directly or indirectly, within the United States or to, or for the account or

beneﬁt of, U.S. Persons (as deﬁned in Regulation S under the U.S. Securities Act), except

pursuant to an exemption from, or in a transaction not subject to, the registration requirements of

the U.S. Securities Act and in compliance with any applicable securities laws of any state or other

jurisdiction in the United States. There will be no public offer of the Shares in the United States.

The Shares are being offered or sold outside the United States to non-U.S. Persons in offshore

transactions in reliance on the exemption from the registration requirements of the U.S. Securities

Act provided by Regulation S thereunder. The Company has not been and will not be registered

under the U.S. Investment Company Act of 1940, as amended (the ‘‘U.S. Investment Company

Act’’) and investors will not be entitled to the beneﬁts of the U.S. Investment Company Act.

The Shares have not been approved or disapproved by the U.S. Securities and Exchange

Commission, any state securities commission in the United States or any other U.S. regulatory

authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the

offering of Shares or the accuracy or adequacy of this document. Any representation to the

contrary is a criminal offence in the United States and any re-offer or resale of any of the Shares

in the United States or to U.S. Persons may constitute a violation of U.S. law or regulation. Any

person in the United States who obtains a copy of this document is requested to disregard it.

In relation to each member state in the EEA that has implemented the AIFM Directive, no Shares

have been or will be directly or indirectly offered to or placed with investors in that member state

at the initiative of or on behalf of the Company or the Investment Manager other than in

accordance with methods permitted in that member state.

Copies of this document will be available on the Company’s website (www.mandg.co.uk/

creditincomeinvestmenttrust) and the National Storage Mechanism of the FCA at

www.morningstar.co.uk/uk/nsm and hard copies of the document can be obtained free of charge

from the Company Secretary.

Without limitation, neither the contents of the Company’s or the Investment Manager’s

website (or any other website) nor the content of any website accessible from hyperlinks on

the Company’s or the Investment Manager’s website (or any other website) is incorporated

into, or forms part of this document. Investors should base their decision whether or not to

invest in the Shares on the contents of this document alone.

Dated: 26 September 2018

CONTENTS

Page

SUMMARY 5

RISK FACTORS 20

IMPORTANT INFORMATION 37

EXPECTED TIMETABLE 43

INITIAL ISSUE AND PLACING PROGRAMME STATISTICS 44

DEALING CODES 45

DIRECTORS, MANAGEMENT AND ADVISERS 46

PART 1 – INFORMATION ON THE COMPANY 48

PART 2 – M&G 56

PART 3 – THE INVESTMENT OPPORTUNITY AND ASSET CLASS

OVERVIEW 63

PART 4 – DIRECTORS, MANAGEMENT AND ADMINISTRATION 68

PART 5 – THE INITIAL ISSUE 74

PART 6 – THE PLACING PROGRAMME 80

PART 7 – TAXATION 85

PART 8 – GENERAL INFORMATION 89

PART 9 – AIFM DIRECTIVE ARTICLE 23 DISCLOSURES 118

PART 10 – DEFINITIONS 125

PART 11 – TERMS AND CONDITIONS OF INITIAL PLACING AND

PLACING PROGRAMME 132

PART 12 – TERMS AND CONDITIONS OF APPLICATION UNDER THE

OFFER FOR SUBSCRIPTION 142

APPENDIX 1 – APPLICATION FORM 157

APPENDIX 2 – INDIVIDUAL HOLDER TAX RESIDENCY SELF CERTIFICATION

FORM – SOLE HOLDING 164

SUMMARY

Summaries are made up of disclosure requirements known as ‘‘Elements’’. These elements are

numbered in Sections A-E (A.1-E.7). This summary contains all the Elements required to be included in a

summary for this type of securities and issuer. Some Elements are not required to be addressed which

means there may be gaps in the numbering sequence of the Elements. Even though an Element may be

required to be inserted into the summary because of the type of securities and issuer, it is possible that

no relevant information can be given regarding the Element. In this case a short description of the

Element is included in the summary with the mention of ‘‘Not applicable’’.

Section A – Introduction and warnings

Element

Disclosure

Requirement Disclosure

A.1. Warning This summary should be read as an introduction to this document.

Any decision to invest in Shares should be based on consideration

of this document as a whole by the investor. Where a claim relating

to the information contained in this document is brought before a

court, the plaintiff investor might, under the national legislation of

the Relevant Member State, have to bear the costs of translating

this document before the legal proceedings are initiated. Civil

liability attaches only to those persons who have tabled the

summary including any translation thereof, but only if the summary

is misleading, inaccurate or inconsistent when read together with

the other parts of this document or it does not provide, when read

together with the other parts of this document, key information in

order to aid investors when considering whether to invest in such

securities.

A.2. Subsequent resale or

ﬁnal placement of

securities through

ﬁnancial

intermediaries

The Company consents to the use of this document by

Intermediaries in connection with the subsequent resale or ﬁnal

placement of securities by Intermediaries.

The offer period within which any subsequent resale or ﬁnal

placement of securities by Intermediaries can be made and for

which consent to use this document is given commences on

26 September 2018 and closes at 1.00 p.m. on 7 November 2018,

unless closed prior to that date.

Any Intermediary that uses this document must state on its website

that it uses this document in accordance with the Company’s

consent. Intermediaries are required to provide the terms and

conditions of the Intermediaries Offer to any prospective investor

who has expressed an interest in participating in the Intermediaries

Offer to such Intermediary.

Information on the terms and conditions of any subsequent

resale or ﬁnal placement of securities by any ﬁnancial

intermediary is to be provided at the time of the offer by the

ﬁnancial intermediary.

Section B – Issuer

Element

Disclosure

Requirement Disclosure

B.1. Legal and commercial

name

M&G Credit Income Investment Trust plc

B.2. Domicile and legal

form

The Company was incorporated in England and Wales on 17 July

2018 with registered number 11469317 as a public company limited

by shares under the Companies Act. The principal legislation under

which the Company operates is the Companies Act.

B.5. Group description Not applicable. The Company is not part of a group.

B.6. Major shareholders The Directors intend to subscribe for the following Ordinary Shares

pursuant to the Initial Issue:

Ordinary

David Simpson 25,000

Richard Bole´at 10,000

Mark Hutchinson 20,000

Barbara Powley 15,000

The Prudential Assurance Company Limited intends to subscribe

for the lower of (i) 80,000,000 Ordinary Shares and (ii) 25% of the

Ordinary Shares to be issued pursuant to the Initial Issue. The

Directors believe that this proposed investment strongly aligns the

interests of M&G with Shareholders.

As at 25 September 2018 (the latest practicable date prior to the

publication of this document) insofar as known to the Company,

there are no parties known to have a notiﬁable interest under

English law in the Company’s capital or voting rights.

All Shareholders have the same voting rights in respect of the

shares of the same class in the share capital of the Company.

Pending the allotment of Ordinary Shares pursuant to the Initial

Issue, the Company is controlled by Mark Hutchinson. The

Company and the Directors are not aware of any other person

who, directly or indirectly, jointly or severally, exercises or could

exercise control over the Company.

B.7. Key ﬁnancial

information

Not applicable. No key ﬁnancial information is included in this

document as the Company is yet to commence operations.

B.8. Key pro forma

ﬁnancial information

Not applicable. No pro forma ﬁnancial information is included in this

document.

B.9. Proﬁt forecast Not applicable. No proﬁt forecast or estimate is included in this

document.

B.10. Description of the

nature of any

qualiﬁcations in the

audit report on the

historical ﬁnancial

information

Not applicable. There are no audit reports in this document.

B.11. Qualiﬁed working

capital

Not applicable. The Company is of the opinion that, on the basis

that the Minimum Net Proceeds are raised, the working capital

available to it is sufﬁcient for its present requirements, that is, for at

least the next 12 months from the date of this document.

B.34. Investment policy Investment Objective

The Company aims to generate a regular and attractive level of

income with low asset value volatility.

Investment Policy

The Company seeks to achieve its investment objective by

investing in a diversiﬁed portfolio of public and private debt and

debt-like instruments (‘‘Debt Instruments’’). Over the longer term,

it is expected that the Company will be mainly invested in private

Debt Instruments, which are those instruments not quoted on a

stock exchange.

The Company operates an unconstrained investment approach

and investments may include, but are not limited to:

Asset-backed securities, backed by a pool of loans secured

on, amongst other things, residential and commercial

mortgages, credit card receivables, auto loans, student

loans, commercial loans and corporate loans;

Commercial mortgages;

Direct lending to small and mid-sized companies, including

lease ﬁnance and receivables ﬁnancing;

Distressed debt opportunities to companies going through a

balance sheet restructuring;

Infrastructure-related debt assets;

Leveraged loans to private equity owned companies;

Public Debt Instruments issued by a corporate or sovereign

entity which may be liquid or illiquid;

Private placement debt securities issued by both public and

private organisations; and

Structured credit, including bank regulatory capital trades.

The Company will invest primarily in Sterling denominated Debt

Instruments. Where the Company invests in assets not

denominated in Sterling it is generally expected that these assets

will be hedged back to Sterling.

Investment restrictions

There are no restrictions, either maximum or minimum, on the

Company’s exposure to sectors, asset classes or geography. The

Company, however, achieves diversiﬁcation and a spread of risk by

adhering to the limits and restrictions set out below.

Once fully invested, the Company’s portfolio will comprise a

minimum of 50 investments.

The Company may invest up to 30% of Gross Assets in below

investment grade Debt Instruments, which are those instruments

rated below BBB- by S&P or Fitch or Baa3 by Moody’s or, in the

case of unrated Debt Instruments, which have an internal M&G

rating below BBB-.

The following restrictions will also apply at the individual Debt

Instrument level which, for the avoidance of doubt, does not apply

to investments to which the Company is exposed through collective

investment vehicles:

Rating

Secured Debt

Instruments

(% of Gross

Assets)

Unsecured

Debt

Instruments

(% of Gross

Assets)

AAA 5% 5%

AA/A 4% 3%

BBB 3% 2%

Below investment grade 2% 1%

1 Secured Debt Instruments are secured by a ﬁrst or secondary ﬁxed and/or

ﬂoating charge.

2 This limit excludes investments in G7 Sovereign Instruments.

For the purposes of the above investment restrictions, the credit

rating of a Debt Instrument is taken to be the rating assigned by

S&P, Fitch or Moody’s or, in the case of unrated Debt Instruments,

an internal rating by M&G. In the case of split ratings by recognised

rating agencies, the second highest rating will be used.

It is expected that the Company will typically invest directly, but it

may also invest indirectly through collective investment vehicles

which are expected to be managed or advised by an M&G Entity.

The Company may not invest more than 20% of Gross Assets in

any one collective investment vehicle and not more than 40% of

Gross Assets in collective investment vehicles in aggregate. No

more than 10% of Gross Assets may be invested in other

investment companies which are listed on the Ofﬁcial List.

Unless otherwise stated, the above investment restrictions are to

be applied at the time of investment.

Borrowings

The Company is expected to be managed primarily on an ungeared

basis although the Company may, from time to time, be geared

tactically through the use of borrowings. Borrowings would

principally be used for investment purposes, but may also be

used to manage the Company’s working capital requirements or to

fund market purchases of Shares. Gearing represented by

borrowing will not exceed 30% of the Company’s Net Asset

Value, calculated at the time of draw down, but is typically not

expected to exceed 20% of the Company’s Net Asset Value.

Hedging and Derivatives

The Company will not employ derivatives for investment purposes.

Derivatives may however be used for efﬁcient portfolio

management, including for currency hedging.

Cash management

The Company may hold cash on deposit and may invest in cash

equivalent investments, which may include short-term investments

in money market type funds (‘‘Cash and Cash Equivalents’’).

There is no restriction on the amount of Cash and Cash Equivalents

that the Company may hold and there may be times when it is

appropriate for the Company to have a signiﬁcant Cash and Cash

Equivalents position. For the avoidance of doubt, the restrictions

set out above in relation to investing in collective investment

vehicles do not apply to money market type funds.

Changes to the investment policy

Any material change to the Company’s investment policy set out

above will require the approval of Shareholders by way of an

ordinary resolution at a general meeting and the approval of the UK

Listing Authority.

B.35. Borrowing limits The Company is expected to be managed primarily on an ungeared

basis although the Company may, from time to time, be geared

tactically through the use of borrowings. Borrowings would

principally be used for investment purposes, but may also be

used to manage the Company’s working capital requirements or to

fund market purchases of Shares. Gearing represented by

borrowing will not exceed 30% of the Company’s Net Asset

Value, calculated at the time of draw down, but is typically not

expected to exceed 20% of the Company’s Net Asset Value.

B.36. Regulatory status As an investment trust, the Company will not be regulated as a

collective investment scheme by the FCA. However, from Initial

Admission, it will be subject to the Listing Rules, Prospectus Rules,

the Disclosure Guidance and Transparency Rules, Market Abuse

Regulation and the rules of the London Stock Exchange.

B.37. Typical investor The typical investors for whom an investment in the Company is

appropriate are institutional investors and professionally-advised or

ﬁnancially sophisticated non-advised private investors who

understand and are capable of evaluating the merits and risks of

such an investment and who have sufﬁcient resources to be able to

bear any losses (which may equal the whole amount invested) that

may result from such an investment. Such investors are

recommended to consult an independent ﬁnancial adviser who

specialises in advising on the acquisition of shares and other

securities before making an investment. Furthermore, an

investment in the Company should constitute part of a diversiﬁed

investment portfolio.

B.38. Investment of more

than 20% of gross

assets in single

underlying asset or

collective investment

undertaking

Not applicable.

B.39. Investment of in

excess of 40% of

gross assets

in another collective

investment

undertaking

Not applicable.

B.40. Applicant’s service

providers

Investment Manager

The Company has appointed the Investment Manager to act as the

Company’s AIFM for the purposes of the AIFM Directive and

accordingly the Investment Manager is responsible for providing

discretionary portfolio management and risk management services

to the Company.

The Investment Manager is entitled to receive from the Company

an investment management fee which is calculated and paid

quarterly in arrears at an annual rate of (i) 0.5% per annum of the

prevailing published Net Asset Value until the end of the

Company’s ﬁrst accounting period, 31 December 2019; and (ii)

0.7% per annum of the prevailing published Net Asset Value

thereafter.

Where the Company invests in a collective investment vehicle that

is managed or advised by an M&G Entity, the Investment Manager

will reduce its investment management fee by the amount of any

equivalent management fee that is charged to such collective

investment vehicle or such entity will rebate its management fee

such that the Investment Manager ensures the Company is not

charged twice. The above arrangement will not apply to any other

fees or expenses charged to the Company or any such entity in

which it invests.

The Investment Manager is also entitled to be paid half of any

arrangement fee charged by the Company to the issuer of a Debt

Instrument in which the Company invests. The balance of any

arrangement fee is retained by the Company.

The Investment Management Agreement is for an initial term of ﬁve

years from the date of Initial Admission and thereafter subject to

termination on not less than six months’ written notice by either

party. The Investment Management Agreement can be terminated

at any time in the event of the insolvency of the Company or the

Investment Manager or in the event that the Investment Manager

ceases to be authorised and regulated by the FCA (if required to be

so authorised and regulated to continue to carry out its duties under

the Investment Management Agreement).

Administrator

State Street Bank & Trust Company has been appointed to act as

the administrator of the Company. The Administrator is responsible

for general fund administration services including calculation of the

Net Asset Value, bookkeeping and accounts preparation.

Depositary

State Street Trustees Limited has been appointed as depositary to

provide depositary services to the Company, which will include

safekeeping of the assets of the Company. The Depositary is

permitted to delegate (and authorise its delegates to sub-delegate)

the safekeeping of the assets of the Company.

The Administrator and Depositary are entitled to a combined fee

(the ‘‘State Street Fee’’). The State Street Fee shall be up to 0.08%

of the Net Asset Value per annum. The fee is subject to a minimum

rate, whereby if the Net Asset Value is less than £250 million the

fee will be calculated as if the Net Asset Value were £250 million.

The State Street Fee is calculated monthly and payable monthly in

arrears. In addition, the Administrator and the Depositary are

entitled to certain transaction charges, each of which will be at

normal commercial rates and certain other fees for ad hoc services

rendered from time to time. The Administrator and the Depositary

are entitled to reimbursement of out-of-pocket expenses incurred

by them (and by subcustodians and depositories) on behalf of the

Company in connection with the performance of the services. The

Company shall also reimburse the Administrator and Depositary for

the reasonable fees and customary agents’ charges paid to any

sub-custodian (which shall be charged at normal commercial

rates). All amounts are exclusive of any VAT that may be charged

thereon.

Custodian

The Depositary has delegated safekeeping duties as set out in the

AIFM Directive and the FCA Handbook to State Street Bank &

Trust Company, whom it has appointed as global sub-custodian.

Company Secretary

Link Company Matters Limited has been appointed as the company

secretary of the Company to provide the company secretarial

functions required by the Companies Act.

Under the terms of the Company Secretarial Services Agreement,

the aggregate fees payable to Link Asset Services are £60,000 per

annum. In addition a fee of £30,000 is payable to Link Asset

Services for services undertaken as part of the Initial Admission

process.

Registrar

Link Asset Services has been appointed as the Company’s

registrar. The Registrar is entitled to a fee calculated on the basis

of the number of Shareholders and the number of transfers

processed (exclusive of any VAT).

Receiving Agent

The Company has appointed Link Asset Services to provide

receiving agent services in connection with the Initial Issue. The

Receiving Agent shall be entitled to receive a fee from the

Company of not less than £15,000 (exclusive of any VAT) in

connection with these services.

Auditor

Deloitte LLP has been appointed auditor of the Company. The

Auditor will be entitled to an annual fee from the Company, which

will be agreed with the Board each year in advance of the Auditor

commencing audit work.

B.41. Regulatory status of

the investment

manager, depositary

and custodian

The Investment Manager is authorised and regulated by the FCA

(FCA registration number 122011) as a full-scope alternative

investment fund manager for the purposes of the AIFM Rules.

The Depositary is authorised and regulated by the FCA.

The Custodian is authorised and regulated by the FCA and

authorised and regulated by the Federal Reserve Board.

B.42. Calculation of Net

Asset Value

The unaudited Net Asset Value will be calculated in Sterling by the

Administrator on a monthly basis, as described below and on the

basis of information provided by the Investment Manager. The Net

Asset Value per Ordinary Share (and Net Asset Value per C Share,

where applicable), calculated by dividing the relevant Net Asset

Value by the number of Shares in issue of the relevant class

(excluding Shares held in treasury), will be published both on a

cum-income and ex-income basis, via a Regulatory Information

Service and made available on the Company’s website as soon as

practicable thereafter.

The Net Asset Value for each class of Shares is the value of all

assets of the Company attributable to that class of Shares less its

share of liabilities to creditors, each determined in accordance with

UK GAAP.

Any suspension in the calculation of the Net Asset Value will be

notiﬁed via a Regulatory Information Service as soon as practicable

after any such suspension occurs.

B.43. Cross liability Not applicable. The Company is not an umbrella collective

investment undertaking and as such there is no cross liability

between classes or investment in another collective investment

undertaking.

B.44. No ﬁnancial

statements have been

made up

The Company has not commenced operations and no ﬁnancial

statements have been made up as at the date of this document.

B.45. Portfolio Not applicable. The Company is newly incorporated and does not

currently hold any assets as at the date of this document.

B.46. Net Asset Value Not applicable. The Company has not commenced operations.

Section C – Securities

Element

Disclosure

Requirement Disclosure

C.1. Type and class of

securities

The Company is targeting an issue in excess of 250 million

Ordinary Shares with a nominal value of £0.01 each at an Issue

Price of 100 pence per Ordinary Share pursuant to the Initial Issue.

The Company also intends to issue Ordinary Shares with a nominal

value of £0.01 each and/or C Shares with a nominal value of £0.10

each pursuant to the Placing Programme.

The ISIN of the Ordinary Shares is GB00BFYYL325 and the

SEDOL of the Ordinary Shares is BFYYL32. The ticker for the

Ordinary Shares is MGCI.

The ISIN of the C Shares is GB00BFYYT831 and the SEDOL of the

C Shares is BFYYT83.

C.2. Currency The Ordinary Shares and C Shares (if applicable) will be

denominated in Sterling.

C.3. Details of share

capital

The Company is targeting an issue in excess of 250 million

Ordinary Shares pursuant to the Initial Issue. The maximum

number of Ordinary Shares available under the Initial Issue is

400 million. The minimum size of the Initial Issue is 100 million

Ordinary Shares.

The actual number of Ordinary Shares to be issued pursuant to the

Initial Issue, and therefore the Initial Gross Proceeds, are not

known as at the date of this document but will be notiﬁed by the

Company via a Regulatory Information Service announcement prior

to Initial Admission. If the Minimum Gross Proceeds (or such lesser

amount as the Company and Winterﬂood Securities may agree) are

not raised, the Initial Issue will not proceed.

Set out below is the issued share capital of the Company as at the

date of this document:

Aggregate

nominal value Number

Management Shares of £1.00 each £50,000 50,000

Ordinary Shares £0.01 1

The Ordinary Share in issue is fully paid up. To enable the

Company to obtain a certiﬁcate of entitlement to conduct business

and to borrow under section 761 of the Companies Act, on

18 September 2018, 50,000 Management Shares were allotted to

Mark Hutchinson. The Management Shares are paid up as to one

quarter of their nominal value and will be redeemed immediately

following Initial Admission out of the proceeds of the Initial Issue.

The Directors have authority to issue, in aggregate, up to 400 million

Shares pursuant to the Placing Programme.

C.4. Description of the

rights attaching to the

securities

The holders of the Ordinary Shares and C Shares shall only be

entitled to receive, and to participate in, any dividends declared in

relation to the relevant class of Shares that they hold.

On a winding-up or a return of capital by the Company, if there are

C Shares in issue, the net assets of the Company attributable to the

C Shares shall be divided pro rata among the holders of the

C Shares. For so long as C Shares are in issue, and without

prejudice to the Company’s obligations under the Companies Act,

the assets attributable to the C Shares shall, at all times, be

separately identiﬁed and shall have allocated to them such

proportion of the expenses or liabilities of the Company as the

Directors fairly consider to be attributable to any C Shares in issue.

The holders of Ordinary Shares shall be entitled to all of the

Company’s remaining net assets after taking into account any net

assets attributable to the C Shares (if any) in issue.

The Ordinary Shares and the C Shares (if any) shall carry the right

to receive notice of, attend and vote at general meetings of the

Company.

The consent of either the holders of Ordinary Shares or the holders

of C Shares will be required for the variation of any rights attached

to the relevant class of Shares.

C.5. Restrictions on the

free transferability of

the securities

There are no restrictions on the free transferability of the Shares,

subject to compliance with applicable securities laws.

C.6. Admission Applications will be made to the UK Listing Authority and to the

London Stock Exchange for all of the Ordinary Shares issued and

to be issued pursuant to the Initial Issue to be admitted to the

premium segment of the Ofﬁcial List and to trading on the premium

segment of the London Stock Exchange’s main market.

Applications will be made to the UK Listing Authority and to the

London Stock Exchange for all of the Shares issued pursuant to the

Placing Programme to be admitted to the premium segment of the

Ofﬁcial List and to trading on the premium segment of the London

Stock Exchange’s main market.

It is expected that Initial Admission will become effective, and that

dealings in the Ordinary Shares will commence at 8.00 a.m. on

14 November 2018.

It is expected that any further Admissions under Subsequent

Placings will become effective and dealings will commence

between 15 November 2018 and 25 September 2019.

All Shares to be issued pursuant to a Subsequent Placing under the

Placing Programme will be allotted conditionally upon the relevant

Admission occurring.

C.7. Dividend policy The Company intends to pay two dividends in respect of the ﬁrst

ﬁnancial period following Initial Admission. The ﬁrst interim dividend

is expected to be declared in July 2019 and paid in August 2019

and the second interim dividend is expected to be declared in

January 2020 and paid in February 2020. Thereafter the Company

intends to pay dividends on a quarterly basis with dividends

typically declared in January, April, July and October and paid in

February, May, August and November in each ﬁnancial year.

The Company will target an annualised dividend yield of LIBOR

plus 2.5% (on the Issue Price) in respect of the Company’s ﬁrst

ﬁnancial period to 31 December 2019. The Company will target an

annualised dividend yield of LIBOR plus 4% (on the opening Net

Asset Value per Ordinary Share) in respect of each ﬁnancial year

thereafter. Where LIBOR materially changes or ceases to be

provided, the Company shall determine a suitable replacement

benchmark and shall notify investors accordingly. The Directors

intend to apply the ‘‘streaming’’ regime to distributions of portfolio

interest returns paid by the Company, such that these distributions

are expected to be designated as payments of interest. If

appropriate, in addition to, or instead of, interest distributions, the

Company may also pay ordinary corporate dividends.

Investors should note that the target dividend is a target only and

not a proﬁt forecast and there can be no assurance that such target

will be met.

In accordance with regulation 19 of the Investment Trust (Approved

Company) (Tax) Regulations 2011, the Company will not (except to

the extent permitted by those regulations) retain more than 15% of

its income (as calculated for UK tax purposes) in respect of an

accounting period.

In order to increase the distributable reserves available to facilitate

the payment of future dividends, the Company has resolved that,

conditional upon Initial Admission and the approval of the Court, the

amount standing to the credit of the share premium account of the

Company immediately following completion of the Initial Issue be

cancelled and transferred to a special distributable reserve. The

Company may, at the discretion of the Board, pay all or part of any

future dividends out of this special distributable reserve, taking into

account the Company’s investment objective.

Although there is no current expectation that they will exercise such

power, the Directors will have the power to pay dividends in relation

to the C Shares (if issued) in the event that the assets that are

attributable to the C Shares generate material income while the

C Shares are in issue.

C.22 Information about the

In the event that any C Shares are issued under the Placing

Programme, the investments which are attributable to the C Shares

following Conversion will be merged with the Company’s existing

portfolio. The new Ordinary Shares arising on Conversion of the

C Shares will, subject to the Articles, rank pari passu with the

Ordinary Shares then in issue.

The Ordinary Shares carry the right to receive all dividends

declared by the Company or the Directors, subject to the rights of

any C Shares in issue.

On a winding-up, provided the Company has satisﬁed all of its

liabilities and subject to the rights conferred by any C Shares in

issue at that time to participate in the winding-up, the holders of

Ordinary Shares will be entitled to all of the surplus assets of the

Company.

Holders of Ordinary Shares and C Shares (if any) will be entitled to

attend and vote at all general meetings of the Company and, on a

poll, to one vote for each Ordinary Share or C Share held.

The consent of either the holders of Ordinary Shares or the holders

of C Shares will be required for the variation of any rights attached

to the relevant class of Shares.

The nominal value of the Ordinary Shares is £0.01 per Ordinary

Share.

The nominal value of the C Shares is £0.10 per C Share.

The Ordinary Shares will be in registered form, will be admitted to

the premium segment of the Ofﬁcial List and will be traded on the

London Stock Exchange’s main market. The Company will use its

reasonable endeavours to procure that, upon Conversion, the new

Ordinary Shares thereby arising are admitted to the premium

segment of the Ofﬁcial List and to trading on the premium segment

of the London Stock Exchange’s main market.

There are no restrictions on the free transferability of the Ordinary

Shares, subject to compliance with applicable securities laws.

Section D – Risks

Element

Disclosure

Requirement Disclosure

D.1. Key information on the

key risks that are

speciﬁc to the

Company or its

industry

The Company has no operating results, and it will not

commence operations until it has obtained funding through

the Initial Issue. As the Company lacks an operating history,

investors have no basis on which to evaluate the Company’s

ability to achieve its investment objective and provide a

satisfactory investment return.

The past performance of other investments managed or

advised by the Investment Manager’s investment

professionals cannot be relied upon as an indicator of the

future performance of the Company. Investor returns will be

dependent upon the Company successfully pursuing its

investment policy.

There can be no guarantee that the investment objective of

the Company will be achieved.

The Company may experience ﬂuctuations in its operating

results due to a number of factors, including changes in the

values of investments made by the Company, changes in the

Company’s operating expenses, and general economic and

market conditions (including a deterioration in the

performance of the economies to which issuers of Debt

Instruments in which the Company invests are exposed, in

particular, the UK economy, changes to interest rates, credit

spreads, equity risk premium, inﬂation and bond ratings,

changes in laws or regulations, national and international

political circumstances and general market pricing of similar

investments).

Changes in tax legislation or practice, whether in the United

Kingdom or elsewhere, could affect the value of the

investments held by the Company, affect the Company’s

ability to provide returns to Shareholders, and affect the tax

treatment for Shareholders of their investments in the

Company (including rates of tax and availability of reliefs).

Whilst the use of borrowings should enhance the total return

on the Shares where the return on the Company’s portfolio of

investments exceeds the cost of borrowing, it will have the

opposite effect where the return on the Company’s portfolio of

investments is lower than the cost of borrowing. The use of

borrowings by the Company may increase the volatility of the

Net Asset Value per Share.

The departure of some or all of the Investment Manager’s

investment professionals could prevent the Company from

achieving its investment objective. The past performance of

the Investment Manager’s investment professionals cannot

be relied upon as an indication of the future performance of

the Company.

There is no guarantee that the Net Proceeds will be deployed

in a timely manner, or at all. Competition for investments may

result in the Company being unable to make investments or

lead to the available coupon on investments decreasing. Any

delay in the initial deployment of the Net Proceeds and/or the

transition of the Company’s portfolio to mainly private Debt

Instruments may have a material adverse effect on the

performance of the Company, the Net Asset Value, the

Company’s earnings and returns to Shareholders.

The Company will invest into illiquid public and private Debt

Instruments. Such investments may be difﬁcult to value or

realise (if at all) and therefore the market price that is

achievable for such investments might be lower than the

valuation of these assets and as reﬂected in the Company’s

published Net Asset Value per Ordinary Share and/or Net

Asset Value per C Share.

Investment defaults may result in a loss of anticipated

revenues. These losses may adversely affect the

Company’s ability to pay dividends and, if the level of

defaults is sufﬁciently large, may result in the Company’s

inability to fully recover its investment. The risk of inability to

fully recover investments is higher for highly leveraged Debt

Instruments such as leveraged loans to private equity owned

companies.

The Company’s investments may be subject to interest rate

risk. When interest rates decline, the value of ﬁxed rate

obligations can be expected to rise, and conversely when

interest rates rise, the value of ﬁxed-rate obligations can be

expected to decline. In general, if prevailing interest rates fall

signiﬁcantly below the interest rates on any Debt Investments

held by the Company, such investments are more likely to be

the subject of prepayments than if prevailing rates remain at

or above the rates borne by such investments.

Issuers of Debt Instruments in which the Company invests

may decide to prepay or redeem all or a portion of such Debt

Instruments at any time, and with respect to some of the

Company’s investments, without penalty. In the event of a

prepayment or redemption, the Company may not receive all

of the interest payments that it expected to receive, thereby

impacting negatively on the Company’s investment returns.

To the extent that any of the Company’s investments prepay,

are redeemed, mature or are sold it will ordinarily seek to

reinvest such proceeds. There can be no guarantee that such

further investments can be made in a timely manner (or at all)

and consequently the Company may hold material cash

balances pending reinvestment. Further, such proceeds may

be reinvested in investments with a lower yield and/or with

different characteristics to those replaced. Any delays in the

speed of capital deployment may have a material adverse

effect on the performance of the Company, the Net Asset

Value, the Company’s earnings and returns to Shareholders.

D.3. Key information on the

key risks that are

speciﬁc to the Shares

The value of an investment in the Company, and the returns

derived from it, if any, may go down as well as up and an

investor may not get back the amount invested.

The market price of the Shares may ﬂuctuate independently

of their underlying net asset value and may trade at a discount

or premium to net asset value at different times.

The Directors are under no obligation to effect repurchases of

Ordinary Shares. Shareholders wishing to realise their

investment in the Company will therefore be required to

dispose of their Ordinary Shares through the secondary

market.

It may be difﬁcult for Shareholders to realise their investment

and there may not be a liquid market in Shares.

Section E – Offer

Element

Disclosure

Requirement Disclosure

E.1. Net proceeds and

costs of the issue

The Initial Issue

The Company is targeting an issue in excess of 250 million

Ordinary Shares pursuant to the Initial Issue. The net proceeds of

the Initial Issue are dependent on the level of subscriptions

received. Assuming the gross proceeds of the Initial Issue are

£250 million, the net proceeds of the Initial Issue will be

approximately £247 million.

The costs and expenses of, and incidental to, the formation of the

Company and the Initial Issue are not expected to exceed

approximately £3 million, equivalent to 1.2% of the Gross

Proceeds, assuming Initial Gross Proceeds of £250 million. The

costs will be deducted from the Initial Gross Proceeds. It is

expected that the starting Net Asset Value per Ordinary Share will

be 98.8 pence, assuming Initial Gross Proceeds of £250 million.

The Placing Programme

The net proceeds of the Placing Programme are dependent, inter

alia, on, the Directors determining to proceed with a placing under

the Placing Programme, the level of subscriptions received, the

price at which such Shares are issued and the costs of the

Subsequent Placing.

The costs and expenses of issuing Ordinary Shares pursuant to

any Subsequent Placing will be covered by issuing such Ordinary

Shares at the prevailing published Net Asset Value per Ordinary

Share at the time of issue together with a premium to at least cover

the costs and expenses of the relevant Subsequent Placing of

Ordinary Shares (including, without limitation, any placing

commissions).

The costs and expenses of any issue of C Shares under the

Placing Programme will be paid out of the gross proceeds of such

issue and will be borne by holders of those C Shares only.

E.2.a. Reason for issue and

use of proceeds

The Initial Gross Proceeds will be utilised in accordance with the

Company’s investment policy, to meet the costs and expenses of

the Initial Issue and for working capital purposes.

It is currently expected that the Net Proceeds will be deployed in

accordance with the Company’s investment policy in the manner

set out below.

The Company expects the Investment Manager to deploy the Net

Proceeds in readily available public lower yielding assets within a

period of three months after Initial Admission (subject to market

conditions). Based on current market conditions, the Investment

Manager then intends to transition the Company’s portfolio of

investments such that it mainly comprises private Debt Instruments

in accordance with the Company’s investment policy. It is currently

expected that, subject to market conditions, such transition will be

completed by the end of the ﬁrst accounting period of the

Company, i.e. by 31 December 2019.

The Directors intend to use the net proceeds of any Subsequent

Placing under the Placing Programme to acquire investments in

accordance with the Company’s investment policy and for working

capital purposes.

E.3. Terms and conditions

of the offer

Initial Issue

The Company is targeting an issue in excess of 250 million

Ordinary Shares pursuant to the Initial Issue comprising the Initial

Placing, the Offer for Subscription and the Intermediaries Offer.

The Initial Issue has not been underwritten. The maximum number

of Ordinary Shares to be issued under the Initial Issue is 400

million.

Ordinary Shares will be issued pursuant to the Initial Issue at an

Issue Price of 100 pence per Ordinary Share.

The Offer for Subscription and the Intermediaries Offer will remain

open until 1.00 p.m. on 7 November 2018 and the Initial Placing will

remain open until 2.00 p.m. on 8 November 2018.

If the Initial Issue is extended, the revised timetable will be notiﬁed

via a Regulatory Information Service announcement.

The Initial Issue is conditional, inter ali a, on:

Initial Admission having become effective on or before 8.00

a.m. on 14 November 2018 or such later time and/or date as

the Company and Winterﬂood Securities may agree (being

not later than 8.00 a.m. on 28 February 2019);

the Placing and Offer Agreement becoming wholly

unconditional in respect of the Initial Issue (save as to Initial

Admission) and not having been terminated in accordance

with its terms at any time prior to Initial Admission; and

the Minimum Gross Proceeds (or such lesser amount as the

Company and Winterﬂood Securities may agree) being

raised.

Placing Programme

Shares which may be made available under the Placing

Programme will, subject to the Company’s decision to proceed

with an allotment and issue at any given time, be issued at the

Placing Programme Price. The Placing Programme will open on

15 November 2018 and will close on 25 September 2019 (or any

earlier date on which it is fully subscribed or as otherwise agreed

between the Company and Winterﬂood Securities).

The minimum price at which Ordinary Shares will be issued

pursuant to the Placing Programme, which will be in Sterling, will be

equal to the prevailing published Net Asset Value per Ordinary

Share at the time of issue together with a premium to at least cover

the costs and expenses of the relevant Subsequent Placing of

Ordinary Shares (including, without limitation, any placing

commissions).

The issue price of any C Shares issued pursuant to the Placing

Programme will be 100 pence per C Share.

The Placing Programme is not being underwritten.

Each issue of Shares pursuant to a Subsequent Placing under the

Placing Programme is conditional, inter alia, on:

Admission of the relevant Shares occurring by no later than

8.00 a.m. on such date as the Company and Winterﬂood

Securities may agree from time to time in relation to that

Admission, not being later than 25 September 2019;

a valid supplementary prospectus being published by the

Company if such is required by the Prospectus Rules;

in the case of an issue of Ordinary Shares, the Placing

Programme Price being determined by the Directors; and

the Placing and Offer Agreement being wholly unconditional

as regards the relevant Subsequent Placing (save as to

Admission) and not having been terminated in accordance

with its terms prior to the relevant Admission.

E.4. Material interests The Prudential Assurance Company Limited intends to subscribe

for the lower of (i) 80,000,000 Ordinary Shares and (ii) 25% of the

Ordinary Shares to be issued pursuant to the Initial Issue.

E.5. Name of person

selling securities and

lock-up agreements

Not applicable. No person or entity is offering to sell Ordinary

Shares as part of the Initial Issue.

E.6. Dilution No dilution will result from the Initial Issue.

If 400 million Shares were to be issued pursuant to Subsequent

Placings, and assuming the Initial Issue had been subscribed as to

250 million Ordinary Shares, there would be a dilution of

approximately 61.5% in Shareholders’ voting control of the

Company immediately after the Initial Issue (and prior to any

conversion of C Shares). The voting rights may be diluted further

on conversion of any C Shares depending on the applicable

conversion ratio. However, it is not anticipated that there would be

any dilution in the Net Asset Value per Ordinary Share as a result of

the Placing Programme.

E.7. Estimated expenses The costs and expenses of, and incidental to, the formation of the

Company and the Initial Issue are not expected to exceed

approximately £3 million, equivalent to 1.2% of the Initial Gross

Proceeds, assuming Initial Gross Proceeds of £250 million. The

costs will be deducted from the Initial Gross Proceeds. It is

expected that the starting Net Asset Value per Ordinary Share will

be 98.8 pence, assuming Initial Gross Proceeds of £250 million.

All expenses incurred by any Intermediary are for its own account.

Investors should conﬁrm separately with any Intermediary whether

there are any commissions, fees or expenses that will be applied by

such Intermediary in connection with any application made through

that Intermediary pursuant to the Intermediaries Offer.

The costs and expenses of issuing Ordinary Shares pursuant to

any Subsequent Placing will be covered by issuing such Ordinary

Shares at the prevailing published Net Asset Value per Ordinary

Share at the time of issue together with a premium to at least cover

the costs and expenses of the relevant Subsequent Placing of

Ordinary Shares (including, without limitation, any placing

commissions).

The costs and expenses of any issue of C Shares under the

Placing Programme will be paid out of the gross proceeds of such

issue and will be borne by holders of those C Shares only.

RISK FACTORS

Any investment in the Company should not be regarded as short-term in nature and

involves a degree of risk, including, but not limited to, the risks in relation to the Company

and the Shares referred to below. If any of the risks referred to in this document were to

occur this could have a material adverse effect on the Company’s business, ﬁnancial

position, results of operations, business prospects and returns to Shareholders. If that were

to occur, the trading price of the Shares and/or their respective Net Asset Values and/or the

level of dividends or distributions (if any) received from the Shares could decline

signiﬁcantly and investors could lose all or part of their investment.

Prospective investors should note that the risks relating to the Company, its investment

strategy and the Shares summarised in the section of this document headed ‘‘Summary’’

are the risks that the Board believes to be the most essential to an assessment by a

prospective investor of whether to consider an investment in the Shares. However, as the

risks which the Company faces relate to events and depend on circumstances that may or

may not occur in the future, prospective investors should consider not only the information

on the key risks summarised in the section of this document headed ‘‘Summary’’ but also,

among other things, the risks and uncertainties described below.

The risks referred to below are the risks which are considered to be material but are not

the only risks relating to the Company and the Shares. There may be additional material

risks that the Company and the Board do not currently consider to be material or of which

the Company and the Board are not currently aware.

RISKS RELATING TO THE COMPANY

The Company is a newly formed company with no separate operating history

The Company is a newly formed company incorporated in England and Wales on 17 July 2018.

The Company has no operating results and it will not commence operations until it has obtained

funding through the Initial Issue. As the Company lacks an operating history, investors have no

basis on which to evaluate the Company’s ability to achieve its investment objective and provide a

satisfactory investment return.

The Company’s returns will depend on many factors, including the performance of its investments,

the availability and liquidity of investment opportunities within the scope of the Company’s

investment objective and policy, the level and volatility of interest rates, conditions in the ﬁnancial

markets and economy and the Company’s ability to successfully operate its business and

successfully pursue its investment policy. There can be no assurance that the Company’s

investment policy will be successful.

Reliance on third party service providers

The Company has no employees and the Directors have all been appointed on a non-executive

basis. The Company is reliant upon the performance of third party service providers for its

executive function. In particular, the Investment Manager, the Depositary, the Administrator, the

Secretary, the Registrar and third parties (which may include the Investment Manager or another

M&G Entity) providing debt administration services will be performing services which are integral to

the operation of the Company or the administration of its investments.

Failure by any service provider to carry out its obligations to the Company in accordance with the

terms of its appointment could have a materially detrimental impact on the operation of the

Company or administration of its investments. The termination of the Company’s relationship with

any third party service provider or any delay in appointing a replacement for such service provider,

could disrupt the business of the Company materially and could have a material adverse effect on

the Company’s performance.

Past performance cannot be relied upon as an indicator of the future performance of the

Company

The past performance of other investments managed or advised by M&G or any of M&G’s

investment professionals cannot be relied upon as an indicator of the future performance of the

Company. Investor returns will be dependent upon the Company successfully pursuing its

investment policy.

RISKS RELATING TO THE COMPANY’S INVESTMENT STRATEGY

The Company may not meet its investment objective and there is no guarantee that the

Company’s targeted dividend, as may be from time to time, will be met

The Company may not achieve its investment objective. Meeting the investment objective is a

target but the existence of such an objective should not be considered as an assurance or

guarantee that it can or will be met.

The Company’s investment objective is to generate a regular and attractive level of income with

low asset value volatility. The achievement of the target dividend and low asset value volatility will

depend upon, amongst other things, the Company successfully pursuing its investment policy and

the performance of its portfolio of investments. There can be no assurance as to the level of

income return or capital volatility over the long term. The declaration, payment and amount of any

dividend by the Company will be subject to the discretion of the Directors and will depend upon,

amongst other things, the Company successfully pursuing its investment policy and its earnings,

ﬁnancial position, cash requirements, level and rate of borrowings and availability of proﬁt, as well

as the provisions of relevant laws or generally accepted accounting principles from time to time.

Investor returns will be dependent upon the performance of the Company’s portfolio of

investments and the Company may experience ﬂuctuations in its operating results

Any returns generated by the Company are reliant primarily upon the performance of the

Company’s investments. No assurance is given, express or implied, that Shareholders will receive

back any of their original investment in the Shares.

The Company may experience ﬂuctuations in its operating results due to a number of factors,

including changes in the values of investments made by the Company, changes in the Company’s

operating expenses, and general economic and market conditions (including a deterioration in the

performance of the economies to which issuers of Debt Instruments in which the Company invests

are exposed, in particular the UK economy, changes to interest rates, credit spreads, equity risk

premium, inﬂation and bond ratings, changes in laws or regulations, national and international

political circumstances and general market pricing of similar investments). Such variability may lead

to volatility in the trading price of the Shares and cause the Company’s results for a particular

period not to be indicative of its performance in a future period and this may have a material

adverse effect on the performance of the Company, the Net Asset Value, the Company’s earnings

and returns to Shareholders.

Availability of appropriate investments and transition of the Company’s portfolio of investments

There is no guarantee that the Net Proceeds will be deployed in a timely manner, or at all, and the

Company has not committed to make any investments.

In addition, the Company is subject to competition in sourcing and making investments.

Competition for investments may result in the Company being unable to make investments or lead

to the available coupon on investments decreasing, which may further limit the Company’s ability to

generate its targeted dividend.

If the Investment Manager is not able to source a sufﬁcient number of suitable investments within

a reasonable timeframe whether by reason of lack of demand, competition or otherwise, a greater

proportion of the Company’s assets will be held in cash for longer than anticipated and the

Company’s ability to achieve its investment objective will be adversely affected. To the extent that

any of the Company’s investments prepay, are redeemed, mature or are sold it will ordinarily seek

to reinvest the proceeds thereof in accordance with the Company’s investment policy. There can

be no guarantee that such further investments can be made in a timely manner (or at all) and

consequently the Company may hold material cash balances pending reinvestment. Further, such

proceeds may be reinvested in investments with a lower yield and/or with different characteristics

to those replaced. Any delays in the speed of capital deployment may have a material adverse

effect on the performance of the Company, the Net Asset Value, the Company’s earnings and

returns to Shareholders.

The Company expects the Investment Manager to deploy the Net Proceeds in readily available

public lower yielding assets within a period of three months after Initial Admission (subject to

market conditions). Based on current market conditions, the Investment Manager then intends to

transition the Company’s portfolio of investments such that it mainly comprises private Debt

Instruments in accordance with the Company’s investment policy. It is currently expected that,

subject to market conditions, such transition will be completed by the end of the ﬁrst accounting

period of the Company, i.e. by 31 December 2019. There can be no guarantee that initial

deployment of the Net Proceeds and/or the transition of the Company’s portfolio of investments will

be achieved in the timeframes referred to above. Any delay in initial deployment of the Net

Proceeds and/or the transition of the Company’s portfolio of investments may have a material

adverse effect on the performance of the Company, the Net Asset Value, the Company’s earnings

and returns to Shareholders.

Sufﬁciency of due diligence

The due diligence process that the Investment Manager will undertake in connection with the

Company’s investments may not reveal all facts and circumstances that may be relevant in

connection with an investment.

When conducting due diligence and making an assessment regarding an investment, the

Investment Manager will be required to rely on resources available to it, including in certain

circumstances information provided by the target of the investment.

There can be no assurance that due diligence investigations with respect to any investment

opportunity will reveal or highlight all relevant facts and circumstances that may be necessary or

helpful in evaluating such investment opportunity.

Any failure by the Investment Manager to identify relevant facts and circumstances through the due

diligence process may lead to unsuccessful investment decisions, which may have a material

adverse effect on the performance of the Company, the Net Asset Value, the Company’s earnings

and returns to Shareholders.

Fraud, misrepresentation or omission risks

The value of the Company’s investments may be affected by fraud, misrepresentation or omission

on the part of any issuer of Debt Instruments in which the Company invests and/or by parties

related to the issuer (or related collateral and security arrangements). Such fraud,

misrepresentation or omission may adversely affect the value of the collateral underlying the

investment in question or may adversely affect the Company’s ability to enforce its contractual

rights or the issuer’s ability to fulﬁl its obligations in respect of the investment.

Cash management and credit risk of bank deposits

To the extent the Company has cash balances (including any un-invested proceeds of the Initial

Issue or any Subsequent Placing), these may be held on deposit with banks or ﬁnancial

institutions. Returns on cash or cash-equivalents may be materially lower than those available on

the Company’s target investments and material cash balances may materially and adversely affect

the performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

To the extent the Company holds material cash balances it will be subject to the credit risk of the

banks or ﬁnancial institutions with which they are deposited. If any such bank or ﬁnancial institution

were to become insolvent, or default on its obligations, the Company would be exposed to the

potential loss of the sum deposited. This may materially and adversely affect the performance of

the Company, the Net Asset Value, the Company’s earnings and returns to Shareholders.

Geographic concentration

The Company has no limit on exposure to a single geography and the Company will invest

primarily in Sterling denominated Debt Instruments. Accordingly, the Company’s portfolio may have

a signiﬁcant exposure to the UK economy.

An economic slowdown in the UK or any other jurisdiction where the Company has signiﬁcant

exposure could, depending primarily on the severity and duration of any economic slowdown, result

in the creditworthiness of the issuers of Debt Instruments in which the Company invests becoming

impaired which could cause an increased risk of investment default and cause the Company to

incur losses.

Sectoral diversiﬁcation

The Company has no limit on its exposure to any sector which may lead to the Company having

concentrated exposure to certain business sectors from time to time. Concentration of exposure to

any one sector may result in greater Net Asset Value volatility and may have a material adverse

effect on the performance of the Company, the Company’s earnings and returns to Shareholders.

Changes in laws, government policy or regulations

The Company will be subject to laws, government policy and regulations enacted by national and

local governments. Any change in the law, regulation or government policy affecting the Company

may have a material adverse effect on the value of its investments, its ability to carry on its

business and successfully pursue its investment policy and on the Company’s earnings and returns

to Shareholders. In particular, the Company will be required to comply with certain regulatory

requirements that are applicable to listed closed-ended investment companies. The Company must

comply with the Listing Rules, Prospectus Rules, the Disclosure Guidance and Transparency

Rules, MAR and the rules of the London Stock Exchange. Any failure in future to comply with any

future changes to such rules and regulations may result in the Shares being suspended from

trading on the London Stock Exchange.

The ﬁnancial markets are uncertain and have been the subject of governmental intervention

Uncertain conditions in the global ﬁnancial markets, and initiatives by governments to address

them, have created a great deal of uncertainty for the ﬁnance industries, which may adversely

affect the Company’s investments and overall performance.

The scale and extent of these government initiatives have been unprecedented in recent times and

it remains unclear what impact they will have on global ﬁnancial markets in the long term, and on

European, U.S. and other economies.

These initiatives are subject to change, may be implemented in unanticipated ways and their

effects are difﬁcult to predict. It is not known whether the Company and the counterparties to

whom the Company will be exposed or its competitors will be able to beneﬁt from these initiatives,

directly, indirectly or at all. There can be no assurance the conditions in the global ﬁnancial

markets, or actions by governments, will not worsen and/or further adversely affect the value of the

Company’s investments and overall performance.

UK exit from the European Union

A referendum was held on 23 June 2016 to decide whether the UK should remain in the EU. A

vote was given in favour of the UK leaving the EU (‘‘Brexit’’) and Article 50 of the Treaty on

European Union was triggered on 29 March 2017. The extent of the impact on the Company will

depend in part on the nature of the arrangements that are put in place between the UK and the

EU following the eventual Brexit and the extent to which the UK continues to apply laws that are

based on EU legislation. The macroeconomic effect of an eventual Brexit on the value of

investments is unknown. The UK’s exit from the EU could also create signiﬁcant uncertainty in the

UK (and potentially global) ﬁnancial markets, which may materially and adversely affect the

performance of the Company, the Net Asset Value, the Company’s earning and returns to

Shareholders. It could also potentially make it more difﬁcult for the Company to raise capital in the

EU and/or increase the regulatory compliance burden on the Company. This could restrict the

Company’s future activities and thereby negatively affect returns. As such, it is not possible to state

the impact that Brexit will have on the Company and its investments.

Investments outside the UK are exposed to local, legal, economic, political, social and other

risks

Whilst the Company’s investments will be primarily denominated in Sterling, it may make

investments outside the UK. The laws and regulations of various jurisdictions in which the

Company may invest, may impose restrictions that would not exist in the UK. Such jurisdictions

may have their own legal, economic, political, social, cultural, business, industrial and labour and

environmental risks and investments made in such jurisdictions may require signiﬁcant government

approvals under corporate, securities, exchange control, foreign investment and other similar laws

and may require ﬁnancing and structuring alternatives that differ signiﬁcantly from those customarily

used in the UK.

In addition, governments may from time to time impose restrictions intended to prevent capital

ﬂight, which may, for example, involve punitive taxation (including high withholding taxes) on certain

securities or transfers or the imposition of exchange controls, making it difﬁcult or impossible to

exchange or repatriate foreign currency. These and other restrictions may make it impracticable for

the Company to distribute the amounts realised from such investments at all or may force the

Company to distribute such amounts other than in Sterling and therefore a portion of the

distribution may be made in foreign securities or currency. It also may be difﬁcult to obtain and

enforce a judgment in a local court. No assurance can be given that a given political or economic

climate, or particular legal or regulatory risks, will not adversely affect an investment by the

Company.

Use of borrowings

The Company is expected to be managed primarily on an ungeared basis although the Company

may, from time to time, be geared tactically through the use of borrowings. Borrowings would

principally be used for investment purposes, but may also be used to manage the Company’s

working capital requirements or to fund market purchases of Shares. Whilst the use of borrowings

should enhance the total return on the Shares where the return on the Company’s portfolio of

investments exceeds the cost of borrowing, it will have the opposite effect where the return on the

Company’s portfolio of investments is lower than the cost of borrowing. The use of borrowings by

the Company may increase the volatility of the Net Asset Value per Share.

To the extent that a fall in the value of the Company’s investments causes gearing to rise to a

level that is not consistent with the Company’s borrowing limits or loan covenants, the Company

may have to sell investments in order to reduce borrowings. Such investments may be difﬁcult to

realise and therefore the market price which is achievable may give rise to a signiﬁcant loss of

value compared to the book value of the investments, as well as a reduction in income from

investments.

