Condensed Statement of Cash Flows

For the SIX-MONTH period to 31 July 2022

The accompanying notes form an integral part of these Interim Financial Statements.

Notes to the Unaudited Condensed Interim Financial Statements

For the six-month period to 31 July 2022

1. General information

ICG-Longbow Senior Secured UK Property Debt Investments Limited is a non-cellular company limited by shares and was incorporated in Guernsey under the Companies Law on 29 November 2012 with registered number 55917 as a closed-ended investment company. The registered office address is Floor 2, PO Box 286, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY.

The Company's shares were admitted to the Premium Segment of the Official List and to trading on the Main Market of the London Stock Exchange on 5 February 2013.

The unaudited condensed financial statements comprise the financial statements of the Company as at 31 July 2022.

In line with the revised Investment Objective and Policy approved by shareholders in the Extraordinary General Meeting in January 2021, the Company is now undertaking an orderly realisation of its investments. As sufficient funds become available the Board intends to return capital to shareholders, taking account of the Company's working capital requirements and funding commitments.

ICG Alternative Investment Limited is the external discretionary investment manager. The Board resolved to simplify its corporate structure by collapsing the Luxembourg subsidiary company which has historically acted as the lender for the Group's investments. The subsidiary was dissolved on 18 January 2022. Under Luxembourg Law, and as sole shareholder, the Company has taken responsibility for the remaining assets and liabilities of its subsidiary following its dissolution.

2. Accounting policies

a) Basis of preparation

The Interim Financial Statements included in this Interim Report, have been prepared in accordance with IAS 34  'Interim Financial Reporting', as adopted by the EU, and the Disclosure and Transparency Rules of the FCA.

The Interim Financial Statements have not been audited or reviewed by the Company's Auditor.

The Interim Financial Statements do not include all the information and disclosures required in the Annual Report and Financial Statements and should be read in conjunction with the Company's Annual Report and Financial Statements for the year ended 31 January 2022, which are available on the Company's website (www.lbow.co.uk). The Annual Report and Financial Statements have been prepared in accordance with IFRS as adopted by the EU.

Prior to its dissolution on 18 January 2022, the subsidiary (ICG Longbow Senior Debt S.A.), was consolidated into the Company's accounts and the Company's financial statements were prepared on a consolidated basis, as the Group existed for the majority of the financial year ended 31 January 2022. The financial statements for the period ended 31 July 2022 have been prepared for the Company only, with comparative information comprising the results of the Group. Since the Company has taken responsibility for the remaining assets and liabilities of its subsidiary following its dissolution, the Directors consider these comparatives to be appropriate.

Other than as set out above, the same accounting policies and methods of computation have been followed in the preparation of these Interim Financial Statements as in the Annual Report and Financial Statements for the year ended 31 January 2022.

The Company applied, for the first time, certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2022. The new standards or amendments to existing standards and interpretations, effective from 1 January 2022, did not have a material impact on the Company's interim condensed financial statements. It is not anticipated that any standard which is not yet effective, will have a material impact on the Company's financial position or on the performance of the Company's statements.

b) Going concern

The Directors, at the time of approving the Financial Statements, are required to satisfy themselves that they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. At the EGM of the Company on 14 January 2021, following a recommendation from the Board published in a circular on 16 December 2020, shareholders voted by the requisite majority in favour of a change to the Company's Objectives and Investment Policy which would lead to an orderly realisation of the Company's assets and a return of capital to shareholders.

It is intended that the investments will be realised as and when the loans fall due or shortly thereafter, and the Directors expect that the investments will be held to maturity with the last loan due for repayment by the end of 2023. Whilst the Directors are satisfied that the Company has adequate resources to continue in operation throughout the realisation period and to meet all liabilities as they fall due, given the Company is now in a managed wind down, the Directors consider it appropriate to adopt a basis other than a going concern in preparing the financial statements. The basis of valuation for investments is amortised cost, recognising the realisable value of each investment in the orderly wind down of the Company and in the absence of a ready secondary market in real estate loans by which to assess market value. There has been no material change in the carrying value of the investments. No material adjustments have arisen as a result of ceasing to apply the going concern basis.

