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REG-Eurocastle Inv. Ltd 1st Quarter Results - Part 2
RNS Number:8714L
Eurocastle Inv. Ltd
Part 2 : For preceding part double-click [nRNSD8714L]
Financial Instruments
Classification
Financial assets and liabilities measured at fair value through the profit and
loss account those instruments that the Company principally holds for the
purpose of short-term profit taking. These include securities portfolio
contracts and forward foreign exchange contracts that are not designated as
effective hedging instruments.
Available-for-sale assets are financial assets that are not classified as held
for trading purposes, loans and advances, or held to maturity.
Available-for-sale instruments include real estate and other asset backed
securities.
Recognition
The Company recognises financial assets held for trading and available-for-sale
assets on the date it commits to purchase the assets (trade date). From this
date any gains and losses arising from changes in fair value of the assets are
recognised.
A financial liability is recognised on the date the Company becomes party to
contractual provisions of the instrument.
Measurement
Financial instruments are measured initially at fair value plus, in the case of
a financial asset or liability not measured at fair value through profit and
loss, transaction costs that are directly attributable to the acquisition or
issue of the financial asset or financial liability.
Subsequent to initial recognition all trading instruments and available for sale
assets are carried at fair value.
All financial assets other than trading instruments and available-for-sale
assets are measured at amortised cost less impairment losses. Amortised cost is
calculated on the effective interest rate method. Premiums and discounts,
including initial transaction costs, are included in the carrying amount of the
related instrument and amortised based on the effective interest rate of the
instrument.
Fair value measurement principles
The fair value of financial instruments is based on their quoted market price at
the balance sheet date without any deduction for transaction costs. If a quoted
market price is not available, the fair value of the instrument is estimated
using pricing models or discounted cash flow techniques, as applicable.
Where discounted cash flow techniques are used, estimated future cash flows are
based on management's best estimates and the discount rate is a market related
rate at the balance sheet date for an instrument with similar terms and
conditions. Where pricing models are used, inputs are based on market related
measures at the balance sheet date.
The fair value of derivatives that are not exchange traded is estimated at the
amount that the Company would receive or pay to terminate the contract at the
balance sheet date taking into account current market conditions and the current
creditworthiness of the counterparties.
Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of trading instruments
are recognised directly in the income statement. Gains and losses arising from a
change in the fair value of available-for-sale securities are recognised
directly in equity until the investment is derecognised (sold, collected, or
otherwise disposed of) or impaired, at which time the cumulative gain or loss
previously recognised in equity is included in the income statement for the
period.
Derecognition
A financial asset is derecognised when the Company loses control over the
contractual rights that comprise that asset. This occurs when the rights are
realised, expire or are surrendered. A financial liability is derecognised when
it is extinguished.
Assets held for trading and available-for-sale assets that are sold are
derecognised and corresponding receivables from the buyer for the payment are
recognised as of the date the Company commits to sell the assets. The Company
uses the specific identification method to determine the gain or loss on
derecognition.
Impairment
The Company assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired. A
financial asset or a group of financial assets is impaired and impairment losses
are incurred if, and only if, there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the
asset (a 'loss event') and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets
that can be reliably estimated.
In the case of financial assets classified as available-for-sale, a significant
or prolonged decline in the fair value of the security below its cost is
considered in determining whether the assets are impaired. If any such evidence
exists for available-for-sale financial assets, the cumulative loss - measured
as the difference between the acquisition cost and the current fair value, less
any impairment loss on that financial asset previously recognised in profit or
loss - is removed from equity and recognised in the income statement.
Impairment losses recognised in the income statement on securities and loans are
not reversed through the income statement. Subsequent increases in the fair
values of debt instruments classified as available-for-sale, which can be
objectively related to an event occurring after previous impairment losses have
been recognized in the income statement, are recorded in the income statement.
Such reversals are then taken through the income statement only to the extent
previous impairment losses have been taken through the income statement.
Hedge accounting
Where there is a hedging relationship between a derivative instrument and a
related item being hedged, the hedging instrument is measured at fair value.
Where a derivative financial instrument hedges the exposure to variability in
the cash flows of recognised assets or liabilities, the effective part of any
gain or loss on re-measurement of the hedging instrument is recognised directly
in equity. The ineffective part of any gain or loss is recognised in the income
statement.
