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  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    19 April 2010

    NB Distressed Debt Investment Fund Limited Announces Intention to Float

    Neuberger Berman today announces its intention to establish NB Distressed Debt Investment Fund Limited (the Company). It is intended that the Company, once established, will seek admission to trading of its ordinary shares (Ordinary Shares) on the Specialist Fund Market (SFM) of the London Stock Exchange plc (LSE) and a dual-listing on the Official List of the Channel Island Stock Exchange (CISX) (Admission), through a proposed placing and offer for subscription with a target size in excess of US$150 million and the potential to increase the offer size, subject to global investor demand. Highlights Objective To provide investors with attractive risk-adjusted returns through long biased,

    opportunistic stressed, distressed and special situation investments in credit-related products.

    Market opportunity Neuberger Berman believes that the increased supply of distressed

    debt and rising default rates have created a compelling investment opportunity.

    Attractive potential returns Target returns of 20%1,2 per annum without the use of leverage.

    Risk management The Company intends to invest in approximately 40 to 50 holdings

    diversified across stressed, distressed and special situations investments, with a focus on senior debt backed by hard assets.

    Fixed life Investment / reinvestment period of three years with any profits expected to be

    returned to investors from year four onwards.

    Capital deployed quickly At least one third is expected to be invested in the first one to three months following Admission and the aim is to be fully invested in three to nine months.

    Highly experienced portfolio management team The portfolio will be managed by the

    distressed debt team within what Neuberger Berman believes to be one of the largest and most experienced credit teams in the industry.

    1 Gross of fees and expenses. 2 This is the Companys targeted return only and there is no guarantee that the target return can be achieved. The actual returns of the Company will be dependent on a number of factors, including, but not limited to, market conditions, the success of the Company's investment strategy and individual investments held in the Company's portfolio. Accordingly, actual returns may be materially lower than the target returns.

  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    Proprietary database Neuberger Bermans comprehensive proprietary information and commentary on over 2,000 companies, providing extensive private and public financial and capital structure information on issuers.

    Discount control Continuation vote and discretionary 20% tender offer approximately 18 months after Admission; separate authority to buy back up to 14.99% of issued shares.

    Targeted proceeds US$150 million, with the ability to upsize. Issue price US$1.00; Opening NAV per share US$0.98.

    Bonus subscription share issue 1 for 5 bonus subscription share issue to all initial

    public offering investors with an exercise price equal to issue price and bullet conversion date 18 months after Admission.

    Joint Global Co-ordinators and Joint Bookrunners Oriel Securities Limited and RBS Hoare Govett Limited.

    Michael J. Holmberg, Managing Director, Neuberger Berman, commented: We are delighted to be creating a listed fund which will aim to capture what we perceive to be the attractive current opportunity in distressed debt. We believe that we are still in the early days of this opportunity, and we believe our experienced team and proprietary research platform are well placed to capture these potentially attractive, risk-adjusted returns. Patrick H. Flynn, Managing Director, Neuberger Berman, added: We have structured the offering with investors in mind, creating a fixed life fund with several discount control mechanisms in place and a commitment to investor communications, including daily NAV plus quarterly disclosure of holdings by industry. NB Distressed Debt Investment Fund The Company will take the form of a closed-ended limited liability investment company incorporated in Guernsey. The Companys primary objective will be to provide investors with attractive risk-adjusted returns through long-biased, opportunistic stressed, distressed and special situation investments in credit-related products. The Company's portfolio is intended to focus on 40 to 50 holdings of senior and senior secured debt backed by hard assets which can limit risk. Historically strong distressed debt investment performance has followed periods when a large number of companies have failed to meet their debt obligations. Neuberger Berman believes there are compelling reasons why the investment opportunity in distressed debt will continue for the next three to four years.