The loans owned by the Company will be held to their maturity.

c) Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as a whole. The key measure of performance used by the Board to assess the Company's performance and to allocate resources is the total return on the Company's Net Asset Value, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the Financial Statements.

For management purposes, the Company is organised into one main operating segment, being the provision of a diversified portfolio of UK commercial property backed senior debt investments.

The majority of the Company's income is derived from loans secured on commercial and residential property in the United Kingdom.

Due to the Company's nature it has no employees.

The Company's results do not vary significantly during reporting periods as a result of seasonal activity.

3. Critical accounting judgements and estimates in applying the Company's accounting policies

The preparation of the Financial Statements under IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements

In assessing the Expected Credit Loss (ECL), the Board have made critical judgements in relation to the staging of the loans and assessments which impact the loss given default. In assessing whether the loans have incurred a significant increase in credit risk the Investment Manager, on behalf of the Board, assesses the credit risk attaching to each of the loans. The Company has adopted the Investment Manager's internal credit rating methodology and has used its loss experience to benchmark investment performance and potential impairment for both Stage 1 and Stage 2 loans under IFRS 9 considering both probability of default and loss given default. The judgement applied in allocating each investment to Stage 1, 2 or 3 is key in deciding whether losses are considered for the next 12 months or over the life of the loan. The Board has estimated that one loan, Southport, has shown evidence of heightened credit risk. In assessing the ultimate ECL in relation to this loan, the Board has made assumptions regarding the collateral value and headroom over the principal loan amounts as well as the residual term of the loan.

Critical accounting estimates

The measurement of both the initial and ongoing ECL allowance for loan receivables measured at amortised cost is an area that requires the use of significant assumptions about credit behaviour such as likelihood of borrowers defaulting and the resulting losses. In assessing the probability of default, the Board has taken note of the experience and loss history of the Investment Manager which may not be indicative of future losses. The default probabilities are based on a number of factors including rental income trends, interest cover and LTV headroom and sectoral trends which the Investment Manager believes to be a good predictor of the probability of default, in accordance with recent market studies of European commercial real estate loans. Covid-19 impacted valuations in those real estate sectors most impacted by lockdowns and social restrictions and changes in working habits. As the restrictions have been lifted and the vaccination programme has been rolled out, most sectors have recovered somewhat and investors, and tenants, have returned to the market. Inflation and interest rate pressures remain a concern and the prospect for growth has deteriorated since the start of the Ukrainian crisis. However, given the exit plans in place for each remaining loan, supported by valuation equity headroom, the Directors consider the loss given default to be close to zero as the loans are the subject of very detailed due diligence procedures on inception, close monitoring through their life to provide early warning of a deteriorating credit position and LTV headroom. In line with the Company's investment strategy at the time, most loans benefited from significant LTV headroom, and business plans designed to deliver further value increases over time. This combined with tight covenants have enabled the Investment Manager to manage risk over the term of the loans. Following the change in Investment Strategy to one of orderly wind down, the Investment Manager and the Board have placed greater emphasis on the source and delivery of repayment over the residual term of each loan when assessing valuation and the risk of capital loss. As a result of these considerations, no loss allowance has been recognised based on 12-month expected credit losses for those loans in stage 1 nor for lifetime losses for those in stage 2, as any such impairment would be wholly insignificant to the Company.

Revenue recognition is considered a significant accounting judgement and estimate that the Directors make in the process of applying the Company's accounting policies.

The Directors also make estimates in determining the fair value of prepayment options embedded within the contracts for loans advanced. The key factors considered in the valuation of prepayment options include the exercise price, the interest rate of the host loan contract, differential to current market interest rates, the risk-free rate of interest, contractual terms of the prepayment option, and the expected term of the option. Given the low probability of exercise and undeterminable exercise date, the value attributed to these embedded derivatives is considered to be £nil (31 January 2022: £nil).

4.  Loans advanced

(i) Loans advanced

(ii)  Valuation considerations

As noted above the Company is now in the process of an orderly wind down. It remains the intention of the Investment Manager and Directors to hold loans through to their repayment date. The Directors consider that the carrying value amounts of the loans, recorded at amortised cost in the Interim Financial Statements, are approximately equal to their fair value. For further information regarding the status of each loan and the associated risks see the Investment Manager's Report.

