Companies involved : BlueBay Multi-Strategy Investments (Luxembourg) S.a r.i.

Transcription

1 LE GOUVERNEMENT DU GRAND-DUC HE DE LUXEMBOURG Administration des contributions directes Bureau d'imposition Societes 6 For the attention of Laurent de La Mettrie PricewaterhouseCoopers 400, route d'esch B.P L Luxembourg Companies involved : BlueBay Multi-Strategy Investments (Luxembourg) S.a r.i. Tax Number: SEP Dear Sir, Further to your letter dated 15 September 2010 and referenced LIE/NAAA/Q M-SEBD relating to the transactions that the group BlueBay would like to conduct, I find the contents of said letter to be in compliance with current tax legislation and administrative practice. It is understood that my above confirmation may only be used within the framework of the transactions contemplated by the above-mentioned letter and that the principles described in your letter shall not apply ipso facto to other situations. du bureau 18, rue du Fort Wedell Tel.: (352) Adresse postale Site Internet Luxembourg Fax: (352) L-2982 Luxembourg

2

3 fjr/cewa1 RHousF(mPERS I CLASSIFICATION SHEET This document relates to the following request: 15 September 20 I 0 References: LIE/NAAA/Q M-SEBD BlucBay Multi-Strategy Investments (Luxembourg) S.a r. l. Tax identification number I. Key topics: Tax returns in USD functional currency 2. Name of the advisor : PwC 4. Name of the project: BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l. 5. Amount intended to be invested: N/ A 6. Date of receipt: 15 September 2010 BUREAU O'IMPOSITION SOC. e EHTREE I J

4

5 For the attention of Mr Marius Kohl Administration des Contributions Directes Bureau d'imposition Soeietes VI 18, rue du Fort Wedell L-2982 Luxembourg 15 September 2010 References: LI E/N AAA/Q27l01 l 5M-SEBD L-1014 Luxembourg Telephone Facsimile info@lu.pwc.com BUREAU O'IMPOSITION SOC. 8 ENTREE 1 5 SEP BlueBay Multi-Strategy Tax returns in USO functional currency BlueBay Multi-Strategy Investments (Luxembourg} S.a r.1. - number Tax identification Dear Mr Kohl, In our capacity of tax consultant acting for the above-mentioned client, we discussed in our meetings dated 17 January 2007' and 25 August the tax treatment applicable to the transactions implemented by our client and the application of the Luxembourg functional currency tax treatment on the special investment vehicle structure implemented for the purpose of its investments. This letter seeks to confirm the conclusions reached during our last meeting, and will serve as a basis for the preparation of the tax returns of the Luxembourg company involved, in order to allow the latest to file all its tax returns in United States of America dollars (hereafter referred "USD"). 1 Please refer to the Advance Tax Agreement filed on 17 January 2007 under the following reference LIE/ JERS/Q M-ANB E. 2 Please refer to the Worksheet discussed with the Luxembourg tax administration on 25 August 2010 and filed under the following reference: LIE/NAANQ M-SEBD. Cabinet de revi51on agn:~ hpcn-cornplablc (autorisati.jn gouvememeniale n 9S992) R C.S Luxembourg U Capital social EUR VA LUl

6 A Background BlueBay Multi-Strategy (Master) Fund Limited is a Cayman based investment fund organised under Cayman Master-Feeder structure, and managed by BlueBay Asset Management plc 3. 2 The Master Fund incorporated on 25 October 2007, a Luxembourg special investment vehicle, BlueBay Multi-Strategy Investments (Luxembourg) S.a r.i. (hereafter referred as the "Company"). 3 As previously discussed, the Company was funded with 1 % equity contribution and 99% Profit Participating loan ("PPL") that was structured as facility and qualifies as debt for Luxembourg tax purposes 4 4 The base currency of the entire Master-Feeder structure, and in particular of the Master Fund itself, is the USD. It is also foreseen that after a first launching period, the USD should be the main investment currency for the majority of the underlying investments done via the Company. 5 Nonetheless, at the time when the Advance Tax Agreement was submitted to the Luxembourg Tax Administration (on 17 January 2007), the Company was not incorporated and the currencies of the underlying investments were not clearly defined. It was expected, at that date, that the investments should be USD denominated. However, as from its incorporation and for the time being, the Company mainly invests in multi-currency portfolios (i.e., GBP and EUR mainly). 6 Considering that (i) the Company was incorporated with USD denominated share capital, (ii) its statutory accounts are in USO and (iii) further to the clarifications provided regarding the Company's investment policy definition, it is decided that the USD is the Company's functional currency as from the Company's incorporation and onwards. 7 As a result of using the USO as functional tax currency, the Corporate Income Tax, Municipal Business Tax and Net Wealth Tax returns are to be based on the USO denominated statutory accounts. 8 Therefore, the annual taxable result would be converted into EUR using the market EUR/USD exchange rate of the closing date of the fiscal year. 3 BlueBay Asset Management Pie. is a London based specialist manager of fixed income credit funds. It is also currently dealing with all the Funds traded by the BlueBay Group. 4 Meaning Corporate Income Tax, Municipal Business Tax and Net Wealth Tax. (2)