  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    First, U.S. bond default rates reached a 25-year3 high in 2009. Default rates and distressed debt returns have historically been correlated, with strong investment returns typically following two years after rising defaults. Neuberger Berman believes that the sharp rise in defaults from 2009 onward implies strong distressed debt performance for at least the next two years. Second, Neuberger Berman expects default rates for leveraged loans to accelerate again from 2011 as a large quantity of these loans will start to mature and many companies may find it difficult to refinance in a capital-constrained market. This is expected to present a second wave of investment opportunities from 2011 to 2014. Investment Managers The Company will be managed by Neuberger Berman Europe Limited, a company incorporated in England and Wales, and certain responsibilities and functions will be delegated to Neuberger Berman Fixed Income LLC, a limited liability company incorporated in Delaware, USA (together, the Investment Managers). The Investment Managers distressed debt team is backed by the strong breadth and depth of their research platform. The Investment Managers are wholly-owned indirect subsidiaries of Neuberger Berman Group LLC (Neuberger Berman). Established in 1939, Neuberger Berman is one of the worlds largest private, independent employee-controlled asset management companies, managing approximately $173 billion in assets as of December 31, 2009, including approximately US$70 billion in fixed income investments and which includes more than US$11 billion in high yield bonds and loans. Neuberger Berman is a leader in providing a broad range of global investment solutions to institutions and individuals through customized separately managed accounts, mutual funds and alternative investment products. For more information please visit our website at www.nb.com. Admission Dealings are expected to commence in early June 2010. Oriel Securities Limited and RBS Hoare Govett Limited have been appointed as joint global co-ordinators and joint bookrunners to the proposed initial public offering. Oriel Securities Limited has also been appointed as financial adviser to the Company.

    3 Moodys Investor Service reportJanuary 29, 2010.

    http://www.nb.com/

  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    For further information, please contact: Neuberger Berman Europe +44 (0)20 3214 9000 Nick Hoar Oriel Securities +44 (0)20 7710 7600 Joe Winkley Neil Langford RBS Hoare Govett +44 (0)20 7678 8000 Gary Gould Stuart Klein Financial Dynamics +44 (0)20 7269 7114 Rob Bailhache Nick Henderson www.nbddif.com Portfolio Managers Michael J. Holmberg, Managing Director, joined Neuberger Berman in 2009 and is the co-head of Distressed Portfolio Management. Prior to joining Neuberger Berman, Michael was the managing principal of Newberry Capital Management LLC and prior to that Michael founded and managed Ritchie Capital Managements Special Credit Opportunities Group. He was also a managing director of Strategic Value Partners and Moore Strategic Value Partners. He began investing in distressed and credit-orientated strategies at Continental Bank/Bank of America, where he was a founder and portfolio manager for the banks global proprietary capital account. Michael received an AB in Economics from Kenyon College and an MBA from the University of Chicago. Patrick H. Flynn, Managing Director, joined Neuberger Berman in 2006 and is the co-head of Distressed Portfolio Management and Director of Leveraged Asset Management Research. He came to Neuberger Berman with more than 15 years of experience, including positions with Putnam Investments, JP Morgan Chase and UBS. Most recently, Patrick served as Director of Research at DDJ Capital Management LLP. He holds an AB from Columbia University and an MBA in Finance and Economics from the University of Chicago. Patrick has been awarded the Chartered Financial Analyst designation.

    http://www.nbddif.com/

  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    This document is not for release, publication or distribution (directly or indirectly) in or into the United States, Canada, Australia or Japan or to any "US person" as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act") or into any other jurisdiction where applicable laws prohibit its release, distribution or publication. It does not constitute an offer of securities for sale anywhere in the world, including in or into the United States, Canada, Australia or Japan. No recipient may distribute, or make available, this document (directly or indirectly) to any other person. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of this document may in certain jurisdictions be restricted by law. Accordingly, recipients represent that they are able to receive this document without contravention of any applicable legal or regulatory restrictions in the jurisdiction in which they reside or conduct business.