The gains or losses that are recognised in equity are transferred to the income
statement in the same period in which the hedged firm commitment affects the net
profit and loss.
Repurchase Agreements
Securities and real estate loans subject to repurchase agreements are
reclassified in the financial statements as pledged assets when the transferee
has the right by contract or custom to sell or repledge the collateral. The
counterparty liabilities have been classified as repurchase agreements.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at banks and in hand and short-term
deposits with an original maturity of three months or less.
Restricted Cash
Restricted cash comprises margin account balances held by derivative
counterparties as collateral for forward foreign exchange contracts, as well as
cash held by the trustees of the CDO I securitisation as a reserve for future
trustee expenses. As such, these funds are not available for use by the Group.
Investment Properties
Investment properties comprise land and buildings. In accordance with IAS 40,
property held to earn rentals and/or for capital appreciation is categorised as
investment property. Investment property acquired at the end of December 2004
has been recognised at cost, being the fair value of the consideration given,
including real estate transfer taxes, professional advisory fees and other
acquisition costs. After initial recognition, investment properties are measured
at fair value, with unrealised gains and losses recognised in the consolidated
income statement.
The value of investment properties incorporates five properties which are held
by the Company under finance or operating leases. An associated liability is
recognised at an amount equal to the fair value of the leased property or, if
lower, the present value of the minimum lease payments, determined at the
inception of the lease.
Fair values for all investment properties have been determined by reference to
the existing rental income and operating expenses for each property and the
current market conditions in each geographical market. Fair values also
incorporate current valuation assumptions which are considered reasonable and
supportable by willing and knowledgeable parties.
Deferred Financing Costs
Deferred financing costs represent costs associated with the issuance of
financings and are amortised over the term of such financing using the effective
interest rate method.
Interest-Bearing Loans and Borrowings
All loans and borrowings, including the Company's repurchase agreements, are
initially recognised at fair value, being the fair value of consideration
received, net of transaction costs incurred. Borrowings are subsequently stated
at amortised cost; any difference between proceeds net of transaction costs and
the redemption value is recognised in the income statement over the period of
the borrowings using the effective interest method.
Minority Interests
Minority interests represent interests held by outside parties in the Company's
consolidated subsidiaries.
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Company and the revenue can be reliably measured.
Interest income and expenses are recognised in the income statement as they
accrue, taking into account the effective yield of the asset/liability or an
applicable floating rate. Interest income and expense include the amortisation
of any discount or premium or other differences between the initial carrying
amount of an interest bearing instrument and its amount at maturity calculated
on an effective interest rate basis.
Rental income is recognised on an accruals basis.
Income Tax
The Company is a Guernsey, Channel Islands limited company and is not subject to
taxation. The company's subsidiaries, EFL, CDO I, CDO II and CDO III are Irish
registered companies and are structured to qualify as securitisation companies
under section 110 of the Taxes Consolidation Act 1997. It is envisaged that
these companies will generate minimal net income for Irish income tax purposes
and no provision for income taxes has been made for these companies.
The Company's German subsidiary companies, Longwave and Shortwave, are subject
to German income tax on income arising from its investment properties, after the
deduction of allowable debt financing costs and other allowable expenses. The
taxation provision for the quarter ended 31 March 2005 relates to these
subsidiaries.
Foreign Currency Translation
The functional and presentation currency of the Company and its subsidiaries is
the euro. Transactions in foreign currencies are initially recorded in the
functional currency rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency rate of exchange ruling at the balance
sheet date. All differences are taken to the consolidated income statement.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of initial
transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Share-Based Payments
Share-based payments are accounted for based on their fair value on grant date.
In accordance with the transitional provisions of IFRS 2, Share-Based Payment
the Company has restated the comparative information by way of adjusting the
opening balance of equity for earlier periods. The effect of the transitional
provisions is in compliance with IAS 8, Accounting Policies, Changes in
Accounting Estimates and Errors.
3. OTHER OPERATING EXPENSES
Unaudited Three Months Three Months Ended
Ended
31 March 2005 31 March 2004
e'000 e'000
---------------------------------------------------------------------
Professional fees 456 168
Management fees 1,475 236
Other 786 34
------------------- --------------
2,717 438
=================== ==============
4. AVAILABLE-FOR-SALE SECURITIES
The following is a summary of the Company's available-for-sale securities at 31
March 2005.
