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Eurocastle Investment Limited: Eurocastle announces its intention to raise additional capital through an offer of new shares



International Administration Group (Guernsey) Limited
Company Administrator
Attn: Mark Woodall
Tel: +44 1481 723450


Eurocastle announces its intention to raise additional capital through an
offer of new shares
Guernsey. 17 April 2015

Eurocastle Investment Limited (Euronext Amsterdam: ECT) ("Eurocastle
" or the "Company
", together with its SPVs and subsidiaries from time to time, the "Group
") announces today that it intends to raise additional capital through an
offer of new ordinary shares (the "Offer Shares
") to certain institutional and other sophisticated investors (the "Offer

Overview of the Offer

* Eurocastle is targeting to raise circa €300 million through the issuance of
the Offer Shares to pursue new investment opportunities in the Italian debt
and real estate markets in line with the Company's investment focus.
* The price (the "Offer Price ") at which the Offer Shares will be offered
will be determined by an institutional bookbuilding process, which is
expected to start on 20 April 2015. Following completion of this process,
the number of Offer Shares to be issued and the Offer Price will be set by
Credit Suisse Securities (Europe) Limited, as the Sole Bookrunner, in
consultation with the Company. The Offer is expected to be completed before
the end of April 2015.
* Full details of the Offer will be contained in a prospectus (the
"Prospectus ") which is expected to be published in due course subject to
regulatory approval. A further announcement will be made once the
Prospectus has been published.
* The Offer will be made by way of a private placement to institutional and
other sophisticated investors in the UK and elsewhere outside the United
States to non-US persons in reliance on Regulation S of the US Securities
Act of 1933, as amended (the "Securities Act "), and in the United States
in reliance on Rule 144A or another exemption from registration under the
Securities Act.
* The Company is not and will not be registered under the U.S. Investment
Company Act of 1940, as amended (the "Investment Company Act "), and
consequently all holders of the Offer Shares in the United States or who
are US persons must be "Qualified Purchasers" within the meaning of the
Investment Company Act.

About Eurocastle

Eurocastle Investment Limited is a closed-ended investment company that owns
Italian loans and real estate related assets, German commercial real estate
and European real estate securities and loans. The Company is Euro
denominated and is listed on Euronext Amsterdam under the symbol "ECT".
Eurocastle is managed by an affiliate of Fortress Investment Group LLC, a
leading global investment manager. For more information regarding Eurocastle
Investment Limited and to be added to our email distribution list, please

In connection with the Offer, the Company notes the following supplemental
information regarding its business:

UCCMB Acquisition

On 12 February 2015, the Company announced that, together with other
affiliates of Fortress Investment Group LLC, it had reached an agreement to
acquire a portfolio of NPLs and a loan servicing business held through UCCMB
from UniCredit for aggregate consideration of approximately €500 million.
Payment of the consideration will be staggered with approximately €300
million due at closing and the balance due in December 2015. The balancing
payment will be adjusted to take into account cash collections on the NPL
portfolio until December 2015. The acquisition will be made by a newly
created vehicle 50 per cent. of which is indirectly owned by the Company, and
50 per cent. of which is indirectly owned by other affiliates of Fortress
Investment Group LLC ("Purchaser"). The Company will be required to invest
into Purchaser 50 per cent. of the amount required by Purchaser to satisfy
its obligations under the purchase agreement, subject to Purchaser utilising
potential alternative sources of funding. A shareholders' agreement will
govern the management and operation of Purchaser. It is anticipated that all
material decisions relating to the ownership of UCCMB will require the
unanimous agreement of each of the shareholders.

UCCMB is the largest captive servicer in Italy, servicing loans with a gross
book value of approximately €34.1 billion and with a wide network throughout
Italy. In the past 5 years, UCCMB averaged collections of approximately €1.4
billion per annum. As part of the acquisition, UCCMB will enter into a
10-year master servicing agreement ("MSA") with respect to existing NPLs and
which is expected to include a right to service certain of UniCredit's future
NPLs with balances below €1 million generated during the term of the
agreement. UCCMB's future income from the MSA is expected to be based on a
base fee and a performance fee, with the base fees being a simple percentage
of the net accounting balance of the outstanding claims and the performance
fees being dependent on collections. In addition, it is expected that the MSA
will include a specific indemnity due to UCCMB if UniCredit decides to sell
portfolios of non-performing loans that fall within the terms of the MSA.
This indemnity would consist of a portion of the base fee plus a portion of
the variable fee depending on the aggregate gross book value of loans sold in
a certain timeframe. Penalties are expected to apply to the overall fees due
to UCCMB in the event that it fails to meet certain agreed key performance
indicators and repeated failure to achieve critical key performance
indicators may lead to termination of the MSA. It is expected that the
agreement may also be terminated by UniCredit in the event of certain other
actions constituting a material breach of the contract by UCCMB.