    This document has been prepared by Neuberger Berman Europe Limited ("NBEL") and is the sole responsibility of NBEL. No liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document is accepted and no representation, warranty or undertaking, express or implied, is or will be made by NBEL or Oriel Securities Limited ("Oriel Securities") or RBS Hoare Govett Limited (RBS Hoare Govett) or any of their respective directors, officers, employees, advisers, representatives or other agents ("Agents") for any information or any of the opinions contained herein or for any errors, omissions or misstatements. None of Neuberger Berman LLC, Neuberger Berman Fixed Income LLC ("NBFI"), Oriel Securities, RBS Hoare Govett nor any of their respective Agents makes or has been authorised to make any representation or warranties (express or implied) in relation to NB Distressed Debt Investment Fund Limited ("NBDDIF") or as to the truth, accuracy or completeness of this document, or any other written or oral statement provided. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in this document and nothing in this document is or should be relied on as a promise or representation as to the future. The name "Neuberger Berman" is used interchangeably throughout these materials for a number of entities associated with the Neuberger Berman Group and NBDDIF and when used in this notice includes all such entities.

    This document is an advertisement and does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of NBDDIF or other evaluation of any securities of NBDDIF or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities. Neither the issue of this document nor any part of its contents constitutes an offer to sell or invitation to purchase any securities of NBDDIF or any other entity or any persons holding securities of NBDDIF and no information set out in this document or referred to in other written or oral information is intended to form the basis of any contract of sale, investment decision or any decision to purchase any securities in it. An investment decision must be made solely on the basis of a prospectus to be published by NBDDIF. When made available, copies of the prospectus may be obtained, subject to applicable law, at no cost from the registered office of NBDDIF and will be made available for viewing at the document viewing facility of the Financial Services Authority.

    The information contained in this document is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment when the definitive admission document is published. In particular, the proposals referred to herein are tentative and are subject to verification, material updating, revision and amendment. No reliance may be placed for any purpose whatsoever on the information of opinions contained in this document or on its completeness, accuracy or fairness. The contents of this document have not been verified by Oriel Securities or RBS Hoare Govett and the document has not been approved by any competent regulatory or supervisory authority.

    This document, any presentation made in conjunction with this document and any accompanying materials (the "Information Materials") are preliminary and made available for information purposes only. The Information Materials, which are not a prospectus or listing particulars or an admission document, do not contain any representations, do not constitute or form part of any offer or invitation to sell or transfer, or to underwrite, subscribe for or acquire, any shares or other securities, and do not constitute or form any part of any solicitation of any such offer or invitation, nor shall they are or any part of them or the fact of their distribution form the basis of or be relied upon in connection with any contract therefore, and do not constitute a recommendation regarding the securities of NBDDIF.

    The Information Materials contain inside information. By accepting this document you agree not to use all or any of the information contained in the Information Materials (except to the extent it has lawfully been made public) to deal, advise or otherwise require or encourage another person to deal in the securities of the Company or engage in any other behaviour which amounts to the criminal offence of insider dealing under the Criminal Justice Act 1993 or the civil offence of market abuse under the Financial Services and Markets Act 2000.

    Neuberger Berman gives no undertaking to provide the recipient with access to any additional information, or to update this document or any additional information, or to correct any inaccuracies in it which may become apparent and the distribution of this document shall not be deemed to be any form of commitment on the part of Neuberger Berman to proceed with any transaction.

    The promotion of NBDDIF and the distribution of this document in the United Kingdom is restricted by law. Accordingly, this communication is directed only at (i) persons outside the United Kingdom to whom it is lawful to communicate to, or (ii) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), or (iii) high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) provided that in the case of persons falling into categories (ii) or (iii), the communication is only directed at persons who are also "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000 (each a "Relevant Person"). Any investment or investment activity to which this communication relates is available only to and will be engaged in only with such Relevant Persons. Persons within the United Kingdom who receive this communication (other than persons falling within (ii) and (iii) above) should not rely on or act upon this communication. You represent and agree that you are a Relevant Person.

    NBDDIF will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and investors will not be entitled to the benefits of that Act. The securities described in this document have not been and will not be

  • NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

    registered under the Securities Act, or the laws of any state of the United States. Consequently, such securities may not be offered, sold or otherwise transferred within the United States or to or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, applicable state laws and under circumstances which will not require NBDDIF to register under the Investment Company Act. No public offering of the securities is being made in the United States.