Amortised cost is calculated using the effective interest rate method which takes into account all contractual terms (including arrangement and exit fees) that are an integral part of the loan agreement. As these fees are taken into account when determining initial net carrying value, their recognition in profit or loss is effectively spread over the life of the loan. 

The Company's investments are in the form of bilateral loans, and as such are illiquid investments with no readily available secondary market. Whilst the terms of each loan includes repayment and prepayment fees, in the absence of a liquid secondary market, the Directors do not believe a willing buyer would pay a premium to the par value of the loans to recognise such terms and as such the amortised cost is considered representative of the fair value of the loans.

Each property on which investments are secured was subject to an independent, third-party valuation at the time the investment was entered into. All investments are made on a hold to maturity basis. Each investment is monitored on a quarterly basis, in line with the underlying property rental cycle, including a review of the performance of the underlying property security. No market or other events have been identified through this review process which would result in a fair value of the investments significantly different to the carrying value.

As the UK economy emerges from the impacts of Covid-19 the position of each underlying property has generally improved, notwithstanding the record levels of inflation and high interest rates.  However as set out above and in the Investment Manager's report a recession is likely and the outlook is less certain than at 31 January 2022 although the balance outstanding in each case remains at sufficient discount to the value of the underlying real estate on which they are secured. The Investment Manager has reviewed the plans in place and prospects for repayment of each loan over its residual term and the Directors do not currently consider any loan to be subject to specific impairment, or for there to be an immediate risk of not achieving full repayment, including arears of interest, over the residual term of each loan.

(iii) IFRS 9 - Impairment of Financial Assets

The internal credit rating of each loan as at 31 July 2022 has been reviewed. Of the two loans identified as Stage 2 assets at 31 January 2022, one has since repaid in full while the other is still identified as Stage 2. All other loans showed no deterioration and were considered as Stage 1 assets with no ECL over a twelve-month period.

As at 31 July 2022

As at 31 January 2022

One loan was considered as Stage 2 loan as at 31 July 2022 (31 January 2022: two loans).

The Quattro loan, identified as Stage 2 as at 31 January 2022, was repaid in full in April 2022, following the combination of property sales and a refinance by the borrower.

The second Stage 2 loan, Southport, continues to be recognised as Stage 2 as at 31 July 2022. Whilst trading at the hotel is improving and a strong summer has been reported, a new red book valuation received after period end indicates the Company's exposure has increased to 96% LTV. The Sponsor placed the property on the market for sale in July 2022 and is now progressing an offer in excess of this valuation which would see the Company's Loan repaid in full before maturity, although there can be no assurance that this will complete.   Whilst the sales price and valuation support a repayment of the loan in full, given the elevated LTV exposure and sector uncertainties, the Company has taken steps to accelerate repayment.

All other loans have shown no material deterioration since inception or over the course of the financial period and were considered as Stage 1 assets with no ECL over a twelve-month period.

A reconciliation of the ECL allowance was not presented as the allowance recognised at period end was £nil.

(iv) IFRS 9 Impairment - Stress Analysis

As discussed above, the Company's ECL is a function of the probability of default ("PD") and loss given default ("LGD"), where PD is benchmarked against ICG Real Estate's internal credit rating model and LGD is based on ICG Real Estate's track record of over £5.7 billion of senior and whole loans which would satisfy the Company's investment parameters.

All loans are expected to repay in full within their residual term, or following short term extensions granted by the Company in its sole discretion.  The Company has performed stress analysis on its expected credit loss by considering the impact of a one, two and three grade deterioration in the credit rating of each loan as if they were all Stage 2 assets and considered the impact of impairment over the life of the loans.

As discussed above, the Covid-19 pandemic impacted the performance of a number of loans with a resultant reduction in interest cover, and either arrears or capitalisation of interest leading to higher LTV exposures, the leisure sector was particularly affected where properties were subject to forced closure and operating restrictions. Within ICG's benchmark portfolio the Covid-19 pandemic, and its impact on valuation of the retail sector properties in particular, lowered ICG's recovery expectations for non‑performing loans. As a result, the application of stress tests in accordance with the Company's policy results in a significantly higher risk profile than pre Covid-19, reflecting ICG's loss experience. It should be noted that the Company has very limited exposure to the retail sector.