Gross
Unrealised Weighted Average
--------------- -----------------------------------
Current Amortised Gains Losses Carrying S&P Coupon Yield Maturity
Face Cost Value Rating (Years)
Amount Basis
------- -------- ------ ------ ------- ------- ------ ----- -------
e'000 e'000 e'000 e'000 e'000
Portfolio I
CMBS 172,110 171,876 2,445 (40) 174,281 BBB+ 3.93% 3.98% 3.49
Other ABS 208,116 207,863 3,187 (262) 210,788 BBB+ 4.22% 4.29% 3.97
------- -------- ------ ------ ------- ------ ------- ------ -------
380,226 379,739 5,632 (302) 385,069 BBB+ 4.09% 4.15% 3.75
------- -------- ------ ------ ------- ------ ------- ------ -------
Portfolio
II
CMBS 93,683 92,961 935 (18) 93,878 BBB 3.76% 3.89% 5.51
Other ABS 107,244 107,575 1,045 (11) 108,609 BBB 4.13% 4.06% 5.07
------- -------- ------ ------ ------- ------ ------- ------ -------
200,927 200,536 1,980 (29) 202,487 BBB 3.96% 3.98% 5.28
------- -------- ------ ------ ------- ------ ------- ------ -------
Portfolio
III
CMBS 118,232 118,558 1,783 (166) 120,175 BBB+ 4.55% 4.52% 3.74
Other ABS 99,700 99,019 1,501 (297) 100,223 BBB+ 4.22% 4.83% 3.14
------- -------- ------ ------ ------- ------ ------- ------ -------
217,932 217,577 3,284 (463) 220,398 BBB+ 4.40% 4.66% 3.47
------- -------- ------ ------ ------- ------ ------- ------ -------
------- -------- ------ ------ ------- ------ ------- ------ -------
Total Portfolio 799,085 797,852 10,896 (794) 807,954 BBB+ 4.14% 4.25% 4.06
------- -------- ------ ------ ------- ------ ------- ------ -------
Other Securities
CMBS 137,779 137,175 595 (443) 137,327 AA- 3.33% 3.57% 2.44
Other ABS 68,560 68,567 760 - 69,327 A 3.20% 3.12% 5.04
------- -------- ------ ------ ------- ------ ------- ------ -------
206,339 205,742 1,355 (443) 206,654 A+ 3.29% 3.42% 3.30
------- -------- ------ ------ ------- ------ ------- ------ -------
------- -------- ------ ------ ------- ------ ------- ------ -------
1,005,424 1,003,594 12,251 (1,237) 1,014,608 BBB+ 3.97% 4.08% 3.90
------- -------- ------ ------ ------- ------ ------- ------ -------
Short Term
Investments
Asset backed
commercial
paper 200,000 199,490 - - 199,490 A-1+ n/a 2.12% 0.16
------- -------- ------ ------ -------
Total 1,205,424 1,203,084 12,251 (1,237) 1,214,098
------- -------- ------ ------ -------
Restricted Cash 22,517
-------
Total Asset Backed
Securities (including
cash to be invested) 1,236,615
-------
CMBS - Commercial Mortgage Backed Securities
Other ABS - Other Asset Backed Securities
The securities within Portfolio I are encumbered by the CDO I securitisation
(Note 8). The securities within Portfolio II and Portfolio III are encumbered by
the borrowings under the warehouse credit facilities for CDO II and CDO III
described in Note 9.
Asset backed securities, available for sale at fair value of e405.1 million have
been pledged to third parties in sale and repurchase agreements. In accordance
with the revisions to IAS 39 Financial Instruments: Recognition and Measurement,
effective 1 January 2005, these securities have been reclassified as pledged
securities as follows:
Unaudited 31 December
31 March 2005 2004
e'000 e'000
------------ ----------
Asset backed securities, available for sale
(includes cash to be invested) 831,492 796,522
Asset backed securities pledged under
repurchase agreements 405,123 467,962
------------ ----------
Total asset backed securities 1,236,615 1,264,484
------------ ----------
Net unrealised gains on available for-sale-securities and hedge instruments
recognised in the statement of changes in equity were as follows:
Unaudited 31 December
31 March 2005 2004
e'000 e'000
------------ ----------
Unrealised gains on available-for-sale
securities 12,251 7,833
Unrealised losses on available-for-sale
securities (1,237) (1,229)
Unrealised (loss)/gain on hedge instruments
(Note 14) (759) 713
------------ ----------
10,255 7,317
============ ==========
5. REAL ESTATE LOANS
Gross
Unrealised Weighted Average
--------------- -----------------------------------
Current Amortised Gains Losses Carrying S&P Coupon Yield Maturity
Face Cost Value Rating (Years)
Amount Basis
------- -------- ------ ------ ------- ------- ------ ----- -------
Real estate
loans 46,682 46,356 - - 46,356 * 6.82% 8.07% 4.51
======= ======== ====== ====== ======== ======= ======= ====== =======
* Included in real estate loans are loans with a total current face amount of
e23,844,000 and with an average rating of BB from Standard and Poors.