Any amounts that are secured by the Company under a bank facility are likely to rank ahead of

Shareholders’ entitlements and accordingly, should the Company’s investments not grow at a rate

sufﬁcient to cover the costs of establishing and operating the Company, on a liquidation of the

Company, Shareholders may not recover all or any of their initial investment.

The Company will pay interest on any borrowings. As such, the Company may be exposed to

interest rate risk due to ﬂuctuations in the prevailing market rates to the extent that it has borrowed

funds outstanding.

Currency risk

If an investor’s currency of reference is not Sterling, currency ﬂuctuations between the investor’s

currency of reference and Sterling may adversely affect the value of an investment in the

Company.

A proportion of the Company’s investments may be denominated in currencies other than Sterling.

The Company will maintain its accounts and intends to pay dividends in Sterling. Accordingly,

ﬂuctuations in exchange rates between Sterling and the relevant local currencies and the costs of

conversion and exchange control regulations will directly affect the value of the Company’s

investments and the ultimate rate of return realised by investors. Whilst the Company may seek to

hedge the currency risk, there can be no assurance that any currency hedging arrangements will

be sufﬁcient to cover the relevant risk.

Hedging and derivatives risk

The Company will not employ derivatives for investment purposes. Derivatives may however be

used for efﬁcient portfolio management, including for currency hedging. Should the Company elect

to enter into hedging arrangements, the use of instruments to hedge a portfolio carries certain

risks, including the risk that losses on a hedge position will reduce the Company’s earnings and

funds available for distribution to the Shareholders and that such losses may exceed the amount

invested in such hedging instruments. There is no perfect hedge for any investment, and a hedge

may not perform its intended purpose of offsetting losses on an investment and, in certain

circumstances, could increase such losses. The Company may also be exposed to the risk that the

counterparties with which the Company trades may cease making markets and quoting prices in

such instruments, which may render the Company unable to enter into an offsetting transaction

with respect to an open position.

Although the Company will select the counterparties with which it enters into hedging arrangements

with due skill and care, the residual risk that the counterparty may default on its obligations

remains.

The Net Asset Value may be based on estimates

Certain of the Company’s investments will be in the form of Debt Instruments for which market

quotations are not readily available, and third-party pricing information may not be available for

certain investments held in the Company’s portfolio of investments.

In calculating the Net Asset Value, the value of certain investments of the Company may be based

on estimates. Such estimates may be unaudited or may not be possible to verify. In addition,

estimates of the value of collateral may not be revised on a regular or timely basis or at all with

the result that the values of investments may be estimated on the basis of information available at

the time.

This may result in increased volatility in the Net Asset Value and the value at which such

investments could be liquidated may differ from the valuations reﬂected in the latest published Net

Asset Value.

RISKS RELATING TO THE DEBT INSTRUMENTS

General Risks

Liquidity of investments

The Company will invest into illiquid public and private Debt Instruments. Such investments may be

difﬁcult to value or realise (if at all) and therefore the market price that is achievable for such

investments might be lower than the valuation of these assets and as reﬂected in the Company’s

published Net Asset Value per Ordinary Share and/or Net Asset Value per C Share.

By way of example, in respect of private placements, owing to their customised nature and private

issuance, they may not be purchased or sold as easily as publicly-traded debt securities. As a

result, the Company may have difﬁculty in disposing of certain private placements because of the

limited secondary market for such securities. In addition, under adverse economic or market

conditions, the secondary market for private placements could contract further independently of

adverse changes relating to a particular issuer. Reduced secondary market liquidity for certain

private placements may also make it more difﬁcult for the Company to obtain accurate market

quotations for the purpose of valuing the assets.

The liquidity in defaulted Debt Instruments may be further impaired and, to the extent the Company

seeks to sell any defaulted Debt Instruments, it is unlikely that the proceeds from such disposal will

be equal to the amount of principal and interest thereon, which may have a material adverse effect

on the performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

Investment defaults may result in losses

Investment defaults may result in a loss of anticipated revenues. These losses may adversely

affect the Company’s ability to pay dividends and, if the level of defaults is sufﬁciently large, may

result in the Company’s inability to fully recover its investment. The risk of inability to fully recover

investments is higher for highly leveraged Debt Instruments such as leveraged loans to private

equity owned companies.

While the Company will seek to repossess and sell or otherwise realise the value of any collateral

that secures a defaulted investment, it may not be able to do so on favourable terms. In some

cases, the cost of repossessing the collateral related to a defaulted investment may make trying to

recover the asset impractical. Also, if an issuer of Debt Instruments in which the Company invests

ﬁles for protection under bankruptcy or administration laws, then the Company may experience

difﬁculties and delays in realising on the collateral from the defaulting party and, in addition, it may

be unable to enforce important contract provisions against the insolvent party, including the security

provisions related to the collateral.

The Company may suffer a loss due to, or the Company’s ability to pay dividends may be

adversely affected by, the high costs of: (i) enforcing an issuer’s contractual obligations;

(ii) recovering the collateral from the defaulting party; (iii) transporting, storing and repairing the

collateral; (iv) the costs related to enforcement by the Company of its rights; and (v) ﬁnding a

purchaser for the collateral.

In the event of a default, certain collateral that may secure the Company’s investments may have

a higher value if that collateral remains in place and the issuer continues to operate.

Interest rate risk

The Company’s investments may be subject to interest rate risk. When interest rates decline, the

value of ﬁxed rate obligations can be expected to rise, and conversely when interest rates rise, the

value of ﬁxed-rate obligations can be expected to decline. In general, if prevailing interest rates fall

signiﬁcantly below the interest rates on any Debt Investments held by the Company, such

investments are more likely to be the subject of prepayments than if prevailing rates remain at or

above the rates borne by such investments.

Since the global ﬁnancial crash there has been a sustained period of very low levels of central

bank set interest rates. It is expected that central banks will raise their interest rates in the near

future. For investments that have a ﬁxed rate of return, any such interest rate rises may negatively

impact the returns on the investments and the returns realised by the investors.

Covenant Risk

Investments made by the Company may become non-performing for a wide variety of reasons,

including non-payment of principal or interest, as well as material covenant breaches by the issuer

of the relevant Debt Instrument. Whilst the Investment Manager monitors the covenants and

conditions attaching to the Company’s investments, there can be no assurance that such

covenants and conditions will be fulﬁlled in a timely fashion and the Company could, as a result,

be exposed to loss. Any failure by the Investment Manager to monitor the covenants and

conditions attaching to an investment or to appropriately enforce the Company’s rights in the event

of a breach of a material covenant may cause the value of the Company’s investments to be

impaired. This may have a material adverse effect on the performance of the Company, the Net

Asset Value, the Company’s earnings and returns to Shareholders.

Prepayment and redemption risks

Issuers of Debt Instruments in which the Company invests may decide to prepay or redeem all or

a portion of such Debt Instruments at any time, and with respect to some of the Company’s

investments, without penalty. The degree to which issuers prepay or redeem, whether as a

contractual requirement or at their election, may be affected by general business conditions, market

interest rates, the issuer’s ﬁnancial condition and competitive conditions among lenders. In the

event of a prepayment or redemption, the Company may not receive all of the interest payments

that it expected to receive, thereby impacting negatively on the Company’s investment returns.

Volatility of investment grade assets credit ratings

Investment grade assets must have a minimum credit rating of BBB- by S&P or Fitch or Baa3 by

Moody’s, or, in the case of unrated Debt Instruments, a minimum internal M&G rating of BBB-.

Although investment grade assets must exhibit such minimum rating, their respective credit ratings

may range widely and may vary over time. In particular, where such credit ratings are at the lower

end of the range, the issuers of such assets may face uncertainties and exposure to adverse

business, ﬁnancial or economic conditions. This could lead to them being unable to meet their

ﬁnancial commitments despite being regarded as issuers of investment grade debt.

In addition, investment grade debt can be subordinated or junior in the capital structure (see the

risk factor under the heading ‘‘Subordinated loan risk’’ below).

Below investment grade assets

The Company may invest in below investment grade assets which carry greater credit risk than

investment grade assets due to the higher probability of default by the issuer. Below investment

grade assets may also be less liquid than investment grade assets. Changing market conditions

and interest rate levels can also have a larger impact on the values of below investment grade

assets as compared to investment grade assets.

Subordinated loan risk

The Company may invest in or have exposure to Debt Instruments that are subordinated in right

and rank junior to other Debt Instruments. The covenants provided in favour of holders of senior

Debt Instruments are generally extensive and a breach of one or more of such covenants may

result in payments to the Company, as a holder of subordinated debt or Debt Instruments, being

suspended. Where such a breach or any other event leads to an event of default, holders of senior

debt or Debt Instruments (or any future senior holders) will have a priority claim on cashﬂow

generated by the issuer and/or may have the right to take control of the issuer and ultimately to

sell it. In such circumstances, the issuer may be unable to satisfy part, or all of its payment

obligations in respect of the Company’s interest in the relevant subordinated debt investment.

There are no restrictions on the Company’s ability to make subordinated loans. Concentration of

the Company’s portfolio of investments in subordinated loans may result in greater volatility in the

value of the Company’s investments and consequently the Net Asset Value and may have a

material adverse effect on the performance of the Company, the Net Asset Value, the Company’s

earnings and returns to Shareholders.

Unsecured Debt Instruments

The Company may invest in or have exposure to unsecured Debt Instruments in relation to which

the Company will not have recourse to any security or other assets of the issuer of the Debt

Instrument should the issuer default on its payment obligations. The risk of investing in unsecured

Debt Instruments is ultimately dependent upon payment of the underlying debt by the issuer.

Future discontinuance of the London Interbank Offered Rate

In this paragraph headed ‘‘Future discontinuance of the London Interbank Offered Rate’’, ‘‘LIBOR’’

shall mean the Sterling London Interbank Offered Rate administered by ICE Benchmark

Administration Limited (or any other person which takes over administration of that rate).

From the end of 2021, panel banks will no longer be compelled by the FCA to submit rates for the

calculation of LIBOR and therefore it is not possible to predict whether, and to what extent, they

will continue to provide submissions from this date and whether LIBOR will continue on its current

basis. In the event that LIBOR is discontinued or otherwise unavailable, the rate of interest on

Debt Instruments which reference LIBOR will need to be determined based on any applicable fall-

back provisions. This may in certain circumstances be reliant upon the provision by reference

banks of offered quotations for the LIBOR rate, which may not be available, or require the

application of a ﬁxed rate based on the last relevant LIBOR rate available. Additionally, where such

fall-back provisions need to be amended to reﬂect such discontinuance and there is uncertainty on

the establishment of an alternative interest rate measure, there can be no assurance that any such

amendments or alternative interest rates will adequately mitigate future interest rate risk. Therefore,

such changes could have an adverse effect on the applicable interest rates of Debt Instruments

referencing LIBOR and their value and liquidity, and this in turn may have an adverse effect on the

performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

Reliance on obligors

The Company will not, in most cases, have control over the activities of any issuer of Debt

Instruments invested in by the Company or which is the payer of any receivable acquired by the

Company. Managers of issuers in whose Debt Instruments the Company has invested may

manage those companies in a manner not anticipated by the Investment Manager.

Investments in collective investment vehicles

The Company may invest in one or more collective investment vehicles, which it is expected will

be managed or advised by an M&G Entity. In relation to any such investments, the Company will

only be a passive investor and will not therefore have the same degree of control it has over its

other investments. M&G may be removed, or cease to manage or advise, any such vehicle and

the Company may be unable to inﬂuence the selection of a replacement manager or adviser.

The Company is unlikely to be able to inﬂuence signiﬁcantly, or at all, the management of such

vehicles. The Company is, therefore, reliant upon the skills of the investment managers/advisers of

the vehicles in which it invests and may not be in a position to remove any such manager/adviser

or to exit its investment in the event of under performance by those vehicles and/or managers/

advisers.

Such vehicles will be exposed to similar underlying risks as those applying to the Company’s

directly held portfolio of investments, but the risk proﬁle may be higher than the Company’s directly

held portfolio of investments due to the characteristics of the underlying portfolio in any relevant

vehicle.

Accordingly, the Company cannot guarantee that these vehicles will be managed or advised

appropriately, which may have a material adverse effect on the performance of the Company, the

Net Asset Value, the Company’s earnings and returns to Shareholders.

Risks relating to speciﬁc Debt Instruments

Asset-backed securities

Each asset-backed security that the Company invests in will typically be backed by a pool of

assets representing the obligations of a number of different borrowers or debtors (such as

mortgage or credit card borrowers for example). In some cases however, the security may be

backed by a single asset, for example a mortgage relating to a speciﬁc commercial property. The

value of an investment in an asset-backed security can be affected by a number of factors,

including: (i) changes in the market’s perception of the underlying assets backing the security; (ii)

economic and political factors such as interest rates and levels of unemployment and taxation

which can have an impact on the arrears, foreclosures and losses incurred with respect to the pool

of assets backing the security; (iii) changes in the market’s perception of the adequacy of credit

support built into the security’s structure to protect against losses caused by arrears and

foreclosures; (iv) changes in the perceived creditworthiness of the originator of the security or any

other third parties to the transaction; and (v) the speed at which mortgages or loans within the pool

are repaid by the underlying borrowers (whether voluntary or due to arrears or foreclosures).

At times of rapid changes in market conditions it may be difﬁcult to value certain asset-backed

securities investments made by the Company and values may ﬂuctuate considerably, with market

prices quickly becoming out of date and not reﬂecting the value which would be realised on a sale

of the relevant asset-backed security in such market conditions. The value of the Company’s

investment in any such asset-backed security will be determined on a marked to market basis and,

accordingly, falls in the market price of asset-backed securities will result in a corresponding fall in

the Net Asset Value of the Ordinary Shares and/or C Shares.

Investments in asset-backed securities that are not backed by mortgages present certain risks that

are not presented by mortgage-backed securities. Primarily, these securities may not have the

beneﬁt of the same security interest in the related collateral. Credit card receivables, for example,

are generally unsecured. Therefore, there is a possibility that recoveries on defaulted collateral may

not, in some cases, be available to support payments on these securities. The risk of investing in

these types of asset-backed securities is ultimately dependent upon payment of the underlying debt

by the debtor(s).

Extension and prepayment risks related to asset-backed securities and structured credit

Asset-backed securities and structured credit are often subject to extension and prepayment risks,

which may have a substantial impact on the timing of their cashﬂows. The average life of each

individual security may be affected by a number of factors such as structural features (including the

existence and frequency of exercise of any optional redemption, mandatory redemption or

prepayment or sinking fund features), the payment or the prepayment rate of the underlying assets,

the prevailing level of interest rates, the actual default rate of the underlying assets, the timing of

recoveries and the level of rotation in the underlying assets.

The Company may invest in or have exposure to asset-backed securities and structured credit that

are subordinated in right of payment and rank junior to other securities that are secured by or

represent an ownership interest in the same pool of assets. In addition, the underlying

documentation may provide for the diversion of payments of interest and/or principal to more senior

classes when the delinquency or loss experience of the pool of assets underlying such asset-

backed securities and structured credit breaches a covenant test. In certain circumstances,

payments of interest on certain asset-backed securities and structured credit in the Company’s pool

of assets may be reduced, deferred or eliminated for one or more payment dates, which may

adversely affect the value of the performance of the Company, the Net Asset Value, the

Company’s earnings and returns to Shareholders.

Rising interest rates tend to extend the duration of mortgage-backed securities, making them more

sensitive to changes in interest rates. As a result, in a period of rising interest rates the Company

may exhibit increased levels of volatility should it hold mortgage-backed securities. In addition,

mortgage-backed securities are subject to prepayment risk. When interest rates decline, borrowers

may pay off their mortgages sooner than expected.

Loans to borrowers in the ﬁnancial services industry may be secured by portfolios of ﬁnancial assets

The collateral for loans made to borrowers in the ﬁnancial services industry may consist of

portfolios of ﬁnancial assets, typically other loans, receivables or other contractual cash ﬂows. Such

transactions may represent several types of risk to the Company.

Such ﬁnancial assets will typically have shorter maturities than the maturity of the relevant loan by

the Company. The Company is dependent on the borrower originating additional loans to maintain

the value of the collateral relative to the loan. Typically, if the collateral value declines below an

agreed threshold, the collateral pool will enter a run off period which will amortise the loan. There

can be no assurance that the cash ﬂow during a run off period will be sufﬁcient to repay the loan

amount.

While the Company obtains legal advice in order to structure the collateral pool so as to protect

the Company’s interests from other creditors, there can be no assurance that the legal structures

and agreements protecting the Company’s interest in the collateral pool would not be subject to

litigation in the event of the borrower’s insolvency.

The Company is generally dependent upon the borrower servicing and monitoring assets of the

collateral pool. The Investment Manager conducts initial due diligence on the borrower and the

assets in the collateral pool. In addition, a third party servicer may be engaged to monitor the

borrower’s compliance with the loan terms and the performance of the collateral pool over time.

Commercial mortgages

Commercial mortgages are subject to the general risks associated with any mortgage loan, in that

they are in the ordinary course dependant on the successful operation of the underlying properties,

including the sufﬁciency of the rental income from the underlying properties and, upon default by

the relevant borrowers on the market value of the relevant mortgaged properties and/or the

borrowers’ ability to reﬁnance such mortgaged properties.

A borrowers’ ability to make payments due under a commercial mortgage will also be subject to

the risks generally associated with investment in real property and may be beyond the control of

the borrower. These and other factors may make it impossible for a mortgaged property to

generate sufﬁcient income to make full and timely payments on the related loan.

Such risks include the performance of the relevant underlying property market, the location and

condition of the property or properties and changes in supply of, or demand for, competing

properties in the area (as a result, for instance, of overbuilding) which may impact on the demand

for the property or properties and the rental levels it/they can command. Further, indirect factors

and risks which also inﬂuence the demand for a property, and therefore, its value, include

government regulations, changes in real property taxes, changes in interest rates and availability of

mortgage funds and environmental liabilities.

Adverse change in any of these factors may have a negative impact on the value of collateral that

supports a commercial mortgage and/or the ability of a borrower to service its debts including any

investment made by the Company. This may have a material adverse effect on the performance of

the Company, the Net Asset Value, the Company’s earning and returns to Shareholders.

Following an event of default, enforcement of the relevant related security may not be immediate,

resulting in a signiﬁcant delay in the relevant security agent’s recovery of amounts owed by the

relevant borrower under a loan. In certain circumstances, a moratorium may apply to prevent or

delay enforcement in a relevant jurisdiction. Additionally, in each relevant jurisdiction, there may be

certain classes of creditors entitled to receive the proceeds of secured assets before the relevant

security agent (for example unpaid salaries, enforcement costs and taxes).

The Company may lend to smaller and mid -sized companies

The Company may lend to smaller and/or mid-sized companies. Whilst loans made to smaller and/

or mid-sized companies may fall within the relevant credit criteria of the Company at the time the

loan is entered into, a smaller or mid-sized company may be more susceptible to market volatility

and adverse changes in its trading conditions which may in turn impact its ﬁnancial condition and

may mean that it is unable to comply with its payment obligations under the terms of the relevant

loan agreement. To the extent that a small or mid-sized company is unable to meet its obligations

pursuant to a loan agreement, the value of the Company’s investment in such a loan may fall and

interest payments to the Company may be interrupted, which may have an adverse impact on the

Company’s ﬁnancial performance.

Distressed debt

The Company may invest in or have exposure to the Debt Instruments of issuers who are going

through a balance sheet restructuring or are in a weakened ﬁnancial condition (for example,

suffering poor ﬁnancial metrics, requiring further capital investment or being encumbered by an

unsustainable debt burden). While the Company is subject to limitations on the maximum size of

investment in any such individual Debt Instruments, there is no limitation on the Company’s

aggregate exposure to these Debt Instruments. The complexity of these situations and the fact that

it may be difﬁcult to obtain information relating to an issuer’s true ﬁnancial position means that the

future of these issuers may be uncertain.

The issuer may be involved in or undergoing workouts, liquidations, spin-offs, reorganisations,

bankruptcies or other catalytic changes or similar transactions. In any investment opportunity

involving any such type of special situation, there is the risk that the contemplated transaction

either will be unsuccessful, take considerable time or will result in a distribution of cash or a new

instrument the value of which will be less than the purchase price. Similarly, if an anticipated

transaction does not in fact occur, the Company may be required to sell its investment at a loss.

Because there is substantial uncertainty concerning the outcome of transactions involving ﬁnancially

troubled issuers in which the Company may invest, there is a potential risk of loss by the Company

of its entire investment related to such issuers.

Infrastructure ﬁnance

The obligors under infrastructure ﬁnance Debt Instruments will generally be entities that have been

formed for, and are generally restricted to, the limited business purpose of owning and/or operating

the related project. Accordingly, payment of amounts due is generally dependent solely upon

successful development, construction and operation of the underlying project or the ownership and

management of a key economic asset that has already been completed.

Loans that ﬁnance equipment leasing

Generally, lease equipment is owned by a special purpose entity, the lessor, established by a

leasing company which then leases the equipment to the users, the lessees. The leasing company

generally contributes equity to the lessor and the Company would provide a loan to the lessor to

fund the acquisition of the equipment. The Company will generally be dependent on the leasing

company to service the leases, provide ongoing reports to the Company, and take remedial action,

if any, if a lessee does not perform as required under a lease.

A number of factors may affect an equipment leasing company’s ability to operate proﬁtably,

including: (i) changes in economic conditions, including ﬂuctuations in demand for assets, interest

rates and inﬂation rates; (ii) the quality of the assets it acquires and leases; (iii) the continuing

strength of equipment manufacturers; (iv) the timing of the equipment leasing company’s

investments and the equipment leasing company’s ability to forecast technological advances; (v)

technological and economic obsolescence of the assets it acquires; (vi) defaults by lessees or

other counterparties; and (vii) increases in the equipment leasing company’s ongoing expenses. If

the equipment leasing company is unable to operate proﬁtably it may not be able to service its

debts including any investment made by the Company. This may have a material adverse effect on

the performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

Further, when an equipment leasing company enters into a lease, it will not know what the residual

value of the asset leased will be when the lease ends (on expiry, in the case of an operating

lease, or prematurely in the case of a cashﬂow lease). Where an equipment leasing company

enters into operating leases, the present value of minimum rental payments during the initial lease

term will usually be structured to result in the equipment leasing company’s recovery of an amount

less than the fair value or purchase price of the asset. Therefore, the equipment leasing company’s

ability to recover the full purchase price of the asset and the equipment leasing company’s

expected return in connection with an operating lease depends on the potential value of the asset

once the primary lease term expires. This is the ‘‘residual value’’. Similarly, in circumstances where

a cashﬂow lease ends prematurely, the equipment leasing company may be reliant on the residual

value in order to achieve the desired returns. The residual value will depend on numerous factors

beyond the equipment leasing company’s control, including whether the original lessee wants to

keep the asset, the cost of a comparable new asset, whether the leased asset is obsolete or in

poor condition, whether there is a secondary market for the type of used asset and, if so, the

market value of such asset.

In certain circumstances, the equipment leasing company may be reliant entirely on the residual

value of some of its investments to recover and/or make a proﬁt on those investments and any

failure to achieve this may adversely affect the ability of an equipment leasing company to service

its debts including any investment made by the Company. In addition, if an equipment leasing

company’s assumptions are inaccurate or the assets lose value more rapidly than anticipated this

may also adversely affect the ability of an equipment leasing company to service its debts

including any investment made by the Company. Each of the above risks may have a material

adverse effect on the performance of the Company, the Net Asset Value, the Company’s earnings

and returns to Shareholders.

RISKS RELATING TO THE SHARES

General risks affecting the Shares

The value of an investment in the Company, and the returns derived from it, if any, may go down

as well as up and an investor may not get back the amount invested.

The market price of the Shares, like shares in all investment companies, may ﬂuctuate

independently of their underlying net asset values and may trade at a discount or premium to net

asset value at different times, depending on factors such as supply and demand for the Shares,

market conditions and general investor sentiment. There can be no guarantee that any discount

control policy will be successful or capable of being implemented. The market value of a Share

may vary considerably from its Net Asset Value.

It may be difﬁcult for Shareholders to realise their investment and there may not be a liquid

market in the Shares

The Company will apply for the Shares to be admitted to the premium segment of the Ofﬁcial List

and to trading on the premium segment of the London Stock Exchange’s main market. However,

there can be no guarantee that an active secondary market in the Shares will develop or be

sustained or that the Shares will trade at prices close to their underlying Net Asset Value per

Ordinary Share or Net Asset Value per C Share (as the case may be). The number of Shares to

be issued pursuant to the Initial Issue and the Placing Programme is not yet known and there may

be a limited number of holders of Shares. Limited numbers and/or holders of Shares may mean

that there is limited liquidity in such Shares which may affect: (i) a Shareholder’s ability to realise

some or all of their investment; (ii) the price at which a Shareholder can effect such realisation;

and/or (iii) the price at which such Shares trade in the secondary market.

Whilst the Board will provide Shareholders with an opportunity to elect to realise the value of their

Ordinary Shares during the ﬁfth year following Initial Admission and every ﬁfth year thereafter,

Shareholders wishing to realise their investment in the Company will otherwise be required to

dispose of their Shares through the secondary market. Accordingly, Shareholders’ ability to realise

their investment at Net Asset Value per Ordinary Share or Net Asset Value per C Share (as the

case may be) before such realisation opportunity is dependent on the existence of a liquid market

for the Shares. There can be no guarantee that a liquid market in the Ordinary Shares or C Shares

will develop or that the Ordinary Shares or C Shares will trade at prices close to their underlying

Net Asset Value. Accordingly, Shareholders may be unable to realise their investment at such Net

Asset Value or at all.

Further, while the Board retains the right to effect repurchases of Ordinary Shares in the manner

described under the subheading ‘‘Repurchase of Ordinary Shares’’ in Part 1 of this document, they

are under no obligation to use such powers at any time and Shareholders should not place any

reliance on the willingness of the Directors to do so.

The Company may issue additional Shares that dilute existing Shareholders

Following the Initial Issue, subject to legal and regulatory requirements, the Company may issue

additional Shares pursuant to the Placing Programme. Any additional issuances by the Company,

or the possibility of such issuances, may cause the market price of the existing Ordinary Shares to

decline. Furthermore: (i) the relative voting percentages of existing holders of Ordinary Shares who

cannot, or choose not to participate will be diluted by further issues of Ordinary Shares; and (ii) the

voting rights of holders of Ordinary Shares may be diluted further on conversion of any C Shares

depending on the applicable conversion ratio.

The Shares will be subject to signiﬁcant transfer restrictions for investors in certain jurisdictions

as well as forced transfer provisions

The Shares have not been registered and will not be registered in the United States under the

U.S. Securities Act or under any other applicable securities laws. Moreover, the Shares are only

being offered and sold outside the United States to non-U.S. Persons (as deﬁned in Regulation S

under the US Securities Act), except pursuant to an exemption from, or in a transaction not subject

to, the registration requirements of the U.S. Securities Act and in compliance with any applicable

securities laws of any state or other jurisdiction in the United States.

If at any time the holding or beneﬁcial ownership of any shares in the Company by any person

(whether on its own or taken with other shares), in the opinion of the Directors: (i) would cause the

assets of the Company to be treated as ‘‘plan assets’’ of any beneﬁt plan investor under section

3(42) of ERISA or the U.S. Tax Code; or (ii) would or might result in the Company and/or its

shares and/or any of its appointed investment managers or investment advisers being required to

1940 and/or the U.S. Securities Act and/or the U.S. Securities Exchange Act 1934, as amended

and/or any laws of any state of the U.S. or other jurisdiction that regulate the offering and sale of

securities; or (iii) may cause the Company not to be considered a ‘‘Foreign Private Issuer’’ under

the U.S. Securities Exchange Act 1934, as amended; or (iv) may cause the Company to be a

‘‘controlled foreign corporation’’ for the purpose of the U.S. Tax Code; or (v) creates a signiﬁcant

legal or regulatory issue for the Company under the U.S. Bank Holding Company Act 1956, as

amended or regulations or interpretations thereunder, or (vi) would cause the Company adverse

consequences under the foreign account tax compliance provisions of the U.S. Hiring Incentives to

Restore Employment Act of 2010, including the Company becoming subject to any withholding tax

or reporting obligation (including by reason of the failure of the Shareholder concerned to provide

promptly to the Company such information and documentation as the Company may have

requested to enable the Company to avoid or minimise such withholding tax or to comply with

such reporting obligations), the Directors may require the holder of such shares to dispose of such

shares and, if the Shareholder does not sell such shares, may dispose of such shares on their

behalf. These restrictions may make it more difﬁcult for a U.S. Person to hold and Shareholders

generally to sell the Shares and may have an adverse effect on the market value of the Shares.

Local laws or regulations may mean that the status of the Company and/or the Shares is

uncertain or subject to change, which could adversely affect investors’ ability to hold Shares

For regulatory and tax purposes, the status and treatment of the Company and/or the Shares may

be different in different jurisdictions. For instance, in certain jurisdictions and for certain purposes,

the Shares may be treated as units in a collective investment scheme. Furthermore, in certain

jurisdictions, the regulatory and tax status of the Company and/or the Shares may be uncertain or

subject to change, or it may differ depending on the availability of certain information or as a result

of disclosures made by the Company. Changes in the status or treatment of the Company and/or

the Shares for regulatory and/or tax purposes may have unforeseen effects on the ability of

investors to hold Shares or the consequences to investors of doing so.

RISKS RELATING TO THE INVESTMENT MANAGER

Reliance on the Investment Manager

Investor returns will be dependent upon the Company successfully pursuing its investment policy.

The success of the Company will depend on the Investment Manager’s ability to identify, acquire

and realise investments in accordance with the Company’s investment policy. This, in turn, will

depend on the ability of the Investment Manager to apply its investment processes in a way which

is capable of identifying suitable investments for the Company. There can be no assurance that the

Investment Manager will be able to do so or that it will enable the Company to invest on attractive

terms or generate any investment returns for Shareholders or avoid investment losses.

The performance of the Company depends on the ability of the Investment Manager to provide

competent, attentive and efﬁcient services to the Company. There can be no assurance that, over

time, the Investment Manager will be able to provide such services or that the Company will be

able to invest its assets on attractive terms or generate any investment returns for Shareholders or

indeed avoid investment losses.

The Company depends on the diligence, skill, judgement and business contacts of M&G’s

investment professionals and the information and deal ﬂow they generate and communicate to the

Company during the normal course of their activities. The Company’s future success depends on

the continued service of these individuals (or their replacements from time to time) who are not

obligated to remain employed with M&G, and M&G’s ability to recruit and retain personnel. A

failure of M&G to retain or recruit appropriately qualiﬁed personnel may have a material adverse

effect on the performance of the Company, the Net Asset Value, the Company’s earnings and

returns to Shareholders.

If the Investment Management Agreement is terminated, the Directors would have to ﬁnd a

replacement investment manager for the Company and there can be no assurance that a

replacement with the necessary skills and experience could be appointed on terms acceptable to

the Company.

The resources of the Investment Manager are not solely dedicated to activities in which the

Company is engaged and the Investment Manager will allocate resources to activities in which

the Company is not engaged, which might have a negative impact on the Company’s ability to

achieve its investment objective

The Investment Manager is not required to commit all of its resources (or ensure continuity of any

of its resources or that any of its resources are solely dedicated) to the Company’s affairs and

allocates its resources to other business activities. Insofar as the Investment Manager devotes

resources to its responsibilities in relation to other business interests, its ability to devote resources

and attention to the Company’s affairs will be limited. This could adversely affect the Company’s

ability to achieve its investment objective, which could have a material adverse effect on the

performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

Potential conﬂicts of interest

M&G is involved in other ﬁnancial, investment or professional activities which may on occasion give

rise to conﬂicts of interest with the Company, which M&G shall manage in accordance with its

policies and procedures relating to conﬂicts of interest. In particular, M&G manages funds other

than the Company and may provide investment management, investment advisory or other services

in relation to those funds or future funds which may have similar investment policies to that of the

Company.

M&G may carry on investment activities for their other accounts and for other accounts in which

the Company has no interest. M&G also provides management services to other clients, including

other collective investment schemes which make investments which fall within the Company’s

investment policy. M&G may give advice and recommend investments to other managed accounts

or investment funds which may differ from advice given to, or investments recommended or bought

for, the Company, even though their investment policies may be the same or similar.

In relation to the allocation of investment opportunities, the Investment Manager has procedures in

place to seek to ensure appropriate allocations between its clients in accordance with its allocation

policy from time to time.

Access to material non-public information may restrict the ability of the Investment Manager to

take action with respect to some investments

The Investment Manager has established policies and procedures reasonably designed to prevent

the misuse by the Investment Manager and its personnel of material information regarding

particular issuers that has not been publicly disseminated (‘‘material non-public information’’) in

accordance with applicable legal and regulatory requirements. In general, under such policies and

procedures and applicable law, when the Investment Manager is in possession of material non-

public information related to a publicly traded security or the issuer of such security, whether

acquired unintentionally or otherwise, neither the Investment Manager nor its personnel are

permitted to render investment advice as to, or otherwise trade or recommend a trade in, the

securities of such issuer until such time as the information that the Investment Manager has is no

longer deemed to be material non-public information.

The Investment Manager has procedures that outline the process by which it will determine

whether to elect to receive material non-public information, or whether it will determine not to

receive material non-public information, in any given case. This determination will be made on an

issuer-by-issuer basis using objective criteria established by the Investment Manager. It should be

noted that the Investment Manager’s determination regarding whether or not to receive material

non-public information regarding a speciﬁc issuer may have implications for the services the

Investment Manager is able to provide to certain clients in certain situations, including the

Company.

RISKS RELATING TO REGULATION, STRUCTURE AND TAXATION

Investment trust status

It is the intention of the Directors to conduct the affairs of the Company so as to satisfy the

conditions under sections 1158 to 1159 of the CTA 2010 and ongoing requirements under the

Investment Trust (Approved Company) (Tax) Regulations 2011 for it to be approved by HMRC as

an investment trust. In respect of each period for which the Company is an approved investment

trust, the Company will be exempt from UK corporation tax on its chargeable gains and capital

proﬁts on loan relationships. The Company will also have access to an optional interest

‘‘streaming’’ regime which enables it to deduct from its taxable interest income the amount of

dividend distributions to Shareholders that have been notionally designated as interest distributions.

There is a risk that the Company does not receive approval of its investment trust status from

HMRC or, having received such approval, the Company fails to maintain its status as an

investment trust. In such circumstances, the Company would be subject to the normal rates of

corporation tax on chargeable gains and capital proﬁts arising on the transfer or disposal of

investments and other assets, and on interest income which could adversely affect the Company’s

ﬁnancial performance, its ability to provide returns to its Shareholders or the post-tax returns

received by its Shareholders. In addition, it is not possible to guarantee that the Company will

remain a non-close company, which is a requirement to maintain investment trust status, as the

Shares are freely transferable. The Company, in the unlikely event that it becomes aware that it is

a close company, or otherwise fails to meet the criteria for maintaining investment trust status, will,

as soon as reasonably practicable, notify Shareholders of this fact.

Changes in taxation legislation or practice may adversely affect the Company and the tax

treatment for Shareholders investing in the Company

Changes in tax legislation or practice, whether in the United Kingdom or elsewhere, could affect

the value of the investments held by the Company, affect the Company’s ability to provide returns

to Shareholders, and affect the tax treatment for Shareholders of their investments in the Company

(including rates of tax and availability of reliefs).

Investors should consult their tax advisers with respect to their own particular tax circumstances

and the tax effects of an investment in the Company. Statements in this document concerning the

taxation of investors or prospective investors in Shares are based upon current tax law and

practice, each of which is, in principle, subject to change. The value of particular tax reliefs, if

available, will depend on each individual Shareholder’s circumstances. This document does not

constitute tax advice and must not therefore be treated as a substitute for independent tax advice.

The investment activity to be undertaken by the Company may expose the Company to the risk

of regulation in the United Kingdom and other jurisdictions

The investment activity to be undertaken by the Company includes direct lending, which is an

unregulated activity. There is a risk that some or all of such activity and the other investment

activity of the Company becomes regulated in future. In particular, the European Commission and

other relevant authorities have stated that they are considering whether lending by non-bank

institutions (or ‘‘shadow banking’’) should, in itself, be a regulated activity and the Financial Stability

Board has recently announced a consultation on the subject. Whilst there are no ﬁrm proposals

currently on the legislative agenda, the future regulation of shadow banking cannot be ruled out.

Any future regulation may have an impact on the Company, which could be signiﬁcant, in terms of

compliance costs and, potentially, the restriction of its activities (in particular the Company’s ability

to undertake direct lending). Any such costs or restrictions may have an adverse effect on the

performance of the Company, the Net Asset Value, the Company’s earnings and returns to

Shareholders.

Greater regulation of the ﬁnancial services industry, which imposes additional restrictions on

the Company, may materially affect the Company’s business and the Company’s ability to

achieve its investment objective

Legislation proposing greater regulation of the ﬁnancial services industry and the ﬁnancial markets

is being actively pursued in the European Union and other jurisdictions.

There can be no assurance that future regulatory action will not result in additional market

dislocation. It is impossible to predict the nature, timing and scope of future changes in laws and

regulations applicable to the Company. Any such changes in laws and regulations may have a

material adverse effect on the ability of the Company to successfully pursue its investment policy

and to realise its proﬁt potential, and may include a requirement of increased transparency as to

the identity of investors in the Company. Any such event may have a material adverse effect on

the investment returns of the Company. If the Company fails to comply with these laws and

regulations, the Company may have to pay penalties or private damages awards.

Due diligence and reporting obligations

The Company will be required to comply with certain due diligence and reporting requirements

under the International Tax Compliance Regulations 2015, which were enacted to meet the United

Kingdom’s obligations under FATCA, the Common Reporting Standard developed by the

Organisation for Economic Co-operation and Development and the EU Directive on Administrative

Cooperation in Tax Matters. Shareholders may be required to provide information to the Company

to enable the Company to satisfy its obligations under the regulations. Failure by the Company to

comply with its obligations under the regulations may result in ﬁnes being imposed on the

Company and, in such event, the target returns of the Company may be adversely affected.

Alternative Investment Fund Managers Directive

The AIFM Directive imposes a regime for EEA managers of AIFs and in respect of the marketing

of AIFs in the EEA. The AIFM Directive has been implemented in the UK by the AIFM Rules. The

AIFM Directive requires that EEA alternative investment fund managers of AIFs are authorised and

regulated.

The Board has appointed the Investment Manager as the alternative investment fund manager of

the Company. The Investment Manager is authorised and regulated by the FCA. If the Investment

Manager ceases to act or becomes unable to act as the Company’s alternative investment fund

manager, then the Company must appoint another suitably authorised person as its alternative

investment fund manager or the Company must be its own alternative investment fund manager. In

order for the Company to be its own alternative investment fund manager it may be required to be

authorised in the United Kingdom to act as an alternative investment fund manager. The Company

is not currently authorised to act as an alternative investment fund manager and does not intend to

apply for such authorisation to the extent that it is not required to do so. In the event that, and for

so long as, the Company does not have an external alternative investment fund manager and is

not permitted to act as an alternative investment fund manager in the United Kingdom then the

Company may not be able to operate or, as a minimum, the ability of the Company to operate will

be adversely affected to a signiﬁcant extent.

In addition, the Company is required to appoint a depositary which will be State Street Trustees

Limited. In complying with the AIFM Directive, the Company is likely to have higher management

and operating costs than would otherwise be the case.

The Company has not and will not register as an investment company under the U.S. Investment

Company Act

The Company is not, and does not intend to become, registered as an investment company under

the U.S. Investment Company Act and related rules and regulations. The U.S. Investment

Company Act provides certain protections to investors and imposes certain restrictions on

companies that are registered as investment companies.

As the Company is not so registered and does not plan to register, none of these protections or

restrictions is or will be applicable to the Company. In addition, to avoid being required to register

as an investment company under the U.S. Investment Company Act, the Board may, under the

Articles and subject to certain conditions, compulsorily require the transfer of Shares held by a

person to whom the sale or transfer of Shares may cause the Company to be classiﬁed as an

investment company under the U.S. Investment Company Act.

The assets of the Company could be deemed to be ‘‘plan assets’’ that are subject to the

requirements of ERISA or Section 4975 of the U.S. Tax Code, which could restrain the Company

from making certain investments, and result in excise taxes and liabilities

Under the current United States Plan Asset Regulations, if interests held by Beneﬁt Plan Investors

are deemed to be ‘‘signiﬁcant’’ within the meaning of the Plan Asset Regulations (broadly, if Beneﬁt

Plan Investors hold 25% or greater of any class of equity interest in the Company) then the assets

of the Company may be deemed to be ‘‘plan assets’’ within the meaning of the Plan Asset

Regulations. After the Initial Issue, the Company may be unable to monitor whether Beneﬁt Plan

Investors or any other investors acquire Shares and therefore, there can be no assurance that

Beneﬁt Plan Investors will never acquire Shares or that, if they do, the ownership of all Beneﬁt

Plan Investors will be below the 25% threshold discussed above or that the Company’s assets will

not otherwise constitute ‘‘plan assets’’ under the Plan Asset Regulations. If the Company’s assets

were deemed to constitute ‘‘plan assets’’ within the meaning of the Plan Asset Regulations, certain

transactions that the Company might enter into in the ordinary course of business and operation

might constitute non-exempt prohibited transactions under the Employee Retirement Income

Security Act of 1974, as amended (‘‘ERISA’’) or the U.S. Tax Code, resulting in excise taxes or

other liabilities under ERISA or the U.S. Tax Code. In addition, any ﬁduciary of a Beneﬁt Plan

Investor or an employee beneﬁt plan subject to Similar Law that is responsible for the beneﬁt

plan’s investment in the Shares could be liable for any ERISA violations or violations of such

Similar Law relating to the Company.

Risks relating to packaged retail and insurance-based investment products (‘‘PRIIPS’’)

Investors should be aware that the PRIIPs Regulation requires the Investment Manager, as PRIIP

manufacturer, to prepare a key information document (‘‘KID’’) in respect of each class of share of

the Company. The KID must be made available by the Investment Manager to retail investors prior

to them making any investment decision and is available on the Company’s website at

www.mandg.co.uk/creditincomeinvestmenttrust. The content of a KID is highly prescriptive, both in

terms of the calculations underlying the numbers and the narrative, with limited ability to add

further context and explanations, and therefore the KID should be read in conjunction with material

produced by the Company including the annual report, the quarterly factsheets and this document,

all of which will be made available on the Company’s website.

IMPORTANT INFORMATION

GENERAL

No person has been authorised by the Company to issue any advertisement or to give any

information or to make any representations in connection with the offering or sale of Shares other

than those contained in this document and, if issued, given or made, such advertisement,

information or representation must not be relied upon as having been authorised by the Company,

the Investment Manager or Winterﬂood Securities. Without prejudice to the Company’s obligations

under the Prospectus Rules, the Listing Rules, the Disclosure Guidance and Transparency Rules

and MAR, neither the delivery of this document nor any subscription for or purchase of Shares

pursuant to the Initial Issue and/or the Placing Programme, under any circumstances, creates any

implication that there has been no change in the affairs of the Company since, or that the

information contained herein is correct at any time subsequent to, the date of this document.

Prospective investors should not treat the contents of this document as advice relating to legal,

taxation, investment or any other matters. Prospective investors should inform themselves as to:

(a) the legal requirements within their own countries for the purchase, holding, transfer or other

disposal of Shares; (b) any foreign exchange restrictions applicable to the purchase, holding,

transfer or other disposal of Shares which they might encounter; and (c) the income and other tax

consequences which may apply in their own countries as a result of the purchase, holding, transfer

or other disposal of, or subscription for Shares. Prospective investors must rely upon their own

legal advisers, accountants and other ﬁnancial advisers as to legal, tax, investment or any other

related matters concerning the Company and an investment in the Shares.

This document should be read in its entirety before making any application for Shares. All

Shareholders are entitled to the beneﬁt of, and are bound by and are deemed to have notice of,

the provisions of the Articles.

This document does not constitute, and may not be used for the purposes of, an offer or

solicitation to anyone in any jurisdiction: (i) in which such offer or solicitation is not authorised; or

(ii) in which the person making such offer or invitation is not qualiﬁed to do so; or (iii) to any

person to whom it is unlawful to make such offer or solicitation. The distribution of this document

and the offering of Shares in certain jurisdictions may be restricted and accordingly persons into

whose possession this document is received are required to inform themselves about and to

observe such restrictions.

FOR THE ATTENTION OF UNITED STATES RESIDENTS

The Shares have not been and will not be registered under the U.S. Securities Act or with any

securities regulatory authority of any state or other jurisdiction of the United States and the Shares

may not be offered, sold, exercised, resold, transferred or delivered, directly or indirectly, within the

United States or to, or for the account or beneﬁt of, U.S. Persons (as deﬁned in Regulation S

under the U.S. Securities Act), except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the U.S. Securities Act and in compliance with any

applicable securities laws of any state or other jurisdiction in the United States. There will be no

public offer of the Shares in the United States. The Shares are being offered or sold outside the

United States to non-U.S. Persons in offshore transactions in reliance on the exemption from the

registration requirements of the U.S. Securities Act provided by Regulation S thereunder. The

Company has not been and will not be registered under the U.S. Investment Company Act and

investors will not be entitled to the beneﬁts of the U.S. Investment Company Act.

The Shares have not been approved or disapproved by the U.S. Securities and Exchange

Commission, any state securities commission in the United States or any other U.S. regulatory

authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the

offering of Shares or the accuracy or adequacy of this document. Any representation to the

contrary is a criminal offence in the United States and any re-offer or resale of any of the Shares

in the United States or to U.S. Persons may constitute a violation of U.S. law or regulation. Any

person in the United States who obtains a copy of this document is requested to disregard it.

FOR THE ATTENTION OF PROSPECTIVE INVESTORS IN CANADA, JAPAN, AUSTRALIA OR THE

REPUBLIC OF SOUTH AFRICA

The offer and sale of Shares has not been and will not be registered under the applicable

securities laws of Canada, Japan, Australia or the Republic of South Africa. Subject to certain

exemptions, the Shares may not be offered to or sold within Canada, Japan, Australia or the

Republic of South Africa or to any national, resident or citizen of such territories.

FOR THE ATTENTION OF PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

In relation to each Relevant Member State which has implemented the Prospectus Directive, no

Shares have been offered or will be offered pursuant to the Initial Issue or the Placing Programme

to the public in that Relevant Member State prior to the publication of a prospectus in relation to

the Shares which has been approved by the competent authority in that Relevant Member State,

or, where appropriate, approved in another Relevant Member State and notiﬁed to the competent

authority in that Relevant Member State, all in accordance with the Prospectus Directive, except

that offers of Shares to the public may be made at any time under the following exemptions under

the Prospectus Directive, if they are implemented in that Relevant Member State:

(a) to any legal entity which is a ‘‘qualiﬁed investor’’ as deﬁned in the Prospectus Directive;

(b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provision

of the 2010 PD Amending Directive (as deﬁned below), 150 natural or legal persons (other

than qualiﬁed investors as deﬁned in the Prospectus Directive) in such Relevant Member

State; or

or (subject to the Relevant Member State having implemented the provision) Article 3 of the

Prospectus Regulation 2017,

provided that no such offer of Shares shall result in a requirement for the publication of a

document pursuant to Article 3 of the Prospectus Directive or any measure implementing the

Prospectus Directive in a Relevant Member State and each person who initially acquires any

Shares or to whom any offer is made under the Initial Placing or the Placing Programme will be

deemed to have represented, acknowledged and agreed that it is a ‘‘qualiﬁed investor’’ within the

meaning of Article 2(1)(e) of the Prospectus Directive.

The expression an ‘‘offer to the public’’ in relation to any offer of Shares in any Relevant Member

State means a communication in any form and by any means presenting sufﬁcient information on

the terms of the offer and any Shares to be offered so as to enable an investor to decide to

purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State

by any measure implementing the Prospectus Directive in that Relevant Member State and the

expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC (and the amendments thereto and

related regulation, including Directive 2010/73/EU) (the ‘‘2010 PD Amending Directive’’), to the

extent implemented in the Relevant Member State and includes any relevant implementing

measure in each Relevant Member State.

In addition, Shares will only be offered to the extent that the Shares: (i) are permitted to be

marketed into the relevant EEA jurisdiction pursuant to the AIFM Directive (if and as implemented

into local law); or (ii) can otherwise be lawfully offered or sold (including on the basis of an

unsolicited request from a professional investor).

NOTICE TO PROSPECTIVE INVESTORS IN GUERNSEY

Shares in the Company may only be offered or sold in or from within the Bailiwick of Guernsey

either (i) by persons licensed to do so under the Protection of Investors (Bailiwick of Guernsey)

Law, 1987, as amended (the ‘‘POI Law’’); or (ii) to persons licensed under the POI Law or persons

licensed under the Insurance Business (Bailiwick of Guernsey) Law, 2002, as amended, the

Banking Supervision (Bailiwick of Guernsey) Law, 1994, as amended, the Insurance Managers and

Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended, or the Regulation of Fiduciaries,

Administration Businesses and Company Directors, etc., (Bailiwick of Guernsey) Law, 2000, as

amended.

NOTICE TO PROSPECTIVE INVESTORS IN JERSEY

Subject to certain exemptions (if applicable), the Company shall not raise money in Jersey by the

issue anywhere of Shares, and this document relating to the Shares shall not be circulated in

Jersey, without ﬁrst obtaining consent from the Jersey Financial Services Commission pursuant to

the Control of Borrowing (Jersey) Order 1958, as amended. No such consents have been obtained

by the Company. Subject to certain exemptions (if applicable), offers for securities in the Company

may only be distributed and promoted in or from within Jersey by persons with appropriate

registration under the Financial Services (Jersey) Law 1998, as amended. It must be distinctly

understood that the Jersey Financial Services Commission does not accept any responsibility for

the ﬁnancial soundness of, or any representations made in connection with, the Company.

NOTICE TO PROSPECTIVE INVESTORS IN OTHER JURISDICTIONS

The distribution of this document in other jurisdictions may be restricted by law and therefore

persons into whose possession this document comes should inform themselves about and observe

any such restrictions.

INTERMEDIARIES

Under the Intermediaries Offer, the Shares are being offered to Intermediaries who will facilitate the

participation of their retail investor clients (and any member of the public who wishes to become a

client of that Intermediary) located in the United Kingdom and the Channel Islands. The Company

consents to the use of this document in connection with any subsequent resale or ﬁnal placement

of securities by the Intermediaries in the United Kingdom and the Channel Islands on the following

terms: (i) in respect of the Intermediaries who have been appointed prior to the date of this

document, as listed in paragraph 13 of Part 8 of this document; and (ii) in respect of the

Intermediaries who are appointed after the date of this document, a list of which appears on the

Company’s website, from the date on which they are appointed to participate in connection with

any subsequent resale or ﬁnal placement of securities and, in each case, until the closing of the

period for the subsequent resale or ﬁnal placement of securities by the Intermediaries at 1.00 p.m.

on 7 November 2018, unless closed prior to that date.

The offer period within which any subsequent resale or ﬁnal placement of securities by the

Intermediaries can be made and for which consent to use this document is given commences on

26 September 2018 and closes on 7 November 2018, unless closed prior to that date (any such

prior closure to be announced via a Regulatory Information Service).

Any Intermediary that uses this document must state on its website that it uses this

document in accordance with the Company’s consent. Intermediaries are required to

provide the terms and conditions of the Intermediaries Offer to any prospective investor

who has expressed an interest in participating in the Intermediaries Offer to such

Intermediary. Information on the terms and conditions of any subsequent resale or ﬁnal

placement of securities by any ﬁnancial intermediary is to be provided at the time of the

offer by the ﬁnancial intermediary.

The Company consents to the use of this document and accepts responsibility for the information

contained in this document with respect to subsequent resale or ﬁnal placement of securities by

any ﬁnancial intermediary given consent to use this document.

Any new information with respect to Intermediaries unknown at the time of approval of this

document will be available on the Company’s website at www.mandg.co.uk/

creditincomeinvestmenttrust.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive

2014/65/EU on markets in ﬁnancial instruments, as amended (‘‘Directive 2014/65/EU’’); (b) Articles

9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU;

and (c) local implementing measures (together, the ‘‘MiFID II Product Governance

Requirements’’), and disclaiming all and any liability, whether arising in tort, contract or otherwise,

which any ‘‘manufacturer’’ (for the purposes of the MiFID II Product Governance Requirements)

may otherwise have with respect thereto, the Shares have been subject to a product approval

process, which has determined that the Ordinary Shares to be issued pursuant to the Initial Issue

and any Shares which may be issued pursuant to any Subsequent Placing are: (i) compatible with

an end target market of retail investors and investors who meet the criteria of professional clients

and eligible counterparties, each as deﬁned in Directive 2014/65/EU; and (ii) eligible for distribution

through all distribution channels as are permitted by Directive 2014/65/EU (the ‘‘Target Market

Assessment’’).