    Prospective investors should take note that any securities may not be acquired by investors using assets of any retirement plan or pension plan that is subject to Part 4 of Subtitle B of Title I of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA") or section 4975 of the United States Internal Revenue Code of 1986, as amended (the "Code"), entities whose underlying assets are considered to include "plan assets" of any such retirement plan or pension plan, or any governmental plan, church plan, non-U.S. plan or other investor subject to any state, local, non-U.S. or other laws or regulations similar to Title I or ERISA or Section 4975 of the Code or that would have the effect of the regulations issued by the United States Department of Labor set forth at 29 CFR Section 2510.3-101, as modified by section 3(42) of ERISA.

    The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of Neuberger Berman. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities. Recipients of this document are recommended to seek their own independent legal, tax, financial and other advice and should rely solely on their own judgment, review and analysis in evaluating Neuberger Berman, its business and its affairs. Potential investors and their representatives are invited to ask questions of, and receive answers from, NBEL and NBFI concerning the contemplated investment to the extent the same can be acquired without unreasonable effort or expense, in order to verify the accuracy of the information herein.

    This document may contain certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, forward-looking statements can be indentified by terms such as "anticipate", believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will", and "would", or the negative of those terms or other comparable terminology. The forward-looking statements are based on Neuberger Berman's beliefs, assumptions, and expectations of future performance and market developments, taking into account all information currently available. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known or are within Neuberger Bermans control. If a change occurs, the NBDDIFs business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Some of the factors that could cause actual results to vary from those expressed in forward-looking statements, include, but are not limited to: the factors described in this document; the rate at which NBDDIF deploys its capital in investments and achieves expected rates of return; NBDDIF, NBEL and NBFI's ability to execute NBDDIF's investment strategy, including through the identification of a sufficient number of appropriate investments; the continuation of NBEL and NBFI as investment manager and sub-investment manager, respectively, of NBDDIF's investments, the continued affiliation with Neuberger Berman of its key investment professionals; NBDDIFs financial condition and liquidity; changes in the values of or returns on investments that the Company makes; changes in financial markets, interest rates or industry, general economic or political conditions; and the general volatility of the capital markets and the market price of NBDDIFs shares.

    By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances that may or may not occur in the future. Forward- looking statements are not guarantees of future performance. Any forward-looking statements are only made as at the date of this document, and Neuberger Berman neither intends nor assumes any obligation to update forward-looking statements set forth in this document whether as a result of new information, future events, or otherwise, except as required by law or other applicable regulation. In light of these risks, uncertainties, and assumptions, the events described by any such forward-looking statements might not occur. Neuberger Berman qualifies any and all of their forward-looking statements by these cautionary factors. Please keep this cautionary note in mind while reading this document.

    Oriel Securities and RBS Hoare Govett, each of which is authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for NBDDIF and no-one else in connection with the potential offering of securities by NBDDIF and will not be responsible to anyone other than NBDDIF for providing the protections afforded to customers of Oriel Securities and RBS Hoare Govett or for providing advice in relation to the offer of securities by NBDDIF.

    By reading this document you will be deemed to have represented, warranted and undertaken for the benefit of Neuberger Berman, Oriel Securities and RBS Hoare Govett and others that (a) you are outside of the United States and are an "investment professional" (as defined above), (b) you have read and agree to comply with the contents of this notice, you will keep the information in this document and delivered during any accompanying document and all information about Neuberger Berman confidential, and will not reproduce or distribute, in whole or in part, (directly or indirectly) any such information, until such information has been made publicly available and take all reasonable steps to preserve such confidentiality, and (c) you are permitted, in accordance with applicable laws, to receive such information.

    This document is issued by Neuberger Berman Europe Limited, which is authorised and regulated by the United Kingdom Financial Services Authority and whose registered address is at Lansdowne House, 57 Berkeley Square, London, W1J 6ER. Neuberger Berman LLC is a registered Investment Adviser and Broker Dealer and member of the New York Stock Exchange, the Financial Industry Regulation Authority and the Securities Investor Protection Corporation. Neuberger Berman Fixed Income LLC is a US registered Investment Adviser. Neuberger Berman is a registered trademark. All rights reserved. 2010 Neuberger Berman.

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