With ICG's internal rating model a two-stage deterioration in rating would migrate the Southport Loan classification from Borderline to Substandard, with a model ECL of 1.8%, whilst a three-stage deterioration  would result in a model ECL of 15.6%.

The majority of loans still benefit from strong equity value protection and could withstand a 20% fall in property values before being at risk of loss. The exception is Southport where the LTV is currently 96%, following receipt of an updated valuation of the hotel.  Notwithstanding the current sales process which would see the Company's loan repaid in full, a 20% fall in underlying property values would result in a loss of approximately £2.5 million.

Stress test impact on Expected Credit Loss at 31 July

The remaining loan portfolio is set out in 4(i) above and the current performance of each loan is discussed in the Investment Manager's report.

5. Earnings per share and Net Asset Value per share

Earnings per share

The calculation of basic and diluted Earnings per share is based on the profit for the period and on the weighted average number of ordinary shares in issue during the period. 

The calculation of adjusted basic and diluted Earnings per share is based on the profit for the period, adjusted for one-off other fee income during the period totalling £Nil (31 July 2021: £Nil).

There are no dilutive shares at 31 July 2022 (31 January 2022: £Nil).

Net Asset Value per share

The calculation of NAV per share is based on Net Asset Value and the number of ordinary shares in issue at the period/year end.

6. Share Capital

The authorised share capital of the Company is represented by an unlimited number of ordinary shares with or without a par value which, upon issue, the Directors may designate as (a) ordinary shares; (b) B shares; and (c) C shares, in each case of such classes and denominated in such currencies as the Directors may determine.

Return of Capital

Return of Capital is recognised by the Company in the quarterly NAV calculation following the declaration date.

The Directors announced one return during the period ended 31 July 2022 and have returned an amount of 6 pence per Ordinary Share to shareholders, being £7,278,167 in total based on the current number of Ordinary Shares in issue. This return of capital was effected by way of an issue of redeemable B Shares to existing shareholders pro rata to their shareholding on the record date set out below and the subsequent redemption of those B Shares.

7. Dividends

Dividends are recognised by the Company in the quarterly NAV calculation following the declaration date. A summary of the dividends declared and/or paid during the period/year ended 31 July 2022 and 31 January 2022 are set out below:

Following shareholder approval of proposed changes to the Company's Investment Objectives and Investment Policy which will allow an orderly realisation of the Company's assets and return of capital to shareholders, the Board expects the Company to continue the payment of quarterly dividends whilst it remains prudent to do so.  The dividend payable per ordinary share will however reduce over time as assets are realised and as capital is returned to shareholders.

Rights attaching to Shares

The Company has a single class of Ordinary Shares which are not entitled to a fixed dividend. The company had one issue of redeemable B shares which were redeemed throughout the period ended 31 July 2022 on a Return of Capital payment to shareholders of the redeemable B shares. At any General Meeting of the Company each Ordinary Shareholder is entitled to have one vote for each share held. The Ordinary Shares also have the right to receive all income attributable to those shares and participate in distributions made and such income shall be divided pari passu among the holders of Ordinary Shares in proportion to the number of Ordinary Shares held by them.

The Company's Articles include a B Share mechanism for returning capital to Shareholders and following Shareholder approval on 14 January 2021, the Company has and will continue to utilise this mechanism in future. When the Board determines to return capital to Shareholders, the Company has issued B Shares, paid up out of the Company's assets, to existing Shareholders pro rata to their holding of Ordinary Shares at the time of such issue. The amount paid up on the B Shares will be equal to the cash distribution to be made to Shareholders via the B Share mechanism. The B Shares shall be redeemable at the option of the Company following issue and the redemption proceeds (being equal to the amount paid up on such B Shares) paid to the holders of such B Shares on such terms and in such manner as the Directors may from time to time determine. It is therefore expected that the B Shares will only ever be in issue for a short period of time and will be redeemed for cash shortly after their issue in order to make the return of capital to Shareholders.

It is intended that following each return of capital the Company will publish a revised estimated Net Asset Value and Net Asset Value per Ordinary Share based on the prevailing published amounts adjusted to take into account the return of capital.

