The Capital Markets Way forward for iBanking ...

T2 Income Fund, which
invests in the US syndicated corporate loan market, has recently seen
increased interest in the shares of the company, reflected in an
increase in the share price of 143 per cent over the last three
months.
The syndicated corporate loan market is an asset class that is
largely unknown by retail investors. The market in the US is around
USD1trn in size but has traditionally been difficult for most investors
to access.

The objective of T2 is to provide investors with a stable and
predictable dividend yield, with long term preservation of net asset
value. T2 offers retail and institutional investors the ability to gain
exposure to the US syndicated corporate loan market through an Aim
quoted investment company.

T2 Advisers, the investment manager of T2, says: “Over the past 18
months, the syndicated corporate loan market has seen both
unprecedented price declines and unprecedented volatility. Although
prices remain depressed across most sectors and ratings categories, we
have seen a recent upward move from the lowest price levels reached
during the first quarter 2009.

“Our view is that certain larger-issuer broadly syndicated corporate
loan prices do not at the moment adequately reflect the spreads
necessary to compensate investors for the risks involved. We believe
that concern over worsening fundamentals (lower GDP figures, increased
unemployment rates and, inevitably, increased corporate loan default
rates combined with lower recovery rates) into the latter part of 2009
will likely cause loan prices to retrace at least some portion of their
upward move over the last 4 months. We believe that this will offer
interesting buying opportunities through the end of 2009 and through
the first half of 2010.”