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13 December 2023

ICG-Longbow Senior Secured UK Property Debt Investments Limited (the Company)

Portfolio Update

The Company has received repayment in full of the outstanding balance of its Northlands loan, together with interest and fees, totalling £0.5 million, following a further property sale.  The loan has been repaid through a series of property sales over the past 12-18 months generating an 8.4% IRR. 

Conditions in the UK property markets remain sluggish, with transaction volumes in the third quarter down 8% on Q2's weak figures.  As a consequence, realising the Company's remaining investments continues to be challenging.  All remaining investments are now subject to enforcement processes and the Board and Investment Manager are focused on pro-actively managing the assets to support income and value during the sales processes.

Affinity Loan

Following appointment of a receiver over the property, active management continues to seek to optimise income with a key lease renewal in documentation at a 10% premium to Estimated Rental Value ("ERV"), and a potential new letting at an 8% premium to ERV, which would be a record rent for the building. Should these transactions complete we expect this will allow for a revitalised marketing process for the asset.  In the meantime income from this loan is expected to be sufficient to cover the Company's cost base in the coming quarters. 

Southport Loan

Following appointment of a new joint sales agent, several interested parties have come forward albeit no offers have yet been received.  The hotel continues to trade profitably coming into the quieter winter period.

RoyaleLife Loan

The administrator has appointed a selling agent to solicit bids for the assets within the Company and its co-lenders' portfolio.  This process is continuing and, subject to the level of bids, could lead to a sale of some, or all, of the portfolio assets.  Given the weak market conditions, a new operator has been appointed and the Investment Manager continues actively to progress strategic alternatives for the business in conjunction with the operator, the administrator and its advisers.

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Further information on the Company can be found on its website at http://www.lbow.co.uk.