Kuala Lumpur, 29 June 2009 – HwangDBS Investment Management Berhad ("HwangDBS IM" or "the Company") declared its second quarterly net income distribution of 1.6255 sen per Unit for the HwangDBS Structured Income Fund II ("StrIF II") and the first quarterly net income distribution of 0.2631 sen per Unit for the HwangDBS Structured Income Fund III ("StrIF III"). All StrIF II and StrIF III unit holders registered as at 22 June 2009 respectively were eligible to receive the income allotment.

The funds, launched on 16 January 2009 and 21 April 2009 respectively, represents the two (2) funds in the HwangDBS IM series of two-year close-ended income funds targeted at Qualified Investors which comprise mainly of corporate investors. Its objective is to provide regular income distributions over an investment horizon of two (2) years by investing up to a minimum 0.20 per cent of the Fund’s Net Asset Value ("NAV") in cash and money market instruments. Both StrIF II and StrIF III funds may invest up to a maximum of 99.8 per cent in a Structured Note linked to a basket of high quality corporate bond (local and/or offshore corporate bonds).

Teng Chee Wai, Chief Executive Officer and Executive Director of HwangDBS IM commented, "All of the four underlying referenced credits (i.e. IOI Corp., Hongkong Land Ltd, CapitaLand Ltd and Hutchison Whampoa Ltd) of the StrIF II’s structured product and the four underlying referenced credits (i.e. Khazanah Nasional Bhd, YTL Corporation Bhd, CapitaMall Trust and Hutchison Whampoa Ltd) of the StrIF III’s structured product continued to meet their financial obligations as at 22 June 2009."

Looking offshore, the global sentiment improved significantly from early March 2009 and has continued through June 2009. Equity markets staged a comeback, on the back of declining pace of negative news flow on the global macroeconomic front as well as positive performances by global banks exceeding initial analyst expectations. Improved risk appetite amongst investors was evident as investment flows moved into higher beta markets and asset classes.

"As such, credit markets were also beneficiaries through this period. On the local and regional fixed income front, yields trended lower as signs of potential stabilisation in economic data provided support to the markets. Credit spreads and yields of all the four underlying issues of the Fund’s structured product investment tightened alongside the rest of the market, leading to improved mark-to-market valuations of the structured product," Teng added.

Hence, in respect of the four underlying credits of StrIF II and StrIF III, Hutchison Whampoa Ltd was in the spotlight over May 2009 and early June 2009 as it was conducting an exercise to purchase up to USD1.5 billion aggregate principle amount of its outstanding debt. The exercise was taken very positively by the market as evidenced by significant tightening on both Hutchison Whampoa’s cash bond yields and Credit Default Swap spreads. The exercise was completed successfully on 8 June 2009.

Therefore, HwangDBS IM will continue to monitor the economic environment and credit markets in respect of their effect on the four referenced underlying credits of the StrIF II and StrlF III's structured product investment. The company remains optimistic on the credit worthiness of all the four underlying credits over the remaining tenure of the StrIF II and StrlF III. As such, the structured product investment of the StrIF II and StrIF III is expected to meet its quarterly coupon payments.