Notwithstanding the Target Market Assessment, distributors should note that: the price of the

Shares may decline and investors could lose all or part of their investment; the Shares offer no

guaranteed income and no capital protection; and an investment in the Shares is compatible only

with investors who do not need a guaranteed income or capital protection, who (either alone or in

conjunction with an appropriate ﬁnancial or other adviser) are capable of evaluating the merits and

risks of such an investment and who have sufﬁcient resources to be able to bear any losses that

may result therefrom. The Target Market Assessment is without prejudice to the requirements of

any contractual, legal or regulatory selling restrictions in relation to the Initial Issue and any

Subsequent Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment,

Winterﬂood Securities will only procure investors who meet the criteria of professional clients and

eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment

of suitability or appropriateness for the purposes of Directive 2014/65/EU; or (b) a recommendation

to any investor or group of investors to invest in, or purchase, or take any other action whatsoever

with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the

Shares and determining appropriate distribution channels.

DATA PROTECTION

The information that a prospective investor in the Company provides in documents in relation to a

subscription for Ordinary Shares and/or C Shares or subsequently by whatever means which

relates to the prospective investor (if it is an individual) or a third party individual (‘‘personal data’’)

will be held and processed by the Company (and any third party in the United Kingdom to whom it

may delegate certain administrative functions in relation to the Company) in compliance with: (a)

the relevant data protection legislation and regulatory requirements of the United Kingdom (the

‘‘Data Protection Legislation’’); and (b) the Company’s privacy notice, a copy of which is

available for consultation on the Company’s website at www.mandg.co.uk/

creditincomeinvestmenttrust (‘‘Privacy Notice’’) (and if applicable any other third party delegate’s

privacy notice).

Without limitation to the foregoing, each prospective investor acknowledges that it has been

informed that such information will be held and processed by the Company (or any third party,

functionary, or agent appointed by the Company, which may include, without limitation, the

Registrar) in accordance with and for the purposes set out in the the Company’s Privacy Notice

which include:

verifying the identity of the prospective investor to comply with statutory and regulatory

requirements in relation to anti-money laundering procedures;

carrying out the business of the Company and the administering of interests in the Company;

and

meeting the legal, regulatory, reporting and/or ﬁnancial obligations of the Company in the

United Kingdom or elsewhere or any third party functionary or agent appointed by the

Company.

Where necessary to fulﬁl the purposes set out above and in the Company’s Privacy Notice, the

Company (or any third party, functionary, or agent appointed by the Company, which may include,

without limitation, the Registrar) will:

disclose personal data to third party service providers, afﬁliates, agents or functionaries

appointed by the Company or its agents to operate and administer the Company; and

transfer personal data outside of the EEA to countries or territories which do not offer the

same level of protection for the rights and freedoms of prospective investors provided that

suitable safeguards are in place for the protection of such personal data, details of which

shall be set out in the Privacy Notice or otherwise notiﬁed from time to time.

The foregoing processing of personal data is required in order to perform the contract with the

prospective investor, to comply with the legal and regulatory obligations of the Company or

otherwise is necessary for the legitimate interests of the Company.

If the Company (or any third party, functionary or agent appointed by the Company, which may

include, without limitation, the Registrar) discloses personal data to such a third party, agent or

functionary and/or makes such a transfer of personal data, it will ensure that adequate safeguards

are in place for the protection of such personal data, details of which shall be set out in the

Privacy Notice or otherwise notiﬁed from time to time.

Prospective investors are responsible for informing any third party individual to whom the personal

data relates of the disclosure and use of such data in accordance with these provisions. Individuals

have certain rights in relation to their personal data; such rights and the manner in which they can

be exercised are set out in the Company’s Privacy Notice.

PRESENTATION OF FINANCIAL INFORMATION

The Company is newly formed and as at the date of this document has not commenced operations

and has no assets or liabilities which will be material in the context of the Initial Issue and,

therefore, no ﬁnancial statements have been prepared as at the date of this document. All future

ﬁnancial information for the Company will be prepared under UK GAAP.

Certain ﬁnancial and statistical information contained in this document has been rounded to the

nearest whole number or the nearest decimal place. Therefore, the actual arithmetic total of the

numbers in a column or row in a certain table may not conform exactly to the total ﬁgure given for

that column or row. In addition, certain percentages presented in the tables in this document reﬂect

calculations based upon the underlying information prior to rounding, and, accordingly, may not

conform exactly to the percentages that would be derived if the relevant calculations were based

upon the rounded numbers.

PRESENTATION OF MARKET AND OTHER DATA

Market and economic data used throughout this document is sourced from various independent

sources. The Company and the Directors conﬁrm that such data has been accurately reproduced

and, so far as they are aware and are able to ascertain from information published from such

sources, no facts have been omitted which would render the reproduced information inaccurate or

misleading.

CURRENCY PRESENTATION

Unless otherwise indicated, all references in this document to ‘‘£’’, ‘‘pence’’ or ‘‘GBP’’ are to the

lawful currency of the UK, all references in this document to ‘‘Euro’’ or ‘‘e’’ are to the lawful

currency of the EU and all references in this document to ‘‘US$’’ or ‘‘USD’’ are to the lawful

currency of the United States.

REFERENCE TO CREDIT RATINGS (REGULATION (EC) NO 1060/2008

The credit rating agencies providing ratings to securities referred to in this document (if any) are

each established in the EU and registered under Regulation (EC) No. 1060/2008 (as amended). As

such, each such credit rating agency is included in the list of credit rating agencies published by

the ESMA on its website in accordance with the CRA Regulations.

DEFINITIONS

A list of deﬁned terms used in this document is set out at pages 125 to 131.

GOVERNING LAW

Unless otherwise stated, statements made in this document are based on the law and practice

currently in force in England and Wales.

FORWARD LOOKING STATEMENTS

This document contains forward looking statements, including, without limitation, statements

containing the words ‘‘believes’’, ‘‘estimates’’, ‘‘anticipates’’, ‘‘expects’’’, ‘‘intends’’, ‘‘may’’, ‘‘might’’,

‘‘will’’ or ‘‘should’’ or, in each case, their negative or other variations or similar expressions. Such

forward looking statements involve unknown risks, uncertainties and other factors which may cause

the actual results, ﬁnancial condition, performance or achievement of the Company, or industry

results, to be materially different from any future results, performance or achievements expressed

or implied by such forward looking statements.

Given these uncertainties, prospective investors are cautioned not to place any undue reliance on

such forward looking statements. These forward looking statements speak only as at the date of

this document. Subject to its legal and regulatory obligations (including under the Prospectus

Rules), the Company expressly disclaims any obligations to update or revise any forward looking

statement contained herein to reﬂect any change in expectations with regard thereto or any change

in events, conditions or circumstances on which any such statement is based unless required to do

so by law or any appropriate regulatory authority, including FSMA, the Listing Rules, the

Prospectus Rules, the Disclosure Guidance and Transparency Rules and MAR.

Nothing in the preceding two paragraphs should be taken as limiting the working capital statement

in paragraph 8 of Part 8 of this document.

EXPECTED TIMETABLE

Expected Initial Issue Timetable

Publication of this document and Initial Placing, Offer for

Subscription and Intermediaries Offer open

26 September 2018

Latest time and date for applications under the Offer for Subscription 1.00 p.m. on 7 November 2018

Latest time and date for completed applications from the

Intermediaries in respect of the Intermediaries Offer

1.00 p.m. on 7 November 2018

Latest time and date for receipt of commitments under the Initial

Placing

2.00 p.m. on 8 November 2018

Announcement of the results of the Initial Issue 8.00 a.m. on 9 November 2018

Initial Admission and dealings in the Ordinary Shares issued

pursuant to the Initial Issue commence

8.00 a.m. on 14 November 2018

Crediting of CREST stock accounts in respect of the Ordinary

Shares issued pursuant to the Initial Issue

14 November 2018

Where applicable, deﬁnitive share certiﬁcates despatched in respect

of the Ordinary Shares*

week commencing 19 November

2018 (or as soon as possible

thereafter)

* Underlying applicants who apply to Intermediaries for Ordinary Shares under the Intermediaries Offer will not receive share

certiﬁcates.

Expected Placing Programme Timetable

Placing Programme opens 15 November 2018

Announcement of the results of each Subsequent Placing as soon as practicable after the

closing of each Subsequent

Placing pursuant to the Placing

Programme

Admission and crediting of CREST stock accounts in respect of

each Subsequent Placing

as soon as practicable after the

closing of each Subsequent

Placing pursuant to the Placing

Programme

Share certiﬁcates despatched in respect of Shares issued pursuant

to each Subsequent Placing (if applicable)

approximately one week after

the Admission of Shares

pursuant to a Subsequent

Placing

Placing Programme closes and last date for Shares to be issued

pursuant to the Placing Programme

25 September 2019

The dates and times speciﬁed are subject to change subject to agreement between the Company and Winterﬂood Securities. All

references to times in this document are to London time unless otherwise stated. Any changes to the expected timetable will be

notiﬁed by the Company via a Regulatory Information Service.

INITIAL ISSUE AND PLACING PROGRAMME STATISTICS

Initial Issue Statistics

Issue Price 100 pence

Initial Gross Proceeds* £250 million

Estimated Net Proceeds* £247 million

Estimated Net Asset Value per Ordinary Share at Initial Admission* 98.8 pence

* Assuming Initial Gross Proceeds of £250 million. The Company is targeting Initial Gross Proceeds in excess of £250 million

subject to a maximum of £400 million. The Minimum Gross Proceeds are £100 million. The number of Ordinary Shares to be

issued pursuant to the Initial Issue, and therefore the Initial Gross Proceeds and the Net Proceeds, is not known as at the date

of this document but will be notiﬁed by the Company via a Regulatory Information Service prior to Initial Admission. If the Initial

Issue does not proceed (because the Minimum Gross Proceeds (or such lesser amount as the Company and Winterﬂood

Securities agree) are not raised or otherwise), subscription monies received will be returned without interest at the risk of the

applicant to the applicant from whom the money was received, within 14 calendar days.

Placing Programme Statistics

Maximum size of the Placing Programme 400 million Shares in aggregate

Minimum Placing Programme Price in respect of the Ordinary Shares, Net

Asset Value per Ordinary Share plus a

premium intended to at least cover the

costs and expenses of the relevant

Subsequent Placing (including,

without limitation, any placing

commissions) or 100 pence per C

Share for any issue of C Shares

DEALING CODES

The dealing codes for the Ordinary Shares will be as follows:

ISIN GB00BFYYL325

SEDOL BFYYL32

Ticker MGCI

The dealing codes for the C Shares will be as follows:

ISIN GB00BFYYT831

SEDOL BFYYT83

LEI 549300E9W63X1E5A3N24

DIRECTORS, MANAGEMENT AND ADVISERS

Directors (all non-executive) David Simpson (Chairman)

Richard Bole´at

Mark Hutchinson

Barbara Powley

all of the registered ofﬁce below:

Registered Ofﬁce Beaufort House

51 New North Road

Exeter

EX4 4EP

AIFM and Investment Manager M&G Alternatives Investment Management Limited

Laurence Pountney Hill

London

EC4R 0HH

Administrator State Street Bank and Trust Company

20 Churchill Place

London

E14 5HJ

Company Secretary Link Company Matters Limited

Beaufort House

51 New North Road

Exeter

EX4 4EP

Sponsor, Financial Adviser,

Bookrunner and Intermediaries

Offer Adviser

Winterﬂood Securities Limited

The Atrium

Cannon Bridge House

25 Dowgate Hill

London

EC4R 2GA

Solicitors to the Company Gowling WLG (UK) LLP

4 More London Riverside

London

SE1 2AU

Solicitors to the Sponsor,

Financial Adviser, Bookrunner

and Intermediaries Offer

Adviser

CMS Cameron McKenna Nabarro Olswang LLP

Cannon Place

78 Cannon Street

London

EC4N 6AF

Reporting Accountants and

Auditor

Deloitte LLP

Saltire Court

20 Castle Street

Edinburgh

EH1 2DB

Registrar Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent

BR3 4TU

Receiving Agent Link Asset Services

Corporate Actions

The Registry

34 Beckenham Road

Beckenham

Kent

BR3 4TU

Depositary State Street Trustees Limited

20 Churchill Place

London

E14 5HJ

Custodian State Street Bank and Trust Company

20 Churchill Place

London

E14 5HJ

PART 1

INFORMATION ON THE COMPANY

1. INTRODUCTION

M&G Credit Income Investment Trust plc was incorporated on 17 July 2018 as a public company

limited by shares. The Company intends to carry on business as an investment trust within the

meaning of section 1158 of the CTA 2010. The Company’s investment objective is to aim to

generate a regular and attractive level of income with low asset value volatility.

The Company is targeting an issue in excess of 250 million Ordinary Shares pursuant to the Initial

Issue comprising the Initial Placing, the Offer for Subscription and the Intermediaries Offer to invest

in accordance with the Company’s investment objective and policy.

The Company has an independent board of non-executive directors and has engaged M&G

Alternatives Investment Management Limited as the Company’s alternative investment fund

manager to provide portfolio and risk management services to the Company. The Investment

Manager is ultimately owned by Prudential, the UK’s largest insurer by market capitalisation, and is

part of M&G.

M&G is one of the longest established asset managers in Europe, managing c.£286 billion as at

30 June 2018. It has particular expertise in ﬁxed income with c.£188 billion under management as

at 30 June 2018 split c.£151 billion in public and c.£37 billion in private credit. Further information

on M&G is set out in Part 2 of this document.

The Prudential Assurance Company Limited intends to subscribe for the lower of (i) 80,000,000

Ordinary Shares and (ii) 25% of the Ordinary Shares to be issued pursuant to the Initial Issue. The

Directors believe that this proposed investment strongly aligns the interests of M&G with

Shareholders.

Applications will be made to the UK Listing Authority and to the London Stock Exchange for all of

the Ordinary Shares (issued and to be issued pursuant to the Initial Issue) to be admitted to the

premium segment of the Ofﬁcial List and to trading on the premium segment of the London Stock

Exchange’s main market. It is expected that Initial Admission will become effective, and that

dealings in the Ordinary Shares issued pursuant to the Initial Issue will commence, at 8.00 a.m. on

14 November 2018.

2. INVESTMENT OBJECTIVE AND INVESTMENT POLICY

Investment Objective

The Company aims to generate a regular and attractive level of income with low asset value

volatility.

Investment Policy

The Company seeks to achieve its investment objective by investing in a diversiﬁed portfolio of

public and private debt and debt-like instruments (‘‘Debt Instruments’’). Over the longer term, it is

expected that the Company will be mainly invested in private Debt Instruments, which are those

instruments not quoted on a stock exchange.

The Company operates an unconstrained investment approach and investments may include, but

are not limited to:

Asset-backed securities, backed by a pool of loans secured on, amongst other things,

residential and commercial mortgages, credit card receivables, auto loans, student loans,

commercial loans and corporate loans;

Commercial mortgages;

Direct lending to small and mid-sized companies, including lease ﬁnance and receivables

ﬁnancing;

Distressed debt opportunities to companies going through a balance sheet restructuring;

Infrastructure-related debt assets;

Leveraged loans to private equity owned companies;

Public Debt Instruments issued by a corporate or sovereign entity which may be liquid or

illiquid;

Private placement debt securities issued by both public and private organisations; and

Structured credit, including bank regulatory capital trades.

The Company will invest primarily in Sterling denominated Debt Instruments. Where the Company

invests in assets not denominated in Sterling it is generally expected that these assets will be

hedged back to Sterling.

Investment restrictions

There are no restrictions, either maximum or minimum, on the Company’s exposure to sectors,

asset classes or geography. The Company, however, achieves diversiﬁcation and a spread of risk

by adhering to the limits and restrictions set out below.

Once fully invested, the Company’s portfolio will comprise a minimum of 50 investments.

The Company may invest up to 30% of Gross Assets in below investment grade Debt Instruments,

which are those instruments rated below BBB- by S&P or Fitch or Baa3 by Moody’s or, in the

case of unrated Debt Instruments, which have an internal M&G rating of below BBB-.

The following restrictions will also apply at the individual Debt Instrument level which, for the

avoidance of doubt, does not apply to investments to which the Company is exposed through

collective investment vehicles:

Rating

Secured Debt Instruments

(% of Gross Assets)

Unsecured Debt Instruments

(% of Gross Assets)

AAA 5% 5%

AA/A 4% 3%

BBB 3% 2%

Below investment grade 2% 1%

1 Secured Debt Instruments are secured by a ﬁrst or secondary ﬁxed and/or ﬂoating charge.

2 This limit excludes investments in G7 Sovereign Instruments.

For the purposes of the above investment restrictions, the credit rating of a Debt Instrument is

taken to be the rating assigned by S&P, Fitch or Moody’s or, in the case of unrated Debt

Instruments, an internal rating by M&G. In the case of split ratings by recognised rating agencies,

the second highest rating will be used.

It is expected that the Company will typically invest directly, but it may also invest indirectly

through collective investment vehicles which are expected to be managed or advised by an M&G

Entity. The Company may not invest more than 20% of Gross Assets in any one collective

investment vehicle and not more than 40% of Gross Assets in collective investment vehicles in

aggregate. No more than 10% of Gross Assets may be invested in other investment companies

which are listed on the Ofﬁcial List.

Unless otherwise stated, the above investment restrictions are to be applied at the time of

investment.

Borrowings

The Company is expected to be managed primarily on an ungeared basis although the Company

may, from time to time, be geared tactically through the use of borrowings. Borrowings would

principally be used for investment purposes, but may also be used to manage the Company’s

working capital requirements or to fund market purchases of Shares. Gearing represented by

borrowing will not exceed 30% of the Company’s Net Asset Value, calculated at the time of draw

down, but is typically not expected to exceed 20% of the Company’s Net Asset Value.

Hedging and Derivatives

The Company will not employ derivatives for investment purposes. Derivatives may however be

used for efﬁcient portfolio management, including for currency hedging.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which

may include short-term investments in money market type funds (‘‘Cash and Cash Equivalents’’).

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold

and there may be times when it is appropriate for the Company to have a signiﬁcant Cash and

Cash Equivalents position. For the avoidance of doubt, the restrictions set out above in relation to

investing in collective investment vehicles do not apply to money market type funds.

Changes to the investment policy

Any material change to the Company’s investment policy set out above will require the approval of

Shareholders by way of an ordinary resolution at a general meeting and the approval of the UK

Listing Authority.

3. DIVIDEND POLICY AND TARGET RETURN S

The Company intends to pay two dividends in respect of the ﬁrst ﬁnancial period following Initial

Admission. The ﬁrst interim dividend is expected to be declared in July 2019 and paid in August

2019 and the second interim dividend is expected to be declared in January 2020 and paid in

February 2020. Thereafter the Company intends to pay dividends on a quarterly basis with

dividends typically declared in January, April, July and October and paid in February, May, August

and November in each ﬁnancial year.

The Company will target an annualised dividend yield of LIBOR plus 2.5% (on the Issue Price) in

respect of the Company’s ﬁrst ﬁnancial period to 31 December 2019. The Company will target an

annualised dividend yield of LIBOR plus 4% (on the opening Net Asset Value per Ordinary Share)

in respect of each ﬁnancial year thereafter. Where LIBOR materially changes or ceases to be

provided, the Company shall determine a suitable replacement benchmark and shall notify

investors accordingly. The Directors intend to apply the ‘‘streaming’’ regime to distributions of

portfolio interest returns paid by the Company, such that these distributions are expected to be

designated as payments of interest. If appropriate, in addition to, or instead of, interest

distributions, the Company may also pay ordinary corporate dividends.

Investors should note that the target dividend is a target only and not a proﬁt forecast and there

can be no assurance that such target will be met.

In accordance with regulation 19 of the Investment Trust (Approved Company) (Tax) Regulations

2011, the Company will not (except to the extent permitted by those regulations) retain more than

15% of its income (as calculated for UK tax purposes) in respect of an accounting period.

In order to increase the distributable reserves available to facilitate the payment of future dividends,

the Company has resolved that, conditional upon Initial Admission and the approval of the Court,

the amount standing to the credit of the share premium account of the Company immediately

following completion of the Initial Issue be cancelled and transferred to a special distributable

reserve. The Company may, at the discretion of the Board, pay all or part of any future dividends

out of this special distributable reserve, taking into account the Company’s investment objective.

Although there is no current expectation that they will exercise such power, the Directors will have

the power to pay dividends in relation to the C Shares (if issued) in the event that the assets that

are attributable to the C Shares generate material income while the C Shares are in issue.

4. USE OF PROCEEDS

The Initial Gross Proceeds will be utilised in accordance with the Company’s investment policy, to

meet the costs and expenses of the Initial Issue and for working capital purposes.

It is currently expected that the Net Proceeds will be deployed in accordance with the Company’s

investment policy in the manner set out below.

The Company expects the Investment Manager to deploy the Net Proceeds in readily available

public lower yielding assets within a period of three months after Initial Admission (subject to

market conditions). Based on current market conditions, the Investment Manager then intends to

transition the Company’s portfolio of investments such that it mainly comprises private Debt

Instruments in accordance with the Company’s investment policy. It is currently expected that,

subject to market conditions, such transition will be completed by the end of the ﬁrst accounting

period of the Company, i.e. by 31 December 2019. Once transitioned, the Company will seek to

provide Shareholders with a diversiﬁed exposure to a range of underlying private Debt Instruments,

many of which may not otherwise be accessible to Shareholders, in particular to individual

investors.

The exact composition of the fully invested portfolio post-transition and the identity of speciﬁc

investments will depend on market conditions and the continued availability of investments which

satisfy the Company’s investment policy. The Investment Manager will invest in a mixture of both

ﬂoating rate and ﬁxed rate Debt Instruments, and may at times be more heavily weighted towards

one than the other depending on market conditions, and will manage the interest rate exposure

through the use of derivatives.

5. NET ASSET VALUE

Publication of Net Asset Valu e per Share

The unaudited Net Asset Value will be calculated in Sterling by the Administrator on a monthly

basis, as described below and on the basis of information provided by the Investment Manager.

The Net Asset Value per Ordinary Share (and Net Asset Value per C Share, where applicable),

calculated by dividing the relevant Net Asset Value by the number of Shares in issue of the

relevant class (excluding Shares held in treasury), will be published on both a cum-income and ex-

income basis, via a Regulatory Information Service and made available on the Company’s website

as soon as practicable thereafter.

Valuation Methodologies

The Net Asset Value for each class of Shares is the value of all assets of the Company

attributable to that class of Shares less its share of liabilities to creditors, each determined in

accordance with UK GAAP.

Assets listed or traded on a stock exchange or over-the-counter market that are freely transferable

and for which market quotations are readily available will be valued at the closing bid price on the

principal exchange or market for such investment, without deduction for the estimated future selling

costs.

Units or shares in open-ended or limited liquidity collective investment vehicles will be valued at the

latest available net asset value per unit, share or class thereof as at the close of trading; units or

shares in closed-ended collective investment vehicles will, if listed or traded on a stock exchange

and freely transferable, be valued at the closing bid price on the principal exchange or market for

such investment, without deduction for the estimated future selling costs.

Derivative instruments will be valued at fair value based on observable market inputs.

Investments other than those speciﬁed above will be valued at their probable realisation value

determined by the Investment Manager in accordance with its valuation policy. Each valuation will

reference one or more of a variety of factors as appropriate including the original purchase price,

the last traded price, proprietary valuations models, the issuer’s ﬁnancial strength and stability, the

issuer’s operating performance, the ranking and value of any security held, and/or the contracted

cash ﬂows of the investment.

If deemed appropriate by the Company or the Investment Manager, the Company may engage

third party valuation professionals to provide valuations of investments. Such third party

professionals may be related to the Investment Manager.

Any value expressed otherwise than in Sterling (the functional and reporting currency of the

Company) (whether of an investment or cash) will be converted into Sterling at the rate (whether

ofﬁcial or otherwise) which the Directors deem appropriate in the circumstances.

If in any case a particular value is not ascertainable as provided above or if the Directors consider

that some other method of valuation better reﬂects the fair value of the relevant investment, then in

such case the method of valuation of the relevant investment will be such as the Directors

consider reasonable in the circumstances.

Suspension of the calculation of the Net Asset Value

The Directors may temporarily suspend the calculation of the Net Asset Value and the publication

of Net Asset Value per Share during a period when, in the opinion of the Directors:

there are political, economic, military or monetary events or any circumstances outside the

control, responsibility or power of the Board, and disposal or valuation of investments of the

Company or other transactions in the ordinary course of the Company’s business is not

reasonably practicable without this being materially detrimental to the interests of

Shareholders or if, in the opinion of the Board, the Net Asset Value cannot be fairly

calculated;

there is a breakdown of the means of communication normally employed in determining the

calculation of the Net Asset Value; or

it is not reasonably practicable to determine the Net Asset Value on an accurate and timely

basis.

Any suspension in the calculation of the Net Asset Value will be notiﬁed via a Regulatory

Information Service as soon as practicable after any such suspension occurs.

6. REPORTS, ACCOUNTS AND MEETINGS

The audited accounts of the Company will be prepared in Sterling under UK GAAP. The

Company’s annual report and accounts will be prepared up to 31 December each year, with the

ﬁrst accounting period of the Company ending on 31 December 2019. It is expected that copies of

the report and accounts will be published by the end of April each year and copies sent to

Shareholders. The Company will also publish an unaudited half-yearly report covering the six

months to 30 June each year, which is expected to be published within the following three months.

The ﬁrst ﬁnancial report and accounts that Shareholders will receive will be the half-yearly report

for the period ending on 30 June 2019 (covering the period from incorporation of the Company).

The ﬁnancial report and accounts and unaudited half-yearly report once published will be available

for inspection from the Company Secretary at the Company’s registered ofﬁce and on the

Company’s website (www.mandg.co.uk/creditincomeinvestmenttrust).

The Company will hold its ﬁrst annual general meeting before 30 June 2020 and will hold an

annual general meeting each year thereafter. Other general meetings may be convened from time

to time by the Directors by sending notices to Shareholders.

7. SHARE CAPITAL MANAGEMENT

As set out below, the Board has put in place appropriate strategies to seek to limit, as far as

practicable, the extent to which the market price of the Ordinary Shares diverges from the Net

Asset Value per Ordinary Share.

Premium Management

Once the proceeds of the Initial Issue have been fully invested, the Company intends to implement

the Placing Programme. The Directors have authority to issue, in aggregate, up to 400 million

Shares pursuant to the Placing Programme. Shareholders’ pre-emption rights over this unissued

share capital have been disapplied so that the Directors will not be obliged to offer any new

Shares under the Placing Programme to Shareholders pro rata to their existing holdings; this

ensures that the Company retains full ﬂexibility, following Initial Admission, in issuing new Shares

to investors. The minimum price at which Ordinary Shares may be issued pursuant to this authority

is the prevailing published Net Asset Value per Ordinary Share at the time of issue plus a premium

intended to at least cover the costs and expenses of the relevant Subsequent Placing (including,

without limitation, any placing commissions). C Shares (if any) issued pursuant to this authority will

be issued at 100 pence per C Share.

Further details of the Placing Programme are set out in Part 6 of this document.

Investors should note that the issuance of new Shares is entirely at the discretion of the Board,

and no expectation or reliance should be placed on such discretion being exercised on any one or

more occasions or as to the proportion of new Shares that may be issued.

Discount Management

The Directors have introduced discount control measures with two elements:

periodic liquidity opportunities; and

use of the Company’s share buy-back authority where appropriate.

Liquidity opportunities

Before the Company’s ﬁfth annual general meeting in 2024, the Board will formulate and submit to

Shareholders proposals (which may constitute a tender offer or other method of distribution) to

provide Shareholders an opportunity to realise the value of their Ordinary Shares at Net Asset

Value per Ordinary Share less costs. In all circumstances, the Board will seek to balance the

interests of both continuing Shareholders and those electing to realise their investment with a view

to minimising any reduction in the overall size of the Company.

Repurchase of Ordinary Shares

The Directors will consider repurchasing Ordinary Shares in the market if they believe it to be in

Shareholders’ interests and as a means of correcting any imbalance between the supply of and

demand for the Ordinary Shares.

A special resolution has been passed granting the Directors authority to repurchase up to 14.99%

of the Company’s issued Ordinary Share capital immediately following Initial Admission during the

period expiring on the conclusion of the earlier of the Company’s ﬁrst annual general meeting and

30 June 2020. Renewal of this buy-back authority will be sought at each annual general meeting of

the Company or more frequently if required. Ordinary Shares purchased by the Company may be

held in treasury or cancelled.

The maximum price (exclusive of expenses) which may be paid for an Ordinary Share must not be

more than the higher of (i) 5% above the average of the mid-market values of the Ordinary Share

for the ﬁve Business Days before the purchase is made, or (ii) the higher of the price of the last

independent trade and the highest current independent bid as stipulated by Regulatory Technical

Standards adopted by the European Commission pursuant to Article 5(6) of MAR. In addition, the

Company will only make such repurchases through the market at prices (after allowing for costs)

below the relevant prevailing published Net Asset Value per Ordinary Share under the guidelines

established from time to time by the Board.

Shareholders should note that the purchase of Ordinary Shares by the Company is at the absolute

discretion of the Directors and is subject to the working capital requirements of the Company and

the amount of cash and reserves available to the Company to fund such purchases. Accordingly,

no expectation or reliance should be placed on the Directors exercising such discretion on any one

or more occasions.

The Company does not have (and does not intend to seek) any authority to buy back C Shares.

Accordingly, the Directors will not be able to operate any discount management policy through the

use of C Share buy-backs.

Treasury Shares

Any Ordinary Shares repurchased pursuant to the general buy-back authority or, if applicable, any

periodic return of capital referred to above may be held in treasury. The Companies Act allows

companies to hold shares acquired by way of market purchase as treasury shares, rather than

having to cancel them. These shares may be subsequently cancelled or sold for cash. This would

give the Company the ability to reissue Ordinary Shares quickly and cost efﬁciently, thereby

improving liquidity and providing the Company with additional ﬂexibility in the management of its

capital base.

No Ordinary Shares will be sold from treasury at a price less than the Net Asset Value per

Ordinary Share at the time of sale unless they are ﬁrst offered pro rata to existing Shareholders.

8. C SHARES

If there is sufﬁcient demand from potential investors at any time following Initial Admission, the

Company may seek to raise further funds through the issue of C Shares pursuant to the Placing

Programme. No C Shares will be issued pursuant to the Initial Issue. The issue of C Shares is

designed to overcome the potential disadvantages for both existing and new investors, which could

arise out of a conventional ﬁxed price issue of further Shares for cash. In particular:

the C Shares will convert into Ordinary Shares just over 12 months after the date of their

issue or such earlier time that the Directors deem that the return proﬁles of the underlying

assets of the portfolios of C Shares and Ordinary Shares are sufﬁciently aligned;

the assets representing the net proceeds of a C Share issue would be accounted for and

managed as a distinct pool of assets until their conversion date. By accounting for the net

proceeds of a C Share issue separately, holders of Ordinary Shares will not participate in a

portfolio containing a substantial amount of un-invested cash before the conversion date;

the basis on which the C Shares would convert into Ordinary Shares is such that the number

of Ordinary Shares to which holders of C Shares would become entitled will reﬂect the

relative net asset values per share of the assets attributable to the C Shares and the

Ordinary Shares. As a result, the Net Asset Value per Ordinary Share can be expected to be

unchanged by the issue and conversion of any C Shares; and

the Net Asset Value per Ordinary Share would not be diluted by the expenses of the C Share

issue, which would be borne by the C Share pool.

The Articles contain the C Share rights, full details of which are set out in paragraph 4 of Part 8 of

this document.

The Directors have the authority to issue C Shares as set out in paragraph 7 above.

9. THE TAKEOVER CODE

The Takeover Code applies to the Company.

Given the existence of the proposed periodic opportunities for return of capital and buyback powers

described in the paragraphs above, there are certain considerations that Shareholders should be

aware of with regard to the Takeover Code.

Under Rule 9 of the Takeover Code, any person who acquires shares which, taken together with

shares already held by him or shares held or acquired by persons acting in concert with him, carry

30% or more of the voting rights of a company which is subject to the Takeover Code, is normally

required to make a general offer to all the remaining shareholders to acquire their shares. Similarly,

when any person or persons acting in concert already hold more than 30% but not more than 50%

of the voting rights of such company, a general offer will normally be required if any further shares

increasing that person’s percentage of voting rights are acquired.

Under Rule 37 of the Takeover Code when a company purchases its own voting shares, a

resulting increase in the percentage of voting rights carried by the shareholdings of any person or

group of persons acting in concert will be treated as an acquisition for the purposes of Rule 9 of

the Takeover Code. A shareholder who is neither a director nor acting in concert with a director

will not normally incur an obligation to make an offer under Rule 9 of the Takeover Code in these

circumstances.

However, under note 2 to Rule 37 of the Takeover Code, where a shareholder has acquired

shares at a time when he had reason to believe that a purchase by the company of its own voting

shares would take place, then an obligation to make a mandatory bid under Rule 9 of the

Takeover Code may arise.

The proposed periodic opportunities for return of capital and buyback powers could have

implications under Rule 9 of the Takeover Code for Shareholders with signiﬁcant shareholdings.

Prior to the Board implementing any return of capital by way of share buyback or general share

buyback the Board will seek to identify any Shareholders who they are aware may be deemed to

be acting in concert under note 1 of Rule 37 of the Takeover Code and will seek an appropriate

waiver in accordance with note 2 of Rule 37. However, neither the Company, nor any of the

Directors, nor the Investment Manager will incur any liability to any Shareholder(s) if they fail to

identify the possibility of a mandatory offer arising or, if having identiﬁed such a possibility, they fail

to notify the relevant Shareholder(s) or if the relevant Shareholder(s) fail(s) to take appropriate

action.

10. THE INITIAL ISSUE AND THE PLACING PROGRA MME

The Initial Issue

The target size of the Initial Issue is in excess of £250 million (before expenses). The minimum

size of the Initial Issue is £100 million (before expenses).

The total number of Ordinary Shares to be issued pursuant to the Initial Issue, and therefore the

Initial Gross Proceeds, are not known as at the date of this document but will be notiﬁed by the

Company via a Regulatory Information Service announcement prior to Initial Admission.

Winterﬂood Securities has agreed to use its reasonable endeavours to procure Placees pursuant to

the Initial Placing for Ordinary Shares at the Issue Price on the terms and subject to the conditions

set out in the Placing and Offer Agreement and this document.

The Company has agreed to make an offer of Ordinary Shares pursuant to the Offer for

Subscription at the Issue Price, subject to the terms and conditions of the Offer for Subscription

set out in this document. These terms and conditions should be read carefully before an

application is made. Investors should consult their independent ﬁnancial adviser if they are in any

doubt about the contents of this document or the acquisition of Ordinary Shares.

Investors may also subscribe for Ordinary Shares pursuant to the Intermediaries Offer, as

described at paragraph 2 of Part 5 of this document.

Further details about the Initial Issue are set out in Part 5 of this document.

The Placing Programme

The Company has authority to issue up to 400 million Ordinary Shares and/or C Shares in

aggregate pursuant to the Placing Programme.

Any Ordinary Shares issued pursuant to the Placing Programme will be issued at a price

calculated by reference to the prevailing published Net Asset Value per Ordinary Share at the time

of issue together with a premium intended to at least cover the costs and expenses of the relevant

Subsequent Placing (including, without limitation, any placing commissions). Any C Shares issued

pursuant to the Placing Programme will be issued at a ﬁxed price of 100 pence per C Share.

Ordinary Shares and/or C Shares issued under the Placing Programme may be issued under this

document provided that it is updated by a supplementary prospectus (if required) under section

87G of FSMA.

Further details about the Placing Programme are set out in Part 6 of this document.

11. TAXATION

Potential investors are referred to Part 7 of this document for details of the taxation of the

Company and Shareholders in the UK. Investors who are in any doubt as to their tax position or

who are subject to tax in jurisdictions other than the UK are strongly advised to consult their own

professional advisers immediately.

12. DISCLOSURE OBLIGATIONS

The provisions of Chapter 5 of the Disclosure Guidance and Transparency Rules (as amended

from time to time) (‘‘DTR 5’’) of the Financial Conduct Authority Handbook apply to the Company

on the basis that the Company is a ‘‘UK issuer’’, as such term is deﬁned in DTR 5.

As such, a person is required to notify the Company of the percentage of voting rights it holds as

a holder of Shares or holds or is deemed to hold through the direct or indirect holding of ﬁnancial

instruments falling within DTR 5 if, as a result of an acquisition or disposal of Shares (or ﬁnancial

instruments), the percentage of voting rights reaches, exceeds or falls below the relevant

percentage thresholds being, in the case of a UK issuer 3% and each 1% threshold thereafter up

to 100%.

13. RISK FACTORS

The Company’s performance is dependent on many factors and potential investors should read the

whole of this document and in particular the section entitled ‘‘Risk Factors’’ on pages 20 to 36 of

this document.

14. DISTRIBUTION TO RETAIL INVESTORS AND MiFID II

The Company intends to conduct its affairs so that its Shares can be recommended by ﬁnancial

advisers to retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled

investment products. The Company’s Shares are expected to be excluded from the FCA’s

restrictions which apply to non-mainstream pooled investment products because they are shares in

an investment trust.

The Company intends to conduct its affairs so that its Shares can be recommended by ﬁnancial

advisers to retail investors in accordance with the rules on the distribution of ﬁnancial instruments

under The Markets in Financial Instruments Directive II (‘‘MiFID II’’). The Directors consider that

the requirements of Article 57 of the MiFID II delegated regulation of 25 April 2016 will be met in

relation to the Company’s Shares and that, accordingly, the Shares should be considered ‘‘non-

complex’’ for the purposes of MiFID II.

PART 2

M&G

1 M&G

Introduction

M&G is one of the longest established asset managers in Europe, managing c.£286 billion as at

30 June 2018. It has particular expertise in ﬁxed income with c.£188 billion under management as

at 30 June 2018 split c.£151 billion in public and c.£37 billion in private credit.

M&G’s commitment to ﬁxed income is long-standing. It began managing public credit portfolios in

the 1970s and private assets since 1997, developing a deep understanding of the skills, expertise

and strategies necessary to run successful ﬁxed income portfolios. Since M&G was acquired by

Prudential in 1999 it has strengthened its emphasis on ﬁxed income, speciﬁcally building in-house

credit research capabilities. It is indicative of M&G’s commitment to credit investing that

approximately two-thirds of its assets under management are in ﬁxed income.

M&G is the largest private credit investor in Europe and second largest in the world. Its scale

provides a competitive advantage in respect of access and asset sourcing enabling it to identify

value from the widest possible opportunity set and to make investments that capture risks where

they are most rewarded. Its disciplined focus on value ensures a selective approach and multiple

teams of credit specialists offer depth of experience with a particular strength in origination of

unusual or complex assets across the full credit universe. M&G has continued to drive the

development of the private debt markets in Europe, whether in the leveraged loan, private

placement or direct lending market through consistent investment and pioneering products and has

an established track record of structuring long-term multi-asset credit solutions to meet client needs

and take advantage of market opportunities.

A break-down of the ﬁxed income assets under M&G’s management by asset class (in aggregate

and by reference to private assets alone) is set out below.

All asset classes (£bn)

Private assets (%)

Infrastructure

equity, £4.1

Long Lease

Property, £7.6

Private Debt,

£24.9

Government

Bonds, £34.2

Index Linked

Government

Bonds, £7.0

Investment Grade

Credit, £95.4

High Yield, £11.9

Other

Instruments**,

£2.8

Other private

debt, £11.9

Private ABS,

£0.6

Syndicated bank

loans, £7.6

Commercial

mortgages, £4.9

Infrastructure

equity, £4.1

Long Lease

Property, £7.6

Total All Fixed Income Assets: £188bn*

Total Private Assets: £37bn

Source: M&G, 30 June 2018.

* The constituents of methodology of the ﬁxed income assets breakdown may differ slightly to the overall ﬁxed income assets

under management set out above due to differing methodology and the inclusion of the separation of Infrastructure Equity and

Long Lease Property.

** Includes derivatives, non-cumulative preference shares and convertible bonds.

The ﬁxed income team

The Company will be managed by M&G’s ﬁxed income team which employs around 275 full-time

investment professionals, including over 75 portfolio managers and over 110 analysts, covering a

range of briefs, including public corporate bond and gilt mandates, Prudential’s life and annuity

funds, a variety of specialist private debt mandates and specialist asset-backed securities funds. A

structure chart of the team as at the last practicable date before the date of this document is set

out below. The origination and structuring teams, organised as market specialists, draw on the

expertise of M&G’s team of over 30 public credit analysts with an average of around 13 years’

experience.

Public

111 investment professionals

Private

162 investment professionals

Chief Executive, Fixed Income

Public

Credit Research

Institutional

Clients Fund

Management

Retail Clients

Fund Management

Real Estate

Finance

Project &

Infrastructure

Finance

Leveraged

Finance

Real Estate

Income

Infrastructure

Equity

Internal

Clients Fund

Management

Fund Directors

Fixed Income

Restructuring

19 17

Alternative~

Credit Research

Alternative Credit

Management

ABS Fund

Management

Fixed Income

Dealers

Private Funds

Investment

Prudential Capital

Source: M&G, 30 June 2018.

Key personnel

The experienced team that will manage the Company’s portfolio of investments will include:

Jeremy Richards, Lead Fund Manager

Jeremy joined Prudential Portfolio Managers in 1983 as a member of the actuarial department. He

joined the ﬁxed income team in 1985, and has been responsible since 1993 for managing the ﬁxed

income team in respect of Prudential’s Life and Annuity funds.

Prior to this, Jeremy worked on bond research, going on to manage the UK and European ﬁxed

income portfolios for insurance and pensions clients. He was also a specialist in index-linked gilts

and ﬁxed income derivatives.

Jeremy graduated from the University of Manchester with a degree in Economics and is a Fellow

of the Institute of Actuaries.

Adam English, Fund Manager

Adam joined M&G in 1999 and is a ﬁxed income fund manager. His focus is on the analysis and

investment of high yield debt and he manages public high yield debt for Prudential Life Fund.

Before joining M&G, Adam worked for the United Bank of Kuwait where he worked within the

credit and high yield departments, with representation on the bank’s credit committee.

Prior to this, he worked for Price Waterhouse, gaining membership of the Associate of Chartered

Accountants.

Adam graduated from Christ Church College, Oxford University with a degree in Physics and is a

CFA charterholder.

William Nicoll, Co-Head of Alternative Credit

William joined M&G in 2004 and is Co-head of Alternative Credit. He is responsible for the

development of various products, including credit solutions for institutional investors, social housing

and other aspects of non-bank lending.

Prior to joining M&G, William was Head of European Credit at Henderson Global Investors and

before this had worked at Cazenove & Co in corporate bond research and fund management.

William graduated from Trinity College, Cambridge University with a degree in Natural Sciences.

He is a CFA charterholder and a Chartered Fellow of the Chartered Institute for Securities and

Investment.

Track record

M&G manages three funds which have investment strategies which, although not directly

comparable with that of the Company, share common characteristics being: (i) Prudential Life with

Proﬁts (‘‘Prudential Life Fund’’); (ii) M&G Alpha Opportunities Fund (‘‘AOF’’); and (iii) M&G Illiquid

Credit Opportunities Fund (‘‘ICOF’’).

Prudential Life Fund was launched in 1865 and as at 30 June 2018 had an aggregate asset value

of c.£20 billion in ﬁxed income investments. Prudential Life Fund invests in a range of public and

private assets on behalf of The Prudential Assurance Company Limited.

AOF was launched in April 2007 and as at 30 June 2018 had an aggregate asset value of

c.EUR 8.5 billion. AOF aims to take advantage of highly diversiﬁed opportunities in liquid public

and private credit markets, including but not limited to, investment grade and below investment

grade corporate bonds, leveraged loans and asset backed securities.

ICOF was launched in May 2014 and as at 30 June 2018 had an aggregate asset value of

c.£955 million. ICOF invests in a range of private and illiquid assets, such as direct lending,

distressed debt and mezzanine asset back securities.

The fund returns and excess returns over LIBOR on invested capital for Prudential Life Fund, AOF

and ICOF respectively are set out below.

Prudential Life with Profits** 1.95 4.62 7.22 6.02 5.83 6.98

M&G Alpha Opportunities Fund 1.16 4.16 2.98 2.50 3.09 3.88

M&G Illiquid Credit Opportunities Fund 4.39 8.11 5.82 5.56 - -

Life AOF ICOF

3.77 1.48 0.50

Prudential Life with Profits 1.48 4.19 6.74 5.52 5.33 6.08

M&G Alpha Opportunities Fund 0.69 3.73 2.50 2.00 2.59 2.98

M&G Illiquid Credit Opportunities Fund 3.92 7.68 5.34 5.06 - -

7.51

Since Inception*4 years

5.46

0.910.51

10 YearsNet Fund return (% ) 1 Year 2 Years

3 month Libor 0.430.47

Excess return (%) 1 Year 2 Years

3 years 5 years

0.48

3.53

0.50

3 years 4 years 5 years 10 Years Since Inception

3.74

2.05

4.95

Source: Investment Manager track record, 30 June 2018 (unaudited). Excess returns to 3-month Libor excluding the impact of

duration. *J. Richards has managed Prudential Life with Proﬁts since July 1993. M&G Alpha Opportunities Fund launched in April

2007 and M&G Illiquid Credit Opportunities Fund launched in May 2014. **This performance reﬂects the ﬁxed income portion of

Prudential Life with Proﬁts only. All ﬁgures shown are net of fees and in the case of Prudential Life with Proﬁts, performance is

shown net of the highest annual average M&G fee rate for the period shown.

The chart below shows the performance of Prudential Life Fund and AOF over the last 10 years to

30 June 2018, demonstrating strong performance with low volatility.

110

130

150

170

190

Jun 08

Dec 08

Jun 09

Dec 09

Jun 10

Dec 10

Jun 11

Dec 11

Jun 12

Dec 12

Jun 13

Dec 13

Jun 14

Dec 14

Jun 15

Dec 15

Jun 16

Dec 16

Jun 17

Dec 17

Jun 18

Prudential Life with Profits M&G Alpha Opportunities Fund

Annual

Volatility

Volatility Since

Apr-2010

£ Prudential Life with Profits

5.36 4.33

£ M&G Alpha Opportunities Fund

4.00 2.95

Excess returns to 3m Libor, local currency, normalised (Net of fees, June 2008 = 100)

Source: M&G, 30 June 2018. Excess returns to 3m Libor excluding the impact of duration.

The Company’s portfolio of investments and the historic portfolios of the funds set out above on

which this track record information is based may be materially different. It should be noted that the

past performance of Prudential Life Fund, AOF and ICOF should not be treated as an indication of

the future performance of the Company.

2 THE INVESTMENT PROCESS

The Investment Manager takes a collegiate approach to fund management whereby investment

opportunities are routinely discussed between portfolio managers and analysts across different

asset classes. The Investment Manager’s investment process is designed to produce a consistent

investment approach, allowing portfolio managers to demonstrate skill and expertise within a

disciplined, research-driven and risk-controlled framework. The portfolio managers judge the relative

risk and return between sectors using their understanding of the contracted coupon income for the

assets under consideration along with the detailed analyst report that is produced in relation to

each investment opportunity. Portfolio managers are responsible for investment performance and

for ensuring that the investment process is followed for the funds under their responsibility.

An overview of the Investment Manager’s investment process is illustrated in the diagram below:

1. Source Opportunity

2. Credit Analysis

3. Independent Credit Rating

4. Portfolio Construction

5. On-going monitoring

Portfolio Manager or Analyst

Analyst

Credit Committee or Analyst

Portfolio Manager

Analyst and Portfolio Manager

Sourcing Investment Opportunities

Investment opportunities will be sourced for the most part through the ﬁxed income team’s

extensive network of contacts, including sponsors, borrowers, lenders, third party brokers and other

intermediaries. In particular, the Investment Manager’s scale and history of investing in private Debt

Instruments has allowed it to build extensive resources to source and manage private or complex

assets and enable it to identify value from the widest possible opportunity set and to capture risks

where they are most rewarded. The purchasing power that the Investment Manager and the funds

it manages can bring means the Investment Manager is frequently given exclusive access to

investments or shown deals before other market participants.

In addition to investment opportunities introduced by the team’s network of contacts the Investment

Manager has structured deals with private debt platforms providing it with exclusivity or priority on

assets. These deals facilitate institutional market access to a wider range of asset classes.

Credit Analysis

The Investment Manager believes that its extensive research resources are a signiﬁcant

competitive advantage when appraising credit opportunities across both public and private markets.

The ﬁxed income team employs a fundamentally driven, bottom-up and value-based investment

approach but also believes that it is of vital importance that credit is not viewed in isolation from

wider macro dynamics in the global and relevant local economy.

The Investment Manager believes that specialisation is important in research. Its public credit

analysts are divided into three specialist teams – corporate, ﬁnancial/sovereigns and asset-backed

securities – covering investment grade and below investment grade Debt Instruments delivering an

integrated sector-based approach to public debt research. Its private credit analysts are also

organised in a number of specialist teams, focusing on leveraged ﬁnance, direct lending, private

placements, real estate debt, infrastructure debt, long lease property and alternative credit. The

private credit teams draw upon the expertise of the Investment Manager’s public credit analysts for

sector expertise. This expertise allows the Investment Manager’s analysts to provide an in-depth

knowledge of both the respective industry and the individual credit assets in their sector.

If an opportunity appears attractive for the Company, a full and detailed analysis will proceed. The

credit analysts’ sole role will be to analyse the individual issuers of Debt Instruments within their

dedicated specialisms, provide speciﬁc internal credit ratings to those Debt Instruments and support

those views with fundamental credit recommendations to the portfolio managers. The credit

analysts will not have any speciﬁc fund management or dealing responsibility.

External third party rating agencies offer issuer and speciﬁc Debt Instrument credit opinions.

However, the Investment Manager has long believed that having internal credit views and opinions

support more informed investment decisions. This is particularly important when investing in private

credit opportunities where no public rating or research is available.

Fundamental qualitative and quantitative assessment of both business and ﬁnancial risk, supported

by appropriate ﬁnancial modelling, alongside a review of corporate structure and issuance

document will form the basis of the credit review. These assessments by their nature will always

be subjective rather than formulaic (despite a degree of ratio analysis within the ﬁnancials review)

and is why the Investment Manager’s research team is built around individuals with speciﬁc

industry expertise and signiﬁcant historical credit analysis experience. When analysing a private

debt opportunity, the Investment Manager believes that proximity to the borrower/issuer is important

given the potential need for greater primary due diligence and ongoing monitoring. Therefore, the

Investment Manager’s focus will principally be on companies based in western European

economies.

Setting an Internal Credit Rating

Each asset acquired by the Company will be assigned an internal credit rating, whether an external

rating exists or not, which will be monitored on a six to 12 month basis (or more frequently as

required) as appropriate for the type of asset. The culmination of the rating process, following a full

analysis of the credit risks, is to categorise the Debt Instrument within the Investment Manager’s

ﬁxed income credit rating structure (M&G AAA to D, including + or – where applicable). The rating

process also provides an indication of the outlook for the credit rating (Positive/Stable/Negative)

where appropriate.

For public assets the credit rating will be assigned by the relevant credit analyst. For private assets

a credit committee will assign the credit rating. The credit committee is composed of senior

members of the ﬁxed income team. The Investment Manager believes this ensures robust

challenge from experienced market professionals and appropriately detailed probing of key credit

issues ahead of a ﬁnal rating decision. For example, the Head of Corporate Credit Analysis may

chair the credit committee for a social housing bond, with directors from Private Placements and

Asset-Backed Securities Credit voting.

Portfolio Construction and Ongoing Monitoring

The Investment Manager believes that the key to investing in credit is not to be a forced buyer of

assets at the wrong point in the market. By maintaining ﬂexibility in a portfolio’s investment

allocations rather than having a top-down sector allocation, a portfolio manager can take advantage

of markets as they develop and avoid assets in sectors that no longer provide attractive value. All

of M&G’s and its client funds’ portfolios that can invest in public and private credit are built from

the bottom up, with each asset being selected on its fundamental and relative value rather than the

portfolio being constructed through top-down allocations or expectations. The Investment Manager

will adopt the same approach with regard to the Company.

In respect of private credit, M&G seeks value across credit asset classes, earning investors a

premium through the liquidity and complexity of the underlying assets. These assets typically have

more limited liquidity and availability then public credit and, as such, creating a portfolio of private

credit typically takes longer than for other assets. It is expected that the private credit part of the

Company’s portfolio of investments will typically comprise a variety of asset classes which will have

different risk and return proﬁles and a range of liquidity and complexity characteristics.

The decision to invest in an individual asset lies solely with the portfolio management team. The

outcome of the credit process is a rating, which allows the portfolio managers to rank the risk. The

majority of the assets to be acquired by the Company are expected to be held to maturity and will

generate returns from their contractual coupons. As a result, the portfolio managers can judge the

relative risk and reward clearly. The portfolio managers will evaluate all risks associated with the

Company’s portfolio of investments they believe are material to making an investment decision and

will assess how those risks are mitigated.

The Company may invest indirectly through collective investment vehicles where to do so facilitates

cost efﬁcient access to diversiﬁed pools of credit opportunities that may otherwise be difﬁcult to

access if investing directly.

The diagram below summarises the process behind portfolio construction, pre-trade and post-trade

checks, together with the ongoing monitoring of the assets and portfolio.