Real estate loans with a carrying value of e23.8 million have been pledged to
third parties in sale and repurchase agreements. In accordance with the
revisions to IAS 39 Financial Instruments: Recognition and Measurement,
effective 1 January 2005, these loans have been reclassified as pledged assets
as follows:
Unaudited 31 December
31 March 2005 2004
e'000 e'000
------------ ----------
Real estate loans 22,512 21,938
Real estate loans pledged under repurchase
agreements 23,844 -
------------ ----------
Total real estate loans 46,356 21,938
============ ==========
6. OTHER ASSETS
Unaudited 31 December
31 March 2005 2004
e'000 e'000
------------ ----------
Interest receivable 9,262 7,800
Rent receivable 461 344
Deferred financing costs 217 217
Prepaid insurance 75 227
Derivative assets - 990
Other assets 387 -
------------- -------------
10,402 9,578
============= =============
Deferred financing costs represent costs associated with the issuance of a
collateralised debt obligation and will be offset against the proceeds of the
issuance.
7. INVESTMENT PROPERTIES
The table below shows the items aggregated under investment property in the
consolidated balance sheet:
EUR '000 (unaudited) Land & Buildings Leasehold Property Total
---------------------------------------------------------------------------------
At 1 January 2004 303,480 15,034 318,514
Additions 9 - 9
-------------- ------------- ------------
At 31 March 2005 303,489 15,034 318,523
============== ============= ============
The property portfolio consists of 96 office and retail assets located
throughout metropolitan and regional Germany, predominantly in western Germany.
The properties were acquired from Deutsche Bank, which remains the largest
occupant of the portfolio, occupying approximately 52% of the portfolio by area.
Deutsche Bank's weighted average unexpired lease term is 7.0 years. Additions
during the period represent additional purchase costs capitalised in respect of
existing properties.
A summary of the location and proportionate value of each property in the
portfolio is as follows:
Location Number of Properties Proportionate Value
---------------------------------------------------------------------------------
Nordrhein-Westfalen 30 33.71%
Baden-Wurttemberg 20 23.91%
Hesse 9 8.56%
Lower Saxony 8 9.66%
Bayern 7 7.30%
Rhineland-Palatinate 6 4.54%
Saxony-Anhalt 3 4.45%
Thuringia 5 2.68%
Saxony 2 1.63%
Schleswig-Holstein 1 1.33%
Hamburg 1 0.99%
Bremen 1 0.43%
Mecklenburg-West Pomerania 2 0.51%
Brandenburg 1 0.30%
---------------------------------------------------------------------------------
96 100.00%
=================================================================================
Fair values for the properties have been assessed by the company to be in line
with the initial cost of the properties including acquisition costs, and as
such, no profit or loss arising from changes in value has been brought to
account in the current period.
8. BONDS PAYABLE
CDO Bonds
As at 31 March 2005 (unaudited)
-------------------------------------------------------------------------
Class Rating Current Face Carrying Weighted Weighted
Amount Amount Average Average
e'000 e'000 Cost of Maturity
Financing (in years)
-------------------------------------------------------------------------
A and B Notes AAA/AA 351,000 347,973 2.78% 7.1
=========================================================================
As at 31 December 2004
-------------------------------------------------------------------------
Class Rating Current Face Carrying Weighted Weighted
Amount Amount Average Average
e'000 e'000 Cost of Maturity
Financing (in years)
-------------------------------------------------------------------------
A and B Notes AAA/AA 351,000 347,877 2.78% 7.3
=========================================================================
None of the CDO bonds are due to be repaid within one year of the balance sheet
date.