7 B Luxembourg Tax Functional currency regime and compliance requirements B.1 Compliance rules in case of application of a functional tax currency B. 1.1 Profit and Loss account inf unctional currency 9 As a general rule, Luxembourg taxpayers file their tax returns in EUR, also when the tax return is based on financial statements established in another currency than EUR. For these purposes, the commercial result (profit or loss) derived from the statutory accounts is converted into EUR using the exchange rate as of the closing date of the relevant fiscal year (which should be the case for the Company) or less frequently by reference to the average exchange rate of the year to which the income or the loss is connected. For the purposes of the computation of taxable basis, potential adjustments to the EUR denominated commercial result (reported in EUR on line 12 of the tax return 5 ) arc made in EUR currency, requiring the relevant profit and loss account items to be converted into EUR according to the same rules as described here above. I 0 The mechanism of functional currency described above, being impacted by exchange rate fluctuations due to normal market circumstances, could however present some non desired effects due to the fact that USD denominated commercial result (profit or loss) should be converted into EUR to establish EUR denominated tax returns. 11 Consequently, a foreign exchange exposure may arise for both the taxpayer (i.e., BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l.) and the tax collector (the Luxembourg tax administration) as a result of the exchange rate fluctuations that could arise between the exchange rates used for the conversion of the result to be reported in the consecutive tax returns. 12 Such foreign exchange exposure is proportional to the volatility of the market and is more visible in market conditions registering strong fluctuations, such as the one currently impacting the foreign financial market. s In this letter, when referring to boxes/lines on a tax return, reference has been made to the boxes/lines mentioned in the Luxembourg 2008 tax forms. For other tax years our statements/comments would mutatis mutandis apply to boxes/lines on the tax return having the same object, content or purpose. (3)

8 8.2 Compliance rules as applied currently trigger certain side effects 13 The application of the mechanism of functional currency such as described above, leads in certain cases to a tax result disconnected from any economical reality, e.g.: Utilization of carried forward losses: the amount of the losses to be carried forward (determined and reported in EUR) is computed by reference to the foreign exchange rate as of the closing date of the fiscal year, whereas this EUR denominated amount would be deducted from a tax basis determined for subsequent years, using the foreign exchange rate of the year for which the losses would be used to offset the taxable result of the year. The resulting difference, due to the foreign exchange fluctuation may increase/ decrease the relative weight of the amount of available carried forward tax losses (determined in EUR), to the advantage/ detriment of the taxpayer or the tax administration, depending on the currency's evolution. Reduction in value on assets (participation, receivable, etc.), followed by a full or partial recapture of the provision in the course of the next year: the exchange rate used for the year of the recapture of the provision would in principle not be the same as the one used in the year the provision has been recorded. The potential result originating from the difference in exchange rates at which a write-down is recorded and at which it is reversed would be in the advantage of the taxpayer or the tax administration depending on the exchange rate fluctuations. In case of a write-down that remains at the balance sheet for certain period of time the provision that was initially recorded would not be re - valuated to reflect the fluctuations in exchange rate since the year for which the write down was initially recorded. Capital gains on participations: according to article 2 of the Grand Ducal Decree of 21 December 200 I, capital gains become taxable up to the amount of expenses incurred in relation to the exempt income since the acquisition of the participation. For the purposes of the recapture, the expenses are calculated each year in which a participation is held by reference to the exchange rate applicable for the year in which said expenses have been incurred, whereas the capital gain will be converted by reference to the exchange rate applicable for the year of realization. Here again a gain or loss may be suffered either by the tax administration or by the tax payer depending on the exchange rate fluctuations. 14 The undesired effects under the current Luxembourg tax functional currency practice should be mitigated. In case the tax returns remain entirely established in EUR, this would require a complex administration requiring the tracking of all transactions (in the Company's books relating to the fi nancial period but also the financial year 2009 and the current year 2010) having had an impact on the dctcnnination of the current year result and the creation of deductible or creditable items. Such adjustments would be based on the current practice in Luxembourg (i.e., there are no specific rules/!,juidance providing for a uniform approach while proceeding to such adjustments). (4)