Asset View

- Absolute value – are the risks

rewarded?

- Structural considerations – are

the documents suitable?

- Default risks – are the risks

appropriately mitigated?

- Is there appropriate security?

- Comparison with public assets

– does the asset offer relative

value to compensate for

illiquidity/complexity?

Portfolio View

- Does the asset fit within

mandate

- Sector concentrations

- Pre trade check by independent

controls and assurance team

against mandate restrictions

- Indication of appetite to analyst

- Allocation process treats clients

fairly apportioning assets

- If pricing or allocation changes,

re-run checks

Post Trade

- Daily trade review by team

head

- Daily monitoring of fund

compliance by Surveillance

Monitoring team

- Daily risk, counterparty and

derivative monitoring by Risk

Monitoring team

- Independent pricing oversight

performed by M&G Data

Management Team

Ongoing Monitoring

- Credit analysts monitor assets

against covenants

- Formal credit committee

periodic review of every private

asset

- Monthly fund performance and

oversight reporting by Risk

Performance team

- Monthly quantitative and

qualitative fund oversight by

M&G Investment Risk

- Portfolio manager reports fund

performance and trade rationale to

monthly front office fund

oversight meeting

The Investment Manager will monitor the progress of the Company’s investments. All investments

made will include a variety of ﬁnancial covenants which will be monitored by the relevant credit

analyst. The credit analyst will track the ﬁnancial performance and covenants for material

underperformance against the Investment Manager’s original expectations. In addition to the

covenant compliance submissions, the Investment Manager will also receive other information on a

regular basis, such as audited ﬁnal and interim ﬁnancial statements as well as, in certain

circumstances, management accounts and forecasts. Performance trends, including covenant

headroom, will be monitored by the Investment Manager to ensure it begins conversations with

management of issuers at an early stage in an effort to mitigate potential problems before they

fully materialise.

For public debt assets, the Investment Manager believes a critical part of successful management

will be the ongoing monitoring of changes in fundamental or relative value. The Investment

Manager will follow a reactive approach to holdings and will look to sell assets where credit

analysts identify any increase in the risk of default/impairment. Equally, where the relative valuation

of an asset becomes over-extended, the Investment Manager will look for more attractively priced

alternative assets to acquire in order to crystallise the opportunistic gain.

With regard to private assets, typically, the credit analysts responsible for a deal at inception will

remain involved in the credit investment through its life. The portfolio managers have regular

dialogue with the credit analysts to go through performance and any other issues associated with

the investment. Any assets that are underperforming are escalated via M&G’s standard credit

oversight processes, which involve senior management.

For investments in collective investment vehicles, the portfolio manager will receive either monthly

or quarterly investment reports from the relevant vehicle administrator. These will be reviewed by

the portfolio manager who can approach the administrator or the relevant manager with any

queries or performance issues.

Additionally the Investment Manager has 19 dedicated restructuring specialists. The team works

closely with the credit analysts and acts as a safety net to ensure that in the event of any debt

impairment, be it technical or structural, the Investment Manager has extensive resource to analyse

both the legal and ﬁnancial aspects and ensure that the Company’s investments are protected.

Fund oversight is carried out by M&G’s Risk and Surveillance Monitoring teams, as well as senior

management in the ﬁxed income team. Daily monitoring includes a review of fund trades, a

covenant compliance review and risk and credit counterparty monitoring. Monthly monitoring

includes a quantitative and qualitative oversight by the Investment Risk team, a fund performance

review and a fund oversight meeting comprising senior management from ﬁxed income.

PART 3

THE INVESTMENT OPPORTUNITY AND ASSET CLASS OVERVIEW

1 THE INVESTMENT OPP ORTUNITY

In the current and persistent low yield environment, there are opportunities for investors to look

beyond traditional ﬁxed income markets. Illiquid Debt Instruments issued by a diverse range of

companies, whether public or private, have become popular alternative investments that generate

stable and attractive returns and predictable yields for investors, often with an expectation of

underlying capital protection. The values of many illiquid Debt Instruments are derived almost

entirely from their cashﬂows, rather than any perceived future capital appreciation. Illiquid credit

investing is, in the Investment Manager’s opinion, a simple trade-off: that which is lost in liquidity is

gained in higher risk-adjusted returns, together with structural protections that can be far superior

to those offered by liquid, in particular publicly-traded, Debt Instruments.

Regulatory developments, particularly those in respect of regulatory capital requirements impacting

banks, have signiﬁcantly reduced the ability of traditional lenders to hold illiquid assets. This has

led to the need and the opportunity for new, unhindered, investors to provide capital to these

markets. Consequently, the Investment Manager believes investors such as the Company are well-

positioned to ﬁll this funding gap.

Growth in bank lending

Decline in bank lending

-5

Jan 04

Jun 04

Nov 04

Apr 05

Sep 05

Feb 06

Jul 06

Dec 06

May 07

Oct 07

Mar 08

Aug 08

Jan 09

Jun 09

Nov 09

Apr 10

Sep 10

Feb 11

Jul 11

Dec 11

May 12

Oct 12

Mar 13

Aug 13

Jan 14

Jun 14

Nov 14

Apr 15

Sep 15

Feb 16

Jul 16

Dec 16

May 17

Oct 17

Mar 18

Germany France Eurozone UK

% Annualised change in bank lending to non financial corporates

Sources: Bank of England and European Central Bank as at 31/03/2018. Non-seasonally adjusted data.

Unlike open-ended investment companies such as UCITS funds, which have a limited ability to

invest in private and/or illiquid Debt Instruments because of the requirement to provide investors

with regular liquidity, the Company is able to take a longer term view and to embrace the virtues of

private and/or illiquid public Debt Instruments. The Company will beneﬁt from the closed-ended

structure enabling it to invest opportunistically in times of market dislocation when other market

participants may be selling and ensuring it should not have to be a forced seller.

The Investment Manager, and in particular Jeremy Richards, has been managing a portfolio of

public, private, liquid and illiquid Debt Instruments for 25 years for Prudential Life Fund. Through

investment in the Company, this expertise will be available to retail investors for the ﬁrst time,

enabling investors to gain unique access to the Investment Manager’s value investment approach

across markets and cycles over the longer term.

The Company will seek opportunities across the credit spectrum and will be unconstrained in its

approach, save to the extent limited by the Company’s investment policy. In practice, this means

the Company will be able to transition the Company’s portfolio of investments over time, leveraging

off the Investment Manager’s deep knowledge and understanding of the public and private credit

universe, in order to position the Company to take advantage of an evolving credit landscape.

Returns on illiquid Debt Instruments are primarily driven by coupon income and the Investment

Manager expects that a diversiﬁed portfolio of such assets should have lower volatility than, and be

uncorrelated to, equity. Illiquid Debt Instruments pay a yield premium versus liquid Debt

Instruments and typically exhibit low interest rate sensitivity. By way of illustration, the graph below

shows the potential returns available from various markets in which the Company might invest:

Investment Horizon (Yrs)

Total Return (%)

Key

BBB

Non rated

Gilt curve*

Returns available across credit markets

Trade

Receivables

Leasing

Corporate Private Placements

Distressed Debt/

Specialist Situations

Infrastructure Debt

Mezzanine ABS

High Grade

ABS

Senior

Commercial Mortgages

Leverage Loans

Junior Commercial

Mortgages

Corporate Direct Lending

Non-Corporate Private

Placements

Specialty Finance

0 5 10 15 20 25 30 35 40

Source: M&G illustrative, Bloomberg UK Sovereign curve. Graph indicates total return of asset classes. *Gilt curve is shown for

reference only. (Gilt Curve I22 GBP UL).

Within the various asset classes in which the Company will invest, the Investment Manager will

seek to enhance the potential returns to Shareholders through focus on what it believes are the

three main drivers of investment performance.

Fundamental credit research analysis – often, where there is a lack of understanding of a

Debt Instrument or an issuer or its industry the instrument can trade at a higher yield to

comparables. The Investment Manager believes it can leverage off its market-leading

relationships and expert analysis of credit fundamentals to gain a better understanding of

such instruments to take advantage of any illiquidity premium or market mispricing in a

measured and sensible way.

Flexibility – credit markets tend to be conservative by nature and new asset classes often

offer excess premia before wider market adoption. The Investment Manager has a long-

standing track record of being at the forefront of many developing asset classes, for example

it was one of the ﬁrst European investors in Private Placements in 1997, it was the ﬁrst

institutional investor in leveraged loans in 1999 and, more recently in 2016, it structured one

of the ﬁrst inﬂation linked private rental sector backed debt packages. These excess premia

have also been witnessed in recent years in several new types of private debt, for example,

the funding of solar power, and aircraft and agricultural leasing. The Investment Manager has

the ability to analyse and participate early in these emerging credit markets owing to its depth

of resource and market reputation.

Timing – the Investment Manager has a reputation as a patient and long-term investor which

can assess the relative value across the credit universe, avoiding market herd mentality and,

by analysing the fundamentals of the asset or its issuer, can take advantage of market

irrationality to achieve positive long-term outcomes for investors.

Many of the Debt Instruments that the Company will provide Shareholders with exposure to may

not otherwise be accessible to Shareholders, in particular to individual investors. This could be for

a number of reasons including those Debt Instruments being (i) available only to investors with

signiﬁcant ﬁnancial resources; (ii) negotiated privately between corporate entities; or (iii) complex or

higher risk in nature, making them unsuitable for retail investors. While certain of the Debt

Instruments that the Company will invest in may, therefore, carry a higher level of risk individually,

the Company’s investment policy and approach, together with the expertise and experience that the

Investment Manager brings to bear in each asset class, should enable asset speciﬁc risk to be

minimised.

Consequently, the Company believes the Investment Manager is strongly placed to deliver on

these opportunities and the Company will provide Shareholders with a diversiﬁed, lower risk

exposure to a range of underlying investments, as detailed more fully below.

2 ASSET CLASS OVERVIEW

The Company will seek a diversiﬁed exposure to public, private, liquid and illiquid Debt

Instruments, with a focus, over the longer term, on private Debt Instruments. A detailed description

of certain of the asset classes and types of Debt Instruments that the Company may invest into

from time to time is set out below, although this list is not exhaustive. To the extent that any of

these asset classes give rise to material risk factors, these risks are set out in the section headed

‘‘Risk Factors’’ on pages 20 to 36 of this document.

Asset-backed securities

Asset-backed securities are backed by a pool of loans secured on residential and commercial

mortgages, credit card receivables, auto loans, student loans, commercial loans and corporate

loans.

Asset-backed securities are typically investments that entitle the holders to receive payments that

depend primarily on the cash ﬂow from a speciﬁc pool of assets that subsequently, by their terms,

convert into cash within a ﬁnite time period. Asset-backed securities are backed by pools of debt

receivables which are often secured against physical collateral, for example residential property in

the case of residential mortgage-backed securities.

Asset-backed securities generally are created by the transfer of assets and/or collateral to a

special purpose entity, which may be a trust, limited liability company, corporation or other entity,

which becomes the issuer. The sponsor or originator usually establishes the special purpose entity

as an orphan entity. The special purpose entity may issue securities in the form of debt secured by

the underlying assets or securities in the form of ownership interests in the underlying assets. With

certain types of asset-backed securities, primarily securitisations, a servicer, often the originator, is

responsible for collecting the cash ﬂow generated by the underlying assets and distributing such

cash ﬂow to security holders in accordance with the terms of the issued securities. In certain

transactions a party unrelated to the originator will perform these functions.

Asset-backed securities offer an attractive premium over public corporate bonds due to their

complexity and provide a return that is attractive within a diversiﬁed portfolio. Senior/upper

mezzanine tranches in certain core asset-backed security sectors exhibit strong relative market

liquidity in relation to illiquid private debt assets. These assets will allow the Investment Manager to

adjust the Company’s portfolio of investments composition as and when required.

Commercial mortgages

Commercial mortgages are loans secured over commercial property. Real estate debt can deliver

stable contractual cashﬂows and, while borrowers have the right to repay the loans at any time,

loans often beneﬁt from prepayment penalties in the event the borrower decides to repay the loan

early.

Commercial mortgages also beneﬁt from strong investor protections. The terms of any particular

loan are usually extensively negotiated between borrower and lender with covenants set at levels

speciﬁc to each lender and asset, which should provide for both full interest payment and recovery

of the loan principal in the event that the lender has to enforce and sell the property. Senior

commercial mortgages normally have a ﬁrst legal charge against the property which ensures that

the loan ranks ahead of any other lender. In the event of default the level of recovery is dependent

on the value of the ring-fenced, physical property. This is different to corporate bond investments

where recovery for bondholders is generally more dependent on the management of a business as

a going-concern. As senior commercial mortgages have a typical loan to value (LTV) of 50-70%,

they are signiﬁcantly over-collateralised by the underlying real estate. In the event of a default this

typically results in higher recoveries with minimal losses compared to an average loss on a

defaulted corporate bond of around 40%.

Direct lending (includes lease ﬁnance and receivables)

Direct lending to smaller and mid-sized companies (‘‘SMEs’’) presents an opportunity for non-bank

lenders and has developed in size and scope as banks have changed how they service these

borrowers after the introduction since the ﬁnancial crisis of more onerous banking regulations.

Providing alternative sources of capital for mid-sized UK companies, the focus is on, among other

areas, senior loans across cash ﬂow lending, asset backed lending (including leasing and

receivable ﬁnancings) and wholesale funding to other lending businesses. Deals can be sourced

directly, through private equity sponsors or by working alongside UK banks. These assets typically

do not have public ratings.

In addition to stable, ﬂoating rate returns, investors in direct lending can also beneﬁt from

diversiﬁcation, seniority with loans typically senior ranking, and structural protection through

covenant and security provided.

The direct lending markets have broadened in recent years and there are interesting opportunities

beyond traditional SME ﬁnancing.

Lease ﬁnance

The Investment Manager believes there are companies that lease hard assets, such as trucks or

industrial equipment, that are unable to ﬁnd ﬁnancing at attractive levels to fund their businesses.

The Investment Manager believes that lending to these companies means that it is possible to

achieve higher returns than lending directly to the end company (which is often a large investment

grade company) and also be secured on hard assets.

Trade receivables transactio ns

In a similar way to lease ﬁnance, banks have stepped back from ﬁnancing global trade and supply

chains. The Investment Manager believes the transactions and structures that provide opportunities

to ﬁnance trade receivables have continued to develop over recent years. In these transactions

suppliers of goods or services sell their invoices or receivables at a discount to the ﬁnance

provider. In return, the suppliers get faster access to the money they are owed, which improves

their working capital position. The credit risk to the ﬁnance provider lies with the purchaser of the

goods or services receivables, which typically will be a company with a stronger credit proﬁle than

the original supplier. The Investment Manager believes that the complex structure of some of these

transactions means that they are often attractively priced. However, the combination of asset-

backed securities and corporate credit research techniques that are required to understand these

types of investments fully means that, in the Investment Manager’s belief, many market participants

do not consider them.

Distressed debt

Distressed debt comprises Debt Instruments issued by companies that the Investment Manager

believes have viable business models, but that have deteriorating credit proﬁles, and are normally

priced well below par.

In most distressed debt investments, the main drivers of returns are capital appreciation on the

nominal amount (‘reversion to par’) or equity upside (‘loan to own’). ‘Special situation’ investments

will beneﬁt from interest income (both cash and non-cash), which will be negotiated at the inception

of each loan, and upside participation (‘sweetener’).

There is often the potential to negotiate better economic terms for ‘special situations’ investments

because they tend to attract only a limited number of competitors due to the complexity and

relatively small size of the opportunities.

Infrastructure-related debt assets

Infrastructure is a defensive asset class. The assets ﬁnanced are usually of an essential nature

such as transport, utilities, energy generation and social infrastructure such as the provision of low-

income housing, schools and hospitals. These industries typically operate in regulated or

concession-based environments, with high barriers to entry and exit creating monopolistic

conditions. Infrastructure assets typically generate revenues with low correlation to business cycles,

providing investors with stable cashﬂows and the beneﬁt of diversiﬁcation within a portfolio. With

debt often secured against long term physical assets infrastructure debt exhibits favourable

recovery rates compared to corporate credit. Infrastructure debt ﬁnance is often provided to private

ﬁnance initiative and public private partnership borrowers and to large infrastructure and utility

companies.

Leveraged loans

The leveraged loans market typically provides ﬁnancing to private equity owned companies and

has developed into a large pan-European market and is relatively liquid compared to many other

private debt asset classes. Leveraged loans are Debt Instruments issued by companies, typically to

ﬁnance acquisitions, mergers or leveraged buy-outs by private equity sponsors. The leverage refers

to the capital structure of the issuing company, which incorporates a signiﬁcant amount of debt.

Consequently, in instances where a public rating exists from a credit rating agency, it is typically

below investment grade. Leveraged loans are senior loans, secured by speciﬁc collateral, and have

a priority position in the capital structure of the issuing company.

Public bonds

A public bond is a Debt Instrument generally issued by a corporate or sovereign entity and is

traded on a recognised bond exchange. The bonds are issued for a deﬁned period of time at a

ﬁxed interest rate or indexed to the performance of the prices of securities, currencies or other

ﬁnancial statistics. These bonds can have an investment grade or below investment grade credit

rating. Liquid bonds are bonds which are commonly traded on the secondary market between

investors whilst illiquid bonds are bonds which are not generally traded between secondary buyers

as they are typically held to maturity by investors.

Private placements

A ‘private placement’ is a private alternative to issuing a publicly offered security as a means for

raising capital. In a private placement the offering of Debt Instruments is made between a business

(or issuer) and a select number of accredited investors / lenders.

Public and private organisations issue in the private placement market for a variety of reasons, and

some of the main advantages are access to ﬂexible and long-term funding, additional ﬁnancing

capacity beyond existing sources of ﬁnance (such and banks and private equity, etc.) or, in the

case of privately held businesses, to maintain conﬁdentiality. As the issuer is only dealing with

accredited investors, they can avoid certain costs associated with a public offering and this also

allows for more ﬂexibility regarding the structure and terms of the placement.

Structured credit (includes regulatory capital trades and specialty ﬁnance)

Regulations covering the banking sector have changed signiﬁcantly in recent years, causing banks

to re-evaluate the assets held on their balance sheets, in light of them generally becoming more

sensitive to the amount of capital required when holding portfolios of loans or other debt. The

impact of this has been for banks to divest themselves of assets, such as pools of consumer loans

(i.e. structured credit).

Regulatory Capital Trades

Regulatory capital trades are where banks seek to transfer risk from their balance sheets to

external investors, such as the Company. These deals have the dual effect of reducing the amount

of risk assets (such as consumer loans) held by the banks and reducing the amount of capital that

they are required to hold.

Specialty Finance

Specialty ﬁnance is an emerging asset class which the Investment Manager expects to grow in

Europe over the coming years as bank deleveraging continues apace. These assets are granular

portfolios of consumer and commercial ﬁnance loans such as residential and commercial mortgage

loans, credit card receivables, auto loans, student loans, commercial loans and corporate loans.

PART 4

DIRECTORS, MANAGEMENT AND ADMINISTRATION

1. DIRECTORS

The Directors are responsible for the determination of the Company’s investment policy and

strategy and have overall responsibility for the Company’s activities including the review of

investment activity and performance and the control and supervision of the Investment Manager.

All of the Directors are non-executive and are independent of the Investment Manager and the

other service providers (with the exception of Mark Hutchinson who is the Chair of Private Assets

at M&G). A majority of the Board will at all times be independent of the Investment Manager.

The Directors will meet at least four times a year, inter alia, to review and assess the Company’s

investment policy and strategy, the risk proﬁle of the Company, the Company’s investment

performance, the performance of the Company’s service providers, including the Investment

Manager and Administrator, and generally to supervise the conduct of its affairs.

The Directors are as follows:

David Simpson (aged 61) (Chairman)

David Simpson is a qualiﬁed solicitor and was a partner at KPMG for 15 years until 2013,

culminating as global head of M&A. Before that he spent 15 years in investment banking, latterly at

Barclays de Zoete Wedd Ltd. He is chairman of Ecoﬁn Global Utilities and Infrastructure Trust plc,

a non-executive director of the British Geological Survey, a trustee of Cardiff University and a non-

executive director of ITC Limited, a major listed Indian company. David graduated from Cambridge

University with a degree in Economics and Law.

Richard Bole´at (aged 55) (Non-executive Director)

Richard Bole´at is a Fellow of the Institute of Chartered Accountants in England & Wales, having

trained with Coopers & Lybrand in Jersey and the United Kingdom. After qualifying in 1986, he

subsequently worked in the Middle East, Africa and the UK for a number of commercial and

ﬁnancial services groups before returning to Jersey in 1991. He was formerly a Principal of

Channel House Financial Services Group from 1996 until its acquisition by Capita Group plc

(‘‘Capita’’) in September 2005. Richard led Capita’s ﬁnancial services client practice in Jersey until

September 2007, when he left to establish Governance Partners, L.P., an independent corporate

governance practice. He currently acts as Chairman of CVC Credit Partners European

Opportunities Limited, Phaunos Timber Fund Limited and Funding Circle SME Income Fund

Limited, all of which are listed on the London Stock Exchange. He is regulated in his personal

capacity by the Jersey Financial Services Commission and is a member of AIMA.

Mark Hutchinson (aged 60) (Non-executive Director)

Mark joined M&G in 1997 as Head of the Private Finance Group and has overseen the start of a

number of activities including Private Placements, Leveraged Finance, Project & Infrastructure

Finance and Structured Credit. In addition, he started the initiative for purchasing properties with

long leases for Prudential’s annuity funds in 2000. He continues to be involved in the development

and growth of private assets within M&G.

Mark began his career in banking in 1980 with Midland Bank, going on to join Citibank and then in

1995, Bank of America, as a relationship manager for UK and global corporates.

Mark graduated from Cambridge University with a degree in Economics.

Barbara Powley (aged 56) (No n-executive Director)

Barbara Powley is a chartered accountant with over 30 years’ experience in the investment trust

industry. Prior to her retirement in March 2018 she was a director in BlackRock’s closed end funds

team from 2005 with responsibility for the oversight and administration of BlackRock’s stable of

investment trusts. From 1996 to 2005 she had a similar role at Fidelity. Barbara graduated from

the University of York with a degree in Mathematics and Economics. She brings to the board her

extensive knowledge of the investment trust sector and its regulatory requirements.

2. THE INVESTMENT MANAGER

2.1 Introduction

The Company has engaged M&G Alternatives Investment Management Limited as the Company’s

alternative investment fund manager to provide portfolio and risk management services to the

Company.

The Investment Manager was incorporated in the United Kingdom on 30 September 1986 as a

private company limited shares and is wholly owned by M&G Limited which is itself ultimately

owned by Prudential, the UK’s largest insurer by market capitalisation. The Investment Manager is

authorised and regulated by the FCA and is registered under number 122011. Prudential is a

publicly held company whose shares are listed on the stock exchange of London (PRU.L), Hong

Kong (2378.HK), Singapore (K6S.SG) and New York (PUK.N). Prudential is not afﬁliated in any

manner with Prudential Financial, Inc., a company whose principal place of business is in the

United States of America.

2.2 The Investment Management Agreement

The Company has appointed the Investment Manager to act as the Company’s AIFM for the

purposes of the AIFM Directive and accordingly the Investment Manager is responsible for

providing discretionary portfolio management and risk management services to the Company.

The Company and the Investment Manager have entered into the Investment Management

Agreement, a summary of which is set out at paragraph 6.2 of Part 8 of this document.

The Investment Manager is entitled to receive from the Company an investment management fee

which is calculated and paid quarterly in arrears at an annual rate of (i) 0.5% per annum of the

prevailing published Net Asset Value until the end of the Company’s ﬁrst accounting period,

31 December 2019; and (ii) 0.7% per annum of the prevailing published Net Asset Value

thereafter.

Where the Company invests in a collective investment vehicle that is managed or advised by an

M&G Entity, the Investment Manager will reduce its investment management fee by the amount of

any equivalent management fee that is charged to such collective investment vehicle or such entity

will rebate its management fee such that the Investment Manager ensures the Company is not

charged twice. The above arrangement will not apply to any other fees or expenses charged to the

Company or any such entity in which it invests.

The Investment Manager is also entitled to be paid half of any arrangement fee charged by the

Company to the issuer of a Debt Instrument in which the Company invests. The balance of any

arrangement fee is retained by the Company.

The Investment Management Agreement is for an initial term of ﬁve years from the date of Initial

Admission and thereafter subject to termination on not less than six months’ written notice by

either party. The Investment Management Agreement can be terminated at any time in the event of

the insolvency of the Company or the Investment Manager or in the event that the Investment

Manager ceases to be authorised and regulated by the FCA (if required to be so authorised and

regulated to continue to carry out its duties under the Investment Management Agreement).

3. OTHER ARRANGEMENTS

3.1 Administrato r

The Administrator is responsible for general fund administration services including calculation of the

Net Asset Value, bookkeeping and accounts preparation.

Details of the Administration Agreement are set out in paragraph 6.3 of Part 8 of this document.

3.2 Depositary

State Street Trustees Limited has been appointed as depositary to provide depositary services to

the Company, which will include safekeeping of the assets of the Company. The Depositary is

permitted to delegate (and authorise its delegates to sub-delegate) the safekeeping of the assets of

the Company.

Details of the Depositary Agreement are set out in paragraph 6.4 of Part 8 of this document.

The Administrator and Depositary are entitled to a combined fee (the ‘‘State Street Fee’’). The

State Street Fee shall be up to 0.08% of the Net Asset Value per annum. The fee is subject to a

minimum rate, whereby if the Net Asset Value is less than £250 million the fee will be calculated

as if the Net Asset Value were £250 million. The State Street Fee is calculated monthly and

payable monthly in arrears. In addition, the Administrator and the Depositary are entitled to certain

transaction charges, each of which will be at normal commercial rates and certain other fees for ad

hoc services rendered from time to time. The Administrator and the Depositary are entitled to

reimbursement of out-of-pocket expenses incurred by them (and by subcustodians and

depositories) on behalf of the Company in connection with the performance of the services. The

Company shall also reimburse the Administrator and Depositary for the reasonable fees and

customary agents’ charges paid to any sub-custodian (which shall be charged at normal

commercial rates). All amounts are exclusive of any VAT that may be charged thereon.

3.3 Custodian

The Depositary has delegated safekeeping duties as set out in the AIFM Directive and the FCA

Handbook to State Street Bank & Trust Company, whom it has appointed as global sub-custodian.

3.4 Company Secretary

The Company Secretary provides the company secretarial functions required by the Companies

Act.

Under the terms of the Company Secretarial Services Agreement, the aggregate fees payable to

Link Asset Services are £60,000 per annum. In addition a fee of £30,000 is payable to Link Asset

Services for services undertaken as part of the Initial Admission process.

Details of the Company Secretarial Services Agreement are set out in paragraph 6.5 of Part 8 of

this document.

3.5 Registrar

The Company utilises the services of Link Asset Services as registrar in relation to the transfer and

settlement of Shares. Under the terms of the Registrar Agreement, the Registrar is entitled to a fee

calculated on the basis of the number of Shareholders and the number of transfers processed

(exclusive of VAT). In addition, the Registrar is entitled to certain other fees for ad hoc services

rendered from time to time.

Details of the Registrar Agreement are set out in paragraph 6.6 of Part 8 of this document.

3.6 Auditor

Deloitte LLP provides audit services to the Company. The annual report and accounts will be

prepared according to the accounting standards laid out under UK GAAP. The fees charged by the

Auditor depend on the services provided and on the time spent by the Auditor on the affairs of the

Company; there is therefore no maximum amount payable under the Auditor’s engagement letter.

4. FEES AND EXPEN SES

4.1 Formation and initial expenses

The formation and initial expenses of the Company are those that arise from, or are incidental to,

the establishment of the Company, the Initial Issue and Initial Admission. These expenses include

the fees and commissions payable under the Placing and Offer Agreement, Receiving Agent’s

fees, listing and admission fees, printing, legal and accounting fees and any other applicable

expenses which will be met by the Company and paid on or around Initial Admission out of the

Initial Gross Proceeds.

The costs and expenses of, and incidental to, the formation of the Company and the Initial Issue

are not expected to exceed approximately £3 million, equivalent to 1.2% of the Initial Gross

Proceeds, assuming Initial Gross Proceeds of £250 million. The costs will be deducted from the

Initial Gross Proceeds. It is expected that the starting Net Asset Value per Ordinary Share will be

98.8 pence, assuming Initial Gross Proceeds of £250 million.

4.2 Placing Programm e expenses

The costs and expenses of the Company relating to the Placing Programme are those that arise

from, or are incidental to, the issue of Shares pursuant to Subsequent Placings. These include the

fees payable in relation to each subsequent Admission, including listing and admission fees, as

well as fees and commissions due under the Placing and Offer Agreement and any other

applicable expenses in relation to the Placing Programme.

The costs and expenses of issuing Ordinary Shares pursuant to any Subsequent Placing will be

covered by issuing such Ordinary Shares at the prevailing published Net Asset Value per Ordinary

Share at the time of issue together with a premium to at least cover the costs and expenses of the

relevant Subsequent Placing of Ordinary Shares (including, without limitation, any placing

commissions).

The costs and expenses of any issue of C Shares under the Placing Programme will be paid out

of the gross proceeds of such issue and will be borne by holders of those C Shares only.

4.3 Ongoing annual expenses

The Company will also incur ongoing annual expenses which will include fees paid to the

Investment Manager and other service providers as described above in addition to other expenses,

but excluding all costs associated with making and realising investments. These fees and expenses

are currently expected to amount to c.0.8% of Net Asset Value in respect of the Company’s ﬁrst

ﬁnancial period to 31 December 2019 and c.1.1% of Net Asset Value per annum thereafter

assuming a Net Asset Value on Initial Admission of £247 million. The lower fees and expenses in

the Company’s ﬁrst ﬁnancial period reﬂect the lower investment management fee during that

period.

5. CONFLICTS OF INTEREST

As a global investment management organisation providing asset management and other services,

the Investment Manager engages in, and will continue to engage in activities, which may, on

occasion conﬂict with the interests of the Company. In providing services to its clients and the

Company, the Investment Manager, any other M&G Afﬁliate, or their respective directors, ofﬁcers

and employees (together the ‘‘M&G Interested Parties’’) may face conﬂicts of interest with respect

to activities recommended to or performed for such clients, on the one hand, and the Company, or

the entities in which the Company invests, on the other hand. In addition, these client relationships

may present conﬂicts of interest in determining whether or not to offer certain investment

opportunities to the Company.

In particular, the Investment Manager may also act as investment adviser, investment manager

and/or in another capacity on behalf of investment funds, investment vehicles or segregated or

managed accounts that invest, or may invest, in Debt Instruments (‘‘Other M&G Clients’’). Other

M&G Clients may include proprietary capital accounts of M&G Afﬁliates and clients with similar

investment objectives and policies to or otherwise in competition with the Company and the

Company’s investments. The Investment Manager may engage in, advise or possess an interest in

other business ventures with persons competing with the Company’s investments or with the

Company for investment opportunities in Debt Instruments. The Investment Manager or another

M&G Entity may also act as agent in respect of the Company’s investments for which it may

charge a fee.

The Investment Manager has regard to its obligations under the Investment Management

Agreement and the Investment Manager will otherwise act in a manner that it considers fair,

reasonable and equitable having regard to its obligations to Other M&G Clients, when potential

conﬂicts of interest arise.

In relation to the allocation of investment opportunities, the Investment Manager has procedures in

place to seek to ensure appropriate allocations between the Company and Other M&G Clients in

accordance with its allocation policy from time to time. Those procedures generally involve a

recording of the investment requirements of Other M&G Clients which are available to all

investment teams within the Investment Manager, the registration of each investment opportunity

introduced to the Investment Manager and the allocation of each opportunity, subject to appropriate

monitoring by the Investment Manager’s control functions. Investment teams within the Investment

Manager meet to review investment opportunities and to express their interest in available

opportunities in accordance with the recorded investment requirements. To ensure that all clients

are treated fairly, unless speciﬁcally agreed and documented between the investment teams, ﬁnal

allocations to each M&G Interested Party should be on a pro rata basis to the original bids.

Further, the Investment Manager may advise on the sale of assets from or to the Company’s

portfolio of investments by Other M&G Clients. The Investment Manager shall in such cases

ensure that such transactions are effected on terms that are at least as favourable to the Company

than if the conﬂict or potential conﬂict had not existed and all such transactions are effected on

normal commercial terms and negotiated at arm’s length.

6. CORPORATE GOVERNANCE

The Disclosure Guidance and Transparency Rules require the Company to: (i) make a corporate

governance statement in its annual report and accounts based on the code to which it is subject,

or with which it voluntarily complies; and (ii) describe its internal control and risk management

arrangements. The Board has considered the principles and recommendations of the AIC Code by

reference to the AIC Guide. The AIC Code, as explained by the AIC Guide, addresses all the

principles set out in the UK Corporate Governance Code, as well as setting out additional

principles and recommendations on issues that are of speciﬁc relevance to listed investment

companies. The Board considers that reporting against the principles and recommendations of the

AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance

Code), will provide better information to Shareholders. As a recently incorporated company, the

Company does not yet comply with the UK Corporate Governance Code or the principles of good

governance contained in the AIC Code. However, the Company intends to join the AIC as soon as

practicable following Initial Admission, and arrangements have been put in place so that, with effect

from Initial Admission, the Company will comply with the AIC Code and the relevant provisions of

the UK Corporate Governance Code in accordance with the AIC Code.

The UK Corporate Governance Code includes provisions relating to:

the appointment of a senior independent director;

the role of the chief executive;

executive directors’ remuneration; and

the need for an internal audit function.

It is acknowledged in the UK Corporate Governance Code that some of its provisions may not be

relevant to externally managed investment companies (such as the Company). For the reasons set

out in the AIC Guide, the Board does not consider that the above provisions are relevant to the

Company. The Company will therefore not comply with these provisions.

The Company’s Audit Committee consists of David Simpson and Barbara Powley and is chaired by

Richard Bole´at. The Audit Committee will meet at least twice a year. In particular, the Board

considers that the Audit Committee as a whole has competence relevant to the sector and the

Board is satisﬁed that at least one member of the Audit Committee has recent and relevant

ﬁnancial experience. The Board considers that the members of the Audit Committee have the

requisite skills and experience to fulﬁl the responsibilities of the Audit Committee. The Audit

Committee will examine the effectiveness of the Company’s control systems. It will review the half-

yearly and annual reports and also receive information from the Investment Manager. It will also

review the scope, results, cost effectiveness, independence and objectivity of the external auditor.

In accordance with the AIC Code, the Company has established a Management Engagement

Committee which is chaired by David Simpson and consists of Richard Bole´ at and Barbara Powley.

The Management Engagement Committee will meet at least once a year or more often if required.

Its principal duties will be to consider the terms of appointment of the Investment Manager and

other service providers and it will annually review those appointments and the terms of

engagement.

The Company’s Remuneration Committee consists of David Simpson and Richard Bole´at and is

chaired by Barbara Powley. The Remuneration Committee will meet at least once a year or more

often if required. The Remuneration Committee’s main functions include: (i) agreeing the policy for

the remuneration of the Directors and reviewing any proposed changes to the policy; (ii) reviewing

and considering ad hoc payment to the Directors in relation to duties undertaken over and above

normal business; and (iii) appointing independent professional remuneration advice.

The Company’s Nomination Committee consists of Richard Bole´ at and Barbara Powley and is

chaired by David Simpson. The Nomination Committee will meet at least once a year or more

often if required. Its principal duties will be to advise the Board on succession planning bearing in

mind the balance of skills, knowledge and experience existing on the Board and will make

recommendations to the Board in this regard. The Nomination Committee advises the Board on its

balance of relevant skills, experience, gender, race, ages and length of service of the Directors

serving on the Board. All appointments to the Board will be made in a formal and transparent

matter.

7. DIRECTORS’ SHARE DEALINGS

The Directors will comply with the share dealing code adopted by the Company in accordance with

MAR in relation to their dealings in Shares. The Board will be responsible for taking all proper and

reasonable steps to ensure compliance with the share dealing code by the Directors.

PART 5

THE INITIAL ISSUE

1. INTRODUCTION

The Company is targeting an issue in excess of 250 million Ordinary Shares pursuant to the Initial

Issue comprising the Initial Placing, the Offer for Subscription and the Intermediaries Offer. The

Initial Issue has not been underwritten. The maximum number of Ordinary Shares to be issued

under the Initial Issue is 400 million. The minimum size of the Initial Issue is 100 million Ordinary

Shares.

The total number of Ordinary Shares to be issued pursuant to the Initial Issue, and therefore the

Initial Gross Proceeds, are not known as at the date of this document but will be notiﬁed by the

Company via a Regulatory Information Service announcement and the Company’s website prior to

Initial Admission.

The Net Proceeds, after deduction of expenses, are expected to be £247 million on the

assumption that the Initial Gross Proceeds are £250 million.

Applications will be made for the Ordinary Shares to be issued pursuant to the Initial Issue to be

admitted to listing on the premium segment of the Ofﬁcial List and to trading on the premium

segment of the London Stock Exchange’s main market. It is expected that Initial Admission will

become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. on 14 November

2018.

2. THE INITIAL ISSUE

Overview

Ordinary Shares will be issued pursuant to the Initial Issue at an Issue Price of 100 pence per

Ordinary Share.

The Initial Issue is conditional, inter alia, on: (i) Initial Admission having become effective on or

before 8.00 a.m. on 14 November 2018 or such later time and/or date as the Company and

Winterﬂood Securities may agree (being not later than 8.00 a.m. on 28 February 2019); (ii) the

Placing and Offer Agreement becoming wholly unconditional in respect of the Initial Issue (save as

to Initial Admission) and not having been terminated in accordance with its terms at any time prior

to Initial Admission; and (iii) the Minimum Gross Proceeds (or such lesser amount as the Company

and Winterﬂood Securities may agree) being raised.

The Prudential Assurance Company Limited intends to subscribe for the lower of (i) 80,000,000

Ordinary Shares and (ii) 25% of the Ordinary Shares to be issued pursuant to the Initial Issue. The

Directors believe that this proposed investment strongly aligns the interests of M&G with

Shareholders.

If the Initial Issue does not proceed (due to the Minimum Gross Proceeds (or such lesser amount

as the Company and Winterﬂood Securities may agree) not being raised or otherwise), any monies

received under the Initial Issue will be returned without interest at the risk of the applicant to the

applicant from whom the money was received, within 14 calendar days.

If the Minimum Gross Proceeds are not raised, the Initial Issue may only proceed where a

supplementary prospectus (including a working capital statement based on a revised minimum net

proceeds ﬁgure) has been prepared in relation to the Company and approved by the UKLA.

Initial Placing

Winterﬂood Securities has agreed to use its reasonable endeavours to procure subscribers

pursuant to the Initial Placing on the terms and subject to the conditions set out in the Placing and

Offer Agreement.

The Ordinary Shares are being made available under the Initial Placing at the Issue Price. The

terms and conditions that shall apply to any subscription for Ordinary Shares under the Initial

Placing are set out in Part 11 of this document. The latest time and date for receipt of

commitments under the Initial Placing is 2.00 p.m. on 8 November 2018 (or such later date, not

being later than 28 February 2019, as the Company and Winterﬂood Securities may agree).

If the Initial Placing is extended, the revised timetable will be notiﬁed via a Regulatory Information

Service announcement.

Each Placee agrees to be bound by the Articles once the Ordinary Shares that the Placee has

agreed to subscribe for pursuant to the Initial Placing have been acquired by the Placee. The

contract to subscribe for the Ordinary Shares under the Initial Placing and all disputes and claims

arising out of or in connection with its subject matter or formation (including non-contractual

disputes or claims) will be governed by, and construed in accordance with, the laws of England

and Wales.

Commitments under the Initial Placing, once made, may not be withdrawn without the consent of

the Directors.

Offer for Subscription

The Company is making an offer of Ordinary Shares pursuant to the Offer for Subscription at the

Issue Price, subject to the terms and conditions of the Offer for Subscription as set out in Part 12

of this document. These terms and conditions and the Application Form set out at Appendix 1 to

this document should be read carefully before an application is made. Investors should consult

their independent ﬁnancial adviser if they are in any doubt about the contents of this document or

the acquisition of Ordinary Shares.

The Offer for Subscription is being made in the UK only.

Applications under the Offer for Subscription must be for Ordinary Shares with a minimum

subscription amount of £1,000. Multiple applications will not be accepted. Commitments under the

Offer for Subscription once made, may not be withdrawn without the consent of the Directors.

Application Forms accompanied by a cheque or banker’s draft in Sterling made payable to ‘‘Link

Market Services Limited re: M&G Credit Income Investment Trust plc OFS Acceptance a/c’’ for the

appropriate sum should be returned to the Receiving Agent by no later than 1.00 p.m. on

7 November 2018.

For applicants sending subscription monies by electronic bank transfer (CHAPS), payment must be

made for value by no later than 1.00 p.m. on 7 November 2018. Applicants should send payment

to the bank account as detailed on the Application Form. Applicants must ensure that they remit

sufﬁcient funds to cover any charges incurred by their bank.

The payment instruction relating to the electronic transfer must also include a unique reference

comprising your name and a contact telephone number which should be entered in the reference

ﬁeld on the payment instruction, for example: MJ Smith 01234 567890. The Receiving Agent

cannot take responsibility for correctly identifying payments without a unique reference nor where a

payment has been received but without an accompanying Application Form.

Applicants choosing to settle via CREST, that is DVP, will need to match their instructions to the

Receiving Agent’s Participant Account RA06, Member Account 29728MAG by no later than

1.00 p.m. on 14 November 2018, allowing for the delivery and acceptance of Ordinary Shares to

be made against payment of the Issue Price per Ordinary Share, following the CREST matching

criteria set out in the Application Form.

All investors, in addition to completing and returning the Application Form to Link Asset Services,

will also need to complete and return a Tax Residency Self Certiﬁcation Form. The ‘‘individual tax

residency self-certiﬁcation – sole holding’’ form can be found at Appendix 2 of this document,

further copies of this form and the relevant form for joint holdings or corporate entity holdings can

be requested from Link Asset Services on 0371 664 0321. Calls are charged at the standard

geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the

applicable international rate. The helpline is open between 9.00 a.m. – 5.30 p.m., Monday to

Friday excluding public holidays in England and Wales. Different charges may apply to calls from

mobile telephones and calls may be recorded and randomly monitored for security and training

purposes. The helpline cannot give any ﬁnancial, legal or tax advice.

It is a condition of any application under the Offer for Subscription that a completed version of the

relevant form is provided with the Application Form before any application under the Offer for

Subscription can be accepted. Application Forms that are returned without the completed Tax

Residency Self-Certiﬁcation Form will be referred to the Company after the Offer for Subscription

closes at 1.00 p.m. on 7 November 2018. It will then be the Company’s decision if these

Application Forms can be accepted under the Offer for Subscription.

If the Offer for Subscription is extended, the revised timetable will be notiﬁed via a Regulatory

Information Service announcement.

Intermediaries Offer

Investors may also subscribe for Ordinary Shares at the Issue Price pursuant to the Intermediaries

Offer. Only Intermediaries’ retail investor clients in the United Kingdom and the Channel Islands

are eligible to participate in the Intermediaries Offer. Investors may apply to any one of the

Intermediaries to be accepted as their client.

All expenses incurred by any Intermediary are for its own account. Investors should conﬁrm

separately with any Intermediary whether there are any commissions, fees or expenses that will be

applied by such Intermediary in connection with any application made through that Intermediary

pursuant to the Intermediaries Offer.

No Ordinary Shares allocated under the Intermediaries Offer will be registered in the name of any

person whose registered address is outside of the United Kingdom and the Channel Islands. A

minimum application of 1,000 Ordinary Shares per underlying applicant will apply. Allocations to

Intermediaries will be determined solely by Winterﬂood Securities (following consultation with the

Company and the Investment Manager).

An application for Ordinary Shares in the Intermediaries Offer means that the underlying applicant

agrees to acquire the Ordinary Shares applied for at the Issue Price. Each underlying applicant

must comply with the appropriate anti-money laundering checks required by the relevant

Intermediary and all other laws and regulations applicable to their agreement to subscribe for

Ordinary Shares. Where an application is not accepted or there are insufﬁcient Ordinary Shares

available to satisfy an application in full, the relevant Intermediary will be obliged to refund the

underlying applicant as required and all such refunds shall be made without interest at the risk of

the applicant to the applicant from whom the money was received. The Company, the Investment

Manager and Winterﬂood Securities accept no responsibility with respect to the obligation of the

Intermediaries to refund monies in such circumstances.

Each Intermediary has agreed, or will on appointment agree, to certain terms and conditions in

relation to the Intermediaries Offer (the ‘‘Intermediaries Terms and Conditions’’), which regulate,

inter alia, the conduct of the Intermediaries Offer on market standard terms and provide for the

payment of a commission and/or fee (to the extent permissible by the rules of the FCA) to

Intermediaries if such Intermediary elects to receive a commission and/or fee. Pursuant to the

Intermediaries Terms and Conditions, in making an application, each Intermediary will also be

required to represent and warrant that they are not a person located in the United States,

Australia, Canada, Japan or the Republic of South Africa and are not acting on behalf of anyone

located in the United States Australia, Canada, Japan or the Republic of South Africa or for any

U.S. Person.

In addition, the Intermediaries may prepare certain materials for distribution or may otherwise

provide information or advice to retail investors in the United Kingdom and the Channel Islands,

subject to the terms of the Intermediaries Terms and Conditions. Any such materials, information or

advice are solely the responsibility of the relevant Intermediary and will not be reviewed or

approved by any of the Company, the Investment Manager or Winterﬂood Securities. Any liability

relating to such documents shall be for the relevant Intermediaries only.

3. SCALING BACK AND ALLOCATION

The results of the Initial Issue will be announced by the Company via a Regulatory Information

Service.

In the event that commitments under the Initial Placing and valid applications under the Offer for

Subscription and the Intermediaries Offer exceed the maximum number of Ordinary Shares

available under the Initial Issue (being 400 million Ordinary Shares), applications under the Placing,

Offer for Subscription and Intermediaries Offer will be scaled back at Winterﬂood Securities’

discretion (in consultation with the Company and the Investment Manager).

The Company reserves the right to decline in whole or in part any application for Ordinary Shares

pursuant to the Initial Issue.

Monies received in respect of unsuccessful applications (or to the extent scaled back) will be

returned without interest at the risk of the applicant to the applicant from whom the money was

received, within 14 calendar days following the close of the Initial Issue.

4. REASONS FOR THE INITIAL ISSUE AND USE OF PROCEEDS

The Initial Gross Proceeds will be utilised in accordance with the Company’s investment policy, to

meet the costs and expenses of the Initial Issue and for working capital purposes. It is currently

expected that the Net Proceeds will be deployed in accordance with the Company’s investment

policy in the manner set out below.

The Company expects the Investment Manager to deploy the Net Proceeds in readily available

public lower yielding assets within a period of three months after Initial Admission (subject to

market conditions). Based on current market conditions, the Investment Manager then intends to

transition the Company’s portfolio of investments such that it mainly comprises private Debt

Instruments in accordance with the Company’s investment policy. It is currently expected that,

subject to market conditions, such transition will be completed by the end of the ﬁrst accounting

period of the Company, i.e. by 31 December 2019.

5. COSTS OF THE INITIAL ISSUE

The formation and initial expenses of the Company are those that arise from, or are incidental to,

the establishment of the Company, the Initial Issue and Initial Admission.

The costs and expenses of, and incidental to, the formation of the Company and the Initial Issue

are not expected to exceed approximately £3 million, equivalent to 1.2% of the Initial Gross

Proceeds, assuming Initial Gross Proceeds of £250 million. The costs will be deducted from the

Initial Gross Proceeds. It is expected that the starting Net Asset Value per Ordinary Share will be

98.8 pence, assuming Initial Gross Proceeds of £250 million.

6. WITHDRAWAL

In the event that the Company is required to publish a supplementary prospectus prior to Initial

Admission, applicants who have applied for Ordinary Shares under the Initial Issue shall have at

least two clear Business Days following the publication of the relevant supplementary prospectus

within which to withdraw their offer to acquire Ordinary Shares in the Initial Issue in its entirety.

The right to withdraw an application to acquire Ordinary Shares in the Initial Issue in these

circumstances will be available to all investors in the Initial Issue. If the application is not withdrawn

within the stipulated period, any offer to apply for Ordinary Shares in the Initial Issue will remain

valid and binding.

Investors under the Offer for Subscription wishing to exercise statutory withdrawal rights after the

publication of a supplementary prospectus prior to Initial Admission must do so by lodging written

notice of withdrawal by hand (during normal business hours only) at Link Asset Services, Corporate

Actions, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, or by emailing

withdraw@linkgroup.co.uk so as to be received no later than two Business Days after the date on

which the supplementary prospectus is published. Notice of withdrawal given by any other means

or which is deposited with or received after expiry of such period will not constitute a valid

withdrawal.

Intermediaries wishing to exercise withdrawal rights on behalf of their underlying clients on behalf

of whom they have submitted applications for Ordinary Shares, after the publication of a

supplementary prospectus prior to the close of the Intermediaries Offer must do so in accordance

with the Intermediaries Terms and Conditions so as to be received no later than two Business

Days after the date on which the supplementary prospectus is published. If the applications for

Ordinary Shares are not withdrawn by the Intermediaries during such time, the offer to apply for

Ordinary Shares as set out in the application will remain valid and binding.

7. THE PLACING AND OFFER AGREEMENT

The Placing and Offer Agreement contains provisions entitling Winterﬂood Securities to terminate

the Initial Issue (and the arrangements associated with it) at any time prior to Initial Admission in

certain circumstances. If this right is exercised, the Initial Issue and these arrangements will lapse

and any monies received in respect of the Initial Issue will be returned to each applicant without

interest at the risk of the applicant to the applicant from whom the money was received.

The Placing and Offer Agreement provides for Winterﬂood Securities to be paid commissions by

the Company in respect of the Ordinary Shares to be allotted pursuant to the Initial Issue. Any

Ordinary Shares subscribed for by Winterﬂood Securities may be retained or dealt in by it for its

own beneﬁt.

Further details of the terms of the Placing and Offer Agreement are set out in paragraph 6.1 of

Part 8 of this document.

8. GENERAL

Pursuant to anti-money laundering laws and regulations with which the Company must comply, the

Company (and its agents) may require evidence in connection with any application for Ordinary

Shares, including further identiﬁcation of the applicant(s), before any Ordinary Shares are issued

pursuant to the Initial Issue.

In the event that there are any signiﬁcant changes affecting any of the matters described in this

document or where any signiﬁcant new matters have arisen after the publication of this document,

the Company will publish a supplementary prospectus. The supplementary prospectus will give

details of the signiﬁcant change(s) or the signiﬁcant new matter(s).

9. INITIAL ADMISSION, CLEARING AND SETTLEMENT

Applications will be made for the Ordinary Shares issued pursuant to the Initial Issue to be

admitted to listing on the premium segment of the Ofﬁcial List and to trading on the premium

segment of the London Stock Exchange’s main market. It is expected that Initial Admission will

become effective, and that dealings in the Ordinary Shares will commence, at 8.00 a.m. on

14 November 2018.

An investor applying for Ordinary Shares in the Initial Issue may receive Ordinary Shares in

certiﬁcated or uncertiﬁcated form. The Ordinary Shares are in registered form. No temporary

documents of title will be issued. Dealings in Ordinary Shares in advance of the crediting of the

relevant stock account shall be at the risk of the person concerned. It is expected that CREST

accounts will be credited on 14 November 2018 in respect of Ordinary Shares issued in

uncertiﬁcated form and deﬁnitive share certiﬁcates in respect of Ordinary Shares held in certiﬁcated

form will be despatched by post after the week commencing 19 November 2018, at the

Shareholder’s own risk.

The ISIN of the Ordinary Shares is GB00BFYYL325 and the SEDOL is BFYYL32.

The Company does not guarantee that at any particular time market maker(s) will be willing to

make a market in the Ordinary Shares, nor does it guarantee the price at which a market will be

made in the Ordinary Shares. Accordingly, the dealing price of the Ordinary Shares may not

necessarily reﬂect changes in the Net Asset Value per Ordinary Share.

10. CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by

a certiﬁcate and transferred otherwise than by written instrument. The Articles permit the holding of

Ordinary Shares under the CREST system. The Company has applied for the Ordinary Shares to

be admitted to CREST with effect from Initial Admission. Accordingly, settlement of transactions in

the Ordinary Shares following Initial Admission may take place within the CREST system if any

Shareholder so wishes.

11. ISA, SSAS AND SIPP

The Ordinary Shares will, on Initial Admission, be ‘‘qualifying investments’’ for the stocks and

shares component of an ISA (subject to applicable subscription limits) provided that they have

been acquired by purchase in the market (which, for these purposes, will include any Ordinary

Shares acquired directly under the Offer for Subscription or Intermediaries Offer but not any

Ordinary Shares acquired directly under the Initial Placing).

Save where Ordinary Shares are being acquired using available funds in an existing ISA, an

investment in Ordinary Shares by means of an ISA is subject to the usual annual subscription

limits applicable to new investments into an ISA. The Ordinary Shares will be permissible assets

for SIPPs and SSAS.