The NPL portfolio being acquired comprises loans to approximately 4,700
borrowers, with loans with a gross book value of more than €1 million
accounting for some two-thirds of aggregate gross book value of €2.4 billion.
Forty two per cent. of the loans are secured by first lien mortgages over
residential, commercial or other property with a further eight per cent.
secured by second lien mortgages. Seventy eight per cent. of the loans by
gross book value relate to northern and central Italy. The average default
year for the portfolio is 2003.

The acquisition, which is subject to approval from the Bank of Italy and
customary conditions, is expected to close in the second quarter of 2015.

Legacy German Commercial Real Estate

Eurocastle is pleased to report that the Senior and Junior lenders to the
Group's Drive Facility have waived an amortisation target that was due to be
met in January 2015. The delay of the sale of one of the Drive Portfolio's
larger remaining assets meant that the Group needed a deferral of this
January 2015 payment. Following the closing of the delayed sale in the first
quarter (previously announced in the Company's 2014 annual report),
sufficient proceeds have been raised not only to remedy the January 2015
amortisation payment but also to clear the July 2015 amortisation target. As
at 31 December 2014, and for all covenant test dates to 28 February 2015, the
Group is compliant with all financial covenant tests certified to lenders for
all facilities where a breach could result in a default (although due to cash
flow triggers being met, each of the facility agreements relating to the
Group's legacy German commercial real estate portfolio, with the exception of
Truss, currently prohibits upstream payments to the Company with all
available cash flow being used to service the debt).

* * *

This announcement is an advertisement and not a prospectus and does not
constitute or form part of any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for, sell, otherwise
dispose of or issue any Offer Shares or any other securities, nor shall it
(or any part of it), or the fact of its distribution, form the basis of, or
be relied on in connection with, any contract commitment or investment
decision in relation thereto nor does it constitute a recommendation
regarding the securities of the Company. Investors should not subscribe for
or purchase shares referred to in this announcement except on the basis of
information in the Prospectus. No public offer is being made in respect of
the Offer Shares. In any member state that has implemented the Prospectus
Directive, the Offer will only be made to, and will only be directed at,
qualified investors in that member state within the meaning of the Prospectus
Directive or otherwise so that there is no offer to the public in that member
state. Furthermore, for the purposes of the EU Alternative Investment Fund
Managers Directive (the "Directive
"), the Company is a non-EU AIF whose AIFM is FIG LLC, itself a non-EU AIFM.
Each member state is adopting or has adopted legislation implementing the
Directive into national law. Under the Directive, marketing to any investor
domiciled or with a registered office in the European Economic Area will be
restricted by such laws and the Offer will not be made to investors domiciled
or with a registered office in any member state unless prior notification has
been given to the competent authority in the relevant member state and the
other conditions in Article 42 of the Directive (as implemented in the
relevant member state) have been met.

Neither this announcement nor the Prospectus constitute an offer to sell, or
the solicitation of an offer to subscribe for or acquire Shares in the United
States or in any other jurisdiction or in which such offer or solicitation is
unlawful or would impose any unfulfilled registration, qualification,
publication or approval requirements on the Company or the Advisers, and, in
particular, are not for release, publication or distribution in the United
States, Australia, Canada or Japan or to U.S., Australian, Canadian or
Japanese persons. The Offer Shares may not be offered or sold in the United
States absent an exemption from registration under the Securities Act. The
Offer Shares have not been and will not be registered under the Securities
Act or any other applicable law of the United States, or under the applicable
securities laws of Australia, Canada or Japan. The Company will not be
registered under the Investment Company Act and investors will not be
entitled to the benefits of such act. All holders of the Offer Shares in the

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