9 15 Such adjustment process (to mitigate the undesired effects) may generate (given its complexity and time consuming character) an important administrative burden for both the taxpayer and the tax administration (having to monitor and verify the adjustments made by the taxpayer). In order to avoid the aforementioned forex issue and to avoid as well an important administrative burden when trying to mitigate it, we would propose as a solution that a company using a tax functional currency would file tax returns that are entirely established in the functional currency. We want to emphasize that the idea underlying this approach is not the creation of any additional deductions/ tax advantages. Rather it is the intention to mitigate to the greatest possible extent both for the taxpayer and the administration any adverse consequences that might arise from the use of a functional tax currency, without triggering additional workload for all parties concerned. 16 The Company has not filed yet any tax returns since its incorporation and tax returns are due as of financial period However, the Company already filed and published its account in USD. 17 It is therefore envisaged to file all tax returns immediately according to the principles elaborated further in this letter. B.3 New application of the tax functional currency regime: filing tax returns in functional currency 18 The aforementioned undesired effects of the current functional tax currency practice could be mitigated if the tax returns of the company using a functional currency would be entirely established in said functional currency instead of EUR and then the resulting final taxable basis is converted in EUR, only for purposes of the computation of the tax due. 19 Thus, the use of a USD functional tax currency would imply that the Company's Corporate Income Tax, Municipal Business Tax and Net Wealth Tax returns would be entirely established on basis of the USD denominated statutory accounts. 20 Consequently, only the final result and balance sheet (and notably the Company's unitary value) would be converted into EUR using the EUR/USD exchange rate at the closing date of the fiscal year. 6 Please note that the Company benefits from a l 81 extended financial period covering 18 months and running as from its incorporation up to 31 December 2008, as defined under its Articles of Association, published under Memorial C (copy of which is enclosed hereafter for your information). (5)

10 Accordingly, Model n 500 F 21 Tax returns "Model n 500 F" of the Company, will be entirely established in USO functional currency, meaning that not only the commercial result (line 12 of the tax return), but also all adjustments to the commercial result (tax losses, tax credits, non-deductible items, exempt income, etc.) will be reported in the tax return in the currency of the commercial balance sheet (USD). 22 Only the taxable result (the amount mentioned on line 77 for the corporate income tax, and the amount mentioned on line 118 for the municipal business tax) will be converted from the USO functional currency into EUR and the appropriate tax rate will be applied in order for the tax authorities to assess the corporate income tax and municipal business tax due. 23 The reference date for the conversion of the taxable basis from functional currency into EUR will be the day on which the tax liability has been generated, thus for corporate income tax ("CIT") and Municipal Business Tax ("MDT") the closing date of the relevant fiscal year (year N), meaning in practice that the USD taxable basis will be converted into EUR by applying the exchange rate of the financial year closing date. 24 The tax liability (in EUR) as computed on the basis of the principles mentioned above will be recorded in USD in the books of the Company. Any variation of the tax charge as a result of the exchange rate fluctuation between EUR and USO between the moment of the recording of a provision and the effective payment, and which would need to be accounted for in the books of the Company, will be considered a non deductible charge or a non taxable income. Model n 506 A 25 Tax form "Model A" of the Company, will be entirely established in USD functional currency by referring in the column "Observation" that the acquisition value of the participation is defined by applying functional tax currency. 26 Would be reported in USO functional currency: the acquisition cost, amount of the pa1ticipations financed by equity/ debt, dividends received, capital gains realized, write-downs, reversal of write-downs, interest expenses and other expenses related to the shareholding, as well as the carried forward amount of expenses subject to recapture. 27 The acquisition value would be converted (for information purposes) from the USD functional currency into EUR using the exchange rate prevailing on the day of acquisition to determine whether a participation would meet the threshold mentioned in article 166 LITL and the Grand Ducal Decree of21 December (6)