The number of Ordinary shares in issue will remain unchanged.

8. Financial Risk Management

The Company through its investment in senior loans is exposed to a variety of financial risks. The main risks arising from the Company's financial instruments are: market risk (including currency risk and interest rate risk), credit risk and liquidity risk and are fully disclosed on pages 54 to 58 of the Annual Report and Financial Statements for the year ended 31 January 2022.

The Company's principal risk factors are fully discussed in the Company's Prospectus, available on the Company's website (www.lbow.co.uk) and should be reviewed by shareholders.

9. Related party transactions and Directors' remuneration

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party in making financial or operational decisions.

In the opinion of the Directors, on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

Directors

The Company Directors' fees for the period amounted to £80,000 (31 July 2021: £91,375) with outstanding fees at 31 July 2022 of £31,250 due to the Directors (31 January 2022: £31,250).

Investment Manager

Investment management fees for the period amounted to £519,039 (31 July 2021: Investment management/advisory fees £595,958) of which £512,712 was outstanding at the period/year end (31 January 2022: £289,107).

10. Other expenses

The other expenses shown in the Statement of Comprehensive Income are made up as shown below.

11. Subsequent events

Following the Ukrainian crisis, the Investment Manager has reviewed the portfolio and has not identified any direct exposure to either Russian or Ukrainian companies or individuals. The Company continues to monitor the situation for potential macro-economic impacts which may affect the performance or repayment of the remaining loan.

There were no other material subsequent events.

glossary of capitalised defined terms

"Administrator" means Ocorian Administration (Guernsey) Limited;

"Admission" means the admission of the shares to the premium-listing segment of the Official List and to trading on the London Stock Exchange;

"AEOI" means Automatic Exchange of Information;

"Affinity" means Affinity Global Real Estate;

"Annual Report and Financial Statements" means the annual publication of the Company or Group provided to the shareholders to describe their operations and financial conditions, together with their Financial Statements;

"Audit Committee" means the Audit and Risk Management Committee, a formal committee of the Board with defined terms of reference;

"Board" or "Directors" or "Board of Directors" means the directors of the Company from time to time;

"CBI" means the Confederation of British Industry;

"Circular" means the Circular of the Company dated 16 December 2020, regarding proposal for a change to the Company's Objectives and Investment Policy which would lead to an orderly realisation of the Company's assets and a return of capital to shareholders;

"Companies Law" means the Companies (Guernsey) Law, 2008, (as amended);

"Company" means ICG-Longbow Senior Secured UK Property Debt Investments Limited;

"CVA" means Company Voluntary Arrangement;

"Disclosure Guidance and Transparency Rules" or "DTRs" means the disclosure guidance published by the FCA and the transparency rules made by the FCA under section 73A of FSMA;

"ECL" means expected credit or losses;

"EGM" means an Extraordinary General Meeting of the Company;

"EPS" or "Earnings per share" means Earnings per ordinary share of the Company and is expressed in Pounds Sterling;

"ERV" means Estimated Rental Value;

"EU" means the European Union;

"Euros" or "€" means Euros;

"FCA" means the UK Financial Conduct Authority (or its successor bodies);

"Financial Statements" or "Consolidated Financial Statements" means the audited consolidated financial statements of the Company for the year to 31 January 2022, including the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, and associated notes;

"GDP" means gross domestic product;

"GFSC" means the Guernsey Financial Services Commission;

"GIIN" means Global Intermediary Identification Number;

"GMG" means GMG Real Estate;

"Group" means the Company, ICG Longbow Senior Secured UK Property Debt Investments Limited together with its wholly owned subsidiary, ICG Longbow Senior Debt S.A (Luxco) which was liquidated on 18 January 2022;

"IAS" means international accounting standards as issued by the Board of the International Accounting Standards Committee;

"ICG" means Intermediate Capital Group plc;

"ICG Private Funds" means private real estate debt funds managed or advised by the Investment Manager or its associates; 

"IFRS" means the International Financial Reporting Standards, being the principles-based accounting standards, interpretations and the framework by that name issued by the International Accounting Standards Board, as adopted by the EU;