9. BANK BORROWINGS
The bank borrowings comprises of:
31 March 2005 31 December 2004
e'000 e'000
--------------------------------------------------------------------------------
Warehouse borrowing (Note 9.1) 371,873 350,843
Term finance (Note 9.2) 243,865 244,006
Revolving credit (Note 9.3) 27,000 14,000
facility
--------------------------------------------------------------------------------
642,738 608,849
================================================================================
The amounts drawn under the revolving credit facility (e27,000,000) and the
warehouse borrowing facility (e371,873,000) are due for repayment within one
year of the balance sheet date.
9.1 Warehouse Borrowings
In July 2004, through its subsidiaries CDO II and CDO III, the Company exercised
its option to purchase securities under the securities portfolio contract for an
aggregate purchase price of approximately e77.5 million. The Company financed
the purchase price through a revolving credit facility arrangement with a major
investment bank, whereby the securities purchased, along with any additional
securities to be acquired, are financed and held in a custody account by the
bank. The Company is using this credit facility as a means of accumulating
securities intended to be used in future securitisation transactions. The
Company completed the securitisation of CDO III on 28 April 2005 and expects to
complete the securitisation of CDO II on 5 May 2005 as described in Note 17
(Subsequent Events).
The terms of the credit facility provide for interest to be calculated with
reference to floating rate benchmarks (i.e. Euribor or Sterling Libor) plus 75
basis points. The weighted average financing cost was 2.83% at 31 March 2005.
9.2 Term Financing for Investment Properties
On 23 December 2004, in order to finance the acquisition of investment
properties the Company's subsidiaries entered into a e246.5 million term loan
facility with a major real estate lending bank. The facility is secured in the
customary manner for German real estate lending, granting security over, inter
alia, all the real estate purchased as well as over rental streams and bank
accounts. The term of the facility is 8.3 years with final maturity in April
2013. The interest rate on the loan is Euribor + 1.18% p.a, payable quarterly.
9.3 Revolving Credit Facility
In December 2004, the Company entered into a revolving e35 million credit
facility with a major investment bank as a means of securing access to temporary
working capital. The facility is secured by receivables flowing from CDO I, CDO
II, CDO III and EFL and with security assignments of the Company's rights under
its management agreement with Fortress Investment Group LLC. The facility
contains a number of financial covenants including a maximum leverage ratio and
a minimum interest cover ratio. The interest rate on drawn amounts is Euribor +
2.5% p.a., while on undrawn amounts it is 0.5% p.a.
10. REPURCHASE AGREEMENTS
In 2004, the Company's consolidated subsidiary EFL entered into a master
repurchase agreement with certain major investment banks to finance the purchase
of available-for-sale securities. The obligations under those agreements are
guaranteed by the Company. The terms of the repurchase agreements provide for
interest to be calculated with reference to floating rate benchmarks (i.e.
Euribor or Sterling Libor) which resets or rolls monthly or quarterly, with the
corresponding security coupon payment dates, plus an applicable spread.
The Company's carrying amount and weighted average financing cost of these
repurchase agreements was approximately e403.2 million and 2.28%, respectively
at 31 March 2005.
11. TRADE AND OTHER PAYABLES
31 March 2005 31 December 2004
e'000 e'000
-----------------------------------------------------------------------------
Security deposit 5,006 5,000
Unsettled security purchases 2,625 254,051
Interest payable 4,690 2,283
Accrued expenses 3,099 2,264
Due to affiliates - Manager 964 237
Derivative liabilities 1,235 -
Finance & operating lease payable 2,926 2,925
Other payables - 127
-----------------------------------------------------------------------------
20,545 266,887
=============================================================================
12. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net profit (loss) available
to ordinary shareholders by the weighted average number of shares of ordinary
stock outstanding during the period.
Diluted earnings per share is calculated by dividing net profit (loss) available
to ordinary shareholders by the weighted average number of ordinary shares
outstanding plus the additional dilutive effect of potential ordinary shares
during the period.
The Company's potential ordinary shares during the period were the stock options
issued under its share option plan.
There have been no other transactions involving ordinary shares or potential
ordinary shares since the reporting date and before the completion of the
financial statements.
The following is a reconciliation of the weighted average number of ordinary
shares outstanding on a diluted basis.