11 Tax return.for Net Wealth Tax ("NWT") 28 The Net Wealth returns of the Company, include an additional reference that they are filed in a functional currency. The Net Wealth of the year N will be declared in functional currency and converted in EUR at the exchange rate of 31 December N- 1 or at the closing date of the financial year (depending on the date of the figures that are being used). The unitary value will be rounded by adjusting the EUR amount to the nearest inferior thousand. 29 The Net Wealth Tax liability (in EUR) as computed on the basis of the principles mentioned under point 28 will be recorded in USO in the books of the Company. Any variation of the Net Wealth Tax charge as a result of the exchange rate fluctuation between EUR and USO between the moment of the recording of a provision and the effective payment, and which would need to be accounted for in the books of Company will be considered a non deductible charge or a non taxable income. Special reserve.for NWT 30 The special reserve for NWT (if any) provided for by article Sa of the Net Wealth Tax law will be recorded in the statutory accounts in the functional currency and will be equal to the NWT due (the EUR amount of NWT converted in USO functional currency at exchange rate used to calculate the net wealth tax liability) multiplied by five. The special reserve for NWT as recorded in the statutory accounts will not be subject to exchange rate variations (conversion at historical rate). Foreign tax credits 31 Given that the taxable basis of the Company will be computed and declared in functional currency, the deductible foreign taxes if any will be declared in functional currency as well. The total amount of creditable foreign tax credits will be converted into EUR, for purposes of the computation of the tax due, using the conversion rate of the closing date of the relevant fiscal year. Luxembourg tax credits for investment 32 The Company is not engaged in any activity on basis of which it has been claiming any Luxembourg tax credits for investments. 33 In case the Company would become engaged in activities entitling to tax credits for investments, these credits would be calculated on basis on the value of the assets as accounted for in their USD functional tax currency (in the commercial accounts). (7)

12 fr/cewaierhousf[ropers I 34 Tax credits that could not offset a profit in the year in which they have arisen (absence of sufficient income tax payable), and would be carried forward to subsequent taxable periods, would equally be carried forward. to those future taxable periods for their value in the USO functional currency (any EUR denominated carried forward amount of credits mentioned on the assessment notice would be for information purposes only). Their actual use (imputation against the EUR amount of income tax due) would be in EUR, the conversion from USO to EUR being made at the exchange rate at the closing date of the fiscal year for which the tax credit will be used. Completion of the tax returns 35 For information purposes, an additional enclosure appended to the tax returns of the Company will provide detailed information regarding the conversions into EUR of the different items of the tax returns, including the items taken into consideration for the computation of the net wealth. 36 In case of a negative tax basis, the canied forward tax loss declared in USO functional currency will be reported in the subsequent tax returns in the same USO functional currency until utilization of the total amount of the loss. 37 For the purposes of the computation of the taxable basis, the amount of losses carried forward in USO functional currency will be deducted in USO from the USO profits reported in the tax return of subsequent years. Only the final result (line 77 for Corporate Income Tax and line 118 for Municipal Business Tax) will be converted into EUR at the exchange rate of the closing date of the year covered by the tax return. The EUR amount of carried forward tax losses mentioned on the assessment notice may thus vary every year depending on the exchange rate fluctuation and will be for information purposes only. 38 As explained during the aforementioned meeting, it is our op1mon that such approach as described above would offer advantages to both the Luxembourg tax authorities and the Company in tenns of administrative handling and exchange risks and would further enhance the neutrality of tax returns established in a functional currency (i.e. based on accounts established in another currency than the EUR). (8)

13 We remain at your disposal should you need any further information and would like to thank you for the attention that you will gjve to our letter. Yours sincerely, Sidonie Braud Senior Manager Appendices Appendix 1: Advance Tax Agreement filed to the Luxembourg tax administration on 17 January 2007 under reference LIE/JERS/Q M-ANBE Appendix 2: Articles of incorporation of BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l. 171is ULr agreement is based on the facts as presented 10 PricewaterhouseCoopers S.a r.!. as at the date the advice was given. 11ie agreement is depende111 on specificfacls and circumslances and may nol be appropriale to anolher par1y. than the one for which ii was prepared. 7'his feller was prepared with only BlueBay Multi-Strategy fnvestme/1/s (Luxembourg) S.cl r.l. interest in mind and our work as not planned or carried out in contemplation of any use whatsoever by any other party. PricewaterhouseCoopers S.<i r.l.. its partners. employees and /or agents neither owe nor accept any duty of care or responsibility to any other party. whether in contract or in tort (including without!imitation. negligence and breach of sta/1.1to1y duty) or however arising, and shall no1 be liable in respect of any loss. damage or expense of whatever nature which is caused to any other party. (9)