"Interest Cover Ratio" or "ICR" means the debt/profitability ratio used to determine how easily a company can pay interest on outstanding debt;

"Interim Financial Statements" means the unaudited interim condensed financial statements of the Company, including the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Equity, the Condensed Statement of Cash Flows, and associated notes;

"Interim Report" means the Company's interim report and unaudited interim condensed financial statements for the period ended 31 July;

"Investment Grade Tenant" means a tenant that is rated Aaa to Baa3 by MIS and/or AAA to BBB- by S&P;

"Investment Manager" or "ICG Real Estate" means ICG Alternative Investment Limited;

"Investment Management Agreement" means Investment Management Agreement dated 25 November 2020 between the Company and the Investment Manager ICG Alternative Investment Limited; 

"IPO" means the Company's initial public offering of shares to the public, which completed on 5 February 2013;

"ISIN" means an International Securities Identification Number;

"LBS" means LBS Properties Limited;

"LGD" means loss given default;

"Listing Rules" means the listing rules made by the FCA under section 73A Financial Services and Markets Act 2000;

"London Stock Exchange" or "LSE" means London Stock Exchange plc;

"LTV" means Loan to Value ratio;

"Luxco" or "Subsidiary" means the Company's wholly owned subsidiary, ICG-Longbow Senior Debt S.A. which was liquidated on 18 January 2022;  

"Main Market" means the main securities market of the London Stock Exchange;

"Management Engagement Committee" means a formal committee of the Board with defined terms of reference;

"MIS" means Moody's Investors Service;

"MSCI" means Morgan Stanley Capital Index;

"NAV per share" means the Net Asset Value per ordinary share divided by the number of Shares in issue (other than shares held in treasury);

"Net Asset Value" or "NAV" means the value of the assets of the Company less its liabilities, calculated in accordance with the valuation guidelines laid down by the Board, further details of which are set out in the 2017 Prospectus;

"Nomination Committee" means a formal committee of the Board with defined terms of reference;

"Northlands" means Northlands Portfolio;

"NMPIs" means Non-Mainstream Pooled Investments;

"OECD" means The Organisation for Economic Co-operation and Development;

"Official List" is the Premium Segment of the FCA's Official List;

"ONS" means Office of National Statistics;

"IPO Prospectus" means the prospectus published on 31 January 2013 by the Company in connection with the IPO of ordinary shares;

"PD" means probability of default;

"post-Covid" means the period after 23 March 2020;

"Prospectus" means the prospectus published in May 2018 by the Company in connection with the placing programme;

"Quattro" means Quattro Portfolio;

"Registrar" Link Asset Services (Guernsey) Limited (formerly Capita Registrars (Guernsey) Limited);

"Registrar Agreement" means the Registrar Agreement dated 31 January 2013 between the Company and the Registrar;

"RICS" means the Royal Institution of Chartered Surveyors;

"RoyaleLife" means the RoyaleLife portfolio;

"S&P" means Standard & Poor's Credit Market Services Europe Limited, a credit rating agency registered in accordance with Regulation (EC) No 1060/2009 with effect from 31 October 2011;

"SONIA" means Sterling Overnight Interbank Average Rate;

"Southport" means the Southport Hotel property;

"SPV" means special purpose vehicle;

"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;

"UK Listing Authority" or "UKLA" means the Financial Conduct Authority;

"US" or "United States" means the United States of America, its territories and possessions; and

"£" or "Pounds Sterling" or "Sterling" means British pound sterling and "pence" means British pence.

directors and general information

cautionary statement

The Chairman's Statement and the Investment Manager's Report have been prepared solely to provide additional information for shareholders to assess the Company's strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose.

The Chairman's Statement and Investment Manager's Report may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or current expectations of the Directors and the Investment Manager, concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance.

The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document.

Subject to their legal and regulatory obligations, the Directors and the Investment Manager expressly disclaim 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 statement is based.

ICG-Longbow Senior Secured UK Property Debt Investments Limited

PO Box 286

Floor 2, Trafalgar Court

Les Banques, St Peter Port, Guernsey

GY1 4LY, Channel Islands.

T +44 (0) 1481 742742

F +44 (0) 1481 742698

Further information available online:

www.lbow.co.uk