The Board will use its reasonable endeavours to manage the affairs of the Company so as to

enable this status to be maintained.

12. OVERSEAS PERSONS

The attention of potential investors who are Overseas Persons is drawn to the paragraphs below.

The offer of Ordinary Shares under the Initial Issue to Overseas Persons may be affected by the

laws of the relevant jurisdictions. Such persons should consult their professional advisers as to

whether they require any government or other consents or need to observe any applicable legal

requirements to enable them to obtain Ordinary Shares under the Initial Issue. It is the

responsibility of all Overseas Persons receiving this document and/or wishing to subscribe for

Ordinary Shares under the Initial Issue to satisfy themselves as to full observance of the laws of

the relevant territory in connection therewith, including obtaining all necessary governmental or

other consents that may be required and observing all other formalities needing to be observed

and paying any issue, transfer or other taxes due in such territory.

No person receiving a copy of this document in any territory other than the UK may treat the same

as constituting an offer or invitation to him/her, unless in the relevant territory such an offer can

lawfully be made to him/her without compliance with any further registration or other legal

requirements.

Persons (including, without limitation, nominees and trustees) receiving this document may not

distribute or send it to any U.S. Person or in or into the United States or any other jurisdiction

where to do so would or might contravene local securities laws or regulations. In particular,

investors should note that the Company has not, and will not be, registered under the U.S.

Investment Company Act and the offer, issue and sale of the Ordinary Shares have not been, and

will not be, registered under the U.S. Securities Act or with any securities regulatory authority of

any state or other jurisdiction of the United States. Accordingly, the Ordinary Shares are being

offered and sold outside the United States to non-U.S. Persons in reliance on the exemption from

the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. The

Ordinary Shares may not be offered, sold, pledged or otherwise transferred or delivered, directly or

indirectly, within the United States or to, or for the account or beneﬁt of, any U.S. Person, except

pursuant to an exemption from, or in a transaction not subject to, the registration requirements of

the U.S. Securities Act and in compliance with any applicable securities laws of any state or other

jurisdiction in the United States.

In addition, until 40 calendar days after the commencement of the Initial Issue, an offer or sale of

the Ordinary Shares within the United States by any dealer (whether or not participating in the

Initial Issue) may violate the registration requirements of the U.S. Securities Act.

The Company reserves the right to treat as invalid any agreement to subscribe for Ordinary Shares

under the Initial Issue if it appears to the Company or its agents to have been entered into in a

manner that may involve a breach of the securities legislation of any jurisdiction.

United States transfer restrictions

Each of Winterﬂood Securities and the Company has acknowledged and warranted in the Placing

and Offer Agreement that it will not offer or sell or procure the offer or sale of the Ordinary Shares

except in compliance with Regulation S. The Ordinary Shares have not been, and will not be,

registered under the U.S. Securities Act or with any securities regulatory authority of any state or

other jurisdiction of the United States. Accordingly, investors may not reoffer, resell, pledge or

otherwise transfer or deliver, directly or indirectly, any Ordinary Shares within the United States, or

to, or for the account or beneﬁt of, any U.S. Person.

13. PROFILE OF A TYPICAL INVESTOR

The typical investors for whom an investment in the Company is appropriate are institutional

investors and professionally-advised or ﬁnancially sophisticated non-advised private investors who

understand and are capable of evaluating the merits and risks of such an investment and who

have sufﬁcient resources to be able to bear any losses (which may equal the whole amount

invested) that may result from such an investment. Such investors are recommended to consult an

independent ﬁnancial adviser who specialises in advising on the acquisition of shares and other

securities before making an investment. Furthermore, an investment in the Company should

constitute part of a diversiﬁed investment portfolio.

PART 6

THE PLACING PROGRAMME

1. INTRODUCTION

The Company has authority to issue up to 400 million Shares on a non-pre-emptive basis pursuant

to the Placing Programme. Ordinary Shares and/or C Shares may be issued pursuant to the

Placing Programme.

The Placing Programme is ﬂexible and may have a number of closing dates in order to provide the

Company with the ability to issue Shares over a period of time. The Placing Programme is

intended to satisfy market demand for Shares and to raise further money after the Initial Issue to

increase the size of the Company and invest in accordance with the Company’s investment policy.

2. THE PLACING PROGRAMME

The Placing Programme will open on 15 November 2018 and will close on 25 September 2019 (or

any earlier date on which it is fully subscribed, or otherwise at the discretion of the Directors). The

terms and conditions that apply to the purchase of Shares under the Placing Programme are set

out in Part 11 of this document.

The Company will have the ﬂexibility to issue Shares on a non-pre-emptive basis where there

appears to be reasonable demand for Shares in the market, for example if the Ordinary Shares

trade at a premium to the Net Asset Value per Ordinary Share. It is expected that the Board will

issue C Shares, rather than Ordinary Shares, in circumst ances where there is substantial investor

demand such that an issue of Ordinary Shares would have the potential to exert ‘‘cash drag’’ on

the performance of the existing Ordinary Shares. The assets representing the net proceeds of an

issue of C Shares would be accounted for as a separate pool, and the C Shares would bear a

proportionate share of the Company’s costs and expenses.

C Shares will convert into Ordinary Shares just over 12 months after the date of their issue or

such earlier time that the Directors deem that the return proﬁles of the underlying assets of the

portfolios of C Shares and Ordinary Shares are sufﬁciently aligned based on the respective Net

Asset Value per Ordinary Shar e and the Net Asset Value per C Share.

The rights attaching to C Shares, including the rights as to Conversion, are described in

paragraph 4.21 of Part 8 of this document.

The issues of Shares under the Placing Programme is at the discretion of the Directors. Issues

may take place at any time prior to the ﬁnal closing date of 25 September 2019 (or any earlier

date on which it is fully subscribed, or otherwise at the discretion of the Di rectors). An

announcement of each Subsequent Placing under the Placing Programme will be released via a

Regulatory Information Service, including details of the type of Share (Ordina ry Share or C Share)

and number of Shares to be issued and the Placing Programme Price for the issue.

There is no minimum subscription. The Placing Programme is not being underwritten and, as at

the date of this document, the actual number of Shares to be issued under the Placing Programme

is not known. The maximum number of Shares available under the Placing Program me should not

be taken as an indication of the number of Shares ﬁnally to be issued.

Where new Shares are issued pursuant to the Placing Programme, the total assets of the

Company will increase by that number of Shares multiplied by the relevant Placing Programme

Price less the expenses of such issuance.

The net proceeds of any Subsequent Placing under the Placing Programme are dependent, inter

alia, on, the level of subscriptions received, the price at which such Shar es are issued and the

costs of the Subsequent Placing.

The Ordinary Shares issued pursuant to the Placing Programme will rank pari passu with the

Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid

on the Ordinary Shares by reference to a record date prior to the allotment and issue of the

relevant Ordinary Shares).

In the event that any C Shares are issued under the Placing Programme, the investments which

are attributabl e to the C Shares following Conversion will be merged with the Company’s existing

portfolio just over 12 months after the date of their issue or such earlier time that the Directors

deem that the return proﬁles of the underlying assets of the portfolios of C Shares and Ordinary

Shares are sufﬁciently aligned. The new Ordinary Shares arising on Conversion of the C Shares

will, subject to the Articles, rank pari passu with the Ordinary Shares then in issue.

In the event that a related party (as deﬁned in the Listing Rules) wishes to make a commitment for

Shares under the Placing Programme, the Company would comply with its obligations under

Chapter 11 of the Listing Rules including, if required, seeking Shareholder approval for the

allotment and issue of Shares to the related party.

The Placing Programme will be suspended at any time when the Company is unable to issue

Shares under any statutory provision or other regulation applicable to the Company or otherwise at

the Directors’ discretion. The Placing Programme may resume when such conditions cease to

exist.

Conditions

Each issue of Shares pursuant to a Subsequent Placing under the Placing Programme is

conditional, inter alia, on:

Admission of the relevant Shares occurring by no later than 8.00 a.m. on such date as the

Company and Winterﬂood Securities may agree from time to time in relation to that

Admission, not being later than 25 September 2019;

a valid supplementary prospectus being published by the Company if such is required by the

Prospectus Rules;

in connection with an issue of Ordinary Shares, the Placing Programme Price being

determined by the Directors as described below; and

the Placing and Offer Agreement being wholly unconditional as regards the relevant

Subsequent Placing (save as to Admission) and not having been terminated in accordance

with its terms prior to the relevant Adm ission.

3. THE PLACING PROGRAMME PRICE

The minimum price at which Ordinary Shares will be issued pursuant to the Placing Programme,

which will be in Sterling, will be equal to the prevailing published Net Asset Value per Ordinary

Share at the time of issue together with a premium to at least cover the costs and expenses of the

relevant Subsequent Placing of Ordinary Shares (including, without limitation, any placing

commissions).

In accordance with Chapter 15 of the Listing Rules, the Company may not issue Ordinary Shares

on a non-pre-emptive basis at a price below the prevailing published Net Asset Value per Ordinary

Share without Shareholder approval.

The issue price of any C Shares issued pursuant to the Placing Programme will be 100 pence per

C Share.

The Placing Programme Price will be announced via a Regulatory Information Service as soon as

practicable in conjunction with each Subsequent Placing.

4. BENEFITS OF THE PLACING PROGRAMME

The Directors believe that the issue of Shares pursuant to the Placing Programme should yield the

following principal beneﬁts:

give the Company the ability to issue Shares, so as to better manage the premiu m at which

the Ordinary Shares may trade relative to the Net Asset Value per Ordinary Share;

enhance the Net Asset Value per Ordinary Share of existing Ordinary Shares through new

issuance of Ordinary Shares at a premium to the prevailing published Net Asset Value per

Ordinary Share;

grow the Company, thereby spreading operating costs over a larger capital base which should

reduce the ongoing charges ratio;

the Company will be able to raise additional capital promptly, allowing it to take advantage of

future investment opportunities as and when they arise, further diversifying the Company’s

portfolio of investments; and

improve liquidity in the market for the Ordinary Shares.

5. COSTS OF THE PLACING PROGRAMME

The costs and expenses of the Company relating to the Placing Programme are those that arise

from, or are incidental to, the issue of Shares pursuant to Subsequent Placings. These include the

fees payable in relation to each subsequent Admission, including listing and admission fees, as

well as fees and commissions due under the Placing and Offer Agreement and any other

applicable expenses in relation to the Placing Programme.

The costs and expenses of issuing Ordinary Shares pursuant to any Subsequent Placing will be

covered by issuing such Ordinary Shares at the prevailing published Net Asse t Value per Ordinary

Share at the time of issue together with a premium to at least cover the costs and expenses of the

relevant Subsequent Placing of Ordinary Shares (including, without limitation, any placing

commissions).

The costs and expenses of any issue of C Shares under the Placing Programme will be paid out

of the gross proceeds of such issue and will be borne by holders of those C Shares only.

6. SCALING BACK

In the event of oversubscription of a Subsequent Placing, applications under the relevant

Subsequent Placing will be scaled back at the absolute discretion of Winterﬂood Securities (in

consultation with the Company and the Investment Manager).

7. WITHDRAWAL

In the event that the Company is required to publish a supplementary prospectus prior to any

subsequent Admission, applicants who have applied for Shares under any Subsequen t Placing

shall have at least two clear Business Days following the publication of the relevant supplementary

prospectus within which to withdraw their offer to acquire Shares in the relevant Subsequent

Placing in its entirety. The right to withdraw an application to acquire Shar es in the relevant

Subsequent Placing in these circumstances will be available to all investors in the relevant

Subsequent Placing. If the application is not withdrawn within the stipulated period, any offer to

apply for Shares in the relevant Placi ng will remain valid and binding.

8. THE PLACING AND OFFER AGREEMENT

Under the Placing and Offer Agreement, Winterﬂood Securities has undertaken, as agent for the

Company, to use its reasonable endeavours to procure subscribers under the Placing Programme

for Shares at the Placing Programme Price. Details of the Placing and Offer Agreement are set out

in paragraph 6.1 of Part 8 of this document .

The Placing and Offer Agreement provides for Winterﬂood Securities to be paid commissions by

the Company in respect of the Shares to be issued pursuant to the Placing Programme. Any

Shares subscribed for by Winterﬂood Securities may be retained or dealt in by it for its own

beneﬁt. Winterﬂood Securities is also entitled under the Placing and Offer Agreement to retain

agents and may pay commission in respect of the Placing Programme to any or all of those

agents out of its own resources.

In circumstances in which the conditions to a Subsequent Placing are not fully met, the relevant

issue of Shares pursuant to the Placing Programme will not take place.

9. VOTING DILUTI ON

If 400 million Shares were to be issued pursuant to Subsequent Placings, and assuming the Initial

Issue had been subscribed as to 250 million Ordinary Shares, there would be a dilution of

approximately 61.5% in Shareholders’ voting contro l of the Company immediately after the Initial

Issue (and prior to any conversion of C Shares). The voting rights may be diluted further on

conversion of any C Shares depending on the applicable conversion ratio. However, it is not

anticipated that there would be any dilution in the Net Asset Value per Ordinary Share as a result

of the Placing Programme.

10. USE OF PROCEEDS

The Directors intend to use the net proceeds of any Subsequent Placing under the Placing

Programme to acquire investments in accordance with the Company’s investment objective and

investment policy and for working capital purposes.

11. GENERAL

Pursuant to anti-money laundering laws and regulat ions with which the Company must comply, the

Company (and its agents) may require evidence in connection with any application for Shares,

including further identiﬁcation of the applicant(s), before any Shares are issued.

In the event that there are any signiﬁcant changes affecting any of the matters described in this

document or where any signiﬁcant new matters have arisen after the publication of this document,

the Company will publish a supplementary prospectus. The supplementary prospectus will give

details of the signiﬁcant change(s) or the signiﬁcant new matter(s).

12. ADMISSION AND SETTLEMENT

The Placing Programme may have a number of closing dates in order to provide the Company

with the ability to issue Shares over the duration of the Placing Programme. Shares may be issued

under the Placing Programme from 15 November 2018 until 25 September 2019.

Applications will be made to the UK Listing Authority and the London Stock Exchange for all of the

Shares issued pursuant to the Placing Programme to be admitted to the premium segment of the

Ofﬁcial List and to trading on the premium segment of the London Stock Exchange’s main market.

It is expected that any Admissions pursuant to Subsequent Placings will become effective and

dealings will commence between 15 November 2018 and 25 September 2019. All Shares issued

pursuant to the Placing Programme will be allotted conditionally on such Admission occurring.

Shares will be issued in registered form and may be held in either certiﬁcated or uncertiﬁcated

form. In the case of Shares to be issued in uncertiﬁcated form pursuant to a Subsequent Placing,

these will be transferred to successful applicants through the CREST system. Dealing in advance

of the crediting of the relevant stock account shall be at the risk of the person concerned. Whilst it

is expected that all Shares allotted pursuant to the Placing Programme will be issued in

uncertiﬁcated form, if any Shares are issued in certiﬁcated form it is expected that share

certiﬁcates will be despatched approximately one week following Admission of the Shares, at the

Shareholder’s own risk.

The ISIN number of the Ordinary Shares is GB00BFYYL325 and the SEDO L code is BFYYL32.

The ISIN number of the C Shares is GB00BFYYT831 and the SEDOL code is BFYYT83.

Any Ordinary Shares issued pursuant to the Placing Programme will rank pari passu with the

Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid

on the Ordinary Shares by reference to a record date prior to the allotment of the relevant

Ordinary Shares).

13. CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by

a certiﬁcate and transferred otherwise than by written instrument. The Articles permit the holding of

Shares under the CREST system. The Company shall apply for the Shares offered under the

Placing Programme to be admitted to CREST with effect from Admission. Accordingly, settlement

of transactio ns in the Shares following an Admission may take place within the CREST system if

any holder of such Shares so wishes.

14. OVERSEAS PERSONS

The attention of potential investors who are Overseas Persons is drawn to the paragraphs below.

The offer of Shares under the Placing Programme to Overseas Persons may be affected by the

laws of the relevant jurisdictions. Such persons should consult their professional advisers as to

whether they require any government or other consents or need to observe any applicable legal

requirements to enable them to obtain Shares under the Placing Programme. It is the responsibility

of all Overseas Persons receiving this document and/or wishing to subscribe for Shares under the

Placing Program me to satisfy themselves as to full observance of the laws of the relevant territory

in connection therewith, including obtaining all necessary governmental or other consents that may

be required and observing all other formalities needing to be observed and paying any issue,

transfer or other taxes due in such territory.

No person receiving a copy of this document in any territory other than the UK may treat the same

as constituting an offer or invitation to him/her under the Placing Programme, unless in the relevant

territory such an offer can lawfully be made to him/her without compliance with any further

registration or other legal requirements.

Persons (including, without limitation, nominees and trus tees) receiving this document may not

distribute or send it to any U.S. Person or in or into the United States or any other jurisdiction

where to do so would or might contravene local securities laws or regulations. In particular,

investors should note that the Company has not, and will not be, registered under the U.S.

Investment Company Act and the offer, issue and sale of the Shares have not been, and will not

be, registered under the U.S. Securities Act or with any securities regulatory authority of any state

or other jurisdiction of the United States. Accordingly, the Shares are only being offered and sold

outside the United States to non-U.S. Persons in reliance on the exemption from the registration

requirements of the U.S. Securities Act provided by Regulation S thereunder. The Shares may not

be offered, sold, pledged or otherwise transferred or delivered, directly or indirectly, within the

United States or to, or for the account or beneﬁt of, any U.S. Person, except pursuant to an

exemption from, or in a transaction not subject to, the registration requirements of the U.S.

Securities Act and in co mpliance with any applicable securities laws of any state or other

jurisdiction in the United States .

The Company reserv es the right to treat as invalid any agreement to subscribe for Shares under

the Placing Programme if it appears to the Company or its agents to have been entered into in a

manner that may involve a breach of the securities legislation of any jurisdiction.

15. PROFILE OF A TYPICAL INVESTOR

The typical investors for whom an investment in the Company is appropriate are institutional

investors and professionally-advised or ﬁnancially sophisticated non-advised private investors who

understand and are capable of evaluating the merits and risks of such an investment and who

have sufﬁcient resources to be able to bear any losses (which may equal the whole amount

invested) that may result from such an investment. Such investors are recommended to consult an

independent ﬁnancial adviser who specialises in advising on the acquisition of shares and other

securities before making an investment. Furthermore, an investment in the Company should

constitute part of a diversiﬁed investment portfolio.

PART 7

TAXATION

Prospective investors should consult their professional advis ers concerning the possible

tax consequences of their subscribing for, purchasing, holding or selling Shares. The

following summary of the principal United Kingdom tax consequences applicable to the

Company and its Shareholders is based upon interpretations of existing laws in effect on

the date of this document and no assurance can be given that courts or ﬁscal authorities

responsible for the administration of such laws will agr ee with the interpretations or that

changes in such laws will not occur. The tax and other matters described in this document

are not intended as legal or tax advice . Each prospective investor must consult its own

advisers with regard to the tax consequences of an investment in Shares. None of the

Company, Directors or Winterﬂood Securities, the Investment Manager or any of their

respective afﬁliates or agents accepts any responsibility for providing tax advice to any

prospective investor.

Introduction

The information below, which relates only to United Kingdom taxation, summarises the advice

received by the Board insofar as applicable to the Company and to persons who are resident in

the United Kingdom for taxation purposes and who hold Shares as an investment. It is based on

current United Kingdom tax law and published practice, respectively, which law or practice is, in

principle, subject to any subsequent changes therein (potentially with retrospective effect). Certain

Shareholders, such as dealers in securities, collective investment schemes, insurance companies

and persons acquiring their Shares in connection with their employment may be taxed differently

and are not considered. The tax consequences for each Shareholder investing in the Company

may depend upon the Shareholder’s own tax position and upon the relevant laws of any jurisdiction

to which the Shareholder is subject.

If you are in any doubt as to your tax position or you are subject to tax in a jurisdiction outside

the UK, you should consult an appropriate professional adviser without delay.

The Company

It is the intention of the Directors to conduct the affairs of the Company so that it satisﬁes and

continues to satisfy the conditions necessary for it to be approved by HMRC as an investment

trust under sections 1158 to 1159 of the CTA 2010. However, neither the Directors nor the

Investment Manager can guarantee that this approval will be maintained. One of the conditions for

a company to qualify as an investment trust is that it is not a close company. The Directors intend

that the Company should not be a close company immediately following Initial Admission. In

respect of each accounting period for which the Company continues to be approved by HMRC as

an investment trust the Company will be exempt from UK taxation on its capital gains and capital

proﬁts from creditor loan relationships. The Compa ny will, however, (subject to what follows) be

liable to UK corporation tax on its income in the normal way.

An investment trust approved under sections 1158 to 1159 of the CTA 2010, or one that intends to

seek such approval, is able to elect to take advantage of modiﬁed UK tax treatment in respect of

its ‘‘qualifying interest income ’’ for an accounting period (referred to here as the ‘‘streaming’’

regime). Under regulations made pursuant to the Finance Act 2009, the Company may, if it so

chooses, designate as an ‘‘interest distribution’’ all or part of the amount it distributes to

Shareholders as dividends in respect of the accounting period, to the extent that it has ‘‘qualifying

interest income’’ for the accounting period. Were the Company to designate any dividend it pays in

this manner, it would be able to deduc t such interest distributions from its taxable interest income

in calculating its taxable proﬁt for the relevant accounting period.

The Company should in practice be exempt from UK corporation tax on any dividend income

received, provided that such dividends (whether from UK or non-UK companies) fall within one of

the ‘‘exempt classes’’ in Part 9A of the CTA 2009.

Shareholders

Taxation of dividends

(a) Individual Shareholders

The Directors intend to apply the interest ‘‘streaming’’ regime to the majority of dividends paid

by the Company going forward.

(i) Non-interest distributions

In the event that the Directors do not elect for the ‘‘streaming’’ regime to apply to any

dividends paid by the Company, the following paragraph summarises the expected UK

tax treatment for individual Shareholders who receive dividends from the Company.

The following paragraph would also apply to any parts of dividen ds not treated as

‘‘interest distributions’’ were the Directors to elect for the ‘‘streaming’’ regime to apply.

Each individual who is resident in the UK for tax purposes is enti tled to an annual tax

free dividend allowance of £2,000 (for the tax year 2018/19). Dividends within the

allowance will still count as taxable income when determining how much of the basic

rate band or higher rate band has been used.

Subject to the availability of any personal allowance and taking account of any other

dividends received during the tax year, dividends received in excess of this threshold

will be taxed, for the 2018/19 tax year at 7.5% to the extent that the amount falls

below the threshold for the higher rate of UK income tax, 32.5% to the extent that the

amount falls above the threshold for the higher rate of UK income tax but below the

threshold for the additional rate of UK income tax and 38.1% to the extent that the

amount falls above the threshold for the additional rate of UK income tax. In

determining the applicable tax rate, dividend income is treated as the top slice of an

individual’s income.

No withholding tax will be applied to ‘‘non-interest distribution s’’ made by the Company.

(ii) Interest distributions

Where the Directors elect to apply the ‘‘streaming’’ regime to any dividends paid by the

Company, were the Company to designate any dividends paid as an ‘‘interest

distribution’’, a UK resident Shareholder in receipt of such a dividend would be treated

as though they had received a payment of interest. For the 2018/2019 tax years, such

a Shareholder would be subject to UK income tax at a rate of 20%, to the extent that

the amount falls below the threshold for the higher rate of UK income tax, 40% to the

extent that the amount falls above the threshold for the higher rate of UK income tax

but below the threshold for the additional rate of UK income tax and 45% to the extent

that the amount falls above the threshold for the additional rate of UK income tax. No

withholding tax will be applied to ‘‘interest distributions’’ made by the Company.

Each UK resident individual who is a basic rate taxpayer is entitled to a Personal

Saving Allowance which exempts the ﬁrst £1,000 of savings income (including

distributions deemed to be ‘‘interest distributions’’ from an Investment Trust Company).

The exempt amount is reduced to £500 for higher rate taxpayers and additional rate

taxpayers do not receive an allowance.

(b) Other Shareholders

UK resident corporate Shareholders may be subject to corporation tax on dividends paid by the

Company unless they fall within one of the exempt classes in Part 9A of CTA 2009. Where,

however, the Directors elect for the ‘‘streaming’’ rules to apply, and such corporate Shareholders

receive dividends designated by the Company as ‘‘interest distributions’’, they would be subject to

corporation tax in the same way as a creditor in a loan relationship.

It is particularly important that prospective investors who are not resident in the UK for tax

purposes obtain their own tax advice concer ning tax liabilities on dividends received from

the Company.

Taxation of capital gains

Individual Shareholders who are resident in the UK for tax purposes will gener ally be subject to

capital gains tax in respect of any gain arising on a disposal or deemed disposal of their Shares.

Each such individual has an annual exemption, such that capital gains tax is chargeable only on

gains arising from all sources during the tax year in excess of thi s ﬁgure. The annual exemption is

£11,700 for the 2018/19 tax year.

UK capital gains tax may be payable at a rate of 10% (for 2018/2019) to the extent that an

individual is subject to income tax at the basic rate and any chargeable gain does not exceed the

unused part of their basic rate income tax band. Where an individual is subject to income tax at

the basic rate but any chargeable gain exceeds the unused part of their basic rate income tax

band, the rate of capital gains tax on the excess is 20% (for 2018/2019). The rate of capital gains

tax for such individuals who are higher or additional rate taxpayers is 20%.

A Shareholder who is not a UK resident will not generally be subject to UK tax on any gain

accruing to them as a result of a disposal or deemed disposal of their Shares unless (i) the

Shareholder carries on a trade, profession or vocation in the UK through a branch, agency, or

permanent establishment and, holds their Ordinary Shares for the purposes of the trade, profession

or vocation or (ii) the Shareholder falls within certain anti-avoidance rules applying to temporary

non-residents.

Corporate Shareholders who are resident in the UK for tax purposes will generally be su bject to

corporation tax on chargeable gains arising on a disposal of their Shares.

Conversion of C Shares

The co nversion of C Shares into new Ordinary Shares at the Conversion Date should be treated

as a reorganisation of share capital and accordingly should not constitute a disposal of the

C Shares for the purposes of UK corporation tax or capital gains tax on chargeable gains. The

Ordinary Shares arising on Conversion should be treated as acquired at the same time as, and

with the same base cost as, the C Shares.

Stamp Duty and Stamp Duty Reserve Tax

The initial issue and allotment by the Company of Shares into CREST should not give rise to

stamp duty or SDRT.

Transfers on sale of Shares will gener ally be subject to UK stamp duty at the rate of 0.5% of the

consideration given for the transfer. The purchaser normally pays the stamp duty.

An agreement to transfer Shares will normally give rise to a charge to stamp duty reserve tax

(‘‘SDRT’’) at the rate of 0.5% of the amount or value of the consideration payable for the transfer.

If a duly stamped transfer in respect of the agreement is produced within six years of the date on

which the agreement is made (or, if the agreement is conditional, the date on which the agreement

becomes unconditional) any SDRT paid is repayable, generally with interest, and otherw ise the

SDRT charge is cancelled. SDRT is, in general, payable by the purchaser.

Paperless transfers of Shares within the CREST system will generally be liable to SDRT, rather

than stamp duty, at the rate of 0.5% of the amount or value of the consideration payable. CREST

is obliged to collect SDRT on relevant transactions settled within the CREST system. Deposits of

Shares into CRE ST will not generally be subject to SDRT, unless the transfer into CREST is itself

for consideration.

ISA, SSAS and SIPP

Shares acquired by a UK resident individual Shareholder in the Offer for Subscription, the

Intermediaries Offer or on the secondary market (but not the Initial Placing or any Subsequent

Placing) should be eligible to be held in a stocks and shares ISA, subject to applicable annual

subscription limits (£20,000 in the tax year 2018-2019).

Investments held in ISAs will be free of UK tax on both capital gains and income. The opportunity

to invest in shares through an ISA is restricted to certain UK resident individuals aged 18 or over.

Junior ISAs are available to children under the age of 18 who are resident in the UK subject to the

annual allowance of £4,260 for the 2018-2019 tax year. Sums received by a Shareholder on a

disposal of Shares would not count towards the Shareholder’s annual limit, but a disposal of

Shares held in an ISA will not serve to make available again any part of the annual subscription

limit that has already been used by the Shareholder in that tax year.

The Shares should be eligible for inclusion in a SIPP or a SSAS, subject to the discretion of the

trustees of the SIPP or the SSAS, as the case may be.

Individuals wishing to invest in Shares through an ISA, SIPP or SSAS should contact their

professional advisers regarding their eligibility.

Information reportin g

The UK has entered into int ernational agreements with a number of jurisdictions which provide for

the exchange of information in order to combat tax evasion and improve tax compliance. These

include, but are not limited to, an Inter-governmental Agreement with the U.S. in relation to FATCA

and the Common Reporting Standard developed by the Organisation for Economic Co-operation

and Development and the EU Directive on Administrative Cooperation in Tax Matters as

implemented in the UK. In connection with such agreements and arrangements the Company may,

among other things, be required to collect and report to HMRC certain personal information

regarding Shareholders and other account holders of the Company and HMRC may pass this

information on to the authorities in other jurisdictions.

PART 8

GENERAL INFORMATION

1. THE COMPANY

1.1 The Company was incorporated with the name M&G Credit Income Invest ment Trust plc in

England and Wales on 17 July 2018 with registered number 11469317 as a public company

limited by shares under the Companies Act.

1.2 The registered ofﬁce and principal place of business of the Company is Beaufort House, 51

New North Road, Exeter EX4 4EP with telephone number +44 (0) 1392 477500.

1.3 The principal legislation under which the Company operates is the Companies Act. As an

investment trust, the Company will not be regulated as a collective investment scheme by the

FCA. How ever, from Initial Admission, the Company and the Shareholders will be subject to

the Listing Rules, the Prospectus Rules, the Disclosure Guidance and Transparency Rules,

MAR and the rules of the London Stock Exchange.

1.4 The principal activity of the Company is to invest in a diversiﬁed portfolio of public and private

Debt Instruments, with a view to achieving the Company’s investment objective.

1.5 Save for entry into each of the material contracts summarised in paragraph 6 of this Part 8,

the Company has not commenced operatio ns since incorporation and, as at the date of this

document, no ﬁnancial statements have been made up and no dividends have been declared

by the Company.

1.6 The Company’s accounting period will end on 31 December of eac h year. The ﬁrst

accounting period will end on 31 December 2019. The annual report and accounts will be

prepared in Sterling according to accounting standards laid out under UK GAAP.

1.7 On 19 September 2018, the Company was granted a certiﬁcate under section 761 of the

Companies Act entitling it to comm ence business and to exercise its borrowing powers.

1.8 The Company is domiciled in England and Wales, does not have any employees and does

not own any premises and, as at the date of this document, has no subsidiaries.

1.9 The Company has given notice to the Registrar of Companies of its intention to carry on

business as an investment company pursuant to section 833 of the Companies Act.

1.10 The Company intends at all times to conduct its affairs so as to enable it to qualify as an

investment trust for the purposes of sections 1158 and 1159 (and regulations made

thereunder) of the CTA 2010 and the Investment Trust (Approved Company) (Tax)

Regulations 2011. In summary, the conditions and requirement s that must be met for

approval by HMRC as an investment trust, and which must continue to be met for each

accounting period in respect of which the Company is approved as an investment trust, are

that:

all, or substantially all, of the business of the Company is investing its funds in shares,

land or other assets with the aim of spreading investment risk and giving members the

beneﬁt of the results of the management of its funds;

the Company is not a close company at any time during the accounting period;

the Company’s ordinary share capital is admitted to trading on a regulated market

throughout the accounting period;

the Company must not retain in respect of the accounting period an amount greater

than the higher of: (a) 15% of its income for the period; and (b) the amount of any

income which the Company is required to retain in respect of the period by virtue of a

restriction imposed by law. However, where the Company has relevant accumulated

losses brought forward from prev ious accounting periods of an amount equal to or

greater than the higher of the amounts mentioned in (a) and (b) above, it may retain

an amount equal to the amount of such losses; and

the Company notiﬁes HMRC if it revises its published investment policy.

2. SHARE CAPITAL

2.1 On incorporation, the issued share capital of the Company was £0.01 represented by one

Ordinary Share, which was subscribed for by Mark Hutchinson.

2.2 Set out below is the issued share capital of the Company as at the date of this document:

Aggregate

nominal value

(£) Number

Ordinary Share 0.01 1

Management Shares of £1.00 each 50,000 50,000

The Ordinary Share in issue is fully paid up. To enable the Company to obtain a certiﬁcate of

entitlement to conduct business and to borrow under section 761 of the Companies Act, on

18 September 2018, 50,000 Management Shares were allotted to Mark Hutchinson. The

Management Shares are paid up as to one quarter of their nominal value and will be

redeemed immediately following Initial Admission out of the proceeds of the Initial Issue.

2.3 Set out below is the issued share capital of the Company as it will be immediately following

the Initial Issue (assuming 250 million Ordinary Shares are allotted):

Aggregate

Nominal value

(£) Number

Ordinary Shares 2,500,000 250,000,000

All Ordinary Shares will be fully paid.

2.4 By ordinary and special resolutions passed on 18 September 2018:

2.4.1 the Directors were gener ally and unconditionally authorised in accordance with section

551 of the Companies Act to exercise all the powers of the Company to allot up to

400 million Ordinary Shares pursuant to the Initial Issue, such authority to expire at the

end of the period of 18 months from the date of the passing of the resolution, save

that the Company may, at any time prior to the expiry of such authority, make an offer

or enter into an agreement which would or might require Or dinary Shares to be

allotted in pursuance of such an offer or agreement as if such authority had not

expired;

2.4.2 the Directors were generally empowered (pursuant to sections 570 and 573 of the

Companies Act) to allot Ordinary Shares and to sell Ordinary Shares from treasury for

cash pursuant to the authority referred to in paragraph 2.4.1 above as if section 561 of

the Companies Act did not apply to any such allotment or sale, such power to expire

at the end of the period of 18 months from the date of the passing of the resolution

(unless previously revoked, varied or renewed by the Company in general meeting),

save that the Company may, at any time prior to the expiry of such power make an

offer or enter into an agreement which would or might require Ordinary Shares to be

allotted or sold from treasury after the expiry of such power, and the Directors may

allot or sell from treasury equity securities in pursuance of such an offer or agreement

as if such power had not expired;

2.4.3 in addition to the authority set out at paragraph 2.4.1 above, the Directors were

generally and unco nditionally authorised in accordance with section 551 of the

Companies Act to exercise all the power s of the Company to allot up to 400 mi llion

Ordinary Shares and/or C Shares pursuant to the Placing Programme in aggregate,

such authority to expire at the end of the period of 18 month s from the date of the

passing of the resolution, save that the Company may, at any time prior to the expiry

of such authority, make an offer or enter into an agreement which would or might

require Shares to be allotted in pursuance of such an offer or agreement as if such

authority had not expired;

2.4.4 the Directors were generally empowered (pursuant to sections 570 and 573 of the

Companies Act) to allot Shares and sell Shares from treasury for cash pursuant to the

authority referred to in paragraph 2.4.3 above as if section 561 of the Companies Act

did not apply to any such allotment or sale, such power to expire at the end of the

period of 18 months from the date of the passing of the resolution (unless previously

revoked, varied or renewed by the Company in general meeting), save that the

Company may, at any time prior to the expiry of such power make an offer or enter

into an agreement which would or might require Shares to be allotted or sold from

treasury after the expiry of such power, and the Directors may allot or sell from

treasury equity securities in pursuance of such an offer or agreement as if such power

had not expired;

2.4.5 in addition to the authorities set out at paragraphs 2.4.1 and 2.4.3 above, the Directors

were generally and unconditionally authorised in accordance with section 551 of the

Companies Act to exercise all the power s of the Company to allot up to 400 mi llion

Ordinary Shares and/or C Shares in aggr egate, such authority to expire at the end of

the period of ﬁve years from the date of passing of the resolution, save that the

Company may, at any time prior to the expiry of such authority, make an offer or enter

into an agreement which would or might require Shares to be allotted in pursuance of

such offer or agreement as if such authority had not expired;

2.4.6 the Directors were generally empowered (pursuant to sections 570 and 573 of the

Companies Act) to allot Shares and to sell Shares from treasury for cash pursuant to

the authority referred to in paragraph 2.4.5 above as if section 561 of the Companies

Act did not apply to any such allotment or sale, such power to expire at the end of the

period of ﬁve years from the date of passing of the resolution, save that the Company

may, at any time prior to the expiry of such power, make an offer or enter into an

agreement which would or might require the Shares to be allotted or sold from

treasury after the expiry of such power and the Directors may allot or sell from

treasury equity securities in pursuance of such an offer or agreement as if such power

had not expired;

2.4.7 the Company was authorised in accordance with section 701 of the Companies Act to

make market purchases (within the meaning of section 693(4) of the Companies Act)

of Ordinary Shares provided that the maximum number of Ordinary Shares authorised

to be purchased is 14.99% of the Ordinary Shares in issue immediately following Initial

Admission. The minimum price which may be paid for an Ordinary Share is £0.01. The

maximum price (exclusive of expenses) which may be paid for an Ordinary Share must

not be more than the higher of (i) 5% above the average of the mid-market values of

the Ordinary Share for the ﬁve Business Days before the purchase is made, or (ii) the

higher of the price of the last independent trade and the highest current independent

bid as stipulated by Regulatory Technical Standards adopted by the European

Commission pursuant to Article 5(6) of MAR. Such authority will expire on the earlier

of the conclusion of the ﬁrst annual general meeting of the Company and 30 June

2020, save that the Company may contract to purchase Ordinary Shares under the

authority thereby conferred prior to the expiry of such authority, which contract will or

may be executed wholly or partly after the expiry of such authority and may purchase

Ordinary Shares in pursuance of such contract;

2.4.8 the Company resolved that, conditional upon Initial Admission and subject to the

conﬁrmation and approval of the Court, the amount standing to the credit of the share

premium account of the Company immediately following completion of the Initial Issue

be cancelled, and the amount of the share premium account so cancelled be credited

to a reserve;

2.4.9 the Directors were authorised to declare and pay all dividends of the Company as

interim dividends and for the last dividend referable to a ﬁnanc ial year not to be

categorised as a ﬁnal dividend that is subject to shareholder approval; and

2.4.10 the Company was authorised to call a general meeting of the Company other than an

annual general meeting on not less than 14 clear days’ notice.

2.5 The provisions of section 561(1) of the Companies Act (which, to the extent not disapplied

pursuant to sections 570 and 573 of the Companies Act, confer on Shareholders rights of

pre-emption in respect of the allotment of equity securities which are, or are to be, paid up in

cash) apply to issues by the Company of equity securi ties save to the extent disapplied as

mentioned in paragraphs 2.4.2, 2.4.4 and 2.4.6 above.

2.6 In accordance with the authori ties referred to in paragraphs 2.4.1 and 2.4.3 above, it is

expected that the Shares to be issued pursuant to the Initial Issue and the Placing

Programme will be all otted (conditionally upon the relevant Admission) pursuant to a

resolution of the Board to be passed shortly before the relevant Admission in accordance with

the Companies Act.

2.7 Save as disclosed in this paragraph 2, no share or loan capital of the Company has since the

date of incorporation of the Company been issued or been agreed to be issued, fully or partly

paid, either for cash or for a consideration other than cash, and, other than pursuan t to the

Initial Issue and the Placing Programme, no such issue is now proposed.

2.8 As at the date of this document, the Company has not granted any options over its share or

loan capital which remain outstanding and has not agreed, conditionally or unconditionally to

grant any such options and no convertible securities, exchangeable securities or securities

with warrants have been issued by the Company.

2.9 All of the Shares will be in registered form and will be eligible for settlement in CREST.

Temporary documents of title will not be issued.

2.10 Applicants who have signed and returned Application Forms in respect of the Offer for

Subscription may not withdraw their applications for Ordinary Shares subject to their statutory

rights of withdrawal in the event of the publication of a supplementary prospectus.

3. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND RELATED PARTY

TRANSACTIONS

3.1 The Directors intend to subscribe for Ordinary Shares pursuant to the Initial Issue in the

amounts set out below:

Director

Number of

Ordinary

% of issued

ordinary share

capital*

David Simpson 25,000 0.010

Richard Bole´at 10,000 0.004

Mark Hutchinson 20,000 0.008

Barbara Powley 15,000 0.006

* Assuming that the Initial Issue is subscribed as to 250 million Ordinary Shares

Save as disclosed in this paragraph, immediately following Initial Admission, no Director will

have any interest, whether beneﬁcial or non-beneﬁcial, in the share or loan capital of the

Company.

3.2 The Prudential Assurance Company Limited intends to subscribe for the lower of (i)

80,000,000 Ordinary Shares and (ii) 25% of the Ordinary Shares to be issued pursuant to the

Initial Issue. The Directors believe that this proposed invest ment strongly aligns the interests

of M&G with Shareholders.

3.3 No Director has a service contra ct with the Company, nor are any such contr acts proposed,

each Director having been appointed pursuant to a letter of appointment entered into with the

Company. The Directors’ appointments can be terminated in accordance with the Articles and

without compensation. Directors are required to retire and seek re-election by the

Shareholders at the ﬁrst annual general meeting of the Company and thereafter the Directors

are subject to retirement by rotation in accordance with the Articles. The Directors intend to

retire and seek re-election annually. There is no notice period speciﬁed in the letters of

appointment or Articles for removal of Directors. The Articles provide that the ofﬁce of

Director sh all be terminated by, among other things: (i) written resignation; (ii) unauthorised

absences from board meetings for six consecutive months or more; or (iii) written request of

all of the other Directors.

3.4 Each of the Directors is entitled to receive a fee from the Company at such rate as may be

determined in accordance with the Articles. Save for the Chairman, the initial fees will be

£30,000 for each Director per annum. The Chairman’s initial fee will be £40,000 per annum.

The Chairperson of the Audit Committee will receive an additional £5,000 per annum. Mark

Hutchinson has agreed to waive his fee. The Directors are also entitled to out-of-pocket

expenses incurred in the proper performance of their duties.

3.5 No amount has been set aside or accrued by the Company to provide pensions, retirement or

other similar beneﬁts.

3.6 Mark Hutchinson is the Chair of Private Assets at the Investment Manager and may therefore

face a conﬂict of interest in the event that the Investment Manager has a conﬂict with the

Company. In the event of any conﬂict between his position as Chair of Private Assets of the

Investment Manager, Mr Hutchinson wi ll comply with the provisions in the Articles concerning

the declaration of directors’ interests and authorisation of conﬂicts of interests and any other

limits or conditions imposed by the Boar d. Save as set out in this paragraph, none of the

Directors has, or has had, an interest in any transaction which is or was unusual in its nature

or conditions or signiﬁcant to the business of the Company or that has been effected by the

Company since its incorporation.

3.7 The Company has not made any loans to the Directors which are outstanding, nor has it ever

provided any guarantees for the beneﬁ t of any Director or the Directors collectively.

3.8 Over the ﬁve years preceding the date of this document, the Directors hold or have held the

following directorships (apart from their directorships of the Company) or memberships of

administrative, management or supervisory bodies and/or partnerships:

Name Current Previous

David Simpson British Geological Survey

Cardiff University

Ecoﬁn Global Utilities and Infrastructure Trust plc

ITC Limited

University College Cardiff Consultants Limited

Annuity Infrastructure Company Limited

Disruptive Capital Finance LLP

D4jsimpson Limited

Ecoﬁn Water & Power Opportunities Plc (in

Members Voluntary Liquidation)

EW&PO Finance plc (dissolved following

Members Voluntary Liquidation)

My Route LLP

Remuneration Committee, Magdalene College,

Cambridge

The Coroners’ Courts Support Service

Richard Bole´at Airbnb International Holdings Limited

Airbnb International Unlimited

Airbnb 1 Unlimited

Airbnb 2 Unlimited

AKO Capital LLP

Autonomy Capital (Jersey) Limited

Autonomy Capital Research Two Limited

Autonomy Jersey Service Company Limited

Bennelong Asia Paciﬁc Multi Strategy Equity Fund

Limited

Bennelong Asia Paciﬁc Multi Strategy Equity

Master Fund Limited

Bennelong Dragon Trading Fund Limited

Bennelong Dragon Trading Master Fund Limited

Brook Bay General Partner Limited

Brook Bay General Partner II Limited

Buriti 1 Sarl

Butterﬁeld Bank (Jersey) Limited

Bybrook Capital Management Limited

CVC Credit Partners European Opportunities

Limited

Emac Illyrian Duba Stonska GP Limited

Funding Circle SME Income Fund Limited

GP2 Limited

Gorey Investments Limited

Habrok General Partner Limited

Habrok Master Limited

Habrok India Fund Limited

Habrok India GP Limited

ILF Carryco Limited

ILFE Limited

ILF 1 Limited

ILF 2 Limited

AI Airports International Limited

Asian Leaders Fund

Bennelong Agricultural Investments Limited

Bennelong General Partner Limited

Bennelong Global Special Opportunities Fund

Limited

Bennelong Global Special Opportunities Master

Fund Limited

Bennelong Tempest Fund Limited

Bennelong Tempest Master Fund Limited

Cazenove Capital Management Jersey Limited

CDPC Holdings Limited

Cooperatie Duba Stonska u.a.

Cooperatie EMAC Illyrian Land Fund III u.a.

Cooperatie EMAC Illyrian Land Fund u.a.

Cooperatie EMAC Illyrian Land Fund X u.a.

Cooperatie EMAC Illyrian Land Fund XIV u.a.

Cooperatie EMAC Illyrian Land Fund XV u.a.

Cooperatie Eurserland ua

Cosford Global Opportunities Fund

Cosford Global Opportunities GP Limited

Cosford Global Opportunities Master Fund

Druggability Technologies IP Holdco (Jersey)

Limited

EMAC Illyrian Land Fund 2 EXUS GP Limited

EMAC Illyrian Land Fund 2 USTP GP Limited

GP Secretaries Limited

Habrok Fund Limited

Habrok General Partner Limited

Habrok SPV Limited

Ignition Romanian Land Fund No1 Limited

Jetstone General Partner Limited

K2A Hospitality Limited

Name Current Previous

K2 Property Limited

Kao Corporate Limited

Landsdowne Road Investments

Matariki Forests

Matariki Forestry Group

Matariki Forests Trading Limited

Mortality Fund 1

Noemi Limited

Phaunos Timber Fund Limited

Primestone Capital Management (GP) Limited

Profounders Capital II General Partner Limited

Securis 1 Fund

Securis 1 Master Fund

Securis General Partner Limited

Securis Investment Partners Limited

Securis 2 Fund SPC

Securis MF1 Fund

Securis Non-Life Fund

Securis Non-Life Master Fund

Securis Life Fund

Securis Life Master Fund

Securis Life Fund II

Securis Life Master Fund II

Securis Opportunities Fund

Securis Opportunities Master Fund

Securis Re I Limited

Securis Re II Limited

Securis Re III Limited

Securis Re IV Limited

Securis Re V Limited

Securis Re VI Limited

Securis Re VII Limited

Securis Re VIII Limited

Securis Re IX Limited

Securis Re LCM Limited

Securis LCM Fund

Securis LCM Holdings Limited

Securis (Bermuda) Holdings Limited

Securis ILS Fund ICAV

Securis ILS Management Limited

Securis Private Life Fund

Securis Special Opportunities Fund

Securis Special Opportunities Master Fund

Securis SP3/SP7 – SPV

Securis Event Fund

Securis Event Master Fund

Sole Shipping SO Coinvest 1 GP Limited

Sole Shipping SO Advisor Limited

Sole Shipping SO GP II Limited

Tannay Jersey Limited

Taxim Capital Advisors Limited

Taxim Capital Partners I GP Limited

Tri-Pillar Infrastructure Fund Limited

Valiance Farmland GP Sarl

Valiance Farmland Luxembourg Sarl

Valiance Life Sciences Growth Investments GP

Sarl

Viva Partners Sarl

Waimarie Forests Pty Ltd

Yatra Capital Limited

Zynga Game International Limited

K2A Private Equity Limited

K2A Residential Limited

K2A Retail Limited

K2B Commercial Limited

K2B Retail Limited

K2C Hospitality Limited

K2C Residential Limited

K2C Retail Limited

K2E Residential Limited

K2F Residential Limited

K2G Residential Limited

Lerisson Nominees Limited

PI Power International Limited

Rathbone Investment Management

International Strategies PCC

Securis Investments Switzerland sarl

Standsure Fund PCC

The LEMA Jersey Fund Limited

THS General Partner Limited

TPR 1 Limited

Tradinvest Fund Limited

Mark Hutchinson Jetty Finance Limited

Lion Credit Opportunity Fund

M&G Specialty Finance (Luxembourg) No 1 SARL

M&G UKCF II GP Limited

Prudential Credit Opportunities 1 SARL

Prudential Credit Opportunities 2 SARL

Prudential Loan Investments 1 SARL

Prudential/M&G UKCF GP Limited

—

Name Current Previous

Rocksure Group Limited

Barbara Powley — —

3.9 Save as disclosed at paragraph 3.8 of this Part 8, the Directors in the ﬁve years before the

date of this document:

3.9.1 do not have any convictions in relation to fraudulent offences;

3.9.2 have not been associated with any bankruptcies, receiverships or liquidations of any

partnership or company through acting in the capacity as a member of the

administrative, management or supervisory body or as a partner, founder or senior

manager of such partnership or company; and

3.9.3 do not have any ofﬁcial public incrimination and/or sanctions by statutory or regulatory

authorities (including designated professional bodies) and have not been disqualiﬁed by

a court from acting as a member of the administration, management or supervisory

bodies of any issuer or from acting in the management or conduct of the affairs of any

issuer.

3.10 As at 25 September 2018 (the latest practicable date prior to the publication of this

document) insofar as known to the Company, there are no parties known to have a notiﬁable

interest under English law in the Company’s capital or voting rights.

3.11 All Shareholders have the same voting rights in respect of shares of the same class in the

share capital of the Company.

3.12 Pending the allotment of Ordinary Shares pursuant to the Initial Issue, the Company is

controlled by Mark Hutchinson, as des cribed in paragraph 2 of this Part 8. The Company and

the Directors are not aware of any other person who, directly or indirectly, jointly or severally,

exercises or could exercise control over the Company.

3.13 The Company and the Directors are not aware of any arrangements, the operation of which

may at a subsequent date result in a change in control of the Company.

3.14 Save for the entry int o of the Directors’ appointment letters and the Investment Management

Agreement, the Company has not entered into any related party transaction at any time

during the period from incorporation to 25 September 2018 (the latest practicable date prior to

the publication of this document).

3.15 Save as disclosed in paragraph 3.6 above, as at the date of this document, none of the

Directors has any conﬂict of interest or potential conﬂict of interest between any duties to the

Company and their private interests and/or other duties.

3.16 The Company intends to maintain directors’ and ofﬁcers’ liability insurance on behalf of the

Directors at the expense of the Company.

4. THE ARTICLES

The Articles contain provisions, inter alia, to the following effect:

4.1 Objects/Purposes

The Articles do not provide for any objects of the Company and accordingly the Company’s

objects are unrestricted.

4.2 Voting rights

4.2.1 Subject to the provisions of the Companies Act, to any special terms as to voting on

which any shares may have been issued or may from time-to-time be held and any

suspension or abrogation of voting rights pursuant to the Articles, at a general meeting

of the Company every shareholder who is present in person shall, on a show of

hands, have one vote, every proxy who has been appointed by a shareholder entitled

to vote on the resolution sh all, on a show of hands, have one vote and every

shareholder pre sent in person or by proxy shall, on a poll, have one vote for each

share of which he is a holder. A shareholder entitled to more than one vote need not,

if he votes, use all his votes or vest all the votes he uses the same way. In the case

of joint holders, the vote of the senior who tenders a vote, whether in person or by

proxy, shall be accepted to the exclusion of the votes of the other joint holders.

4.2.2 Unless the Board otherwise determines, no s hareholder is entitled to vote at a general

meeting or at a separate meeting of shareholders of any class of shares, either in

person or by proxy, or to exercise any other right or privilege as a shareholder in

respect of any share held by him, unless all calls presently payable by him in respect

of that share, whether alone or jointly with any other person, together with interest and

expenses (if any) payable by such sha reholder to the Company have been paid.

4.2.3 Notwithstanding any other provision of the Articles, where required by the Listing

Rules, a vote must be decided by a resolution of the holders of the Company’s shares

that have been admitted to premium listing. In addition, where the Listing Rules require

that a particular resolution must in addition be approved by the independent

shareholders (as such term is deﬁned in the Listing Rules), only independent

shareholders who hold the Company’s shares that have been admitted to premium

listing can vote on such separate resolution.

4.3 Dividends

4.3.1 Subject to the provisions of the Companies Act and of the Articles, the Company may

by ordinary resolution declare dividends to be paid to shareholders according to their

respective rights and interests in the proﬁts of the Company. However, no dividend

shall exceed the amount recommended by the Board.

4.3.2 Subject to the provisions of the Com panies Act, the Board may declare and pay such

interim dividends (including any dividend payable at a ﬁxed rate) as appears to the

Board to be justiﬁed by the proﬁts of the Company available for distribution. If at any

time the share capital of the Company is divided into different classes, the Board may

pay such interim dividends on shares which rank after shares conferring preferential

rights with regard to dividends as well as on shares conferring preferential rights,

unless at the time of payment any preferential dividend is in arrears. Provided that the

Board acts in good faith, it shall not incur any liability to the holders of shares

conferring preferential rights for any loss that they may suffer by the lawful payment of

any interim dividend on any shares ranking after those preferential rights.