14

15 For the attention of Marius Kohl Administration des Contributions Oircctes Bureau d'imposition Soci6tcs VI 18, rue du Fort W<.:dell L-2982 Luxembourg l'rkcwatcrhouwcoopc1 \ So ci~t ~ a rc,pon~abili tt lirnittc Rr i~cur d 'c ntrcpri~cs -llk), route d'bch II.I' I I014 I uxc111hourg I de phone Facsimile: ~ info~i1 Ju.pwc.com 17 January 2007 References: LIE/JERS/Q M-ANBE BlueBay Group BlueBay Multi-Strategy Investments (Luxembourg) Sari - To be incorporated Dear Mr Kohl, For and on behalf of BlueBay, and further to our letters dated 20 January 2005 (our ref.: LIE/RSLE/Q M-BDSR) and 17 October 2006 (our ref.: LIE/ANBE/Q M BDSR), we are pleased to submit for your review and approval the Luxembourg tax treatment of the new BlueBay investment and financing structure. Alternatively, we would bt:: pleased to receive your written comments on this structure. l Background and contemplated structure BlucBay is contemplating setting-up a new investment platform in Luxembourg in the form of a Luxembourg company, namely BlueBay Multi-Strategy Investments (Luxembourg) Sari ("Luxco"). Luxco will be incorporated, in February 2007, by a master fund, namely the BlueBay Multi-Strategy (Master) Fund Limited. The Multi-Strategy Fund will have a master-feeder structure. Luxco will be investing mainly in loans denominated in EUR with non-european countries. This being said, Luxco may also invest, on an ancillary basis, in loans with European companies and som<.: loans may be denominated in currencies other than the EUR. Also, it is cnvisag<.:d that Luxco may invest in equities. The overall invcstm<.:nts to b<.: made by Luxco should amount lo about EUR 200 million. Luxco will be financed with I% cquity and 99% Profit Pai1ic ipating Loan ("PPL"), which will rank superior to the equity. Kl''i lu\c11ilx>u1i:lll1~ 177 l\\111 7'1> 1~ 17

16

17 BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l., Societe a responsabilite limitee. Capital social: USD ,00. Siege social: L-1653 Luxembourg, 2-8, avenue Charles de Gaulle. R.C.S. Luxembourg B In the year two thousand and eight, on the sixteenth day of April. Before Us, Maitre Henri HELLINCKX, notary residing in Luxembourg. There appeared: The BlueBay Multi-Strategy (Master) Fund Limited, an investment company incorporated under the laws of the Cayman Islands, having its registered office at PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Indies, duly represented by Maitre Henning SCHWABE, lawyer, professionally residing in Luxembourg, by virtue of a proxy established on 7 April The said proxy, "initialled ne varietur" by the appearing person and the undersigned notary, will remain annexed to the present deed to be filed at the same time with the registration authorities. Such appearing person, acting in its capacity as sole shareholder of BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l., a limited liability company, having its registered office at 2-8, avenue Charles de Gaulle, L Luxembourg (R.C.S. Luxembourg B ) (the "Company"), incorporated under the laws of the Grand Duchy of Luxembourg pursuant to a deed of the undersigned notary, on 17 October 2007, published in the Memorial C, Recueil des Societes et Associations on 2 February 2008, number 278, has required the undersigned notary to state its resolutions as follows: First resolution The sole shareholder resolves to increase the share capital of the Company by an amount of two million US Dollars (USD 2,000,000.-) so as to raise it from two million US Dollars (EUR 2,000,000.-) to four million US Dollars (USD 4,000,000.-) by the issue of two thousand (2,000) new shares, each having a par value of one thousand US Dollars (EUR 2,000-). The two thousand (2,000) new shares are subscribed by The BlueBay Multi-Strategy (Master) Fund Limited, an investment company incorporated under the laws of the Cayman Islands, having its registered office at PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Indies, here represented by Maitre Henning Schwabe, prenamed, by virtue of the aforementioned proxy. The two thousand (2,000) new shares have been fully paid up in cash by the subscriber so that the total sum of two million 'US Dollars (USD 2,000,000.-) is at the free disposal of the Company, as has been proved to the undersigned notary. Second resolution As a result of the foregoing resolution, the first sentence of Article 6 of the Articles of Incorporation of the Company shall be amended and henceforth read as follows: "The share capital is fixed at four million US Dollars (USO 4,000,000.-) represented by four thousand (4,000) shares with a par value of one thousand US Dollars (USO 1,000.-) each."