-----------------------------------------------------------------------------
Three Three
Months Months
Ended Ended
31 March 31 March
2005 2004
-----------------------------------------------------------------------------
Weighted average number of ordinary shares,
outstanding basic 18,463,670 11,857,670
Dilutive effect of ordinary share options 710,424 10,480
-----------------------------------------------------------------------------
Weighted average number of ordinary shares
outstanding, diluted 19,174,094 11,868,150
=============================================================================
13. SHARE CAPITAL AND RESERVES
The Company was registered in Guernsey on 8 August 2003 under the provisions of
the Companies (Guernsey) Law, 1994 (as amended). On 21 October 2003, the Company
issued 118,576,700 shares at e1.00 each. Pursuant to a written resolution of the
Company dated 18 June 2004 the Shareholders resolved to receive one share for
every ten shares previously held by them. In June 2004, through its initial
public offering, the Company received subscriptions for and issued 6,600,000
ordinary shares at a price of e12 each. At the same time, the Company issued
5,000 shares to Paolo Bassi and 1,000 shares to Keith Dorrian in their capacity
of Directors of the Company. The shares issued to the Directors were non-cash
shares, and were issued with nil proceeds.
Under the Company's Articles of Association, the Directors have the authority to
affect the issuance of additional ordinary shares or to create new classes of
shares as they deem necessary.
Other Reserves
Other reserves represent the fair value of share options at the grant date,
granted to the Manager in December 2003 and June 2004.
14. HEDGE ACCOUNTING - CASH FLOW HEDGES OF INTEREST RATE RISK
The Company's policy is to hedge its exposure to interest rates and foreign
currencies on a case-by-case basis. Hedge accounting is only applied to cash
flow hedges of interest rate risk exposures. Interest rate swaps under which the
Company pays a fixed rate and receives a floating rate have been used to hedge
the interest rate risk on floating rate long-term bank borrowing.
The gain or loss on measurement of the fair value of the interest rate swaps has
been recognised in the statement of changes in equity to the extent that the
swaps are effective.
The details of interest rate swaps entered into by the Company are as follows:
31 March 2005 31 December 2004
e000 e000
-----------------------------------------------------------------------------
Nominal amount 210,000 210,000
Pay rate 3.47% 3.47%
Receive rate 3 Month Euribor 3 Month Euribor
Remaining life 8.0 years 8.3 years
Fair value of swaps (liabilities) (759) 713
/assets
-----------------------------------------------------------------------------
15. SHARE OPTION PLAN
In December 2003, the Company (with the approval of the Board of Directors and
pursuant to the confidential information memorandum dated August 2003) adopted a
nonqualified share option plan (the "Company Option Plan") for officers,
Directors, employees, consultants and advisors, including the Manager. In
December 2003, for the purpose of compensating the Manager for its successful
efforts in raising capital for the Company, the Manager was granted options
representing the right to acquire 1,185,767 ordinary shares at an exercise price
of e10 per share (number of shares and exercise price adjusted for share
consolidation). The fair value of the options at the date of grant was e0.2
million and was estimated by reference to an option pricing model.
In June 2004 following the IPO, the Manager was granted an additional 660,000
options at an exercise price of e12 per share. The fair value of the additional
options at the date of grant was e0.2 million and was also estimated by
reference to an option pricing model. The Manager options represent an amount
equal to 10% of the ordinary shares issued by the Company. The options granted
to the Manager were fully vested on the date of grant and expire ten years from
the date of issuance.
The fair value at the date of grant of options granted to the Manager has been
offset against the proceeds from issuance of ordinary shares as the grant of
options is a cost of capital.
16. DIVIDENDS PAID & PROPOSED
2005
e000
-------------
Paid during the 3 months ended 31 March 2005:
Equity dividends on ordinary shares:
Fourth quarter dividend for 2004: e0.33 (2003: nil) 6,093
-------------
6,093
Dividend declared on 19 April 2005 (not recognised as
a liability at 31 March 2005)
Equity dividends on ordinary shares:
First quarter dividend for 2005: e0.33 (2004: nil) 6,095
No dividends were declared and/or paid during the three months ended 31 March
2004.
17. SUBSEQUENT EVENTS
Subsequent to quarter end, Eurocastle successfully priced two secured debt
offerings to match-fund credit sensitive real estate securities and other asset
backed securities. CDO II is a £200 million collateralized debt obligation which
is expected to be issued by Eurocastle CDO II PLC on 5 May 2005 to purchase
sterling investments. CDO III is a e400 million financing which was issued by
Eurocastle CDO III PLC on 28 April 2005 to purchase euro investments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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