4.3.3 All dividends, interest or other sums payable and unclaimed for a period of 12 months

after having become payable may be invested or otherwise used by the Board for the

beneﬁt of the Company until claimed and the Company shall not be constituted a

trustee in respect thereof. All dividends unclaimed for a period of 12 years after having

become payable shall, if the Board so resolves, be forfeited and shall cease to remain

owing by, and shall become the property of, the Company.

4.3.4 The Board may, with the authority of an ordinary resolution of the Company, direct that

payment of any dividend declared may be satisﬁed wholly or partly by the distribution

of assets, and in particular of paid up shares or debentures of any other company, or

in any one or more of such ways.

4.3.5 The Board may also, with the prior authority of an ordinary resolution of the Company

and subject to such terms and conditions as the Board may determi ne, offer to holders

of shares the right to elect to receive shares, credited as fully paid, instead of the

whole (or some part, to be determined by the Board) of any dividend speciﬁed by the

ordinary resolution.

4.3.6 Unless the Board otherwise determines, the payment of any dividend or other money

that would otherwise be payable in respect of shares will be withheld if such shares

represent at least 0.25% in nominal value of their class and the holder, or any other

person whom the Company reasonably believes to be interested in those shares, has

been duly served with a notice pursuant to the Companies Act requiring such person

to provide inf ormation about his interests in the Company’s shares and has failed to

supply the required information within 14 calendar days. Furthermore such a holder

shall not be entitled to elect to receive shares instead of a dividend.

4.4 Distribution of assets on a winding-up

4.4.1 If the Com pany is wound up, with the sanction of a special resolution and any other

sanction required by law and subject to the Companies Act, the liquidator may divide

among the Shar eholders in specie the whole or any part of the assets of the Company

and for that purpose may value any assets and determine how the division shall be

carried out as between the Shareholders or different classes of Shareholders. With the

like sanction, the liquidator may vest the whole or any part of the assets in trustees

upon such trusts for the beneﬁt of the Shareholders as he may with the like sanction

determine, but no Shareholder shall be compelled to accept any shares or other

securities upon which there is a liability.

4.5 Transfer of shares

4.5.1 Subject to any applicable restrictions in the Articles, each shareholder may transfer all

or any of his shares which are in certiﬁcated form by instrum ent of transfer in writing

in any usual form or in any form approved by the Board. Such instrument must be

executed by or on behalf of the transferor and (in the case of a transfer of a share

which is not fully paid up) by or on behalf of the transferee. The transferor is deeme d

to remain the holder of the share until the transferee’s name is entered in the register

of shareholders.

4.5.2 The Board may, in its absolute discretion, refuse to register any transfer of a share in

certiﬁcated form (or renunciation of a renounceable letter of allotment) unless:

4.5.2.1 it is in respect of a share which is fully paid up;

4.5.2.2 it is in respect of only one class of shares;

4.5.2.3 it is in favour of a single transferee or not more than four joint transferees;

4.5.2.4 it is duly stamped (if so required); and

4.5.2.5 it is delivered for registration to the registered ofﬁce for the time being of the

Company or such other place as the Boar d may from time- to-time determine,

accompanied (except in the ca se of (a) a transfer by a recognised person

where a certiﬁcate has not been issued (b) a transfer of an uncertiﬁcated

share or (c) a renunciation) by the certiﬁcate for the share to which it relates

and such other evidence as the Board may reasonably require to prove the

title of the transferor or person renouncing and the due execution of the

transfer or renunciation by him or, if the transfer or renunciation is executed

by some other person on his behalf, the authority of that person to do so,

provided that the Board shall not refuse to register a transfer or renunciation of a

partly paid share in certiﬁcated form on the grounds that it is partly paid in

circumstances where such refusal would prevent dealings in such share from taking

place on an open and proper basis on the market on which such share is admitted to

trading.

The Board may refuse to register a transfer of an uncertiﬁcated share in such other

circumstances as may be permitted or required by the regulations and the relevant

electronic system provided that such refusal does not prevent dealings in shares from

taking place on an open and proper basis.

4.5.3 Unless the Board otherwise determines, a transfer of shares will not be registered if

the transferor or any other person whom the Company reasonably believes to be

interested in the transferor’s shares has been duly served with a notice pursuant to the

Companies Act requiring such person to provide informatio n about his interests in the

Company’s shares, has failed to supply the required information within 14 calendar

days and the shares in respect of which such notice has been served represent at

least 0.25% in nominal value of their class, unless the shareholder is not himself in

default as regards supplying the information required and proves to the satisfaction of

the Board that no person in default as regards supplying such information is interested

in any of the shares the subject of the transfer, or unless such transfer is by way of

acceptance of a takeover offer, in consequence of a sale on a recognised investment

exchange or any other stock exchange outside the United Kingdom on whi ch the

Company’s shares are normally traded or is in consequence of a bona ﬁde sale to an

unconnected party.

4.5.4 If the Board refuses to register a transfer of a share, it shall send the transferee notice

of its refusal, together with its reasons for refusal, as soon as practicable and in any

event within two months after the date on which the transfer was lodged with the

Company or, in the case of an uncertiﬁcated share, the date on which appropriate

instructions was received by or on behalf of the Company in accordance with the

regulations of the relevant electronic system.

4.5.5 No fee shall be charged for the registration of any instrument of transfer or any other

document relating to or affecting the title to any shares.

4.5.6 If at any time the holding or beneﬁcial ownership of any shares in the Company by

any person (whether on its own or taken with other shares), in the opinion of the

Directors: (i) would cause the assets of the Company to be treated as ‘‘plan assets’’ of

any beneﬁt plan investor under section 3(42) of ERISA or the U.S. Tax Code; or (ii)

would or might result in the Company and/or its shares and/or any of its appointed

investment managers or investment advisers being required to register or qualify under

the U.S. Investment Company Act, and/or U.S. Investment Advisers Act of 1940 and/or

the U.S. Securities Act and/or the U.S. Securities Exchange Act 1934, as amended

and/or any laws of any state of the U.S. or other jurisdiction that regulate the offering

and sale of securities; or (iii) may cause the Company not to be considered a ‘‘Foreign

Private Issuer’’ under the U.S. Secur ities Exchange Act 1934, as amended; or (iv) may

cause the Company to be a ‘‘controlled foreign corporation’’ for the purpose of the

U.S. Tax Code; or (v) creates a signiﬁcant legal or regulatory issue for the Company

under the U.S. Bank Holding Company Act 1956, as amended or regulations or

interpretations thereunder, or (vi) would cause the Company adverse consequences

under the foreign account tax compliance provisions of the U.S. Hiring Incentives to

Restore Employment Act of 2010 or any similar legislation in any territory or jurisdiction

(including the International Tax Compliance Regulation 2015), including the Company

becoming subject to any withholding tax or reporting obligation or to be unable to

avoid or reduce any such tax or to be unable to comply with any such reporting

obligation (including by reason of the failure of the Shareholder concerned to provide

promptly to the Company such information and documentation as the Company may

have requested to enable the Company to avoid or minimise such withholding tax or to

comply with such reporting obligations) then any shares which the Direct ors decide are

shares which are so held or beneﬁcially owned (‘‘Prohibited Shares’’) must be dealt

with in accordance with paragraph 4.5.7 below. The Directors may at any time give

notice in writing to the holder of a share requiring him to make a declaration as to

whether or not the share is a Prohibited Share.

4.5.7 The Directors shall give written notice to the holder of any share which appears to

them to be a Prohibited Share requiring him within 21 calendar days (or such

extended time as the Directors consider reasonable) to transfer (and/or procure the

disposal of interests in) such share to another person so that it will cease to be a

Prohibited Share. From the date of such notice until registration for such a transfer or

a transfer arranged by the Directors as referred to below, the share will not confer any

right on the holder to receive notice of or to atte nd and vote at a general meeting of

the Company and of any class of sha reholder and those rights will vest in the

Chairman of any such meeting, who may exercise or refrain from exercising them

entirely at his discretion. If the notice is not complied with within 21 calendar days to

the satisfaction of the Directors, the Directors shall arrange for the Company to sell the

share at the best price reasonably obtainable to any other person so that the share

will cease to be a Prohibited Share. The net proceeds of sale (after payment of the

Company’s costs of sale and together with interest at such rate as the Directors

consider appropriate) shall be paid over by the Company to the former holder upon

surrender by him of the relevant share certiﬁcate (if applicable).

4.5.8 Upon transfer of a share the transferee of such share shall be deemed to have

represented and warranted to the Company that such transferee is acquiring shares in

an offshore transaction meeting the requirements of Regulation S and is not, nor is

acting on behalf of: (i) a beneﬁt plan investor and no portion of the assets used by

such transferee to acquire or hold an interest in such share constitutes or will be

treated as ‘‘plan assets’’ of any beneﬁt plan investor under Section 3(42) of ERISA;

and/or (ii) a U.S. Person.

4.6 Variation of rights

4.6.1 Subject to the provisions of the Companies Act, if at any ti me the share capital of the

Company is divided into shares of different classes, any of the rights for the time

being attached to any shares (whether or not the Company may be or is about to be

wound up) may from time-to-time be varied or abrogated in such manner (if any) as

may be provided in the Articles by such rights or, in the absence of any such

provision, either with the consent in writing of the holders of not less than three-

quarters in nominal value of the issued shares of the relevant class (excluding any

shares of that class held as treasury shares) or with the sanction of a special

resolution passed at a separate general meeting of the holders of the class.

4.6.2 The quorum at every such meeting shall be not less than two persons present (in

person or by proxy) holding at least one-third of the nominal amount paid up on the

issued shares of the relevant class (excluding any shares of that class held as

treasury shares) and at an adjourned meeting not less than one person holding shares

of the relevant class or his proxy.

4.7 Alteration of share capital

The Company may by ordinary resol ution:

4.7.1 consolidate and divide all or any of its share capital into shares of larger nomin al value

than its existing shares;

4.7.2 subject to the provisions of the Companies Act, sub-divide its shares, or any of them,

into shares of smaller nominal value than its existing shares;

4.7.3 determine that, as between the shares resulting from such a sub-division, one or more

shares may, as compared with the others, have any such preferred, deferred or other

rights or be subject to any such restrictions, as the Company has power to attach to

unissued or new shares; and

4.7.4 redenominate its share capital by converting shares from having a ﬁxed nominal value

in one currency to having a ﬁxed nominal value in another currency.

4.8 General meetings

4.8.1 The Board may convene a general meeting (which is not an annual general meeting)

whenever it thinks ﬁt.

4.8.2 A general meeting shall be convened by such notice as may be required by law from

time-to-time.

4.8.3 The notice of any general meeting shall include such statements as are required by

the Companies Act and shall in any event specify:

4.8.3.1 whether the meeting is convened as an annual general meeting or any other

general meeting;

4.8.3.2 the place, the day, and the time of the meeting;

4.8.3.3 the general nature of the business to be trans acted at the meeting;

4.8.3.4 if the meeting is convened to consider a special resolution, the text of the

resolution and the intention to propose the resolution as such; and

4.8.3.5 with reasonable prominence, that a shareholder entitled to attend and vote is

entitled to appoint one or (provided each proxy is appointed to exercise the

rights attached to a different share held by the shareholder) more proxies to

attend and to speak and vote instead of the shareholder and that a proxy

need not also be a shareholder.

4.8.4 The notice must be given to the shareholders (other than any who, under the

provisions of the Articles or of any restrictions imposed on any shares, are not entitled

to receive notice from the Company), to the Directors and the auditors and to any

other person who may be entitled to receive it. The accidental omission to give or

send notice of any general meeting, or, in cases where it is intended that it be given

or sent out with the notice, any other document relating to the meeting including an

appointment of proxy to, or the non-receipt of notice by, any person entitled to receive

the same, shall not invalidate the proceedings at the meeting.

4.8.5 The right of a shareholder to participate in the business of any general meeting shall

include without limitation the right to speak, vote, be represented by a proxy or proxies

and have access to all documents which are required by the Companies Act or the

Articles to be made available at the meeting.

4.8.6 A Director shall, notwithstanding that he is not a shareholder, be entitled to attend and

speak at any general meeting and at any separate meeting of the holders of any class

of shares of the Company. The Chairman of any general meeting may also invite any

person to attend and spea k at that meeting if he considers that this will assist in the

deliberations of the meeting.

4.8.7 No business shall be transacted at any general meeting unless a quorum is present

when the meeting proceeds to business. Subject to the Articles, two persons entitled

to attend and to vote on the business to be transacted, each being a s hareholder so

entitled or a proxy for a shareholder so entitled or a duly authorised representative of

a corporation which is a shareholder so entitled, shall be a quorum. If, at any time,

there is only one person entitled to attend and to vote on the business to be

transacted, such person being the sole shareholder so entitled or a proxy for such sole

shareholder so entitled or a duly authorised representative of a corporation which is

such sole shareholder so entitled, shall be a quorum. The Chairman of the meeting

may, with the consent of the meeting at which a quorum is present, and shall, if so

directed by the meeting, adjourn the meeting from time-to-time (or indeﬁnitely) and

from place to place as the meeting shall determine. Where a meeting is adjourned

indeﬁnitely, the Board shall ﬁx a time and place for the adjourned meeting. Whenever

a meeting is adjourned for 30 calendar days or more or indeﬁnitely, seven clear days’

notice at the least, specifying the place, the day and time of the adjourned meeting

and the general nature of the business to be transacted, must be given in the same

manner as in the case of the original meeting.

4.8.8 A resolution put to a vote of the meeting shall be decided on a show of hands unless

a poll is duly demanded. Subject to the provisions of the Companies Act, a poll may

be demanded by:

4.8.8.1 the Chairman;

4.8.8.2 at least ﬁve shareholders having the right to vote on the resolution;

4.8.8.3 a shareholder or shareholders representing not less than 5% of the total

voting rights of all the shareholders having the right to vote on the resolution

(excluding any voting rights attached to shares held as treasury shares); or

4.8.8.4 shareholder or shareholders holding shares conferring the right to vote on the

resolution, being shares on which an aggre gate sum has been paid up equal

to not less than 10% of the total sum paid up on all the shares conferring

that right (excluding any voting rights attached to shares in the Company

conferring a right to vote on the resolution held as treasury shares).

4.9 Borrowing powers

The Directors may exercise all the powers of the Company to borrow money and to mortgage

or charge all or any part of its undertaking, property and assets (present and future) and,

subject to the provisions of the Companies Act, to issue debentures and other securities,

whether outright or as collateral security for any debt, liability or obligation of the Company or

of any third party.

4.10 Issue of shares

Subject to the provisions of the Companies Act and to any rights for the time being attached

to any shares, any shares may be allotted or issued with or have attached to them such

preferred, deferred or other rights or restrictions, whether in regard to dividend, voting,

transfer, return of capital or otherwise, as the Company may from time-to-time by ordinar y

resolution determine or, if no such resolution has been passed or so far as the resolution

does not make speciﬁc provision, as the Board may determine, and any share may be issued

which is, or at the option of the Company or the holder of such share is liable to be,

redeemed in accordance with the Articles or as the Directors may determine.

100

4.11 Powers of the Board

The business of the Company shall be managed by the Directors who, subject to the

provisions of the Articles and to any directions given by special resolution to take, or refrain

from taking, speciﬁed action, may exercise all the powers of the Company, whether relating to

the management of the bus iness or not. Any Director may appoint any other Director, or any

other person approved by resolution of the Directors and willing to act and permitted by law

to do so, to be an alternate Director.

4.12 Directors’ fees

The Directors (other than alternate Directors) shall be entitle d to receive by way of fees for

their services as Directors such sum as the Board may from time-to-time determine (not

exceeding in aggregate £300,000 per annum or such other sum as the Company in general

meeting shall from time-to-time determine). Any such fees payable shall be distinct from any

salary, remuneration or other amounts payable to a Director pursuant to any other provision

of the Articles or otherwise and shall ac crue from day to day.

The Directors are entitled to be repaid all reasonable travelling, hotel and other expenses

properly incurred by them in or about the performance of their duties as Directors.

4.13 Directors’ interests

4.13.1 The Board may authorise any matter proposed to it in accordance with the Articles

which would otherwise involve a breach by a Director of his duty to avoid conﬂicts of

interest under the Companies Act, including any matter which relates to a situa tion in

which a Director has or can have an interest which conﬂicts, or possibly may conﬂict,

with the interest of the Company or the exploitation of any property, information or

opportunity, whether or not the Company could take advantage of it (excluding any

situation which cannot reasonably be regarded as likely to give rise to a conﬂ ict of

interest). This does not apply to a conﬂict of interest arising in relation to a transaction

or arrangement with the Company. Any authorisation will only be effective if any

quorum requirement at any meeting at which the matter was considered is met without

counting the Director in question or any other interested Director and the matter was

agreed to without their voting or would have been agreed to if their votes had not

been counted. The Board may impose limits or conditions on any such authorisation or

may vary or terminate it at any time.

4.13.2 Subject to having, where required, obtained authorisation of the conﬂict from the

Board, a Director shall be under no duty to the Company with respect to any

information which he obtains or has obtained otherwise than as a Director and in

respect of which he has a duty of conﬁdentia lity to another person and will not be in

breach of the general duties he owes to the Company under the Companies Act

because he fails to disclose any such information to the Board or to use or apply any

such information in performing his duties as a Director, or because he absents himself

from meetings of the Board at which any matter relating to a conﬂict of interest, or

possible conﬂict, of interest is discuss ed and/or makes arrangements not to receive

documents or information relating to any matter which gives ris e to a conﬂict of

interest or possible conﬂict of interest and/or makes arrangements for such documents

and information to be received and read by a professional adviser.

4.13.3 Provided that his interest is disclosed at a meeting of the Board, or in the case of a

transaction or arrangement with the Company, in the manner set out in the Companies

Act, a Director, notwithstanding his ofﬁce:

4.13.3.1 may be a party to or otherwise be interested in any transaction arrangem ent

or proposal with the Company or in which the Company is otherwise

interested;

4.13.3.2 may hold any other ofﬁce or place of proﬁt at the Company (except that of

auditor of the Company or any of its subsidiaries) and may act by himself or

through his ﬁrm in a professional capacity for the Company, and in any such

case on such terms as to remuneration and otherwise as the Board may

arrange;

101

4.13.3.3 may be a director or other ofﬁcer of, or employed by , or a party to any

transaction or arrangement with, or otherwise interested in, any company

promoted by the Company or in which the Company is otherwise interested

or as regards which the Company has powers of appointment; and

4.13.3.4 shall not be liable to account to the Company for any proﬁt, remuneration or

other beneﬁt realised by any ofﬁce or employment or from any transaction,

arrangement or proposal or from any interest in any body corporate. No such

transaction, arrangement or proposal shall be liable to be avoided on the

grounds of any such interest or beneﬁt nor shall the receipt of any such

proﬁt, remuneration or any other beneﬁ t constitute a breach of his duty not to

accept beneﬁts from third parties.

4.13.4 A Director need not dec lare an interest in the case of a transaction or arrangement

with the Company if the other Directors are already aware, or ought reasonably to be

aware, of the interest or it concerns the terms of his service contract that have been

or are to be considered at a meeting of the Directors or if the interest consists of him

being a director, ofﬁcer or employee of a company in which the Company is

interested.

4.13.5 The Board may cause the voting rights conferred by the shares in any other company

held or owned by the Company or any power of appointment to be exerci sed in such

manner in all respects as it thinks ﬁt and a Director may vote on and be counted in

the quorum in relation to any of these matters.

4.14 Restrictions on Directors voting

4.14.1 A Director shall not vote on, or be counted in the quorum in relation to, any resolution

of the Board or of a committee of the Board concerning any transaction or

arrangement in which he has an interest which is to his knowledge a material interest

and, if he purports to do so, his vote will not be counted, but this prohibition shall not

apply in respect of any resolution concerning any one or more of the following matters:

4.14.1.1 any transaction or arrangement in which he is interested by means of an

interest in shares, debentures or other securities or otherwise in or through

the Company;

4.14.1.2 the giving of any guarantee, security or indemnity in respect of money lent

to, or obligations incurred by him or any other person at the request of or for

the beneﬁt of, the Company or any of its subsidiary undertakings;

4.14.1.3 the giving of any guarantee, security or indemnity in respect of a debt or

obligation of the Company or any of its subsidiary undertakings for which he

himself has assumed responsibility in whole or in part under a guarantee or

indemnity or by the giving of security;

4.14.1.4 the giving of any other indemnity where all other Directors are also being

offered indemnities on substantially the same terms;

4.14.1.5 any proposal concerning an offer of shares or debentures or other securities

of or by the Company or any of its subsidiary undertakings in which offer he

is or may be entitled to participate as a holder of securities or in the

underwriting or sub-underwriting of which he is to participate;

4.14.1.6 any proposal concerning any other body corporate in which he does not to

his kn owledge have an interest (as the term is used in Part 22 of the

Companies Act) in 1% or more of the issued equity share capital of any

class of such body corporate nor to his knowledge holds 1% or more of the

voting rights which he holds as shareholder or through his direct or indirect

holding of ﬁnancial instruments (within the meaning of the Disclosure

Guidance and Transparency Rules) in such body corporate;

4.14.1.7 any proposal relating to an arrangement for the beneﬁt of the employees of

the Company or any of its subsidiary undertakings which does not awar d him

any privilege or beneﬁt not generally awarded to the employees to whom

such arrangement relates;

102

4.14.1.8 any proposal concerning insurance which the Company proposes to maintain

or purchase for the beneﬁt of Directors or for the beneﬁt of persons who

include Directors;

4.14.1.9 any proposal concerning the funding of expenditure by one or more Directors

on defending proceedings against him or them, or doing anything to enable

such Director or Directors to avoid incurring such expenditure; or

4.14.1.10 any transaction or arrangement in respect of which his interest, or the

interest of Directors generally has been authorised by ordinary resolution.

4.14.2 A Director shall not vote or be counted in the quorum on any resolution of the Board

or committee of the Board c oncerning his own appointment (including ﬁxing or varying

the terms of his appointment or its termination) as the holder of any ofﬁce or place of

proﬁt with the Company or any company in which the Company is interested.

4.15 Number of Directors

Unless and until otherwise determined by an ordinary resolution of the Company, the number

of Directors shall be not less than two and the number is not subject to a maximum.

4.16 Directors’ appointment and retirement

4.16.1 Directors may be appointed by the Company by ordinary resolution or by the Board. If

appointed by the Board, a Director shall hold ofﬁce only until the next annual general

meeting.

4.16.2 At each annual general meeting of the Company, one-third of the Directors or, if their

number is not three or a multiple of three, the number nearest to but not exceeding

one-third shall retire from ofﬁce by rotation. If there are fewer than three Directors, one

Director shall retire from ofﬁce.

4.16.3 Any newly appointed Director shall retire at the ﬁrst annual general meeting of the

Company following his appointment and shall not be taken into account in determining

the number of Directors who are to retire by rotation at that meeting.

4.16.4 At each annual general meeting, any Director who was elected or last re-elected at or

before the annual genera l meeting held in the third calendar year before the current

year shall retire by rotation.

4.16.5 Any Director shall also retire if he has been with the Company for a continuous period

of nine years or more at the date of the meeting.

4.17 Notice requiring disclosure of interest in shares

4.17.1 The Company may, by notice in writing, require a person whom the Company knows

to be, or has reasonable cause to believe is, interested in any shares or at any time

during the three years immediately preceding the date on which the notice is issued to

have been interested in any shares, to conﬁrm that fact or (as the case may be) to

indicate whether or not this is the case and to give such further information as may be

required by the Directors. Such information may include, without limitation, particulars

of the person’s identity, particulars of the person’s own past or present interest in any

shares and to disclose the identity of any other person who has a present interest in

the shares held by him, where the interest is a present interest and any other interest,

in any shares, which subsisted during that three year period at any time when his own

interest subsisted to give (so far as is within his knowledge) such particulars with

respect to that other interest as may be required and where a person’s interest is a

past interest to give (so far as is within his knowledge) like particulars for the person

who held that interest immedi ately upon his ceasing to hold it.

4.17.2 If any shareholder is in default in supplying to the Company the information required

by the Company within the prescribed period (which is 14 calendar days after service

of the notice), or such other reasonable period as the Directors may determine, the

Directors in their absolute discretion may serve a direction notice on the shareholder.

The direction notice may direct that in respect of the shares in respect of which the

default has occurred (the ‘‘default shares’’) the shareholder shall not be entitled to

vote in general meetings or class meetings. Where the default shares represent at

least 0.25% in nomi nal value of the class of shares concerned (excluding treasury

shares), the direction notice may additionally direct that dividends on such shares will

103

be retained by the Company (without interest) and that no transfer of the default

shares (other than a transfer authorised under the Articles) shall be registered until the

default is rectiﬁed.

4.18 Untraced shareholders

Subject to the Articles, the Company may sell any shares registered in the name of a

shareholder remaining untraced for 12 years who fails to communicate with the Company

following advertisement of an intention to make such a disposal. Until the Company can

account to the shareholder, the net proceeds of sale will be available for use in the business

of the Company or for investment, in either case at the discretion of the Board. The proceeds

will not carry interest.

4.19 Indemnity of ofﬁcers

Subject to the provisions of the Companies Act, but without prejudice to any indemnity to

which he might otherwise be entitled, every past or present Director (including an alternate

Director) or ofﬁcer of the Company or a director or ofﬁcer of an associated company (except

the auditors or the auditors of an associated company) may at the discretion of the Board be

indemniﬁed out of the assets of the Company against all costs, charges, losses, damages

and liabilities incurred by him for negligence, default, breach of duty, breach of trus t or

otherwise in relation to the affairs of the Company or of an associated company, or in

connection with the activities of the Company, or of an associated company, or as a trustee

of an occupational pension scheme (as deﬁned in section 235(6) Companies Act). In addition,

the Board may purchase and maintain insurance at the expense of the Company for the

beneﬁt of any such person indemnifying him against any liability or expenditure incurred by

him for acts or omissions as a Director or ofﬁcer of the Company (or of an associated

company).

4.20 Management Shares

The Management Shares can be redeemed at any time (subject to the provisions of the

Companies Act) by the Company and carry the right to receive a ﬁxed annual divide nd equal

to 0.01% of the nominal amount of each of the Management Shares payable on demand. For

so long as there are shares of any other class in issue, the holders of the Management

Shares will not have any right to receive notice of or vote at any general meeting of the

Company. If there are no shares of any other class in issue, the holders of the Management

Shares will have the right to receive notice of, and to vote at, general meetings of the

Company. In such circumstances, each holder of a Management Share who is present in

person (or, being a corporation, by representative) or by proxy at a general meeting will have

on a show of hands one vote and on a poll every such holder who is present in person or by

proxy (or being a corporation, by representative) will have one vote in respect of each

Management Share held by him.

4.21 C Shares and Deferred Shares

The rights and rest rictions attaching to the C Shares and the Deferred Shares arising on their

conversion are summarised below.

4.21.1 The following deﬁnitions apply for the purposes of this paragraph 4.21 only:

‘‘Calculation Date’’ means, in relation to any tranche of C Shares, the earliest of the:

(i) close of business on the date falling twelve calendar months after the allotment of

that tranche of C Shares or if such a date is not a Business Day the next fol lowing

Business Day or such earlier date as the Directors determine that the retur n

proﬁles of the underlying assets of the portfolios attributable to the relevant tranche

of C Shares and the Ordinary Shares are sufﬁciently aligned; or

(ii) the close of business on such date as the Directors may decide is necessary to

enable the Company to comply with its obligations in respect of Conversion of that

tranche of C Shares; or

(iii) close of business on the day on which the Directors resolve that Force Majeure

Circumstances have arisen or are in contemplation in relation to any tranche of

C Shares;

‘‘Conversion’’ means conversion of any tranche of C Shares into Ordinary Shares and

Deferred Shares in accordance with paragraph 4.21.8 below;

104

‘‘Conversion Date’’ means, in relation to any tranche of C Shares, the close of

business on such Business Day as may be selected by the Directors falling not more

than 40 Business Days after the Calculation Date of such tranche of C Shares;

‘‘Conversion Ratio’’ is the ratio of the Net Asset Value per C Share of the relev ant

tranche to the Net Asset Value per Ordinary Share, which is calculated as:

Conversion Ratio =

A =

C-D

B =

F-G

where:

‘‘C’’ is the aggregate of:

(i) the value of the investments of the Company attributable to the C Shares of the

relevant tranche which are listed, quoted, dealt in or traded on a stock exchange

(other than investments which are subject to restrictions on trans fer or a

suspension of dealings, which are in each case to be valued in accordance with (ii)

below) calculated by reference to the bid price at close of business of, or, if

appropriate, the daily average of the prices marked for, those investments on the

relevant Calculation Date on the principal stock exchange or market where the

relevant investment is listed, quoted, dealt in or traded, as derived from the

relevant exchan ge’s or market’s recognised method of publication of prices for such

investments where such published prices are available;

(ii) the value of all other investments of the Company attributable to the C Shares of

the relevant tranche (other than investments included in (i) above) calculated by

reference to the Directors’ belief as to an appropriate current value for those

investments on the relevant Calculation Date calculated in accordance with the

valuation policy adopted by the Company from time to time after taking into

account any other price publication services reasonably available to the Directors;

and

(iii) the amount which, in the Directors’ opinion, fairly reﬂects, on the relevant

Calculation Date, the value of the current assets of the Company attributable to the

C Shares of the relevant tranche (excluding the investments valued under (i) and

(ii) above but including cash and deposits with or balances at a bank and including

any accrued income less accrued expenses and other items of a revenue nature

calculated in accordance with the valuation policy adopted by the Company from

time to time);

‘‘D’’ is the amount (to the extent not otherwise deducted from the assets attributable to

the C Shares of the relevant tranche) which, in the Directors’ opinion, fairly reﬂects the

amount of the liabilities of the Company attributable to the C Shares of the relevant

tranche on the relevant Calculation Date (including the amount of any declared but

unpaid dividends in respect of such C Shares);

‘‘E’’ is the number of C Shares of the relevant tranche in issue on the relevant

Calculation Date;

‘‘F’’ is the aggregate of:

(i) the value of all the investments of the Company attributable to the Ordinary Shares

which are listed, quoted, dealt in or traded on a stock exchange (other than

investments which are subject to restrictions on transfer or a suspension of

dealings, which are in each case to be valued in accordance with (ii) below)

calculated by reference to the bid price at close of business of, or, if appropriate,

the daily average of the prices marked for, those investments on the relevant

Calculation Date on the principal stock exchan ge or market where the relevant

105

investment is listed, quoted, dealt in or traded as derived from the relevant

exchange’s or market’s recognised method of publication of prices for such

investments where such published prices are available; and

(ii) the value of all other investments of the Company attributable to the Ordinary

Shares (other than investments included in (i) above) calculated by reference to the

Directors’ belief as to an appropriate current value for those investments on the

relevant Calculation Date calculated in accordance with the valuation policy adopted

by the Company from time to time after taking into account any other price

publication services reasonably available to the Directors; and

(iii) the amount which, in the Directors’ opinion, fairly reﬂects, on the relevant

Calculation Date, the value of the current assets of the Company attributable to the

Ordinary Shares (excluding the investments valued under (i) and (ii) above but

including cash and deposits with or balances at a bank and including any accrued

income less accrued expenses and other items of a revenue nature, calculated in

accordance with the valuation policy adopted by the Company from time to time);

‘‘G’’ is the amount (to the extent not otherw ise deducted in the calculation of F) which,

in the Directors’ opinion, fairly reﬂects the amount of the liabilities of the Company

attributable to the Ordinary Shares on the relevant Calculation Date (including the

amount of any declared but unpaid dividends in respect of such Ordinary Shares); and

‘‘H’’ is the number of Ordinary Shares in issue on the relevant Calculation Date

(excluding any Ordinary Shares held in treasury), provided that the Directors shall

make such adjustments to the value or amount of A and B as the Directors believe to

be appropriate having regard among other things, to the assets of the Company

immediately prior to the date on which the Company ﬁrst receives the net proceeds of

an issue of C Shares of the relevant tranche and/or to the reasons for the issue of the

C Shares of the relevant tranche;

‘‘Deferred Shares’’ means deferred shares of one penny each in the capital of the

Company arising on Conversion;

‘‘Existing Shares’’ means the Ordinary Shares in issue immediately prior to

Conversion;

‘‘Force Majeure Circumstances’’ means, in relation to any tranche of C Shares (i)

any political and/or economic circumstances and/or actual or anticipated changes in

ﬁscal or other legislation which, in the reasonable opinion of the Directors, renders

Conversion necessary or desirable; (ii) the issue of any proceedings challenging, or

seeking to challenge, the power of the Comp any and/or its Directors to issue the

C Shares of the relevant tranche with the rights proposed to be attached to them and/

or to the persons to whom they are, and/or the terms upon which they are proposed

to be issued; or (iii) the giving of notice of any general meeting of the Company at

which a resolution is to be proposed to wind up the Company, whichever shall happen

earliest; and

References to Shareholders, C shareholders and deferred shareholders should be

construed as references to holders for the time being of Ordinary Shares, C Shares of

the relevant tranche and Deferred Shares respectively.

4.21.2 The holders of the Ordinary Shares, the Management Shares, any tranche of C Shar es

and the Deferred Shares shall, subject to the provisions of the Artic les, have the

following rights to be paid dividends:

4.21.2.1 the Deferr ed Shares (to the extent that any are in issue and extant) shall

entitle the holders thereof to a cumulative annual dividend at a ﬁxed rate of

1% of the nominal amount thereof, the ﬁrst such dividend (adjusted pro rata

temporis) (the ‘‘Deferred Dividend’’) being payable on the date six months

after the Conversion Date on which such Deferred Shares were created in

accordance with parag raph 4.21.8 (the ‘‘Relevant Conversion Date’’) and

thereafter on each anniversary of such date payable to the holders thereof

on the register of shareholders on that date as holders of Deferred Shares

but shall confer no other right, save as provided herein, on the holders

thereof to share in the proﬁts of the Company. The Deferre d Dividend shall

106

not accrue or become payable in any way until the date six months after the

Conversion Date and shall then only be payable to those holders of Deferred

Shares registered in the register of shareholders of the Company as holders

of Deferred Shares on that date. It should be noted that given the proposed

redemption of the Deferred Shares as described below, it is not expected

that any dividends will accrue or be paid on such shares;

4.21.2.2 the holders of any tranche of C Shares shall be entitled to receive in that

capacity such dividends as the Directors may resolve to pay out of the

assets attributable to the C Shares of that tranche and from proﬁts available

for distribution which is attributable to the C Shares of that tranche;

4.21.2.3 a holder of Management Shares shall be entitled (in priority to any payment

of dividend on any other class of share) to a ﬁxed c umulative preferential

dividend 0.01% per annum on the nominal amount of the Management

Shares held by him, such dividend to accrue annually and to be payable in

respect of each accounting reference period of the Company within 21

calendar days of the end of such period;

4.21.2.4 the Existing Shares shall confer the right to dividends declared in accordance

with the Articles;

4.21.2.5 the Ordinary Shares into which any tranche of C Shares shall convert sh all

rank pari passu with the Existing Shares for dividends and other distributions

made or declared by reference to a record date falling after the relevant

Calculation Date; and

4.21.2.6 no dividend or other distribution shall be made or paid by the Company on

any of its shares (other than any Deferred Shares for the time being in

issue) between any Calculation Date and the relevant Conversion Date (both

dates incl usive) and no such dividend shall be declared with a record date

falling between any Calculation Date and the relevant Conversion Date (both

dates inclusive).

4.21.3 The holders of the Ordinary Shares, the Management Shares any tranche of C Shares

and the Deferred Shares shall, subject to the provisions of the Artic les, have the

following rights as to capital:

4.21.3.1 the surplus capital and assets of the Company shall on a winding-up or on a

return of capital (otherwise than on a purchase or redemption by the

Company of any of its shares) at a time when one or more tranches of

C Shares are for the time being in issue and prior to the Conversion Date be

applied amongst the holders of the Existing Shares pro rata according to the

nominal capital paid up on their holdings of Existing Shares, after hav ing

deducted therefrom:

4.21.3.1.1 ﬁrst, an amount equivalent to (C-D) for each tranche of C Shares

in issue using the methods of calculation of C and D given in the

deﬁnition of Conversion Ratio, which amount(s) shall be applied

amongst the C shareholders of the relevant tranche(s) pro rata

according to the nominal capital paid up on their holdings of

C Shares of the relevant tranche;

4.21.3.1.2 secondly, if there are Deferred Shares in issue, in paying to the

holders of Deferred Shares one penny in aggregate in respect of

every one million Deferred Shares (or part thereof) of which they

are respectively the holders; and

4.21.3.1.3 thirdl y, in paying to the holders of the Management Shares in

respect of each such share the amount paid up or treated as paid

up thereon,

for the purposes of thi s paragraph 4.21.3.1 the Calculation Date shall be

such date as the liquidator may determine; and

107

4.21.3.2 the surplus capital and assets of the Company shall on a winding-up or on a

return of capital (otherwise than on a purchase or redemption by the

Company of any of its shares) at a time when no C Shares of any tranche

are for the time being in issue be applied as follows:

4.21.3.2.1 ﬁrst, if there are Deferred Shares in issue, in paying to the

deferred shareholders one penny in aggregate in respect of every

one million Deferred Shares (or part thereof) of which they are

respectively the holders;

4.21.3.2.2 secondly, in paying to the holders of the Management Shares in

respect of each such share the amount paid up or treated as paid

up thereon; and

4.21.3.2.3 thirdl y, the surplus shall be divided amongst the Shareholders pro

rata according to the nominal capital paid up on their holdings of

Ordinary Shares.

4.21.4 As regards voting:

4.21.4.1 the C Shares shall carry the right to receive notice of and to attend and vote

at any general meeting of the Company. The voting rights of holders of

C Shares will be the same as that applying to holders of Existing Shares as

set out in the Articles as if the C Shares and Existing Shares were a single

class; and

4.21.4.2 the Deferred Shares and, save as provided in paragraph 4.20 of this Part 8,

the Management Shar es shall not carry any right to receive notice of nor to

attend or vote at any general meeting of the Company.

4.21.5 The following shall apply to the Deferred Shares:

4.21.5.1 the C Shares shall be issued on such terms that the Deferred Shares arising

upon Conversion (but not the Ordinar y Shares arising on Conversion) may

be redeemed by the Company in accordance with the terms set out herein;

4.21.5.2 immediately upon Conversion of any tranche of C Shares, the Company shall

redeem all of the Deferred Shar es which arise as a result of Conversion of

that tranche for an aggregate consideration of one penny for all of the

Deferred Shares so redeemed and the notice referred to in paragraph

4.21.8.2 below shall be deemed to constitute notice to each C shareholder of

the relevant tranche (and any person or persons having rights to acquire or

acquiring C Shares of the relevant tranche on or after the Calculation Date)

that the Deferred Shares shall be so redeemed; and

4.21.5.3 the Company shall not be obliged to: (i) issue share certiﬁcates to the

deferred shareholders in respect of the Deferred Shares; or (ii) account to

any deferred shareholder for the redemption moneys in respect of such

Deferred Shares.

4.21.6 Without prejudice to the generality of the Articles, for so long as any C Shares are for

the time being in issue it shall be a special right attaching to the Existing Shares as a

class and to the C Shares as a separate class that without the sanction or consent of

such holders given in accordance with the Articles:

4.21.6.1 no alteration shall be made to the Articles;

4.21.6.2 no allotment or issue will be made of any security convertible into or carrying

a right to subscribe for any share capital of the Company other than the

allotment or issue of further C Shares; and

4.21.6.3 no resolution of the Company shall be passed to wind up the Company.

For the avoidance of doubt, but subject to the rights or privileges attached to any other

class of shares, the previous sanction of a special resolution of the holders of Existing

Shares and C Shares, as described above, shall not be required in respect of:

108

4.21.6.4 the issue of further Ordinary Share s ranking pari passu in all respects with

the Existing Shares (other wise than in respect of any dividend or other

distribution declar ed, paid or made on the Existing Shares by the issue of

such further Ordinary Shares); or

4.21.6.5 the sale of any shares held as treasury shares (as such term is deﬁned in

section 724 of the Companies Act) in accordance with sections 727 and 731

of the Companies Act or the purchase or redemption of any shares by the

Company (whether or not such shares are to be held in treasury).

4.21.7 For so long as any tranche of C Shares are for the time being in issue, until

Conversion of such tranche of C Shares and without prejudice to its obligations under

applicable laws the Company shall:

4.21.7.1 procure that the Company’s records, and bank and custody accounts shall be

operated so that the assets attribu table to the C Shares of that tranche can,

at all times, be separately identiﬁed and, in particular but without prejudice to

the generality of the foregoing, the Company shall, without prejudice to any

obligations pursuant to applicable laws, procure that separate cash accounts,

broker settlement accounts and investment ledger accounts shall be created

and maintained in the books of the Company for the as sets attributable to

the C Shares of that tranche;

4.21.7.2 allocate to the as sets attributable to the C Shares of that tranche such

proportion of the income, expenses and liabilities of the Company incurred or

accrued between the date on which the Company ﬁrst receives the net

proceeds of an issue of C Shares and the Calculation Date relating to such

tranche of C Shares (both dates inclusive) as the Directors fairly consider to

be attributable to that tranche of C Shares; and

4.21.7.3 give appropriate instructions to the Investment Manager to manage the

Company’s assets so that such undertakings can be complied with by the

Company.

4.21.8 In relation to any tranche of C Shar es, the C Shares for the time being in issue of that

tranche shall be sub-divided and converted into Ordinary Shares and Deferred Shares

on the relevant Conversion Date in accordance with the following provisions of this

paragraph 4.21.8:

4.21.8.1 the Directors shall procure that within 20 Business Days of the relevant

Calculation Date:

4.21.8.1.1 the Conversion Ratio as at the relevant Calculation Date and the

numbers of Ordinary Shares and Deferred Shares to which each

C shareholder of that tranche shall be entitled on Conversion of

that tranche shall be calculated; and

4.21.8.1.2 the Auditors shall conﬁrm that such calculations as have been

made by the Company have, in their opinion, been performed in

accordance with the Articles and are arithmetically accurate

whereupon such calculations shall become ﬁnal and binding on

the Company and all holders of the Company’s shares and any

other securities issued by the Company which are convertible into

the Company’s shares, subject to the proviso immediately after

the deﬁnition of H in paragraph 4.21.1 above.

4.21.8.2 the Directors shall procure that, as soon as practicable following such

conﬁrmation and in any event within 30 Business Days of the relevant

Calculation Date, a notice is sent to each C shareholder of the relevant

tranche advising such shareholder of the Conversion Date, the Conversion

Ratio and the numbers of Ordinary Shares and Deferred Shares to which

such C shareholder of the relevant tranche will be entitled on Conversion.

109

4.21.8.3 on conversion each C Share of the relevant tranche shall automatically

subdivide into 10 conversion shares of one penny each and such conversion

shares of 1p each shall automatically convert into such num ber of Ordinary

Shares and Deferred Shares as sh all be necessary to ensure that, upon

such Conversion being completed:

4.21.8.3.1 the aggregate number of Ordinary Shares into which the same

number of conversion shares of one penny each are converted

equals the number of C Shares of the relevant tranche in issue

on the relevant Calculation Date multiplied by the relevant

Conversion Ratio (rounded down to the nearest whole new

Ordinary Share); and

4.21.8.3.2 each conversion share of one penny which does not so convert

into an Ordinary Share shall convert into one Deferred Share.

4.21.8.4 the Ordinary Shares and Deferred Shares arising upon Conversion shall be

divided amongst the former C shareholders of the relevant tranche pro rata

according to their respective former holdings of C Shares of the relevant

tranche (provided always that the Directors may deal in such manner as they

think ﬁt with fractional entitlements to Ordinary Shares and Deferred Shares

arising upon Conversion including, without prejudice to the generality of the

foregoing, selling any Ordinary Shares representing such fractional

entitlements and retaining the proceeds for the beneﬁt of the Company).

4.21.8.5 forthwith upon Conversion, the share certiﬁcates relating to the C Shares of

the relevant tranche shall be cancelled and the Company shall issue to each

former C shareholder of the relevant tranche new certiﬁcates in respect of

the Ordinary Shares which have arisen upon Conversion to which he or she

is entitled. Share certiﬁcates in respect of the Deferred Shares will not be

issued.

4.21.8.6 the Directors may make such adjustments to the terms and timing of

Conversion as they in their discretion consider are fair and reasonable having

regard to the interests of all Shareholders.

5. CITY CODE ON TAK EOVERS AND MERGERS

5.1 Mandatory bid

The City Code applies to the Company. Under Rule 9 of the City Code, if:

(a) a person acquires an interest in shares which, when taken together with shares

already held by him or persons acting in concert with him, carry 30% or more of the

voting rights in the Company; or

(b) a person who, together with persons acting in concert with him, is interested in not

less than 30% and not more than 50% of the voting rights in the Company acquires

additional interests in shares which increase the percentage of shares carrying voting

rights in which that person is interested,

the acquirer and, depending on the circumstances, its concert parties, would be required

(except with the consent of the Panel on Takeovers and Mergers) to make a cash offer for

the outstanding shares at a price not less than the highest price paid for any interests in the

shares by the acquirer or its concert parties during the previous 12 months.

5.2 Compulsory acquisition

Under sections 974 to 991 of the Companies Act, if an offeror acquires or contracts to

acquire (pursuant to a takeover offer) not less than 90% of the shares (in value and by voting

rights) to which such offer relates it may then compulsorily acquire the outstanding shares not

assented to the offer. It would do so by sending a notice to outstanding holders of shares

telling them that it will compulsorily acquire their shares and then, six weeks later, it would

execute a transfer of the outstanding shares in its favour and pay the consideration to the

company, which would hold the consider ation on trust for the outstanding holders of shares.

The consideration offered to the holders whose shares are compulsorily acquired under the

Companies Act must, in general, be the same as the consideration that was available under

the takeover offer.

110

In addition, pursuant to section 983 of the Companies Act, if an offeror acquires or agrees to

acquire not less than 90% of the shares (in value and by voting rights) to which the offer

relates, any holder of shares to which the offer relates who has not accepted the offer may

require the offeror to acquire his shares on the same terms as the takeover offer.

The offeror would be required to give any holder of shares notice of his right to be bought out

within one month of that right arising. Sell-out rights cannot be exercised after the end of the

period of three months from the last date on which the offer can be accepted or, if later,

three months from the date on which the notice is served on the holder of shares notifying

them of their sell-out rights. If a holder of shares exercises its rights, the offeror is bound to

acquire those shares on the terms of the takeover offer or on such other terms as may be

agreed.

6. MATERIAL CONTRACTS OF THE COMPANY

The following are all of the contracts, not being contracts entered into in the ordinary course of

business that have been entered into by the Company since its incorporation and are, or may be,

material or contain any provision under which the Company has any obligation or entitlement which

is or may be material to it as at the date of this document:

6.1 Placing and Offer Agreement

The Placing and Offer Agreement dated 26 September 2018 between the Company, the

Directors, the Investment Manager and Winterﬂood Securities, pursuant to which, subject to

certain conditions, Winterﬂood Securities has agreed to use reasonable endeavours to procure

subscribers for Ordinary Shares pursuant to the Initial Placing at the Issue Price and to use

reasonable endeavours to procure subscribers under the Placing Programme for Shares at

the Placing Programme Price. The Company has appointed Winterﬂood Securities as sponsor,

ﬁnancial adviser, bookrunner and Intermediaries Of fer Adviser to the Company in connection

with the Initial Issue and the Placing Programme.

The Placing and Offer Agreement provides for Winterﬂood Securities to be paid commissions

by the Company in respect of the Ordinary Shares to be allotted pursuant to the Initial Issue

and Ordinary Shares and/or C Shares to be allotted pursuant to the Placing Programme. Any

Ordinary Shares or C Shares subscribed for by Winterﬂood Securities may be retained or

dealt in by it for its own beneﬁt.

Under the Placing and Offer Agreement, Winterﬂood Securities is entitled at its discretion and

out of its own resources at any time to rebate to some or all investors, or to other parties,

part or all of its fees. Winterﬂood Securities is also entitled under the Placing and Offer

Agreement to retain agents and may pay commission to any or all of those agents out of its

own resources.

The Placing and Offer Agreement may be terminated by Winterﬂood Securities in certain

customary circumstances.

The obligation of the Company to issue the Ordinary Shares and the obligation of Winterﬂood

Securities to use its reasonable endeavours to procure subscribers for Ordinary Shares

pursuant to the Initial Placing is conditional upon certain conditions that are typical for an

agreement of this nature. These conditions include, among others: (i) Initial Admission having

become effective on or before 8.00 a.m. on 14 November 2018 (or such later time and/or

date as the Company and Winterﬂood Securities may agree (not being later than 8.00 a.m.

on 28 February 2019)); (ii) the Placing and Offer Agreement becoming wholly unconditional

(save as to Initial Admission) and not having been terminated in accordance with its terms at

any time prior to Initial Admission; and (iii) the Minimum Gross Proceeds being raised (or

such lesser amount as the Company and Winterﬂood Securities may agree).

Each issue of Shares pursuant to a Subsequent Placing under the Placing Programme is

conditional, inter alia, on (i) Admission of the relevant Shares occurring by no later than 8.00

a.m. on such date as the Com pany and Winterﬂood Securities may agree from time to time

in relation to that Admission, not being later than 25 September 2019; (ii) a valid

supplementary prospectus being published by the Company if such is required by the

Prospectus Rules; (iii) in respect of an issue of Ordinary Shares, the Placing Programme

Price being determined by the Directors as described in Part 5 of this document; and (iv) the

111

Placing and Offer Agreement being wholly unconditional as regards the relevant Subsequent

Placing (save as to Admission) and not having been terminated in accordance with its terms

prior to the relevant Admission.

The Company, the Directors and the Investment Manager have given warranties to

Winterﬂood Securities concerning, inter alia, the accuracy of the information contained in this

document. The Company and the Investment Manager have also given indemnities to

Winterﬂood Securities. The warranties and indemnities are standard for an agreement of this

nature.

The Placing and Offer Agreement is governed by the laws of England and Wales.

6.2 Investment Management Agreement

The Investment Management Agreement dated 26 September 2018 between the Company

and the Investment Manager, pursuant to which the Investment Manager is appointed to act

as the Com pany’s manager for the purposes of the AIFM Directive, and accordingly the

Investment Manager is responsible for providing discretionary portfolio management and risk

management services to the Company, subject to the overall control and supervisions of the

Directors.

Under the terms of the Investment Management Agreement, the Investment Manager is

entitled to receive from the Company an investment management fee which is calculated and

paid quarterly in arrears at an annual rate of (i) 0.5% per annum of the prevailing published

Net Asset Value until the end of the Company’s ﬁrst accounting period, 31 December 2019;

and (ii) 0.7% per annum of the prevailing published Net Asset Value thereafter.

Where the Company invests in a collective investment vehicle that is managed or advised by

an M&G Entity, the Investment Manager will reduce its investment management fee by the

amount of any equival ent management fee that is charged to such collective investment

vehicle or such entity will rebate its management fee such that the Investment Manager

ensures the Company is not charged twice. The above arrangement will not apply to any

other fees or expenses charged to the Company or any such entity in which it invests.

The Investment Manager is also entitled to be paid half of any arrangement fee charged by

the Com pany to the issuer of a Debt Instrument in which the Company invests. The balance

of any arrangement fee is retained by the Company.

The Investment Management Agreement is for an initial term of ﬁve years from the date of

Initial Admission and thereafter subject to termination on not less than six months’ written

notice by either party. The Investment Management Agreement can be terminated at any time

in the event of the insolvency of the Company or the Investment Manager or in the event that

the Investment Manager ceases to be authorised and regulated by the FCA (if required to be

so authorised and regulated to continue to carry out its duties under the Investment

Management Agreement).

The Company has given an indemnity in favour of the Investment Manager (subject to

customary exceptions) in respect of the Investment Manager’s potential losses in carrying on

its responsibilities under the Investment Management Agreement.

The Investment Management Agreement is governed by the laws of England and Wales.

6.3 Administration Agreement

The Administration Agreement between the Company and the Administrator dated

26 September 2018, pursuant to which the Administrator has agreed to act as administrator

to the Company.

Under the terms of the Administration Agreement, the Administrator shall provide the day-to-

day administration of the Company and is also responsi ble for the Company’s general

administrative functions, such as the calculation and publication of the Net Asset Value and

maintenance of the Company’s accounting and statutory records.

The Company has given an indemnity in favour of the Administrator in respect of the

Administrator’s potential losses in carrying on its responsibilities under the Administration

Agreement.

112

The Administration Agreement is terminable, inter alia, upon not less than six months’ written

notice. The Administration Agreement is also terminable immediately upon the occurrence of

certain standar d events including the insolvency of the Company or the Administrator or a

party committing a material breach of the Administration Agreement (where such breach has

not been remedied within 30 calendar days of written notice being given).

Details of the fees payable to the Administrator are set out in paragraph 3.2 of Part 4 of this

document.