18 There being no further business on the agenda, the meeting is closed. Estimate of costs For the purpose ofregistration, the increase of capital is valued at EUR 1,274, The value of expenses, costs, remunerations or charges of any form whatsoever which shall be borne by the Company or are charged to the Company as a result of this extraordinary general meeting is estimated at approximately EUR 10, Whereof the present deed is drawn up in Luxembourg on the day named at the beginning of this document. The undersigned notary who speaks and understands English, states herewith that the present deed is worded in English followed by a French version; on request of the appearing person and in case of divergences between the English and the French text, the English version will be prevailing. The document having been read to the person appearing, known to the notary by his name, first name, civil status and residence, the person appearing signed together with the notary the present deed. L'an deux mille huit, le seize avril. Follows the French translation: Par-devant Maitre Henri HELLINCKX, notaire de residence a Luxembourg. A comparu: The BlueBay Multi-Strategy (Master) Fund Limited, une societ6 d'investissement cr6c.c sous la loi des Iles Cayman, ayant son siege social a PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Lndies, dfiment representee par Maitre Henning SCHWABE, avocat, demeurant a Luxembourg, en vertu d'une procuration sous seing prive donnee le 7 avril La procuration signee "ne varietur" par le comparant et le notaire soussigne restera annexee au present acte pour etre soumise avec lui aux formalites de l'enregistrement. Lequel comparant, agissant en sa qualite de seul et unique associe de BlueBay Multi-Stratef,ry Investments (Luxembourg) S.a r.l., une societe a responsabilite limitee, ayant son siege social au 2-8, avenue Charles de Gaulle, L Luxembourg (R.C.S. Luxembourg B ) (la "Societe"), constituee sous la loi du Grand-Duche de Luxembourg suivant acte rc<;:u par le notairc instrumentant, en date du 17 octobre 2007, publie au Memorial C, Recueil des Societes et Associations du 2 fevrier 2008, numero 278, a requis le notaire instrumentant de constater les resolutions suivantes: Premiere resolution L'associe unique decide d'augmenter le capital social de la Societe a concurrence de deux millions de dollars U.S (USD ,-) pour le porter de deux millions de dollars US (USD ,-) a quatre millions de dollars US (USD ,-) par ]'emission de deux mille (2.000) parts sociales nouvelles, chacune d'une valeur nominale de mille dollars US (USD 1.000). Les deux mille (2.000) parts sociales nouvelles sont souscrites par The BlueBay Multi-Strategy (Master) Fund Limited, une societe d'investissement creee sous la Joi des Iles Cayman, ayant son siege social a PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Indies, ici representee par Maitre Henning SCHWABE, prenomme, en vertu de la procuration dont mention ci-avant. Les deux mille (2.000) parts socialcs nouvelles ont ete entierement liberces en especes par le souscriptcur, de sorte que la Somme de deux millions de dollars us (USD ,-) se trouve a la libre disposition de la Societe, ainsi qu'il en est justifie au notaire instrumentant.

19 Deuxieme resolution En con5equence de la resolution qui precede, la premiere phrase de }'article 6 des Statuts de la Societe sera modi fie et aura desormais la tencur suivante: "Le capital social est fixe a quatre millions de dollars US (USD ,-) represente par quatre mille (4.000) parts social es d'une valeur nominale de mille dollars US (USD 1.000,-) chacune." Plus rie'n n'etant a l'ordre du jour, la seance est levee. Frais Le montant des frais, depenses, remunerations et charges, sous quelque forme que ce soit, qui incombent a la Societe ou qui sont mis a charge a raison de cette assemblee generale extraordinaire est estime a environ EUR ,-. Pour les besoins de l'enregistrement ]'augmentation de capital est evaluee a EUR ,05 Dont acte, fait et passe a Luxembourg, date qu'en tete. Le notaire soussigne qui comprend et parle l'anglais, constate que sur demande du comparant, le present actc est redige en langue anglaise suivi d'une version fran9aise; sur demande du meme comparant et en cas de divergences entre le texte fran9ais et le texte anglais, le texte anglais fait foi. Et apres lecture faite et interpretation donnee au comparant, connu du notairc instrumentant par son nom, prenom usuel, etat et demeure, le comparant a signe avec le notaire le present acte. Signe: H. SCHWABE et H. HELLINCKX. Enregistre a Luxembourg A.C., le 25 avril Relation: LAC/2008/17294.? Rec;u six mille deux cent soixante-dixhuit euros vingt-cinq cents (6278,25?). Le Receveur (signe): F. SANDT. POUR COPIE CONFORME, delivrcc aux fins de la publication au Memorial, Recueil des Societcs et Associations. Luxembourg, le 5 mai Henri HELLINCK.X. Reference de publication: /242/100. ( ) Depose au registre de commerce et des societes de Luxembourg, le 23 mai 2008.

