Untitled - Irish Stock Exchange

which can lead to significant fluctuations in value of mortgage-backed securities; (4) risk that any default in the
underlying mortgage payments may force the sale of such underlying mortgage or mortgaged property for less than
market value; and (5) decline in the market value of the security, whether resulting from changes in interest rates on
the underlying mortgage collateral or other factors.
The Issuer may from to time acquire other asset-backed securities. Asset-backed securities involve certain
risks in addition to those presented by mortgage-backed securities, including the following: (1) often, these
securities do not have the benefit of the same security interest in the underlying collateral as mortgage-backed
securities and are more likely to be dependent solely on the obligor's ability to pay; (2) credit card receivables (and
other collateral assets) are generally unsecured, and the debtors are entitled to the protection of a number of state and
Federal consumer credit laws, many of which give debtors the right to set off certain amounts owed on the credit
cards, thereby reducing the balance due; and (3) most issuers of automobile receivables permit the servicers to retain
possession of the underlying contracts. If the servicer were to sell these contracts to another party, there is a risk that
the purchaser would acquire an interest superior to that of the holders of the related automobile receivables. In
addition, because of the large number of vehicles involved in a typical issuance and technical requirements under
state laws, the trustee for the holders of the automobile receivables may not have an effective security interest in all
of the obligations backing such receivables. There is a risk that recoveries on repossessed collateral may not, in
some cases, be able to support payment of amounts due on these securities.
The Issuer may from time to time acquire collateral debt obligations ("CDO Securities") which may be
backed by a combination of investment grade debt securities, high-yield debt securities, loans, structured finance
securities, synthetic securities and/or other financial assets, and which may also have been acquired by the Issuer
through direct investment. CDO Securities are limited recourse obligations of the issuer thereof payable solely from
the underlying collateral owned by the issuer or proceeds thereof. Consequently, holders of CDO Securities must
rely solely on distributions on the collateral underlying such CDO Securities or the proceeds of sale thereof for
payment. In the event of poor performance of such securities, loans or other assets backing such CDO Securities,
collections on the portfolio would be doubly affected as not only will the collections on the relevant securities, loans
and other assets be reduced, it is also likely that the poor performance of such securities, loans and other assets will
have an adverse impact on the value of the related CDO Security thereby leading to reduced income and capital
returns by the Issuer from each such related CDO Security.
CDO Securities generally present risks similar to those of the other types of assets in which the Issuer may
invest, including those presented by the mortgage-backed securities and other asset-backed securities described
above, and, in fact, such risks may be of greater significance in the case of CDO Securities. Moreover, investing in
CDO Securities may entail additional structural and legal risks. In addition, the performance of a CDO Security will
also be affected by the ability of the relevant collateral manager to administer the portfolio of collateral assets.
Income from the pool of collateral assets collateralizing CDO Securities is typically separated into tranches
representing different degrees of credit quality. The top tranche of CDO Securities, which represents the highest
credit quality in the pool, has the greatest collateralization and pays the lowest interest rate. Lower CDO tranches
represent lower degrees of credit quality and pay higher interest rates to compensate for the attendant risks. The
bottom tranche, such as CDO equity securities, specifically receives the residual interest payments (i.e., money that
is left over after the higher tiers have been paid) rather than a fixed interest rate. The return on the lower tranches of
CDO Securities (particularly CDO equity securities) are especially sensitive to the rate of defaults in the collateral
pool, which increases the risk of the Issuer losing its investments in lower or bottom CDO Security tranches.
Risks of Bankruptcy Process Affecting Fund Investments. There are a number of significant risks inherent
in the bankruptcy process. First, many events in a bankruptcy are the product of contested matters and adversary
proceedings and are beyond the control of the creditors. While creditors are generally given an opportunity to object
to significant actions, there can be no assurance that a bankruptcy court, in the exercise of its broad powers, would
not approve actions that would be contrary to the interests of the Issuer. Second, the effect of a bankruptcy filing on
a company may adversely and permanently affect the company. The company may lose its market position and key
employees and otherwise become incapable of restoring itself as a viable entity. If for this or any other reason the
proceeding is converted to a liquidation, the liquidation value of the company may not equal the liquidation value
that was believed to exist at the time of the investment. Third, the duration of a bankruptcy proceeding is difficult to
predict. A creditor's return on investment can be adversely impacted by delays while the plan of reorganization is
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