The Administration Agreement is governed by the laws of England and Wales.

6.4 Depositary Agreem ent

The Depositary Agreement dated 26 September 2018 entered into between the Depositary,

the Invest ment Manager and the Compa ny, pursuant to which, the Depositary is appointed as

the Company’s depositary.

In accordance with the terms of the Depositary Agreement, and subject to the provisions of

the AIFM Directive, the Depositary may delegate its safe-keeping functions in relation to

ﬁnancial instruments and other assets of the Company. In respect of the assets of the

Company, the Depositary has delegated safekeeping of the assets of the Company to State

Street Bank and Trust Company. The liability of the Depositary shall in principle not be

affected by any delegation of its custody function and the Depositary shall be liable to the

Company or its investors for the loss of ﬁnancial instruments held in custody by the

Depositary or a third party to whom the custody of securities has been delegated as

determined in accordance with the AIFM Directive, and in particular Article 100 of the

Commission Delega ted Regulation No. 231/2013 of 19 December 2012. The Depositary may

discharge its responsibility in case of a loss of a security: (i) in the event that the loss has

arisen as a result of an external event beyond its reasonable control, the consequences of

which would have been unavoidable despite all reasonable efforts to the contrary; (ii) where it

has contractually discharged its liability in compliance with article 21(13) of the AIFM

Directive; or (iii) in compliance with the conditions set out under article 21(14) of the AIFM

Directive where the laws of a third country require that certain ﬁnancial instruments be held

by a local entity and there are no local entities that satisfy the delegation requirements of

article 21(11) of the AIFM Directive. Otherwise than in respect of a loss of a ﬁnancial

instrument held in custody, the Depositar y shall only be liable for damages suffered by the

Company as a direct result of the Depositary’s negligent or intentional failure to properly fulﬁl

its obligations in relation to the services under the agreement. Indirect and/or consequential

damages are excluded.

The Depositary Agreement shall continue for an initial period of six months and thereafter is

terminable by any of the parties giving to the others not less than 90 days’ written noti ce. The

Depositary Agreement may be terminated with immediate effect by any of the parties on the

occurrence of certain events, including: (i) if another party has committed a material breach of

the terms of the Depositary Agreement; or (ii) in the case of insolvency of a party.

The Company has given mark et standard indemnities in favour of the Depositary in respect of

the Depositary’s potential losses in carrying on its responsibilities under the Depositary

Agreement.

Details of the fees payable to the Depositary are set out in paragraph 3.2 of Part 4 of this

document.

The Depositary Agreement is governed by the laws of England and Wales.

6.5 Company Secretarial Agreement

The Company Secretarial Agreement dated 26 September 2018 between the Company and

Link Asset Services pursuant to which the Company Secretary has agreed to provide the

company secretarial functions required by the Companies Act.

Under the terms of the Company Secretarial Agreement, the aggregate fees payable to Link

Asset Services are £60,000 plus VAT per annum. In addition a fee of £30,000 is payable to

Link Asset Services for services undertaken as part of the Initial Admission process. Link

Asset Services will also be entitled to reimbursement of all reasonable out of pocket

expenses incurred by it in connection with the agreement.

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The Company Secretarial Agreement is for an initial period of 12 months and thereafter shall

automatically renew for successive periods of 12 months unless or until terminated by either

party (a) at the end of the initial period, provided written notice is given to the other party at

least six months prior to the end of the initial period or (b) at the end of any successive

12 month period, provided written notice is given to the other party at least six months prior

to the end of such successive 12 month period. In addition, either party may terminate the

Company Secretarial Agreement:

(a) by service of three months’ written notice should the parties not reach an agreement

regarding any increase of the fees payable under the Company Secretarial Agreement;

(b) upon service of written notice if the other party commits a material breach of its

obligations under the Company Secretarial Agreement (including any payment default)

which that party has failed to remedy within 45 calendar days of receipt of a written

notice to do so from the ﬁrst party; or

winding-up, dissolution or administration of the other party, or if the other party is

declared insolvent or if an administrator, administrative receiver, manager or provisional

liquidator (or similar ofﬁcer to any of the foregoing in the relevant jurisdiction) is

appointed over the whole of or a substantial part of the other party or its assets or

undertakings.

The Company has given certain market standar d indemnities in favour of Link Asset Services

and its afﬁliates and their directors, ofﬁcers, employees and agents in respect of its potential

losses in carrying on its responsibilities under the Company Secretarial Agreement. Link Asset

Services liabilities under the Company Secretarial Agreement are subject to a cap.

The Company Secretarial Agreement is governed by the laws of England and Wales.

6.6 Registrar’s Agreement

The Registrar’s Agreement dated 26 September 2018 between the Company and the

Registrar pursuant to which the Registrar has agreed to act as registrar to the Company.

Under the agreement, the Registrar is entitled to a fee calculated on the basis of the number

of Shareholders and the number of transfers processed (exclusive of any VAT). In addition,

the Registrar is entitled to certain other fees for ad hoc services rendered from time to time.

The Registrar is also entitled to reimbursement of all out of pocket costs, expenses and

charges properly incurred on behal f of the Company.

The Registrar Agreement is for an initial period of one year from the date of Initial Admission

and thereafter shall automatically renew for successive periods of 12 months unless or until

terminated by either party (a) at the end of the initial period, provided written notice is given

to the other party at least 6 months prior to the end of the initial period or (b) at the end of

any successive 12 month period, provided written notice is given to the other party at least 6

months prior to the end of s uch successive 12 month period. In addition, either party may

terminate the Registrar Agree ment:

(a) by service of three months’ written notice should the parties not reach an agreement

regarding any increase of the fees payable under the Registrar Agreement; or

(b) upon service of written notice if the other party commits a material breach of its

obligations under the Registrar Agreement (including any payment defaul t) which that

party has failed to remedy within 45 calendar day s of receipt of a written notice to do

so from the ﬁrst party; or

winding-up, dissolution or administration of the other party, or if the other party is

declared insolvent or if an administrator, administrative receiver, manager or provisional

liquidator (or similar ofﬁcer to any of the foregoing in the relevant jurisdiction) is

appointed over the whole of or a substantial part of the other party or its assets or

undertakings.

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The Company has given certain market standard indemnities in favour of the Registrar and its

afﬁliates and their directors, ofﬁcers, employees and agents in respect of the Registrar’s

potential losses in carrying on its responsibilities under the Registrar Agr eement. The

Registrar’s liabilities under the Registrar Agreement are subject to a cap.

The Registrar’s Agreement is governed by the laws of England and Wales.

6.7 Receiving Agent Agreement

The Receiving Agent Agreement dated 26 September 2018 between the Company and the

Receiving Agent pursuant to which the Receiving Agent has agreed to act as receiving agent

in connection with the Initial Issue. Under the terms of the agreement, the Receiving Agent is

entitled to a fee from the Company of £22,000 (exclusive of VAT) in connection with these

services. The Receiving Agent will also be entitled to reimbursement of all out-of-pocket

expenses reasonably incurred by it in connection with its duties.

The Company has given certa in market standard indemnities in favour of the Receiving Agent

and its afﬁliates and their directors, ofﬁcers, employees and agents in respect of the

Receiving Agent’s potential losses in carrying on its responsibilities under the Receiving Agent

Agreement. The Receiving Agent’s liabilities under the Receiving Agent are subject to a cap.

The agreement is governed by the laws of England and Wales.

7. LITIGATION

There have been no governmental, legal or arbitration proceedings, and the Company is not aware

of any governmental, legal or arbitrati on proceedings pending or threatened, nor of any su ch

proceedings having been pending or threatened at any time preceding the date of this document

which may have, or have had in the recent past, a signiﬁcant effect on the ﬁnancial position or

proﬁtability of the Company.

8. WORKING CAPITAL

The Comp any is of the opinion that, on the basis the Minimum Net Proceeds are raised, the

working capital available to the Company is sufﬁcient for its present require ments that is for at

least the next 12 months from the date of this document.

If the Minimum Net Proceeds are not raised, the Initial Issue may only proceed where a

supplementary prospectus (including a working capital statement based on a revised minimum net

proceeds ﬁgure) has been prepared in relation to the Company and approved by the UKLA. In the

event that the Company does not wish to prepare and publish a supplementary prospectus

incorporating a working capital statement based on a revised minimum net proceeds ﬁgure the

Initial Issue will not proceed, the arrangements in respect of the Initial Issue will lapse and any

monies received in respect of the Initial Issue will be returned to applicants and placees without

interest at applicants’/investors’ risk.

9. NO SIGNIFICANT CHANGE

As at the date of this document, there has been no signiﬁcant change in the ﬁnancial or trading

position of the Company since the date of its incorporation.

10. CAPITALISATION AND INDEBTEDNESS

As at the date of this doc ument, the Company has no guaranteed, secured, unguaranteed or

unsecured debt and no indirect or contingent indebtedness, and there have been no material

changes to the Company’s capitalisation from the date of incorporation to the date of this

document.

11. GENERAL

11.1 Where third party information has been referenced in this document, the source of that third

party information has been disclosed. All information in this document that has been sourced

from third parties has been accurately reproduced and, as far as the Company is aware and

able to ascertain from information published by such third parties, no facts have been omitted

which would render the reproduced information inaccurate or misleading.

11.2 No application is being made for the Shares to be dealt with in or on any stock exchange or

investment exchange other than to the London Stock Exchange’s main market.

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11.3 Winterﬂood Securities has given and not withdrawn its written consent to the inclusion in this

document of references to its name in the form and context in which it appears.

11.4 The Investment Manager was incorporated in England and Wales as a private limited

company on 30 September 1986 under the Companies Act 1985 (registration number

02059989). The Investment Manager is authorised and regulated by the FCA (FCA

registration number 1220011). The registered ofﬁce of the Investment Manager is Laurence,

Pountney Hill, London EC4R 0HH (tel. +44 (0) 800 390 390). The Investment Manager has

given and not withdrawn its written consent to the inclusion in this document of references to

its name in the form and context in which they appear. The Investment Manager accepts

responsibility for Part 2 (M&G), Part 3 (The Investment Oppor tunity and asset class

overview), paragraph 2.1 and paragraph 2.2 of Part 4 in relation to the information that

relates to the Investment Manager (The Investment Manager), paragraph 5 of Par t 4

(Conﬂicts of Interest) and paragraph 11.4 of Part 8 (General) of this document (together the

‘‘Investment Manager Sections’’) for the purposes of Prospectus Rule 5.5.3(f). To the best

of the knowledge and belief of the Investment Manager (who has taken all reasonable care to

ensure that such is the case), the Investment Manager Sections are in accordance with the

facts and do not omit anything likely to affect the import of such Investment Manager

Sections.

11.5 State Street Trustees Limited, whose registered ofﬁce is located at 20 Churchill Place,

London E14 5HJ, acts as the Company’s depositary and will safeguard all of the assets of

the Company. The Depositary is a private limited company, registered in England and Wales

with number 02982384 and was incorporated on 24 October 1994. The Depositary’s

telephone number is +44 (0)20 3395 7000. The Depositary maintains its registered ofﬁce and

place of central administration in the United Kingdom. The Depositary is authorised and

regulated by the Financial Conduct Authority. The principal business of the Depositary is

acting as depositary of collective investment schemes.

11.6 State Street Bank & Trust Company, whose registered ofﬁce is located at Copley Place 100,

Huntington Avenue, Boston, Massachusetts 02116, USA, with an ofﬁce at 20 Churchill Place,

Canary Wharf, London E14 5HJ, acts as the Company’s global sub-custodian and has been

delegated safekeeping duties by the Depositary. The Custodian is authorised and regulated

by the Financial Conduct Authority.

11.7 The auditors of the Company are Deloitte LLP of Saltire Court, 20 Castle Street, Edinburgh

EH1 2DB and have been the only auditors of the Company since its incorporation. Deloitte

LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered

Accountants in England and Wales.

11.8 The effect of the Initial Issue will be to increase the net assets of the Company. On the

assumption that the Initial Issue is subscribed as to 250 million Ordinary Shares, the

fundraising is expected to increase the net assets of the Company by approximately £247

million.

12. DOCUMENTS AVAILABLE FOR INSPECTION

12.1 Copies of the following documents will be available for inspection at the registered ofﬁce of

the Company during normal business hours on any Business Day from the date of this

document until 25 September 2019:

12.1.1 the Memorandum and Articles of the Company; and

12.1.2 this document.

116

13. INTERMEDIARIES

The Intermediaries authorised as at the date of this document to use this document are:

AJ Bell Securities

4 Exchange Quay

Salford Quays

Manchester

M5 3EE

Alliance Trust Savings Limited

PO Box 164

8 West Marketgait

Dundee

DD1 9YP

Equiniti Financial Services Ltd

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

Hargreaves Lansdown Asset Management

1 College Square South

Anchor Road

Bristol

BS1 5HL

Interactive Investor Servic es Limited

Exchange Court

Duncombe Street

Leeds

LS1 4AX

Walker Crips Stockbrokers Limited

Old Change House

128 Queen Victoria Street

London

EC4V 4BJ

Dated: 26 September 2018

117

PART 9

AIFM DIRECTIVE ARTICLE 23 DISCLOSURES

This Part 9 sets out important information about the AIFM Directive and its application to the Investment

Manager and the Company. The AIFM Directive is a European Directive which regulates the

management and marketing of an AIF by an AIFM within the EEA.

For the purposes of the AIFM Directive, the Investment Manager is an EEA AIFM of the Company, which

is an EU AIF. This Part 9 seeks to provide information in respect of the Company. Under the AIFM

Directive, for each AIF marketed in the EU, the AIFM must make available to prospective investors in the

AIF certain prescribed information before the investors invest in the AIF, as well as any material changes

thereto. These are the disclosure requirements set out in Article 23 of the AIFM Directive.

This Part 9 must be read together with the other parts of this document and has been included in this

document to comply with the Article 23 disclosure requirements in respect of the Company.

This part cross-refers to, and must all times read in conjunction with, the other parts of this document.

DISCLOSURE REQUIREMENT DISCLOSURE OR LOCATION OF RELEVANT DISCLOSURE

1 Description of the Company

(a) Investment strategy and

objectives of the Company

Information on the investment strategy and objectives of the

Company are outlined in paragraph 2 of Part 1 of this document.

(b) and (c)Information on whether the

Company is a feeder or a

fund of funds

Not applicable: The Company is not a feeder fund nor a fund of

funds.

(d) Types of assets in which

the Company may invest

The types of assets in which the Company may invest are

outlined in paragraph 2 of Part 1 under the heading ‘‘Investment

Policy’’.

(e) The investment techniques

that the Company, or the

Investment Manager on

behalf of the Company,

may employ and all

associated risks

The investment techniques to be used by the Company are

described in Part 2 of this document.

The section entitled ‘‘Risk Factors’’ (pages 20 to 36 inclusive) of

this document provides an overview of the risks involved in

investing in the Company.

(f) Investment Restrictions The investment restrictions applicable to the Company are set

out in paragraph 2 of Part 1 of this document under the heading

‘‘Investment Restrictions’’.

(g) to (j) Use of leverage The circumstances in which the Company may use leverage and

the restrictions on the use of leverage are described in

paragraph 2 of Part 1 under the heading ‘‘Borrowings’’.

The Company may make use of a limited amount of hedging as

described in paragraph 2 of Part 1 of this document under the

heading ‘‘Hedging and Derivatives’’.

The Company’s borrowings will not exceed 30%. Of the

Company’s Net Asset Value, calculated at the time of draw

down.

Certain risks associated with the Company’s use of leverage are

described in the ‘‘Risk Factors’’ section of this document under

the headings ‘‘Use of Borrowings’’ and ‘‘Hedging and Derivatives

risks’’.

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Pursuant to its regulatory obligations, the Investment Manager is

required to express the level which the Company’s ‘leverage’ will

not exceed. For the purposes of this disclosure leverage is any

method by which a fund’s exposure is increased. A fund’s

exposure may be increased by using derivatives, by reinvesting

cash borrowings, through positions within repurchase or reverse

repurchase agreements, through securities lending or securities

borrowing arrangements, or by any other means (such increase

referred to herein as the ‘‘Incremental Exposure’’). The AIFM

Directive prescribes two methods of measuring and expressing

leverage, the ‘‘gross methodology’’ and the ‘‘commitment

methodology’’ (as opposed to gearing) and requires disclosure

of the maximum amount of ‘leverage’ the Company might be

subject to. The deﬁnition of leverage is wider than that of gearing

and includes exposures that are not considered to be gearing.

The commitment methodology takes account of the hedging and

netting arrangements employed by a fund at any given time

(purchased and sold derivative positions will be netted where

both relate to the same underlying asset). This calculation of

exposure includes all Incremental Exposure as well as a fund’s

own physical holdings; and cash. By contrast, the gross

methodology does not take account of the netting or hedging

arrangements employed by a company. This calculation of

exposure includes all Incremental Exposure as well as the

Company’s own physical holdings. Cash is excluded.

Without prejudice to the foregoing, the Company has set a

maximum leverage limit of 150x on a ‘‘commitment basis’’ and

300x on a ‘‘gross’’ basis.

2 Changes to Investment Objective

and Approach

No material change will be made to the investment policy and

investment restrictions without the approval of Shareholders by

ordinary resolution and the approval of the UK Listing Authority.

Any change to the investment policy or investment restrictions

which does not amount to a material change to the investment

policy may be made by the Company without the approval of

Shareholders.

3 Main legal implications of

investment in the Company

Investors will acquire shares in the Company, which is a closed-

ended investment company limited by shares and established in

England and Wales.

While investors acquire an interest in the Company on

subscribing for or purchasing Shares, the Company is the sole

legal and/or beneﬁcial owner of its investments. Consequently,

Shareholders have no direct legal or beneﬁcial interest in those

investments. The liability of Shareholders for the debts and other

obligations of the Company is limited to the amount unpaid, if

any, on the shares held by them.

Shareholders’ rights in respect of their investment in the

Company are governed by the Articles and the Companies

Act. Under English law, the following types of claim may in

certain circumstances be brought against a company by its

shareholders: contractual claims under its articles of association;

claims in misrepresentation in respect of statements made in its

prospectus and other marketing documents; unfair prejudice

claims; and derivative actions. In the event that a Shareholder

considers that it may have a claim against the Company in

connection with such investment in the Company, such

Shareholder should consult its own legal advisers.

119

Jurisdiction and applicable law

As noted above, Shareholders’ rights are governed principally by

the Articles and the Companies Act. By subscribing for Shares,

investors agree to be bound by the Articles which are governed

by, and construed in accordance with, the laws of England and

Wales.

Recognition and enforcement of foreign judgments

Regulation (EC) 593/2008 (‘‘Rome I’’) must be applied in all

member states of the European Union (other than Denmark).

Accordingly, where a matter comes before the courts of a

relevant member state, the choice of a governing law in any

given agreement is subject to the provisions of Rome I. Under

Rome I, the member state’s court may apply any rule of that

member state’s own law which is mandatory irrespective of the

governing law and may refuse to apply a rule of governing law if

it is manifestly incompatible with the public policy of that member

state. Further, where all other elements relevant to the situation

at the time of the choice are located in a country other than the

country whose law has been chosen, the choice of the parties

shall not prejudice the application of provisions of the law of that

other country which cannot be derogated from by agreement.

Shareholders should note that there are a number of legal

instruments providing for the recognition and enforcement of

foreign judgments in England. Depending on the nature and

jurisdiction of the original judgment, Council Regulation (EC) No

44/2001 on jurisdiction and the recognition and enforcement of

judgments in civil and commercial matters, Regulation (EC) No

805/2004 of the European Parliament and of the Council of

21 April 2004 creating a European Enforcement Order for

uncontested claims, the Convention on jurisdiction and the

recognition and enforcement of judgments in civil and

commercial matters done at Lugano on 30 October 2007, the

Administration of Justice Act 1920 and the Foreign Judgment

(Reciprocal Enforcement) Act 1933 may apply. There are no

legal instruments providing for the recognition and enforcement

of judgments obtained in jurisdictions outside those covered by

the instruments listed above, although such judgments might be

enforceable at common law.

4 Service Providers

(a) The Investment Manager’s

duties

Pursuant to the Investment Management Agreement, the

Company has appointed the Investment Manager, M&G

Alternatives Investment Management Limited, to act as the

Company’s AIFM for the purposes of the AIFM Directive and

accordingly the Investment Manager is responsible for providing

discretionary portfolio management and risk management

services to the Company.

Further details of the Investment Management Agreement are

set out in Part 8 of this document.

(b) Depositary duties The Depositary, State Street Trustees Limited, has been

appointed as depositary to provide depositary services to the

Company, which will include safekeeping of the assets of the

Company. The Depositary is permitted to delegate (and

authorise its delegates to sub-delegate) the safekeeping of the

assets of the Company.

120

providers’ duties

Administrator

Under the terms of the Administration Agreement, the

Administrator, State Street Bank and Trust Company, shall

provide the day-to-day administration of the Company and is

also responsible for the Company’s general administrative

functions, such as the calculation and publication of the Net

Asset Value and maintenance of the Company’s accounting and

statutory records.

Company Secretary

The Company Secretary, Link Company Matters Limited, has

been appointed as the company secretary of the Company to

provide the company secretarial functions required by the

Companies Act.

Auditor

The Auditor, Deloitte LLP, provides audit services to the

Company. The auditor’s principal responsibilities are to audit

and express an opinion on the ﬁnancial statements of the

Company in accordance with applicable law and auditing

standards. The annual report and accounts will be prepared

according to accounting standards laid out under UK GAAP.

Registrar

The Registrar, Link Asset Services, has been appointed as

registrar in relation to the transfer and settlement of Shares.

(d) Investors’ rights The Company is reliant on the performance of third party service

providers, including the Investment Manager, the Administrator,

the Company Secretary, the Depositary, the Auditors and the

Registrar.

Without prejudice to any potential right of action in tort that a

Shareholder may have to bring a claim against a service

provider, each Shareholder’s contractual relationship in respect

of its investment in Shares is with the Company only.

Accordingly, no Shareholder will have any contractual claim

against any service provider with respect to such service

provider’s default.

In the event that a Shareholder considers that it may have a

claim against a third party service provider in connection with

such Shareholder’s investment in the Company, such

Shareholder should consult its own legal advisers.

The above is without prejudice to any right a Shareholder may

have to bring a claim against an FCA authorised service provider

under section 138D of the Financial Services and Markets Act

2000 (which provides that breach of an FCA rule by such service

provider is actionable by a private person who suffers loss as a

result), or any tortious cause of action. Shareholders who

believe they may have a claim under section 138D of the

Financial Services and Markets Act 2000, or in tort, against any

service provider in connection with their investment in the

Company, should consult their legal adviser.

Shareholders who are ‘‘Eligible Complainants’’ for the purposes

of the FCA ‘‘Dispute Resolutions Complaints’’ rules (natural

persons, micro-enterprises and certain charities or trustees of a

trust) are able to refer any complaints to the Financial

Ombudsman Service (‘‘FOS ’’) (further details of which are

available at www.fscs.org.uk). Additionally, Shareholders may

be eligible for compensation under the Financial Services

121

Compensation Scheme (‘‘FSCS’’) if they have claims against an

FCA authorised service provider which is in default. There are

limits on the amount of compensation.

Further information about the FSCS is at www.fscs.org.uk. To

determine eligibility in relation to either the FOS or the FSCS,

Shareholders should consult the respective websites above and

speak to their legal advisers.

5 Professional liability risks The Investment Manager has effective internal operational risk

management policies and procedures in order to appropriately

identify, measure, manage and monitor operational risks,

including professional liability risks, to which it is or could

reasonably be exposed. These policies and procedures are

subject to regular review and the operational risk management

activities are performed independently as part of the risk

management policy.

The management of operational risk, through the risk and control

self-assessment process, is aimed at identifying risks in existing

processes and improving existing controls to reduce their

likelihood of failure and the impact of losses. All risks and

events are facilitated via the internal risk management system,

which provides a platform to facilitate the convergence of

governance, risk and compliance.

The Investment Manager is required to cover professional

liability risks, such as the risk of loss of documents evidencing

title of assets to the Company, and complies with such

requirement by maintaining an amount of its own funds in

accordance with the AIFM Directive.

6 Delegated Management Functions The Investment Manager has not delegated any of its functions.

The Company has appointed the Administrator and the

Company Secretary to perform certain administrative functions

covering accounting, administration and company secretarial

services.

The Depositary has delegated safekeeping duties as set out in

the AIFM Directive and the FCA Handbook to the Custodian,

State Street Bank and Trust Company, with registered ofﬁce at

Copley Place 100, Huntington Avenue, Boston, Massachusetts

02116, USA, with an ofﬁce at 20 Churchill Place, Canary Wharf,

London E14 5HJ, UK, whom it has appointed as global sub-

custodian.

7 Valuation Procedure A description of the Company’s valuation procedures is outlined

in paragraph 5 of Part 1 of this document.

8 Liquidity Risk Management The Company is a closed-end listed investment company and,

as such, Shareholders in the Company have no right to redeem

their Shares.

Liquidity risk is therefore the risk that a position held by the

Company cannot be realised at a reasonable value sufﬁciently

quickly to meet the obligations (primarily, debt) of the Company

as they fall due.

In managing the Company’s assets therefore the Investment

Manager seeks to ensure that the Company holds at all times

sufﬁcient assets to enable it to discharge its payment

obligations.

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9 Charges and Expenses The costs and expenses of, and incidental to, the formation of

the Company and the Initial Issue are not expected to exceed

approximately £3 million, equivalent to 1.2% of the Initial Gross

Proceeds, assuming Initial Gross Proceeds of £250 million. The

costs will be deducted from the Initial Gross Proceeds. It is

expected that the starting Net Asset Value per Ordinary Share

will be 98.8 pence, assuming Initial Gross Proceeds of £250

million.

All expenses incurred by any Intermediary are for its own

account. Investors should conﬁrm separately with any

Intermediary whether there are any commissions, fees or

expenses that will be applied by such Intermediary in

connection with any application made through that

Intermediary pursuant to the Intermediaries Offer.

The costs and expenses of issuing Ordinary Shares pursuant to

any Subsequent Placing will be covered by issuing such

Ordinary Shares at the prevailing published Net Asset Value

per Ordinary Share at the time of issue together with a premium

to at least cover the costs and expenses of the relevant

Subsequent Placing of Ordinary Shares (including, without

limitation, any placing commissions).

The costs and expenses of any issue of C Shares under the

Placing Programme will be paid out of the gross proceeds of

such issue and will be borne by holders of those C Shares only.

The fees and expenses payable to the Investment Manager are

described in paragraph 2.2 of Part 4 of this document.

Ongoing fees, charges and expenses following Initial Admission

are outlined in paragraph 4.3 of Part 4 of this document.

10 Fair Treatment The Directors of the Company have certain statutory duties with

which they must comply. These include a duty upon each

Director to act in the way he/she considers, in good faith, would

be most likely to promote the success of the Company for the

beneﬁt of its Shareholders as a whole. As a company listed on

the UKLA’s Ofﬁcial List, the Company is required under the

Premium Listing Principles to treat all Shareholders of a given

class equally.

The Investment Manager maintains a conﬂicts of interest policy

to avoid and manage any conﬂicts of interest that may arise

between the Investment Manager (and its afﬁliates) and the

Company.

The Shares of the same class rank pari passu with each other.

11 Preferential Rights No investor has a right to obtain preferential treatment in relation

to their investment in the Company. However, the Investment

Manager may enter into arrangements with certain investors to

rebate part of the management fee attributable to those

investors’ Ordinary Shares or C Shares, in each case without

the prior approval of, or disclosure of the detail of those terms to,

Shareholders. The types of investors who may beneﬁt are

investors making signiﬁcant or strategic investments in the

Ordinary Shares or C Shares.

12 Issue and Sale of Shares The terms and conditions under which investors can subscribe

for Ordinary Shares under the Initial Placing and Shares under

Subsequent Placings are set out in Part 11 of this document.

123

The terms and conditions and application form to subscribe for

Ordinary Shares under the Offer for Subscription are set out in

Part 12 and the Appendix of this document.

Intermediaries are required to provide the terms and conditions

of the Intermediaries Offer to any prospective investor who has

expressed an interest in participating in the Intermediaries Offer

to such Intermediary.

13 Latest Net Asset Value of the

Company or the latest market price

of the shares of the Company,

in accordance with Article 19

of the AIFM Directive

The Company has not yet published a Net Asset Value in

accordance with Article 19 of the AIFM Directive.

When published, Net Asset Value announcements can be found

on both the Company’s website: www.mandg.co.uk/

creditincomeinvestmenttrust and the London Stock Exchange’s

website: www.londonstockexchange.com.

14 Latest annual report, in line with

Article 22 of the AIFM Directive;

The Company has not yet published an annual report in line with

Article 22 of the AIFM Directive.

When published, annual reports can be found on the Company’s

website: www.mandg.co.uk/creditincomeinvestmenttrust.

15 Where available, the historical

performance of the Company;

The Company has not yet published any annual or interim

ﬁnancial statements.

When published, annual and interim ﬁnancial statements can be

found on the Company’s website: www.mandg.co.uk/

creditincomeinvestmenttrust.

16 Prime Brokerage The Company does not intend to use prime brokers.

17 A description of how and when the

information required under

paragraphs 4 and 5 of Article 23

of the AIFM Directive will be

disclosed

In order to meet the requirements of paragraphs 4 and 5 of

Article 23 of the AIFM Directive, the Company intends to

disclose annually in the Company’s annual report (or in such

manner as the Investment Manager and the Board consider

appropriate):

(1) the percentage of the Company’s assets that are subject to

special arrangements arising from their illiquid nature if

applicable;

(2) any new arrangements for managing the liquidity of the

Company; and

(3) the current risk proﬁle of the Company and the risk

management systems employed by the Investment

Manager to manage those risks.

Information will also be provided to investors regarding any

changes to:

(1) the maximum level of leverage that the Investment

Manager may employ on behalf of the Company;

(2) any right of reuse of collateral or any guarantee granted

under the leveraging arrangement; and

(3) the total amount of leverage employed by the Company.

124

PART 10

DEFINITIONS

The following deﬁnitions apply throughout this document unless the co ntext requires otherwise:

Administration Agreement the administration agreement between the Company and the

Administrator, a summary of which is set out in paragraph 6.3 of

Part 8 of this document

Administrator State Street Bank and Trust Company

Admission admission of any Shares pursuant to the Initial Issue or any

Subsequent Placing (as the context may require): (i) to the

premium segment of the Ofﬁcial List; and (ii) to trading on the

premium segment of the London Stock Exchange’s main market,

becoming effective in accordance with the Listing Rules and the

admission and disclosure standards of the London Stock

Exchange

AIC the Association of Investment Companies

AIC Code the AIC Code of Corporate Governance published by the AIC

from time to time

AIC Guide the Guide to Investment Companies published by the AIC from

time to time

AIF an alternative investment fund

AIFM an alternative investment fund manager within the meaning of the

AIFM Directive

AIFM Directive Directive 2011/61/EU of the European Parliament and of the

Council on Alternative Investment Fund Managers, as amended

from time to time

AIFM Regulations the Alternative Investment Fund Managers Regulations 2013 of

the United Kingdom (SI 2013/1773), as amended from time to

time

AIFM Rules the AIFM Directiv e and all applicable rules and regulations

implementing the AIFM Directive in the UK, including, without

limitation, the AIFM Regulations and all relevant provisions of the

FCA Handbook

Application Form the application form attached to this document for use in

connection with the Offer for Subscription

Articles the articles of association of the Company

Audit Committee the audit committee of the Board

Auditor Deloitte LLP

Beneﬁt Plan Investor (i) an employee beneﬁt plan that is subject to the ﬁduciary

responsibility or prohibited transaction provisions of Title I of

ERISA (including, as applicable, assets of an insuran ce company

general account) or a plan that is subject to the prohibited

transaction provisions of section 4975 of the U.S. Tax Code

(including an individual retirement account), (ii) an entity whose

underlying assets include ‘‘plan assets’’ by reason of a Plan’s

investment in the entity, or (iii) any ‘‘beneﬁt plan investor’’ as

otherwise deﬁned in section 3(42) of ERISA or regulations

promulgated by the U.S. Departm ent of Labor

Board the board of Directors of the Company or any duly constituted

committee thereof

Business Day any day which is not a Saturday or Sunday or a bank holiday in

the City of London

125

C Shares C Shares of £0.10 each in the capital of the Company

Calculation Date has the meaning given in paragraph 4.21 of Part 8 of this

document

Capital gains tax or CGT UK taxation of capital gains or corporation tax on chargeable

gains, as the context may require

certiﬁcated or in certiﬁcated

form

not in uncertiﬁcated form

City Code the City Code on Takeovers and Mergers, as amended from time

to time

Companies Act the Companies Act 2006 and any statutory modiﬁcation or re-

enactment thereof for the time being in force

Company M&G Credit Income Investment Trust plc

Company Secretarial

Agreement

the company secretarial agreement betw een the Company and

Link Asset Services, a summary of which is set out in paragraph

6.5 of Part 8 of this document

Company Secretary Link Company Matters Limited

Conversion the conversion of C Shares into Ordinary Shares and Deferred

Shares in accordance with the Articles and as described in

paragraph 4.21 of Part 8 of this document

Conversion Date has the meaning given in paragraph 4.21 of Part 8 of this

document

Conversion Ratio has the meaning given in paragraph 4.21 of Part 8 of this

document

CRA Regulations Regulations (EC) No. 1060/2008 on credit rating agencies, as

amended from time to time

CREST the computerised settlement system operated by Euroclear which

facilitates the transfer of title to shares in uncertiﬁcated form

CTA 2009 Corporation Tax Act 2009 and any statutory modiﬁcation or re-

enactment thereof for the time being in force

CTA 2010 Corporation Tax Act 2010 and any statutory modiﬁcation or re-

enactment thereof for the time being in force

Custodian State Street Bank and Trust Compan y

Debt Instruments debt or debt-like instruments

Depositary State Street Trustees Limited

Depositary Agreement the agreement between the Company, the Investment Manager

and the Depositary, a summary of which is set out in

paragraph 6.4 of Part 8 of this document

Directors the directors from time to time of the Company and ‘‘Director’’ is

to be construed accordingly

Disclosure Guidance and

Transparency Rules

the disclosure guidance published by the Financial Conduct

Authority and the transparency rules made by the Financial

Conduct Authority under section 73A of FSMA, as amended from

time to time

DVP delivery versus payment

EEA European Economic Area

ERISA U.S. Employee Retirement Income Security Act of 1974, as

amended

ESMA the European Securities and Markets Authority

Euro or g the lawful currency of the EU

Euroclear Euroclear UK & Ireland Limited, being the operator of CREST

126

European Union or EU the European Union ﬁrst established by the treaty made at

Maastricht on 7 February 1992

FATCA the U.S. Foreign Acc ount Tax Compliance Act of 2010, as

amended from time to time

FCA the Financial Conduct Authority or any successor authority

FCA Handbook the FCA handbook of rules and guidance as amended from time

to time

Federal Reserve Board the board of governors of the Federal Reserve System

Fitch Fitch Ratings Limited and any successor or successors thereto

FSMA the Financial Services and Markets Act 2000 and any statutory

modiﬁcation or re-enactment thereof for the time being in force

G7 Sovereign Instruments a term used to refer to sovereign debt instruments issued by a

nation in the Group of Seven (G7). The G7 nations are Canada,

France, Germany, Italy, Japan, the United Kingdom and the

United States

Gross Assets the aggregate value of the total assets of the Company as

determined in accordance with the accounting principles adopted

by the Company from time-to-time

HMRC Her Majesty’s Revenue and Customs

Initial Admission admission of the Ordinary Shares issued pursuant to the Initial

Issue to the premium segment of the Ofﬁcial List and to trading on

the premium segment of the London Stock Exchange’s main

market

Initial Gross Proceeds the gross proceeds of the Initial Issue

Initial Issue the issue of Ordinary Shares pursuant to the Initial Placing, the

Offer for Subscription and the Intermediaries Offer

Initial Placing the conditional placing of Ordinary Shares by Winterﬂood

Securities at the Issue Price as describ ed in this document

Intermediaries the entities listed in paragraph 13 of Part 8 of this document,

together with any other intermediary (if any) that is appointed by

the Company in connection with the Intermediaries Offer after the

date of this document and ‘‘Intermediary’’ shall mean any one of

them

Intermediaries Booklet the booklet entitled ‘‘M&G Credit Income Investment Trust plc:

Intermediaries Offer – Information for Intermediaries’’ and

containing, among other things, the Intermediaries Terms and

Conditions

Intermediaries Offer the offer of Ordinary Shares by the Intermediaries to retail

investors

Intermediaries Terms and

Conditions

the terms and conditions agreed between Winterﬂood, the

Company, the Investment Manager and the Intermediaries in

relation to the Intermediaries Offer and contained in the

Intermediaries Booklet

Investment Management

Agreement

the invest ment management agreement between the Company

and the Investment Manager, a summary of which is set out in

paragraph 6.2 of Part 8 of this document

Investment Manager M&G Alternatives Investment Management Limited

ISA an individual savings account maintained in accordance with the

UK Individual Savings Account Regulations 1998 (as amended

from time to time)

ISIN International Securities Identiﬁcation Number

Issue Price 100 pence per Ordinary Share

127

Key Information Docum ent the key information document relating to the Ordinary Shares or

the C Shares as the case may be produced pursuant to the

PRIIPs Regulation, as amended and updated from time to time

LIBOR the Sterling 3 month London Interbank Offered Rate administered

by ICE Benchmark Administration Limited (or any other person

which takes over the administration of that rate)

Link Asset Services a trading name of Link Market Services Limited

Listing Rules the listing rules made by the FCA under section 73A of FSMA, as

amended from time to time

London Stock Exchange London Stock Exchange plc

M&G those business units within Prudential and its afﬁliates which

render asset management services under the brand ‘‘M&G’’, or

any successor to that brand

M&G Afﬁliate an entity which is a subsidiary or an afﬁliate of Prudential and

which forms part of M&G, provi ded that any Shareholder or other

person (i) which (or any beneﬁcial owner of which) is a client of

M&G, (ii) which is an investment vehicle through which any client

of M&G indirectly invests in the Company and that vehicle is

managed or advised by M&G, or (iii) a retirement or pension fund

sponsored or associated with Prudential, will not in any case be

an M&G Afﬁliate

M&G Entity the Investment Manager or any afﬁliate of the Investment

Manager

Management Engagement

Committee

the management engagement committee of the Board

Management Shares redeemable shares of £1.00 each in the capital of the Company

Market Abuse Regulation or

MAR

Regulation (EU) No 596/2014 of the European Parlia ment and of

the Council of 16 April 2014 on market abuse, as amended from

time to time

MiFID II Directive 2014/65/EU of the European Parliament and of the

Council of 15 May 2014 on markets in ﬁnancial instruments and

amending Directive 2002/92/EC and Directive 2011/61/EU

(‘‘MiFID’’) and Regulation (EU) No 600/2014 of the European

Parliament and the Counci l of 15 May 2014 on markets in

ﬁnancial instrum ents and amending Regulation (EU) No 648/

2012 (‘‘MiFIR’’, and together with MiFID, ‘‘MiFID II’’), as amended

from time to time

Minimum Gross Proceeds the minimum gross proceeds of the Initial Issue, being £100

million

Minimum Net Proceeds the Minimum Gross Proceeds less the costs and expenses of the

Initial Issue

Money Laundering Directive the Council Di rective on prevention of the use of the ﬁnancial

system for the purposes of money laundering or terrorist ﬁnancing

(EU/2015/849) as amended by the Money Laundering Directive

(EU) 2018/843 of the European Parliament and of the Council of

the Europe Union of 9 July 2018 on the prevention of the use of

the ﬁnancial system for the purpose of money laundering and

terrorist ﬁnancing

Money Laundering Regulations the UK Money Laundering, Terrorist Financing and Transfer of

Funds (Information on the Payer) Regulations 2017, as amended

from time to time

Moody’s Moody’s Investors Ser vice Limited and any successor or

successors thereto

128

Net Asset Value the value, as at any date, of the assets of the Company after

deduction of all liabilities determined in accordance with the

accounting policies adopte d by the Company from time-to-time

Net Asset Value per C Share at any time the Net Asset Value attributable to any tranche of

C Shares divided by the number of C Shares of the relevant

tranche in issue (other than C Shares of the relevant tranche held

in treasury) at the date of calculation

Net Asset Value per Ordinary

at any time the Net Asset Value attributable to the Ordinary

Shares divided by the number of Ordinary Shares in issue (other

than Ordinary Shares held in treasury) at the date of calculation

Net Proceeds the proceeds of the Initial Issue, after deduction of costs and

expenses

Nomination Committee the nomination committee of the Board

Offer for Subscription the offer for subscription of Ordinary Shares at the Issue Price on

the terms set out in this document

Ofﬁcial List the ofﬁcial list maintained by the UKLA pursuant to Part VI of

FSMA

Ordinary Shares ordinary shares of one penny each in the capital of the Company

and ‘‘Ordinary Share’’ sha ll be construed accordingly

Overseas Persons a potential investor who is not resident in, or who is not a citizen

of, the UK

Placee any person who agrees to subscribe for Shares pursuant to the

Initial Placing and/or any Subsequent Placing

Placing and Offer Agreem ent the conditional placing, offer and placing prog ramme agreement

between the Company, the Directors, the Investment Manager

and Winterﬂood Securities, a summary of which is set out in

paragraph 6.1 of Part 8 of this document

Placing Programme the proposed programme of placing of Shares incorporating any

Subsequent Placings as described in this document

Placing Programme Price the price at which Shares will be issued to Placees pursuant to a

Subsequent Placing under the Placing Program me, as set out in

Part 6 of this document

Plan Asset Regulations the U.S. Department of Labor Regulations, 29 C.F.R. 2510.3-101,

as and to the extent modiﬁed by section 3(42) of ERISA

PRIIPs Regulation Regulation EU No.1286/2014 on key information documents for

packaged retail and insurance-based investment products, as

amended from time to time

Prospectus Directive Directive 2003/71/EC (and the amendments thereto and related

regulation, including Directive 2010/73/EU, to the extent

implemented in a Relevant Member State

Prospectus Regulation 2017 Regulation (EU) No. 2017/1129

Prospectus Rules the prospectus rules made by the FCA under section 73A of

FSMA, as amended from time to time

Prudential Prudential PLC

Receiving Agent Link Asset Ser vices, a trading name of Link Market Servic es

Limited

Receiving Agent Agreement the receiving agent agreement between the Company and the

Receiving Agent, a summary of which is set out in paragraph 6.7

of Part 8 of this document

Registrar Link Asset Services, a trading name of Link Market Services

Limited

129

Registrar Agreement the registrar agreement between the Company and the Registrar,

a summary of which is set out in paragraph 6.6 of Part 8 of this

document

Regulation S Regulation S promulgated under the U.S. Securities Act, as

amended from time to time

Regulatory Information Service a service authorised by the UKLA to release regulatory

announcements to the London Stock Exchange

Relevant Member State a member state of the EEA which has implemented the

Prospectus Directive

S&P Standard and Poor’s Rating Services, a division of The McGraw-

Hill Companies, Inc. and any successor or successors thereto

SEDOL the Stock Exchange Daily Ofﬁcial List

Shareholder a holder of Shares

Shares Ordinary Shares and/or C Shares (as the context may require)

Similar Law any U.S. federal, state, local or foreign law that is similar to

section 406 of ERISA or section 4975 of the U.S. Tax Code

SIPP a self-invested personal pension as deﬁned in Regulation 3 of the

Retirement Beneﬁts Schemes (Restriction on Discretion to

Approve) (Permitted Investments) Regulations 2001 of the UK

SSAS a small self-administered scheme as deﬁned in Regulation 2 of

the Retirement Beneﬁts Schemes (Restriction on Discretion to

Approve) (Small Self-Administered Schemes) Regulations 1991

of the UK

Sterling or GBP or £ or pence the lawful currency of the United Kingdom

Subsequent Placing any placing of Shares pursuant to the Placing Programme

described in this document

Target Market Assessment has the meaning deﬁned on page 39 of this document

Terms and Conditions of

Application

the terms and conditions to which subscriptions under the Offer

for Subscription are subject as set out in Part 12 of this document

U.S. Investment Compa ny Act U.S. Investment Company Act of 1940, as amended from time to

time

U.S. Person any person who is a U.S. person within the meaning of Regulation

S adopted under the U.S. Securities Act

U.S. Securities Act U.S. Securities Act of 1933, as amended from time to time

U.S. Tax Code the US Internal Revenue Code of 1986, as amended from time to

time

UCITS undertakings for collective investments in transferable securities

UK Corporate Governance

Code

the UK Corporate Governance Code as published by the

Financial Reporting Council from time-to-time

UK GAAP Generally Accepted Accounting Practice in the UK

UKLA or UK Listing Authority the FCA acting in its capacity as the competent authority for the

purposes of Part VI of FSMA

uncertiﬁcated or in

uncertiﬁcated form

a Share recorded on the Register as being held in uncertiﬁcated

form in CREST and title to which, by virtue of the CREST

Regulations, may be transferred by means of CREST

United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland

United States of America,

United States or U.S.

the United States of America, its territories and possessions, any

state of the United States of America and the District of Columbia

130

USD or U.S.$ the lawful currency of the United States of America

VAT value added tax

Winterﬂood Securit ies Winterﬂood Securities Limited

131

PART 11

TERMS AND CONDITIONS OF INITIAL PLACING AND PLACING PROGRAMME

1. INTRODUCTION

1.1 Each Placee which conﬁrms its agreement (whether orally or in writing) to Winterﬂood

Securities to subscribe for Shar es under either the Initial Placing or any Subsequent Placing

will be bound by these terms and conditions and will be deemed to have accepted them.

1.2 Winterﬂood Securities may require any Placee to agree to such further terms and/or

conditions and/or give such addit ional warranties and/or representations as it (in its absolute

discretion) sees ﬁt and may require any such Placee to execute a separate placing letter.

2. AGREEMENT TO SUBSCRIBE FOR SHARES

2.1 Conditional on, amongst other things: (i) in respect of the Initial Placing only, Initial Admission

occurring and becoming effective by 8.00 a.m. on or prior to 14 November 2018 (or such

later time and/or date, not being later than 28 February 2019, as speciﬁed by Winterﬂood

Securities); (ii) in respect of a Subsequ ent Placi ng only, Admission of the Shares issued

pursuant to the relevant Subsequent Placing occurring and becoming effective by 8.00 a.m.

on or prior to the date agreed by the Company and Winterﬂood Securities in respect of that

Subsequent Placing, not being later than 25 September 2019; (iii) in the case of the Initial

Placing, the Minimum Gross Proceeds (or such lesser amount as the Company and

Winterﬂood Securities may agree) being raised; (iv) the Placing and Offer Agreement

becoming otherwise unconditional in all respects in respect of the Initial Placing or the

relevant Subseq uent Placing, as applicable and, not having been terminated on or before the

date of the Initial Placing or the relevant Subsequent Placing; and (v) Winterﬂood Securities

conﬁrming to the Placees their allocation of Shares, a Placee agrees to become a

Shareholder of the Company and agrees to subscribe for those Shares allocated to it by

Winterﬂood Securities at the Issue Price or applicable Placing Programme Price. To the fullest

extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to

exercise any remedy of rescission at any time. This does not affect any other rights the

Placee may have.

2.2 Applications under the Initial Placing and any Subsequent Placing must be for a minimum

subscription amount of £1,000.

2.3 Any commitment to acquire Shares under the Initial Placing and/or any Subsequent Placing

agreed orally with Winterﬂood Securities, as agent for the Company, will constitute an

irrevocable, legally binding commitment upon that person (who at that point will become a

Placee) in favour of the Company and Winterﬂood Securities, to subscribe for the number of

Shares allocated to it on the terms and subject to the conditions set out in this Part 11 and in

a contract note (the ‘‘Contract Note’’) and in accordance with the Articles. Except with the

consent of Winterﬂood Securities, such oral commitment will not be capable of variation or

revocation after the time at which it is made.

2.4 Each Placee’s allocation of Shares under the Initial Placing and/or any Subsequent Placing

will be evidenced by a Contract Not e conﬁrming: (i) the number of Shares that such Placee

has agreed to acquire; (ii) the aggregate amount that such Placee will be required to pay for

such Shares; and (ii) settlement instructions to pay Winterﬂood Securities, as agent for the

Company. The provisions as set out in this Part 11 will be deemed to be incorporated into

that Contract Note.

2.5 If the Minimum Gross Proceeds (or such lesser amount as the Company and Winterﬂood

Securities may agree) are not raised, the Initial Placing will lapse and all proceeds will be

returned to Placees without interest and at the Placee’s risk.

3. PAYMENT FOR SHARES

3.1 Each Placee undertakes to pay the Issue Price or Placing Programme Price (as applicable)

for the Shares issued to the Placee in the manner and by the time directed by Winterﬂood

Securities. In the event of any failure by any Placee to pay as so directed and/or by the time

required by Winterﬂood Securities, the relevant Placee’s application for Shares may, at the

discretion of Winterﬂood Securities, either be accepted or rejected and, in the former case,

paragraph 3.2 below shall apply.

132

3.2 Each Placee is deemed to agree that if it does not comply with its obligation to pay the

relevant Issue Price or Placing Programme Price for the Shares allocated to it in accordance

with paragraph 3.1 of these terms and conditions and Winterﬂood Securities elects to accept

that Placee’s application, Winterﬂood Securities may sell all or any of the Shares allocated to

the Placee on such Placee’s behalf and retain from the proceeds an amount equal to the

aggregate amount owed by the Placee plus any interest due. The Placee will, however,

remain liable for any shortfall below the aggregate amount owed by such Placee and it may

be required to bear any tax or other charges (together with any interest or penalties) which

may arise upon the sale of such Shares on such Placee’s behalf.

3.3 Settlement of transactions in the Shares following Initial Admission will take place in CREST

but Winterﬂood Securities reserves the right in its absolut e discretion to require settlement in

certiﬁcated form if, in its opinion, delivery or settlement is not possible or practicable within

the CREST system within the timescales previously notiﬁed to the Placee (whether orally, in

the Contract Not e or otherwise) or would not be consistent with the regulatory requirements in

any Placee’s jurisdiction.