20

21 BlueBay Multi-Strategy Investments (Luxembourg) S.a r.l., Societe a responsabilite limitee. Siege social: L-1653 Luxembourg, 2-8, avenue Charles de Gaulle. R.C.S. Luxembourg B Statutes In the year two thousand and seven, on the seventeenth day of October. Before Maitrc Henri Hellinckx, notary residing in Luxembourg. There appeared: TIIE BlueBay MUL Tl-STRATEGY (MASTER) FUND LIMITED, an investment company incorporated under the laws of the Cayman Islands, having its registered office at PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Indies, I duly represented by Mr. Henning Schwabe, lawyer, professionally residing in Luxembourg, by virtue of a proxy given on 17 October The said proxy, signed ne varictur by the proxyholder of the person appearing and the undersigned notary, will remain attached to the present deed to be filed with the registration authorities. Such appearing party, represented as stated hereabove, has requested the undersigned notary to state as follows the articles of incorporation of a private limited liability company: Art. 1. There is formed a private limited liability company, which will be governed by the laws pertaining to such an entity (the «Company»), and in particular by the law of August 10, 1915 on commercial companies as amended (the «Law»), as well as by the present articles of incorporation (the «Articles»), which specify in articles 7, I 0, 11 and 14 the exceptional rules applying to a single shareholder company. Art. 2. The object of the Company is to invest in a portfolio of securities or other financial instruments, and to invest into bonds, debentures, funds, notes, loans, equity and other debt instruments or securities, trade receivables or other forms of claims, obligations (including but not limited to synthetic securities obligations), to acquire rights or participations in loans and in financial derivatives agreements or instruments, to enter into any agreements relating to such portfolio and to administrate, develop and manage such portfolio. The Company may also raise funds through, including, but not limited to, the issue of certificates, bonds, notes, obligations and other debt instruments or debt securities, the use of financial derivatives or otherwise and obtain loans or any other form of credit facility. The Company may further guarantee, grant loans or otherwise assist the companies in which it holds a direct or indirect participation or which form part of the same group of companies as the Company. The Company may take any measures and carry out any operations which it may deem useful in the accomplishment or development of its purpose remaining always however within the limits established by the Law. Art. 3. The Company is formed for an unlimited period of time. Art. 4. The Company will have the name BlueBay MULTI-STRATEGY INVESTMENTS (LUXEMBOURG) S.a r.l. Art. 5. The registered office of the Company is established in Luxembourg. It may be transferred to any other place in the Grand Duchy of Luxembourg by means of a resolution of an

22 extraordinary general meeting of its shareholders deliberating in the manner provided for amendments to the Articles. The address of the registered office may be transferred within the municipality by simple decision of the manager or in case of plurality of managers, by a decision of the board of managers. The Company may have offices and branches, both in Luxembourg and abroad. Art. 6. The share capital is fixed at two million US Dollars (USD 2,000,000.-) represented by two thousand (2,000) shares with a par value of one thousand US Dollars (USD 1,000.-) each. Each share is entitled to one vote in ordinary and extraordinary general meetings. Art. 7. The share capital may be changed at any time by a decision of the single shareholder or by a decision of the general meeting of the shareholders of the Company, in accordance with article l 4 of the Articles. Art. 8. Each share entitles to a fraction of the assets and profits of the Company in direct proportion to the number of shares in existence. Art. 9. Towards the Company, the Company's shares are indivisible, since only one owner is admitted per share. Joint co-owners have to appoint a sole person as their representative towards the Company. Art. 10. In case of a single shareholder, the Company's shares held by the single shareholder are freely transferable. In the case of plurality of shareholders, the shares held by each shareholder may be transferred by application of the requirements of article 189 of the Law only. Art. 11. The Company shall not be dissolved by reason of the death, suspension of civil rights, insolvency or bankruptcy of the single shareholder or of one of the shareholders, in case of plurality of shareholders. Art. 12. The Company is managed by one or more managers. If several managers have been appointed, they will constitute a board of managers. The manager(s) need not to be shareholders. The manager(s) may be dismissed ad nutum. In dealing with third parties, the manager(s) will have all powers to act in the name of the Company in all circumstances and to carry out and approve all acts and operations consistent with the Company's objects and provided the terms of this article shall have been complied with. All powers not expressly reserved by law or the present Articles to the general meeting of shareholders fall within the competence of the manager, or in case of plurality of managers, of the board of managers. The Company shall be bound by the sole signature of any one manager. The manager, or in case of plurality of managers, the board of managers may sub-delegate his/their powers for specific tasks to one or several ad hoc agents. The manager, or in case of plurality of managers, the board of managers will determine this agent's responsibilities and remuneration (if any), the duration of the period ofrepresentation and any other relevant conditions of his agency. If several managers have been appointed, any manager may participate in any meeting of the board of managers by conference-call, videoconference or by other similar means of communication allowing all the persons taking part in the meeting to hear one another. The participation in a meeting by these means is equivalent to a participation in person at such meeting. The board of managers may, unanimously pass resolutions by circular means when expressing its approval in writing, by cable, telegram, telex or facsimile, or any other similar means of communication. The entirety will form the minutes giving the evidence of the resolution. In case of plurality of managers, the resolutions of the board of managers shall be adopted by the majority of the managers present or represented.

