CQS Rig Finance Fund Limited Statement Re June Monthly Factsheet


 
TIDMRIG 
 
 
   CQS Rig Finance Fund Limited (the "Company"), a closed-ended investment 
company incorporated in Guernsey, is pleased to announce that its 
Monthly Fact Sheet for June 2013 is now available on the Company's 
website (www.cqsrigfinance.com) and includes further information on the 
top ten investments and outstanding borrowings. 
 
   Global markets continued to react to concerns of a 
sooner-than-anticipated tapering of the US Federal Reserve's ('Fed') 
quantitative easing programme. Equities, US Treasuries, and global 
credit markets were all weaker in June, although statements from Fed 
officials in an attempt to calm markets helped to reverse some of the 
sharper moves towards the end of the month. Increased volatility was 
also exacerbated by continued weak macroeconomic data, especially from 
Europe and China. The MSCI World Index fell 2.4% net in local 
currencies. European equities, as measured by the MSCI Europe Index, saw 
a decline of 5.0% while the MSCI Asia Index fell 2.5%. US 10-year 
Treasury yields climbed to over 2.6%, from 2.1% at the beginning of June, 
though rates partially retraced back to 2.5% by month-end. In Europe, 
iTraxx Crossover (S19) widened from 422bps to 477bps and iTraxx Main 
(S19) widened from 103.25bps to 119.75bps. In the US, CDX Investment 
Grade (S20) widened from 77.75bps to 86.50bps and the CDX High Yield 
(S20) widened from 383bps to 428bps. On an intra-month basis, both 
iTraxx Crossover (S19) and CDX High Yield indices (S20) widened by over 
100bps. The BoAML euro Non-Financial Fixed & Floating Rate High Yield 
Constrained Index posted a 2.1% loss. As in May, the price of Brent 
Crude oil was volatile but started and ended the month not far from the 
$100 per barrel mark. Against this backdrop, the Company's NAV per share 
posted a loss of 1.2% on the month to close at 36.31p. 
 
   Losses were recorded across the majority of strategies alongside the 
weakening markets and negative newsflow from Subsea 7 SA. On 26 June, 
the company announced an increase in the estimated full-life project 
loss on the Guará-Lula NE project which is offshore Brazil. It 
stated, "as a result, the company no longer expects full year adjusted 
EBITDA to show progress compared to 2012...Based on the experience to 
date, the estimated full-life project costs are expected to increase by 
between $250 million and $300 million as compared to our previous 
expectations"(1) . This profit warning led to a steep fall in the Subsea 
7 share price and negatively impacted the price of the Subsea bonds in 
the portfolio. 
 
   Despite the weak markets, the liquidity in the investment space was 
reasonably robust. The market has historically become more illiquid 
during the summer months, especially the Norwegian high yield market as 
most participants take holiday in July. As well as this potential 
liquidity risk, two other factors are notable: weak data from China has 
reignited the market debate over a possible 'hard landing' and the 
ensuing risk to global growth; and it is noteworthy that the oil price 
has remained resilient in the face of weakness in the wider commodity 
markets. Bearing this in mind, the Company took advantage of the 
liquidity to exit some smaller positions and trim other positions across 
the portfolio, thus increasing cash balances. 
 
   All market data sourced from Bloomberg and MSCI unless otherwise stated. 
MSCI index returns are in local currencies with net dividends 
reinvested. 
 
   (1) Source: Bloomberg, as at 26 June 2013 
 
   For further information, please contact: 
 
   Corporate Secretariat 
 
   Kleinwort Benson (Channel Islands) Fund Services Limited 
 
   01481 710 607 
 
   Alastair Moreton, Darren Vickers 
 
   NOMAD and Broker 
 
   Westhouse Securities Limited 
 
   020 7601 6118 
 
   Rig Fact Sheet: http://hugin.info/140293/R/1717117/570849.pdf 
 
   This announcement is distributed by Thomson Reuters on behalf of Thomson 
Reuters clients. 
 
   The owner of this announcement warrants that: 
 
   (i) the releases contained herein are protected by copyright and other 
applicable laws; and 
 
   (ii) they are solely responsible for the content, accuracy and 
originality of the 
 
   information contained therein. 
 
   Source: CQS Rig Finance Fund Ltd via Thomson Reuters ONE 
 
   HUG#1717117 
 
 
  http://www.cqsrigfinance.com/
Cqs Rig (LSE:RIG)
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