4. REPRESENTATIONS AND WARRANTIES

By agreeing to subscribe for Shares under either the Initial Placing or a Subsequent Placing,

each Placee which enters into a commitment to subscribe for Shares will (for itself and for

any person(s) procured by it to subscribe for Shares and any nominee(s) for any such

person(s)) be deemed to undertake, represent and warrant to each of the Company,

Winterﬂood Securities, the Investment Manager and the Registrar that :

4.1 in agreeing to subscribe for Shares under the Initial Placing or a Subsequent Placing, it is

relying solely on this document and any supplementary prospectus issued by the Com pany

and not on any other inform ation given, or representation or statement made at any time by

any person concerning the Company, the Shares, the Initial Placing or any Subsequent

Placing, including without limitation, the Key Informa tion Document(s). It agrees that none of

the Company, Winterﬂood Securities, the Investment Manager or the Registrar, nor any of

their respective ofﬁcers, agents, employees or afﬁliates, will have any liability for any other

information or representation. It irrevocably and unconditionally waives any rights it may have

in respect of any other information or representation;

4.2 if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its

agreement to subscribe for Shares under the Initial Placing or a Subsequent Placing, it

warrants that it has complied with all such laws, obtained all governmental and other

consents which may be required, complied with all requisite formalities and paid any issue,

transfer or other taxes due in connection with its application in any territory and that it has

not taken any action or omitted to take any action which will result in the Company,

Winterﬂood Securities, the Investment Manager or the Registra r or any of their respective

ofﬁcers, agents, employees or afﬁliates acting in breach of the regulatory or legal

requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom

in connection with the Initial Placing and/or any Subsequent Placing;

4.3 it has carefully read and understands this document in its entirety and acknowledges that it is

acquiring Shares on the terms and subject to the conditions set out in this Part 11 and in the

Contract Note and the Articles as in force at the date of Initial Admission or the Subsequent

Placing (as applicable);

4.4 the price payable per Share is payable to Winterﬂood Securities on behalf of the Company in

accordance with the terms of these terms and conditions and in the Contract Note;

4.5 it has the funds available to pay for in full the Shares for which it has agreed to subscribe

and it will pay the total subscription amount in accordance with the terms set out in these

terms and conditions and as set out in the Contract Note on the due time and date;

4.6 it has not relied on Winterﬂood Securities or any person afﬁliated with Winterﬂood Securities

in connection with any investigation of the accuracy of any information contained in this

document;

4.7 it acknowledges that the content of this document is exclusively the responsibility of the

Company, the Directors and the Investment Manager and neither Winterﬂood Securities nor

any person acting on its behalf nor any of its afﬁliates are responsible for or shall have any

liability for any information, representation or statement contained in this document or any

133

information published by or on behalf of the Compa ny and will not be liable for any decision

by a Placee to participate in the Initial Placing or any Subsequent Placing based on any

information, representation or statement contained in this documen t or otherwise;

4.8 it acknowledges that no person is authorised in connection with the Initial Placing or any

Subsequent Placi ng to give any information or make any representation other than as

contained in this document and, if given or made, any information or representation must not

be relied upon as having been authorised by Winterﬂood Securities, the Company or the

Investment Manager;

4.9 it is not applying as, nor is it applying as nomi nee or agent for, a person who is or may be

liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at

any of the increased rates referred to in section 67, 70, 93 or 96 (dep ository receipts and

clearance services) of the Finance Act 1986;

4.10 it accepts that none of the Shares have been or will be registered under the securities laws,

or with any securities regulatory authority of, the United States, any member state of the EEA

other than the United Kingdom, Australia, Canada, the Republic of South Africa or Japan

(each a ‘‘Restricted Jurisdiction’’). Accordingly, the Shares may not be offered, sold, issued

or delive red, directly or indirectly, within any Restricted Jurisdiction unless an exemption from

any registration requirement is available;

4.11 if it is within the United Kingdom, it is (a) a person who falls within (i) Articles 49(2)(A) to (D)

or (ii) Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions)

Order 2005 (the ‘‘Order’’) or is a person to whom the Shares may otherwise lawfully be

offered under such Order, or, if it is receiving the offer in circumstances under which the laws

or regulations of a jurisdicti on other than the United Kingdom would apply, that it is a person

to whom the Shares may be lawfully offered under that other jurisdiction’s laws and

regulations and (b) a qualiﬁed invest or (as such term is deﬁned in section 86(7) of FSMA);

4.12 if it is a resident in the EEA (other than the United Kingdom), it is (a) a qualiﬁed investor

within the meaning of the law in the Relevant Member State implementing Article 2(1)(i), (ii)

or (iii) of the Prospectus Directive and (b) if the Relevant Member State has implemented the

AIFMD, that it is a person to whom the Shares may lawfully be marketed to under the

applicable implementing legislation (if any) of the Relevant Member State;

4.13 in the case of any Shares acquired by an investor as a ﬁn ancial intermediary as that term is

used in Article 3(2) of the Prospectus Directive, (i) the Shares acquired by it in the Initial

Placing and/or Subsequent Placings have not been acquired on behalf of, nor have they been

acquired with a view to their offer or resale to, persons in any Relevant Member State other

than qualiﬁed investors, as that term is deﬁned in the Prospectus Directive, or in

circumstances in which the prior consent of Winterﬂood Securities has been given to the offer

or resale; or (ii) where Shares have been acquired by it on behalf of persons in any Rel evant

Member State other than qualiﬁed investors, the offer of those Shares to it is not treated

under the Prospectus Directive as having been made to such persons;

4.14 if it is outside the United Kingdom, neither this document nor any other offering, marketing or

other material in connection with the Initial Placing or any Subsequent Placing (for the

purposes of this Part 11, each a ‘‘Placing Document’’) co nstitutes an invitation, offer or

promotion to, or arrangement with, it or any person whom it is procuring to subscribe for

Shares pursuant to the Initial Placing or any Subsequent Placin g unless, in the relevant

territory, such offer, invitation or other course of conduct could lawfully be made to it or such

person and such documents or materials could lawfully be provided to it or such person and

Shares could lawfully be distributed to and subscribed and held by it or such person without

compliance with any unfulﬁlle d approval, registration or other regulatory or legal requirements;

4.15 it does not have a registered address in, and is not a citizen, resident or national of a

Restricted Jurisdiction or any jurisdiction in which it is unlawful to make or accept an offer of

the Shares and it is not acting on a non-discretionary basis for any such person;

4.16 if the investor is a natural person, such investor is not under the age of majority (18 years of

age in the United Kingdom) on the date of such investor’s agreement to subscribe for Shares

under the Initial Placing or relevan t Subsequent Placing;

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4.17 it has only communicated or caused to be communicated and will only communicate or cause

to be communicated any invitation or inducement to engage in investment activity (within the

meaning of section 21 of FSMA) relating to the Shares in circumstances in which section

21(1) of FSMA does not require approval of the communication by an authorised person and

acknowledges and agrees that no Placing Document is being issued by Winterﬂood Securities

in its capacity as an authorised person under section 21 of FSMA and s uch documents may

not therefore be subject to the contro ls which would apply if they were made or approved a

ﬁnancial promotion by an authori sed person;

4.18 it is aware of and acknowledges that it is required to comply with all applicable provisions of

FSMA with respect to anything done by it in relation to the Shares in, from or otherwise

involving, the United Kingdom;

4.19 it is aware of the provisions of the Criminal Justice Act 1993 regarding insider dealing and the

Proceeds of Crime Act 2002 and conﬁrms that it has and will continue to comply with any

obligations imposed by such statu tes;

4.20 unless it is otherwise expressly agreed with the Company and Winterﬂood Secur ities in the

terms of any particu lar placing, it has not, directly or indirectly, distributed, forwarded,

transferred or otherwise transmitted this document or any other Placing Document to any

persons within the United States or to any U.S. Persons, nor will it do any of the foregoing;

4.21 it represents, acknowledges and agrees to the representations, warranties and agreements as

set out under the heading ‘‘United States Purchase and Transfer Restrictions’’ in paragraph 5

below;

4.22 no action has been taken or will be taken in any jurisdiction other than the United Kingdom

that would permit a public offering of the Shares or possession of the Prospectus (and any

supplementary prospectus issued by the Company), in any country or jurisdiction where action

for that purpose is required;

4.23 it acknowledges that neither Winterﬂood Securities nor any of its respective afﬁliates nor any

person acting on its or thei r behalf is making any recommendations to it, advising it regarding

the suita bility of any transactions it may enter into in connectio n with the Initial Placing or any

Subsequent Placing or providing any advice in relation to the Initial Placing or any

Subsequent Placing and participation in the Initial Placing or any relevant Subsequent Placin g

is on the basis that it is not and will not be a client of Winterﬂood Securities and that

Winterﬂood Securities does not have any duties or responsibilities to it for providing protection

afforded to their respective clients or for providing advice in relation to the Initial Placing or

any Subsequent Placing (as applicable);

4.24 that, save in the event of fraud on the part of Winterﬂood Securities, none of Winterﬂood

Securities, its ultimate holding companies nor any direct or indirect subsidiary undertakings of

such holding companies, nor any of their respective directors, members, partners, ofﬁcers and

employees, shall be responsible or liable to a Placee or any of its clients for any matter

arising out of Winterﬂood Securities’ role as sponsor, ﬁnancial adviser and bookrunner or

otherwise in connection with the Initial Placing or any Subsequent Placing and that where any

such responsibility or liability nevertheless arises as a matter of law the Placee and, if

relevant, its clients, will immediately waive any claim against any of such persons which the

Placee or any of its clients may have in respect thereof;

4.25 it acknowledges that where it is subscribing for Shares for one or more managed,

discretionary or advisory accounts, it is authorised in writing for each such account: (i) to

subscribe for the Shares for each such account; (ii) to make on each such account’s behalf

the represent ations, warranties and agreements set out in this document; and (iii) to receive

on behalf of each such account any documentation relating to the Initial Placing or relevant

Subsequent Placing (as applicable) in the form provided by the Company and/or Winterﬂood

Securities. It agrees that the provision of this paragraph shall survive any resale of the

Shares by or on behalf of any such account;

4.26 it irrevocably appoints any Director and any director of Winterﬂood Securities to be its agent

and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any

documents and do all acts, matters and things as may be necessary for, or incidental to, its

subscription for all or any of the Shares for which it has given a commitment under the Initial

Placing or any Subsequent Placing (as applicable), in the event of its own failure to do so;

135

4.27 it accepts that if the Initial Placing or relevant Subsequent Placing does not proceed or the

relevant conditions to the Placing and Offer Agreement are not satisﬁed as regards the

relevant placing or the Shares for whi ch valid applications are received and accepted are not

admitted to trading on the London Stock Exchange’s main market for any reason whatsoever,

then none of Winterﬂood Securities or the Company or the Investment Manager, nor persons

controlling, controlled by or under common control with any of them nor any of their

respective employees, agents, ofﬁcers, members, stockhol ders, partners or representatives,

shall have any liability whatsoever to it or any other person;

4.28 in connection with its participation in the Initial Placing or relevant Subsequent Placing (as

applicable) it has observed all relevant legislation and regulations, in particular (but without

limitation) those relating to money laundering and that its application is only made on the

basis that it accepts full responsibility for any requirement to verify the identity of its clients

and other persons in respect of whom it has applied. In addition, it warrants that it is a

person: (i) subject to the Money Laundering Regulations; or (ii) subject to the Money

Laundering Directive on the prevention of the use of the ﬁnancial system for the purpose of

money laundering and terrorist ﬁnancing); or (iii) acting in the course of a business in relation

to which an overseas regulatory authority exercises regulatory functions and is based or

incorporated in, or formed under the law of, a country in which there are in force provisions at

least equivalent to those required by the Money Laundering Directive;

4.29 it acknowledges that due to anti-money laundering requirements, Winterﬂood Securities, the

Administrator, the Registrar and the Company may require proof of identity and veriﬁcation of

the source of the payment before the application can be processed and that, in the event of

delay or failure by the applicant to produce any information required for veriﬁcation purposes,

Winterﬂood Secur ities and the Company may refuse to accept the application and the

subscription monies relating thereto. It holds harmless and will indemnify Winterﬂood

Securities and the Company against any liability, loss or cost ensuing due to the failure to

process such application, if such information as has been requested has not been provided

by it in a timely manner;

4.30 that it is aware of, has complied with and will at all times comply with its obligations in

connection with money laundering under the Proceeds of Crime Act 2002;

4.31 if it is acting as a ‘‘distributor’’ (for the purposes of MiFID II Product Gover nance

Requirements):

4.31.1 it acknowledges that the Target Market Assessment undertaken by the Investment

Manager and Winterﬂood Securities does not constitute: (a) an assessment of

suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation

to any investor or group of investors to invest in, or purchase, or take any other

action whatsoever with respect to the Shares and each distributor is responsible for

undertaking its own target market assessment in respect of the Shares and

determining appropriate distribution channels;

4.31.2 notwithstanding any Target Market Assessment undertaken by the Investment

Manager and Winterﬂood Securities, it conﬁrms that, other than where it is a

providing an execution-only service to investors, it has satisﬁed itself as to the

appropriate knowledge, experience, ﬁnancial situation, risk tolerance and objectives

and needs of the investors to whom it plans to distribute the Shares and that is

has considered the compatibility of the risk/reward proﬁle of such Shares with the

end target market; and

4.31.3 it acknowledges that the price of the Shares may decline and investors could lose

all or part of thei r investment; the Shares offer no guaranteed income and no

capital protection; and an investment in the Shares is compatible only with

investors who do not need a guaranteed incom e or capital protection, who (either

alone or in conjunction with an appropriate ﬁnancial or other adviser) are capable

of evaluating the merits and risks of such an investment and who have sufﬁcient

resources to be able to bear any losses that may result therefrom;

4.32 Winterﬂood Securities and the Company are entitled to exercise any of their rights under the

Placing and Offer Agreement or any other right in their absolute discretion without any liability

whatsoever to it;

136

4.33 the representations, undertakings and warranties contained in this document are irrevocable. It

acknowledges that Winterﬂood Securities and the Company and their respective afﬁliates will

rely upon the truth and ac curacy of the foregoing representations and warranties and it

agrees that if any of the representations or warranties made or deemed to have been made

by its subscription of Shares are no longer accurate, it shall promptly notify Winterﬂood

Securities and the Company;

4.34 where it or any person acting on behalf of it is dealing with Winterﬂood Securiti es, any money

held in an account with Winterﬂood Securities on behalf of it and/or any person acting on

behalf of it will not be treated as client money within the meaning of the relevant rules and

regulations of the FCA which therefore will not require Winterﬂood Securities to segregate

such money, as that money will be held by Winterﬂood Securities under a banking

relationship and not as trustee;

4.35 any of its clients, whether or not identiﬁed to Winterﬂood Securities, will remain its sole

responsibility and will not become clients of Winterﬂood Securities for the purposes of the

rules of the FCA or for the purposes of any other statutory or regulatory provision;

4.36 it accepts that the allocation of Shares shall be determined by Winterﬂood Securities, in its

absolute discretion (following consultation with the Company and the Investment Manager)

and that it may scale down any Initial Placing or Subsequent Placing commitments for this

purpose on such basis as it may determine;

4.37 time shall be of the essence as regards its obligations to settle payment for the Shares and

to comply with its other obligations under the Initial Placing or relevant Subsequ ent Placing

(as applicable);

4.38 it authorises Winterﬂood Securities to deduct from the total amount subscribed under the

Initial Placing or relevant Subsequent Placing (as applicable) the aggregation commission (if

any) payable on the number of Shares all ocated under the Initial Placing or relevant

Subsequent Placing;

4.39 in the event that a supplementary prospectus is required to be produced pursuant to section

87G FSMA and in the event that it chooses to exercise any right of withdrawal pursuant to

section 87(Q)(4) FSMA, such Placee will immediately re-subscribe for the Shares previously

comprising its placing commitment;

4.40 the commitment to subscribe for Shares on the terms set out in these terms and conditions

will continue notwithstanding any amendment that may in the future be made to the terms of

the Initial Placing or to any Subsequent Placing and that it will have no right to be consulted

or require that its consent be obtained with respect to the Company’s conduct of the Initial

Placing and/or any Subsequent Placing; and

4.41 it is capable of being categorised as a person who is a ‘‘professional client’’ or an ‘‘eligible

counterparty’’ within the meaning of Chapter 3 of the FCA’s Conduct of Business Sourcebook.

5. UNITED STATE S PURCHASE AND TRANSFER RESTRICTIONS

Unless it is otherwise expressly agreed with the Company and Winterﬂood Securities in the

terms of any particular placing, by participating in the Initial Placing and/or a Subsequent

Placing, each Placee acknowledges and agrees that it will (for itself and any person(s)

procured by it to subscribe for Shares and any nominee(s) for any such person(s)) be further

deemed to represent and warrant to each of the Company, Winterﬂood Securities, the

Investment Manager and the Regi strar that:

5.1 it is not a U.S. Person, is not located within the United States, is acquiring the Shares in an

offshore transaction meeting the requirements of Regulation S and is not acquiring the Shares

for the account or beneﬁt of a U.S. Person;

5.2 it acknowledges that the Shares have not been and will not be registered under the U.S.

Securities Act or with any securities regulatory authority of any state or other jurisdiction of

the United States and, subject to certain exceptions, may not be offered or sold in the United

States or to, or for the account or beneﬁt of, U.S. Persons absent registration or an

exemption from registration under the U.S. Securities Act;

137

5.3 it acknowledges that the Company has not registered under the U.S. Investment Company

Act and that the Company has put in place restrictions for transactions not involving any

public offering in the United States, and to ensure that the Company is not and will not be

required to register under the U.S. Investment Company Act;

5.4 unless the Company expressly consents in writing otherwise, no portion of the assets used to

purchase, and no portion of the assets used to hold, the Shares or any beneﬁcial interest

therein constitutes or will constitute the assets of: (i) an ‘‘employee beneﬁt plan’’ as deﬁned in

Section 3(3) of ERISA that is subject to Part 4 of subtitle B of ﬁduciary responsibility or

prohibited transaction Title I of ERISA; (ii) a ‘‘plan’’ as deﬁned in Section 4975 of the U.S.

Tax Code, including an individual retirement account, that is subject to Section 4975 of the

U.S. Tax Code; or (iii) an entity whose underlying assets include the assets of any such

‘‘employee beneﬁt plan’’ or ‘‘plans’’ by reason of ERISA or the Plan Assets Regulation, or

otherwise (including certain insurance company general accounts) for the purposes of Section

4.6 of ERISA or Section 4975 of the U.S. Tax Code. In addition, if an investor is a

governmental, church, non-U.S. or other employee beneﬁ t plan that is subject to any federal,

state, local or non-U.S. law that is substantially similar to the ﬁduciary responsibility or

prohibited transaction provisions of Title I of ERISA or Section 4975 of the U.S. Tax Code, its

purchase, holding, and disposition of the Shar es must not constitute or result in a non-exempt

violation of any such substantially similar law;

5.5 that if any Shares offered and sold pursuant to Regulation S are issued in certiﬁcated form,

then such certiﬁcates evidencing ownership will contain a legend substantially to the following

effect unless otherwise determ ined by the Company in accordance with applicable law:

‘‘M&G CREDIT INCOME INVESTMENT TRUST PLC (THE ‘‘COMPANY ’’) HAS NOT BEEN

AND WILL NOT BE REGISTERED UNDER THE U.S. INVESTMENT COMPANY ACT OF

1940, AS AMENDED (THE ‘‘INVESTMENT COMPANY ACT’’). IN ADDITION, THE

SECURITIES OF THE COMPANY REPRESENTED BY THIS CERTIFICATE HAVE NOT

BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS

AMENDED (THE ‘‘SECU RITIES ACT’’), OR WITH ANY SECURITIES REGULATORY

AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.

ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED, EXERCISED

OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE

ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE

SECURITIES ACT OR AN EXEMPTION THEREFROM AND UNDER CIRCUMSTANCES

WHICH WILL NOT REQUIRE THE COMPANY TO REGISTER UNDER THE INVESTMENT

COMPANY ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES

LAWS. FURTHER, NO PURCHASE, SALE OR TRANSFER OF THE SECURITIES

REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS SUCH PURCHASE,

SALE OR TRANSFER WILL NOT RESULT IN THE ASSETS OF THE COMPANY

CONSTITUTING ‘‘PLAN ASSETS’’ WITHIN THE MEANING OF THE EMPLOYEE

RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (‘‘ERISA’’) OR THE PLAN

ASSETS REGULATION;’’

5.6 if in the future the investor decides to offer, sell, transfer, assign or otherwise dispose of the

Shares, it will do so only in compliance with an exemption from the registration requirements

of the U.S. Securities Act and under circumstances which: (a) will not require the Company to

Company constituting ‘‘plan assets’’ within the meaning of ERISA or the Plan Assets

Regulation;

5.7 it is purchasing the Shares for its own account or for one or more investment accounts for

which it is acting as a ﬁduciary or agent, in each case for investment only, and not with a

view to or for sale or other transfer in connection with any distribution of the Shares in any

manner that would violate the U.S. Securities Act, the U.S. Investment Company Act or any

other applicable securities laws;

5.8 it acknowledges that the Company reserves the right to make inquiries of any holder of the

Shares or interests therein at any time as to such person’s status under the U.S. federal

securities laws and to require any such person that has not satisﬁed the Company that the

holding of Shares by such person will not violate or require registration under the U.S.

securities laws to transfer such Shares or interests in accordance with the Articles;

138

5.9 it is entitled to acquire the Share s under the laws of all relevant jurisdictions which apply to it,

it has fully observed all such laws and obtained all governmental and other consents which

may be required thereunder and complied with all necessary formalities and it has paid all

issue, transfer or other taxes due in connection with its acceptance in any jurisdiction of the

Shares and that it has not taken any action, or omitted to take any action, which may result

in the Company, Winterﬂood Securities, the Investment Manager or their respective directors,

ofﬁcers, agents, employees and advisers being in breach of the laws of any jurisdiction in

connection with its acceptance of participation in the Initial Placing and/or any relevant

Subsequent Placing (as applicable);

5.10 it has received, carefully read and understands this document, and has not, directly or

indirectly, distri buted, forwarded, transferred or otherwise transmitted this document or any

other present ation or offering materials concerning the Shares to or within the United States

or to any U.S. Persons, nor will it do any of the foregoing; and

5.11 if it is acquiring any Shares as a ﬁduciary or agent for one or more accounts, it has sole

investment discretion with respect to each such account and full power and authority to make

such foregoing representations, warranties, acknowledgements and agreements on behalf of

each such account.

The Company, Winterﬂood Securities, the Investment Manager and their respective directors,

ofﬁcers, agents, employees, advisers and others will rely upon the truth and accuracy of the

foregoing representations, warranties, acknowledgments and agreements. If any of the

representations, warranties, acknowledgments or agree ments made by the investor are no

longer accurate or have not been complied with, the investor must immediately notify the

Company.

6. SUPPLY OF INFORMATION

If Winterﬂood Securities, the Registrar or the Company or any of their agents request any

information about a Placee’s agreement to subscribe for Shares under the Initial Placing and/

or any Subsequent Placing, such Placee must promptly disclose it to them.

7. MONEY LAUNDERING

Each Placee acknowledges and agrees that:

7.1 in connection with its particip ation in the Initial Placing or Subsequent Placing it has observed

all relevant legislation and regulations, in particular (but without limitation) those relating to

money laundering (‘‘Money Laundering Legislation’’) and that its application is only made

on the basis that it accepts full responsibility for any requirement to verify the identity of its

clients and other persons in respect of whom it has applied. In addition, it warrants that it is a

person: (i) subject to the Money Laundering Regulations in force in the United Kingdom; or (ii)

subject to the Money Laundering Directive; or (iii) acting in the course of a business in

relation to which an overseas regulatory authority exercises regulatory functions and is based

or incorporated in, or formed under the law of, a country in which there are in force

provisions at least equivalent to those required by the Money Laundering Directive;

7.2 due to anti-money laundering requirements, Winterﬂood Securities and the Company and/or

their agents may require proof of identity and veriﬁcation of the source of the payment before

the application can be processed and that , in the event of delay or failure by the applicant to

produce any information required for veriﬁcation purposes, Winterﬂood Securities, the

Company and/or their agents may refuse to accept the application and the subscription

moneys relating thereto. It holds harmless and will indemnify Winterﬂood Securities, the

Company and/or their agents against any liability, loss or cost ensuing due to the failure to

process such application, if such information as has been required has not been provided by

it or has not been provided on a timely basis.

8. DATA PROTECTION

8.1 Each Placee acknowledges that it has been informed that, pursuant to the General Data

Protection Regulation 2016/679 (the ‘‘DP Legislation’’) the Company and/or the Registrar will

following Initial Admission, hold personal data (as deﬁned in the DP Legislation) relating to

past and present Shareholders. Personal data will be retained on record for a period

exceeding seven years after it is no longer used (subject to any limitations on retention

139

periods set out in applicable law). The Registrar will process such personal data at all times

in compliance with DP Legislation and shall only process for the purposes set out in the

Company’s privacy notice (the ‘‘Purposes’’) which is available for consultation on the

Company’s website at www.mandg.co.uk/creditincomeinvestmenttrust (the ‘‘Privacy Notice’’)

which include to:

8.1.1 process its personal data to the extent and in such man ner as is necessary for the

performance of its obligations under its respective service contracts, including as

required by or in connection with the Placee’s holding of Ordinary Shares and/or

C Shares, including processing personal data in connection with credit and anti-money

laundering checks on it;

8.1.2 communicate with it as necessary in con nection with its affairs and generally in

connection with its holding of Ordinar y Shares and/or C Shares;

8.1.3 comply with the legal and regulatory obligations of the Company and/or the Registrar;

and

8.1.4 process its personal data for the Registrar’s internal administration.

8.2 Where necessary to fulﬁl the Purposes, the Company will disclose perso nal data to:

8.2.1 third parties located either within, or outside of the EEA, if necessary for the Registrar to

perform its functions, or when it is within its legitimate interests, and in particular in

connection with the holding of Ordinary Shares and/or C Shares; or

8.2.2 its afﬁliates, the Registrar or the Investment Manager and their respective associates,

some of which may be located outside the EEA.

8.3 Any sharing of personal data between parties will be carried out in compliance with the DP

Legislation and as set out in the Company’s Privacy Notice.

8.4 By becoming registered as a holder of Ordinary Shares and/or C Shares a person becomes a

data subject (as deﬁned under DP Legislation). In providing the Registrar with information, the

Placee hereby represents and warrants to the Company, the Registrar and the Administrator

that: (i) it complies in all material aspects with its data controller obligations under DP

Legislation, and in particular, it has notiﬁed any data subject of the Purposes for which

personal data will be used and by which parties it will be used and it has provided a copy of

the Company’s Privacy Not ice; and (ii) where consent is legally competent and/or required

under DP Legislation the Placee has obtained the consent of any data subject to the

Company and Registrar and their respective afﬁliates and group companies, holding and

using their personal data for the Purposes (including the explicit consent of the data subjects

for the processing of any sensitive personal data for the Purposes).

8.5 Each Placee acknowledges that by submitting personal data to the Registrar (acting for and

on behalf of the Company) where the Placee is a natural person he or she has read and

understood the terms of the Company’s Privacy Notice.

8.6 Each Placee acknowledges that by submitting personal data to the Registrar (acting for and

on behalf of the Comp any) where the Placee is not a natural person it represents and

warrants that:

8.6.1 it has brought the Company’s Privac y Notice to the attention of any underlying data

subjects on whose behalf or account the Placee may act or whose personal data will be

disclosed to the Company as a result of the Placee agreeing to subscribe for Ordinary

Shares and/or C Shares; and

8.6.2 the Placee has complied in all other respects with all applicable data protection

legislation in respect of disclosure and provision of personal data to the Compa ny.

8.7 Where the Placee acts for or on account of an underlying data subject or otherwise discloses

the perso nal data of an underlying data subject, he/she/it shall, in respect of the personal

data it processes in relation to or arising in relation to the Placing:

8.7.1 comply with all applicable data protection legislation;

8.7.2 take appropriate technical and organisationa l measures against unauthorised or unlawful

processing of the personal data and against accidental loss or destruction of, or damage

to the personal data;

140

8.7.3 if required, agree with the Company and the Registrar, the responsibilities of each such

entity as regards relevant data subjects’ rights and notice requirements; and

8.7.4 it shall immediately on demand, fully indemnify each of the Com pany and the Registrar

and keep them fully and effectively indemniﬁed against all costs, demands, claims,

expenses (including legal costs and disbursements on a full indemnity basis), losses

(including indirect losses and loss of proﬁts, business and reputation), ac tions,

proceedings and liabilities of whatsoever nature arising from or incurred by the Company

and/or the Registrar in connection with any failure by the Placee to comply with the

provisions set out above.

9. MISCELLANEOUS

9.1 The rights and remedies of the Company, Winterﬂood Securities, the Investment Manager and

the Registrar under these terms and conditions are in addition to any rights and remedies

which would otherwise be available to each of them and the exercise or partial exercise of

one will not prevent the exercise of others .

9.2 On application, if a Placee is an individual, that Placee may be asked to disclose in writing or

orally, his nationality. If a Placee is a discretionary fund manager, that Placee may be asked

to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All

documents provided in connection with the Initial Placing and any Subsequent Placings will be

sent at the Placee’s risk. They may be returned by post to such Placee at the address

notiﬁed by such Placee.

9.3 Each Placee agrees to be bound by the Articles once the Shares, which the Placee has

agreed to subscribe for pursuant to the Initial Placing and/o r the relevant Subsequent Placi ng,

have been acquired by the Placee. The contract to subscribe for Shares under the Initial

Placing or relevant Subsequent Placing (as applicable) and the appointments and authorities

mentioned in this document and all disputes and claims arising out of or in connection with its

subject matter or formation (including non-contractual disputes or claims) will be governed by,

and construed in accordance with, the laws of England and Wales. For the exclusive beneﬁt

of Winterﬂood Securities, the Company and the Registrar, each Placee irrevocably submits to

the jurisdiction of the courts of England and Wales and waives any objection to proceedings

in any such court on the ground of venue or on the ground that proceedings have been

brought in an inconvenient forum. This does not prevent an action being taken against the

Placee in any other jurisdiction.

9.4 In the case of a joint agreement to subscribe for Shares under the Initial Placing or a

Subsequent Placing, references to a Placee in these terms and conditions are to each of the

Placees who are a party to that joint agreement and their liability is joint and several.

9.5 Winterﬂood Securities and the Company expressly reserve the right to modify the Initial

Placing and/or any Subsequent Placing (including, without limitation, their timetable and

settlement) at any time before allocations are determined. The Initial Placing and each

Subsequent Placing is subject to the satisfaction of the conditions contained in the Placing

and Of fer Agreement and the Placing and Offer Agreement not having been terminated.

Further details of the terms of the Placing and Offer Agreement are contained in

paragraph 6.1 of Part 8 of this document.

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PART 12

TERMS AND CONDITIONS OF APPLICA TION UNDER THE OFFER FOR

SUBSCRIPTION

1. INTRODUCTION

Ordinary Shares are available under the Offer for Subscription at a price of 100 pence per

Ordinary Share.

Applications must be made on the Application Form attached at the end of this document or

otherwise published by the Company.

In addition to completing and returning the Application Form to Link Asset Services, you will

also need to complete and return a Tax Residency Self Certiﬁcation Form. The ‘‘individual tax

residency self-certiﬁcatio n – sole holding’’ form can be found at Appendix 2 of this document,

further copies of this form and the relevant form for joint holdings or corporate entity holdings

can be requested from Link Asset Services on 0371 664 0321. Calls are charged at the

standard geographic rate and will vary by provider. Calls outside of the United Kingdom will

be charged at the applicable international rate. The helpline is open between 9.00 a.m. – 5.30

p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link

Asset Services cannot provide any ﬁnancial, legal or tax advice and calls may be recorded

and monitored for security and training purposes.

It is a condition of any Application under the Offer for Subscription that a completed

version of the relevant form is provided with the Application Form before any

application under the Offer for Subscription can be accepted. Offer for Subscription

Application Forms that are returned without the completed Tax Residency Self-

Certiﬁcation Form will be referred to the Company after the Offer for Subscription

closes at 1.00 p.m. on 7 November 2018. It will then be the Company’s decision if

these Application Forms can be accepted under the Offer for Subscription.

2. EFFECT OF APPLICATION

Applications under the Offer for Subscription must be for Ordinary Shares with a minimum

subscription amount of £1,000. Multiple applications will be accepted.

3. OFFER TO ACQUIRE ORDINARY SHARES

By completing and delivering an Application Form, you, as the applicant, and, if you sign the

Application Form on behalf of another person or a corporation, that person or corporation:

3.1 offer to subscribe for such number of Ordinary Shares at 100 penc e per Ordinary Share as

may be purchased by the subscription amount speciﬁed in Box 1B on your Application Form

(being a minimum of 1,000 Ordinary Shares); or such smaller number for which such

application is accepted, on the terms, and subject to the conditions, set out in this documen t,

including these Terms and Conditions of Application and the Articles;

3.2 agree that, in consideration of the Company agreeing that it will not, prior to the date of Initial

Admission, offer for subscription any Ordinary Shares to any person other than by means of

the procedures referred to in this document, your application may not be revoked (subject to

any legal right to withdraw yo ur application which arises as a result of the publication of a

supplementary prospectus) and that this paragraph shall constitute a collateral contract

between you and the Company which will become binding upon despatch by post to or, in

the case of delivery by hand, on receipt by, the Receiving Agent of your Application Form;

3.3 undertake to pay the subscription amount speciﬁed in Box 1B on your Application Form in full

on application and warrant that the remittance accompanying your Application Form will be

honoured on ﬁrst presentation and agree that if such remittance is not so honoured you will

not be entitled to receive a share cert iﬁcate for the Ordinary Shares applied for in certiﬁcated

form or be entitled to commence dealing in Ordinary Shares applied for in uncertiﬁcated form

or to enjoy or recei ve any rights in respect of such Ordinary Shares unless and until you

make payment in cleared funds for such Ordinary Shares and such payment is accepted by

the Receiving Agent (w hich acceptance shall be in its absolute discretion and on the basis

that you inde mnify the Receiving Agent, the Company and Winterﬂood Securities against all

costs, damages, losses, expenses and liabilities arising out of, or in connection with, the

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failure of your remittance to be honoured on ﬁrst presentation) and the Company may

(without prejudice to any other rights it may have) avoid the agreement to allot the Ordinary

Shares and may allot them to some other person, in which case you will not be entitled to

any refund or payment in respect thereof (other than the refund by way of a cheque drawn

on a branch of a UK clearing bank to the bank account name from which they were received

at your risk or direct to the account of the bank or building society on which the relevant

cheque or banker’s draft was drawn, for an amount equal to the proceeds of the remittance

which accompanied your Applic ation Form, without interest);

3.4 agree, that where on your Application Form a request is made for Ordinary Shares to be

deposited into a CREST account (a ‘‘CREST Account’’), (i) the Receiving Agent may in its

absolute discretion amend the Application Form so that such Ordinary Shares may be issued

in certiﬁcated form registered in the name(s) of the holder(s) speciﬁed in your Application

Form (and recognise that the Receiving Agent will so amend the form if there is any delay in

satisfying the identity of the applicant or the owner of the CREST Account or in receiving

your remittance in cleared funds) and (ii) the Receiving Agent, the Company or Winterﬂood

Securities may authorise your ﬁnancial adviser or whoever he or she may direct to send a

document of title for, or credit your CREST Account in respect of, the number of Ordinary

Shares for which your application is accepted, and/or a crossed cheque for any monies

returnable, by post at your risk to your address set out on your Application Form;

3.5 agree, in respect of applications for Ordinary Shares in certiﬁcated form (or where the

Receiving Agent exercises its discre tion pursuant to paragraph 3.4 above to issue Ordinary

Shares in certiﬁcated form), that any share certiﬁcate to which you or, in the case of joint

applicants, any of the persons speciﬁed by you in your Application Form may become entitled

or pursuant to paragraph 3.4 above (and any monies returnable to you) may be retained by

the Receiving Agent:

pending clearance of your remittance;

pending investigation of any suspected breach of the warranties contained in paragraphs

7.2, 7.6, 7.13, 7.14 or 7.15 below or any other suspected breach of these Terms and

Conditions of Application; or

pending any veriﬁcation of identity which is, or which the Receivi ng Agent considers may

be, required for the purpose of the Money Laundering Regulations and any other

regulations applicable thereto,

and any interest accruing on such retained monies shall accrue to and for the beneﬁt of the

Company;

3.6 agree, on the request of the Receiving Agent to disclose promptly in writing to them such

information as the Receiving Agent may request in connection with your application and

authorise the Receiving Agent to disclose any information relating to your application which

they may consider appropriate;

3.7 agree that if evidence of identity satisfactory to the Receiving Agent is not provided to the

Receiving Agent within a reason able time (in the opinion of the Receiving Agent) following a

request therefor, the Receiving Agent or the Com pany may terminate the agreement with you

to allot Ordinary Shares and, in such case, the Ordinary Shares which would otherwise have

been allotted to you may be re-allotted or sold to some other party and the lesser of your

application monies or such proceeds of sale (as the case may be, with the proceeds of any

gain derived from a sale accruing to the Company) will be returned by a cheque drawn on a

branch of a UK clearing bank to the bank account name from which they were ﬁrst recei ved,

at your risk and without interest of any proceeds of the payment accompanying the

application at your risk or direct to the bank account of the bank or building society on which

the relevant cheque or banker’s draft was drawn;

3.8 agree that you are not applying on behalf of a person engaged in money laundering;

3.9 undertake to ensure that, in the case of an application signed by someone else on your

behalf, the original of the relevant power of attorney (or a complete copy certiﬁed by a

solicitor or notary) is enclosed with your Application Form together with full identity documents

for the person so signing;

3.10 undertake to pay interest at the rate described in paragraph 4 below if the remittance

accompanying your Application Form is not honoured on ﬁrst presentation;

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3.11 authorise the Receiving Agent to procure that there be sent to you deﬁnitive certiﬁcates in

respect of the number of Ordinary Shares for which your application is ac cepted or if you

have completed section 2B on your Application Form, but subject to paragraph 3.4 above, to

deliver the number of Ordinary Shares for which your applica tion is accepted into CREST,

and/or to return any monies returnable without payment of interest (at the applicant’s risk)

either as a cheque by ﬁrst class post to the address completed in Section 4 on the

Application Form or to the agent whose name is completed in Section 6 on your Application

Form or return funds direct to the account of the bank or building society on which the

relevant cheque or banker’s draft was drawn;

3.12 conﬁrm that you have read and complied with paragraph 9 below;

3.13 agree that all subscription cheques and payments will be processed through a bank account

(the ‘‘Acceptance Account’’) in the name of ‘‘ Link Market Services Limited re: M&G

Credit Income Investment Trust plc – OFS Acceptance a/c’’ opened by the Receiving

Agent;

3.14 agree that your Application Form is addressed to the Company and the Receiving Agent;

3.15 agree that your application must be for a whole number of Ordinary Shares and the number

of Ordinary Shares issued to you will be rounded down to the nearest whole number;

3.16 acknowledge that the offer to the public of Ordinary Shares is being made only in the United

Kingdom and represent that you are a United Kingdom resident (unless you are able to

provide such evidence as the Company may, in its absolute discretion, require that you are

entitled to apply for Ordinary Shares); and

3.17 agree that any application may be rejected in whole or in part at the sole discretion of the

Company.

4. ACCEPTANCE OF YOUR OFFER

The Receiving Agent may, on behalf of the Company, accept your offer to subscribe (if your

application is received, valid (or treated as valid), pro cessed and not rejected) by notifying the

UK Listing Authority via a Regulatory Information Service of the basis of allocation (in which

case the acceptance will be on that basis).

The basis of allocation will be determined by Winterﬂood Securities in consultation with the

Company and the Investment Manager. The right is reserved notwithstanding the basis as so

determined to reject in whole or in part and/or scale back any appli cation. The right is

reserved to treat as valid any application not complying fully with these Terms and Conditio ns

of Application or not in all respects completed or delivered in accordance with the instructions

accompanying the Application Form. In particular, but without limitation, the Company may

accept an application made otherwise than by completion of an Application Form where you

have agreed with the Company in some other manner to apply in accordance with these

Terms and Conditions of Application.

The Receiving Agent will present all cheques and banker’s drafts for payment on receipt and

will retain documents of title and surplus monies pending clearance of successful applicants’

payments.

The Receiving Agent may, as agent of the Company, require you to pay interest or its other

resulting costs (or both) if the payment accompanying your application is not honoured on ﬁrst

presentation. If you are required to pay interest you will be obliged to pay the amount

determined by the Receiving Agent to be the interest on the amount of the payment from the

date on which all payments in cleared funds are due to be received until the date of receipt

of cleared funds. The rate of interest will be the then published bank base rate of a clearing

bank selected by the Receiving Agent plus 4% per annum. The right is also reserved to reject

in whole or in part, or to scale down or limit, any application.

Except as provided below, payments may be made by cheque or banker’s draft in pounds

sterling drawn on a branch in the United Kingdo m of a bank or building society that is either

a member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing

Company Limited or that has arranged for its cheques or bankers’ drafts to be cleare d

through the facilities provided for members of either of those companies. Such cheques or

bankers’ drafts must bear the appropriate sort code in the top right hand corner. Cheques,

which must be drawn on the personal account of an individual Applicant where they have sole

144

or joint title to the funds, should be made payable to ‘‘Link Market Services Limited re:

M&G Credit Income Investment Trust plc – OFS Acceptance a/c’’. Third party cheques

may not be accepted with the exception of building society cheques or bankers’ drafts where

the building society or bank has conﬁrmed the name of the account holder by stamping/

endorsing the cheque or banker’s draft to that effect or have provided a supporting letter

conﬁrming the source of funds. The account name should be the same as that shown on the

Application Form.

For applicants sending subscription monies by electronic bank transfer (CHAPS), payment

must be made for value by no later than 1.00 p.m. on 7 November 2018. Applicants should

send payment to the bank account as detailed on the Application Form. Applicants must

ensure that they remit sufﬁcient funds to cover any charges incurred by their bank.

The payment instruction relating to the electronic transfer must also include a unique

reference comprising your name and a contact telephone number which should be entered in

the reference ﬁeld on the payment instruction, for example: MJ Smith 01234 567890. The

Receiving Agent cannot take responsibility for correctly identifying payments without a unique

reference nor where a payment has been received but without an accompanying Application

Form.

Applicants choosing to settle via CREST, that is DVP, will need to match their instructions to

Link Asset Service’s Participant Account RA06, Member Account 29728MAG by no later than

1.00 p.m. on 14 November 2018, allowing for the delivery and acceptance of the Ordinary

Shares to be made against payment of the Issue Price per Ordinary Shar e, following the

CREST matching criteria set out in the Application Form.

5. CONDITIONS

The contracts create d by the acceptance of applications (in whole or in part) under the Offer

for Subscription will be conditional upon:

(a) Initial Admission occurring by 8.00 a.m. (London time) on 14 November 2018 or such

later time or date as the Company and Winterﬂood Securities may agree (being not later

than 8.00 a.m. on 28 February 2019);

(b) the Placing and Offer Agreement becoming otherwise unconditional (save as to Initial

Admission) and not being terminated in accordance with its terms at any time before

Initial Admission; and

Securities may agree) being raised.

You will not be entitled to exercise any remedy of rescission for innocent misrepresentation

(including pre-contractual representations) at any time after acceptance. This does not affect

any other right you may have.

6. RETURN OF APPLICATION MONIES

Where application monies have been banked and/or received, if any application is not

accepted in whole, or is accepted in part only, or if any contract created by acceptance does

not become uncond itional, the application monies or, as the case may be, the balance of the

amount paid on application will be returned without interest (at the applicants’ risk) either by

ﬁrst class pos t as a cheque to the address set out on the Application Form or returned direct

to the acco unt of the bank or building society on which the relevant che que or banker’s draft

was drawn. In the meantime, application monies will be retained by the Receiving Agent in a

separate account.

7. WARRANTIES

By completing an Application Form, you:

7.1 undertake and warrant that, if you sign the Application Form on behalf of somebody else or

on behalf of a corporation, you have due authority to do so on behalf of that other person

and that such other person will be bound accordingly and will be deemed also to have given

the conﬁrmations, warranties and undertakings contained in these Terms and Conditions of

Application and undertake to enclose your power of attorney or other authority or a complete

copy thereof duly certiﬁed by a solicitor or notary;

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7.2 warrant, if the laws of any territory or jurisdiction outside the UK are applicable to your

application, that you have complied with all such laws, obtained all governmental and other

consents which may be required, complied with all requisite formalities and paid any issue,

transfer or other taxes due in connection with your application in any territory and that you

have not taken any action or omitted to take any action which will result in the Company, the

Investment Manager, Winterﬂood Securities or the Receiving Agent or any of their respective

ofﬁcers, agents or employees acting in breach of the regulatory or legal requirements, directly

or indirectly, of any territory or jurisdiction outside of the UK in connection with the Offer for

Subscription in respect of your application;

7.3 conﬁrm that (save for advice received from your ﬁnancial adviser (if any)) in making an

application you are not relying on any information or representations in relation to the

Company other than those contained in this document (on the basis of which alone your

application is made) and accordingly you agree that no person responsible solely or jointly for

this document or any part thereof shall have any liability for any such other information or

representation;

7.4 agree that, having had the opportunity to read this document and the Key Information

Document relating to the Ordinary Shares each in its entirety, you shall be deemed to have

had notice of all information and representations contained in this document and the Key

Information Document relating to the Ordinary Shares;

7.5 acknowledge that no person is authorised in connection with the Offer for Subscription to give

any information or make any representation other than as contained in this document and, if

given or made, any information or representation must not be relied upon as having been

authorised by the Company, the Investment Manager, Winterﬂood Securities or the Receiving

Agent;

7.6 warrant that you are not under the age of 18 on the date of your application;

7.7 agree that all documents and monies sent by post to, by, from or on behalf of the Company

or the Receiving Agent, will be sent at your risk and, in the case of documents and returned

application cheques and payments to be sent to you, may be sent to you at your address (or,

in the case of joint holders, the address of the ﬁrst named holder) as set out in your

Application Form;

7.8 conﬁrm that you have reviewed the restri ctions contained in paragraph 9 below and warrant

that you (and any person on whose behalf you apply) comply with the provisions therein;

7.9 agree that, in respect of those Or dinary Shares for which your Application Form has been

received and processed and not rejected, acceptance of your Application Form shall be

constituted by the Company instructing the Registrar to enter your name on the Register;

7.10 agree that all applications, acceptances of applications and contracts resulting therefrom

under the Offer for Subscription shall be gov erned by and construed in accordance with the

laws of England and Wales and that you submit to the jurisdiction of the English Courts and

agree that nothing shall limit the right of the Company to bring any action, suit or proceedings

arising out of or in connection with any such applications, acceptances of applications and

contracts in any other manner permit ted by law or in any court of competent jurisdiction;

7.11 irrevocably authorise the Company, Winterﬂood Securities or the Receiving Agent or any other

person authorised by any of them, as your agent, to do all things necessary to effect

registration of any Ordinary Shares subscribed by or issued to you into your name and

authorise any representatives of the Company and/or Winterﬂood Securities and/or the

Receiving Agent to execute any documents required therefor and to enter your name on the

7.12 agree to provid e the Company with any information which it, Winterﬂood Securities or the

Receiving Agent may request in connection with your application or to comply with any other

relevant legislation (as the same may be amended from time-to-time) including, without

limitation, satisfactory evidence of identity to ensure compliance with the Money Laundering

Regulations;

7.13 warrant that, in connection with your application, you have observed the laws of all requisite

territories, obtained any requisite governmental or other consents, complied with all requisite

formalities and paid any issue, transfer or other taxes due in connection with your application

in any territory and that you have not taken any action which will or may result in the

146

Company, the Investment Manager, Winterﬂood Securities or the Receiving Agent acting in

breach of the regulatory or legal requirements of any territory in connection with the Offer for

Subscription or your application;

7.14 represent and warrant to the Company that; (i) you are not a U.S. Person, are not located

within the United States and are not acquiring the Ordinary Shares for the account or beneﬁt

of a U.S. Person; (ii) you are acquiring the Ordinary Shares in an offshore transaction

meeting the requirements of Regulation S; (iii) you understand and acknowledge that the

Ordinary Shares have not been and will not be regis tered under the U.S. Securities Act or

with any securities regulatory authority of any state or other jurisdiction of the United States

and may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly,

into or within the United States or to, or for the account or beneﬁt of, U.S. Persons; and (iv)

you understand and acknowledge that the Company has not registered and will not register

as an investment company under the U.S. Investment Company Act;

7.15 represent and warrant to the Company that if in the future you decide to offer, sell, transfer,

assign or otherwise dispose of the Ordinary Shares, you will do so only (i) in an offshore

transaction complying with the provisions of Regulation S under the U.S. Securities Act to a

person outside the United States and not known by the transferor to be a U.S. Person, by

pre-arrangement or otherwise, or (ii) to the Company or a subsidiary thereof. You understand

and acknowledge that any sale, transfer, assignment, pledge or other disposal made other

than in compliance with the above stated restrictions will be subject to the compulsory

transfer provisions as provided in the Articles;

7.16 agree that Winterﬂood Securities and the Receiving Agent are acting for the Company in

connection with the Offer for Subscription and for no-one else and that they will not treat you

as their customer by virtue of such application being accepted or owe you any duties or

responsibilities concerning the price of the Ordinary Shares or concerning the suitability of the

Ordinary Shares for you or be responsible to you for the protections afforded to their

customers;

7.17 warrant that you are not subscribing for the Ordinary Shares using a loan which would not

have been given to you or any associate or not given to you on such favourable terms, if you

had not been proposing to subscribe for the Ordinary Shares;

7.18 warrant that the information contained in the Application Form is true and accurate; and

7.19 agree that if you request that Ordinary Shares are issued to you on a date other than Initial

Admission and such Ordinary Shares are not issued on such date that the Company and its

agents and Directors will have no liability to you arising from the issue of such Ordinary

Shares on a different date.

8. MONEY LAUNDERING

You agree that, in order to ensure compliance with the Money Laundering Regulations, the

Proceeds of Crime Act 2002 and any other applicable regulations, the Receiving Agent may

at its abs olute discretion require veriﬁcation of identity of you (the ‘‘holder(s)’’) as the

applicant lodging an Application Form and further may request from you and you will assist in

providing identiﬁcation of:

(a) the owner(s) and/or controller(s) (the ‘‘payor’’) of any bank account not in the name of

the holder(s) on which is drawn a payment by way of banker’s draft or cheque; or

(b) where it appears to the Receiving Agent that a holder or the payor is acting on behalf of

some other person or persons.

Any delay or failure to provide the necessary evidence of identity may result in your

application being rejected or delays in crediting CREST accounts or the despatch of

documents.

Without prejudice to the generality of this paragraph 8, veriﬁcation of the identity of holders

and payors will be required if the value of the Shares applied for, whether in one or more

applications considered to be connected, exceeds e15,000 (or the Sterling equivalent). If you

use a building society cheque or banker’s draft you should ensure that the bank or building

society issuing the payment enters the name, address and accou nt number of the person

whose account is being debited on the reverse of the cheq ue or banker’s draft and adds its

stamp.

147

If, in such circumstances, the person whose account is being debited is not a holder you will

be required to provide for both the holder and the payor an original or a copy of that person’s

passport or driving licence certiﬁed by a solicitor and an original or certiﬁed copy of the

following no more than three months old, a gas, electricity, water or telephone (not mobile)

bill, a recent bank statement or a council tax bill, in their name and showing their current

address (which originals will be returned by post at the addressees’ risk) together with a

signed declaration as to the relationship between the payor and you the holder.

For the purpose of the Money Laundering Regulations a person making an application for

Ordinary Shares will not be considered as forming a business relationship with the Company

or the Receiving Agent but will be considered as effecting a one-off transaction with either the

Company or with the Receiving Agent. Submission of an Application Form with the

appropriate remittance will constitute a warranty to each of the Company and the Receiving

agent from the applicant that the Money Laundering Regulations will not be breached by the

application of such remittance.

The person(s) submitting an application for Ordinary Shares will ordinarily be considered to be

acting as principal in the transaction unless the Receiving Agent determines otherwise,

whereupon you may be required to provi de the necessary evidence of identity of the

underlying beneﬁcial owner(s).

If the amount being subscribed exceeds e15,000 (or the Sterling equivalent) you should

endeavour to have the declaration contained in Section 6 of the Application Form signed by

an appropriate ﬁrm as described in that Section. If you cannot have that declaration signed

and the amount being subscribed exceeds e15,000 (or the Sterling equivalent) then you must

provide with the Application Form the identity documentation detailed in Section 6 of the

Application Form for each underlying beneﬁcial owner. If the Application Form is lodged with

payment by a regulated ﬁnancial services ﬁrm (being a person or institution) (the ‘‘Firm’’)

which is located in Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany,

Gibraltar, Guernsey, Hong Kong, Iceland, Irela nd, Isle of Man, Italy, Japan, Jersey,

Luxembourg, Malta, the Netherlands, New Zealand, Nor way, Portugal, Singapore, the

Republic of South Africa, Spain, Sweden, Switzerland, the UK and the United States, the Firm

should pro vide with the Application Form written conﬁrmation that it has that status and a

written assurance that it has obtained and recorded evidence of the identity of the person for

whom it acts and that it will on demand make such evidence available to the Company (or

any of its agents). If the Firm is not such an organisation, it should contact Link Asset

Services. To conﬁrm the acceptability of any written assu rance referred to above, or in any

other case, the Applicant should call Link Asset Services on 0371 664 0321. Calls are

charged at the standard geographic rate and will vary by provider. Calls outside the United

Kingdom will be charged at the applicable international rate. The helpline is open between

9.00 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales.

Different charges may apply to calls from mobile telephones and calls may be recorded and

randomly monitored for security and training purposes. The helpline cannot give any ﬁnancial,

legal or tax advice.

9. NON-UNITED KINGDOM INVESTORS

The Offer for Subscription is only being made in the United Kingdom. If you receive a copy of

this document or an Application Form in any territory other than the United Kingdom you may

not treat it as constituting an invitation or offer to you, nor should you, in any event, use an

Application Form unless, in the relevant territory, such an invitation or offer could lawfully be

made to you or an Application Form could lawfully be used without contravention of any

registration or other legal requirements. It is your responsibility, if you are outside the UK and

wish to make an application for Ordinary Shares under the Offer for Subscription, to satisfy

yourself as to full observance of the laws of any relevant territory or jurisdiction in connection

with your application, including obtaining any requisite governmental or other consents,

observing any other formalities requiring to be observed in such territory and paying any

issue, transfer or other taxes required to be paid in such territory.

None of the Ordinary Shares have been or will be registered under the laws of any member

state of the EEA (other than the United Kingdom), Canada, Japan, Australia, the Republic of

South Africa or under the U.S. Securities Act or with any securities regulatory authority of any

state or other political subdivision of the United States, any member state of the EEA (other

148

than the United Kingdom), Canada, Japan, Australia or the Republic of South Africa. If you

subscribe for Ordinary Shares you will, unless the Company and the Receiving Agent agree

otherwise in writing, be deemed to represent and warrant to the Company that you are not a

U.S. Person or a resident of any member state of the EEA (other than the United Kingdom),

Canada, Japan, Australia, the Republic of South Africa or a corporation, partnership or other

entity organised under the laws of any member state of the EEA (other than the United

Kingdom), the U.S. or Canada (or any political subdivision of either) or Japan or Australia or

the Republic of South Africa and that you are not subscribing for such Ord inary Shares for

the account of any U.S. Person or resident of any member state of the EEA (other than the

United Kingdom), Canada, Japan, Australia or the Republic of South Africa and will not offer,

sell, renounce, transfer or deliver, directly or indirect ly, any of the Ordinary Shares in or into

any member state of the EEA (other than the United Kingdom), the United States, Canada,

Japan, Australia or the Republic of South Africa or to any U.S. Person or person resident in

Canada, any member state of the EEA (other than the United Kingdom), Japan, Australia or

the Republic of South Africa. No appli cation will be accepted if it shows the applicant, payor

or a holder having an address other than in the United Kingdom.

10. DATA PROTECTION

10.1 Each applicant acknowledges that it has been informed that, pursuant to the General Data