Keybridge Capital Limited
Media Releases
Mariner Bridge Investments Full Year NPAT $4.1m
9 August 2007

Arrow Right Final fully franked dividend of 2.3 cents per share
Arrow Right Strong earnings in majority of portfolio offset by poor performance in US securitisation investments
Arrow Right Well positioned for future growth
Arrow Right Expect total investments by December 2007 to be over $375 million

Mariner Bridge Investments (ASX: MBR) today announced a net profit after tax of $4.1 million for the year ended 30 June 2007. This is the first full year result for the Company since it changed its name and business focus to being an investor in structured finance transactions.

The proposed final dividend for the year is 2.3 cents per share, fully franked. This is in line with the Company’s policy of fully distributing net profit to shareholders. The record date will be 20 August, with the dividend being paid on 14 September 2007.

Key components of the Company’s operations to 30 June 2007 can be summarised as follows:

Arrow Right Total investment income of $21.5 million, representing an effective pre tax return on average investments of 21.3% per annum.
Arrow Right As previously advised, this strong result from investments was affected by provisions against income from the Company’s investments in the US securitisation market of $10.4 million.
Arrow Right Income was well covered by cashflow, with cash income representing 76% of total income and the remainder being accrued income to be received in the future.
Arrow Right Total investments as at 30 June were $264 million, spread across core asset classes of property, infrastructure, fixed income and leasing. Investment levels have increased further to $309 million as at 8 August.
Arrow Right In view of the current level of investments and the pipeline prospects, the Company is increasing its expectation for total investments by December 2007 to be over $375 million. This is an increase from the previous guidance of $325 million.
Arrow Right Mariner Bridge Investments successfully raised $246 million of equity and $130 million of committed debt facilities during the year.

Mark Phillips, Managing Director, said: “Mariner Bridge is well positioned for future growth”.

“The majority of our transactions have significantly outperformed initial expectations and this has enabled us to offset the poor results from the US Securitisation segment which is now 9% of our portfolio.”

“We have in place a very high quality executive team, a committed and experienced Board and a range of transaction partners capable of generating a strong flow of high quality transactions”, Mr Phillips said.

Investment Performance

As at 8 August 2007, total investments were $309 million, spread as follows:

Asset Class
Total Investment AUD
Share of Portfolio
Fixed Income - US Securitisations
Fixed Income - Other
Leasing (principally shipping and aircraft)

Fixed Income – US Securitisations

On 10 July 2007, the major credit rating agencies announced that they would be taking action to proactively downgrade securities issued in the residential mortgage securitisation markets in the US. Actual and anticipated ratings actions following these announcements have caused Mariner Bridge Investments to reduce further the cashflows expected from its investments in the US securitisation market. As a result, post 30 June, the provision against our investments in these markets has been increased by approximately $5 million. This is reflected in the above investment levels.

These US securitisation investments are now at a book value equal to 61% of their aggregate face value. This reflects the current assessment of the present value of the cashflows that may be received from the individual investments.

The remainder of the investment portfolio is delivering strong returns and we anticipate the increased provision against income can be accommodated without affecting overall profit expectations for the 2008 financial year. Income levels should benefit from strong underlying returns from the majority of the investment portfolio, including the realisation of profits on some of the shipping investments.

Capital Management

The Company had drawn debt of $59 million as at 8 August 2007. New investments will be funded from cash on hand, repayments from within the portfolio and growth in the Company’s debt facilities.

Mariner Bridge Investments had planned to launch a loan-based income fund targeted at retail investors.

“With the recent volatility in global credit markets, we have decided to postpone the launch of this fund. This temporary delay will have no impact on profitability”, Mr Phillips said.

Name Change

Mariner Bridge Investments said today that it will be seeking shareholder approval to change its name to Bridge Investments Group Limited.

“Following discussions with Mariner Financial Limited, the name change is designed to remove any confusion that may exist in the marketplace between the two companies. Mariner Financial will continue to be an asset origination partner for the Company,” Mr Phillips said.

The shareholder meeting to consider the name change will be held on 26 September 2007.

Under a Management Services Agreement, Mariner Financial has been providing the Company with administrative services, including office accommodation and accounting support. Concurrent with its proposed change of name, the Company will internally manage the provision of these services.


Mr Phillips said that in view of the current level of investments and the pipeline prospects, “we expect total investments by December 2007 to be over $375 million. This is an increase from the previous guidance of $325 million.”

The pipeline of potential investments continues to provide a range of attractive opportunities across the target asset classes of property, infrastructure, fixed income and leasing, both in Australia and offshore.

Profitability in the next 6 to 12 months will benefit from strong earnings in the majority of the investments portfolio. If poor performance in the US securitisation markets continues, it is possible further provisioning may be required. If this were to occur, it may have an impact on short-term profits but the Board and management are very positive about the Company’s ability to deliver strong earnings per share growth over the next 2 to 3 years.

Mariner Bridge Investments is an investor in structured finance transactions in the core asset classes of property, infrastructure, fixed income and leasing. Its objective is to build a diversified portfolio of investments that delivers high returns to shareholders.


For further information, please contact:

Karen McGregor
Chief Financial Officer and Company Secretary
Mariner Bridge Investments Limited
Tel: +61 2 8001 5700