23 Art. 13. The manager or the managers (as the case may be) assume, by reason of his/their position, no personal liability in relation to any commitment validly by him/them in the name of the Company. Art. 14. The single shareholder assumes all powers conferred to the general meeting of shareholders. ln case of a plurality of shareholders, each shareholder may take part in collective decisions irrespectively of the number of shares, which he owns. Each shareholder has voting rights commensurate with his shareholding. Collective decisions are only valid taken insofar as they are adopted by shareholders owning more than half of the share capital. However, resolutions to amend the Articles may only be adopted by the majority of the shareholders owning at least three-quarter of the Company's share capital, subject to the provisions of the Law. Art. 15. The Company's financial year starts on the first of January and ends on the thirty-first of December of each year. Art. 16. At the end of each financial year, the Company's accounts are established and the manager, or in case of plurality of managers, the board of managers prepare an inventory including an indication of the value of the Company's assets and liabilities. Each shareholder may inspect the above inventory and balance sheet at the Company's registered office. Art. 17. The gross profits of the Company stated in the annual accounts, after deduction of general expenses, amortization and expenses represent the net profit. An amount equal to five per cent (5%) of the net profit of the Company is allocated to the legal reserve, until this reserve amounts to ten per cent (10%) of the Company's share capital. The balance of the net profit may be distributed to the shareholder(s) in proportion to his/their shareholding in the Company. Art. 18. At the time of winding up the Company the liquidation will be carried out by one or several liquidators, shareholders or not, appointed by the shareholders who shall determine their powers and remuneration. Art. 19. Reference is made to the provisions of the Law for all matters for which no specific provision is made in these Articles. Transitory provisions The first accounting year shall begin on the date of the formation of the corporation and shall terminate on the thirtyfirst December Subscription - Payment The two thousand (2,000) shares have been entirely subscribed by THE BlueBay MULTI-STRATEGY (MASTER) FUND LIMITED. All the shares have been fully paid in cash, so that the amount of two million US Dollars (USD 2,000,000.-) is at the disposal of the Company, as has been proved to the undersigned notary, who expressly acknowledges it. Costs For the purpose of the registration, the amount of two million United States Dollars (USD 2,000,000.-) is valuated at EUR 1,409, The expenses, costs, fees and charges of any kind whatsoever which will have to be borne by the Company as a result of its formation are estimated at approximately 18,000.- Euro. Resolutions of the sole shareholder I) The Company will be administered by the fo llowing managers:

24 - Mr William Jones, residing at I 07 Ragged Staff Wharf, Queensway Quay, Gibraltar; - Mr Henry Kelly, residing at 4, Jean-Pierre Lanter, L-5943 Itzig, Luxembourg; - Mr Jordan Kitson, residing at The Manor House, Riverhead, Kent TN 13 2AS, United Kingdom; - Mr Robert Raymond, residing at 5, rue de Beaujolais, Paris, France; - Mr Nicholas Williams, residing at Flat 7 Smphire, 39 Old Hill, Chislehurst, BR7 5NA, United Kingdom; The duration of their mandate is unlimited. The Company will be bound by the sole signature of any one manager. 2) The address of the Company is fixed at 2-8, avenue Charles de Gaulle, L-1653 Luxembourg. The undersigned notary, who understands and speaks English, states herewith that on request of the appearing person, the present deed is worded in English, followed by a French translation. On request of the same appearing person and in case of divergences between the English and the French text, the English text shall prevail. Whereof the present notarial deed was drawn up in Luxembourg, on the day named at the beginning of this document. The document having been read to the person appearing, known to the notary by his name, first name, civil status and residence the said person appearing signed together with the notary the present deed. Suit la traduction fran~aise du texte qui precede: L'an deux mille sept, le dix-sept octobre. Par-devant Maitrc Henri Ilcllinckx, notaire de residence a Luxembourg (Grand-Duche de Luxembourg). A comparu: THE BlucBay MULTI-STRATEGY {MASTER) FUND LIMITED, une soci6t6 d'invcstisscment organis6 scion Jes lois des iles Cayman, ayant son siege social a PO Box 309 GT, George Town, Grand Cayman, Cayman Islands, British West Indies, ici rcpr6sent6c par Monsieur Henning Schwabe, avocat, demcurant profcssionncllcmcnt a Luxembourg, en vertu d'unc procuration donnee le 17 octobre Laqucllc procuration restcra, apres avoir ete signee ne varictur par le comparant ct le notaire instrumentant, anncx6c aux presentes pour ctrc soumis avec les presentes a la forrnalitc de l'enregistrcment. Lesquels comparants, representes comme indique ci-dessus, ont requis le notaire instrumentant de dresser acte d'unc socicte a responsabilit6 limitec dont ils ont arretc lcs statuts comme suit: Art. 1 er ll est forrne une societe a responsabilite limitee qui scra rcgie par Jes lois relatives a une telle entite ( ci-aprcs «la Societe»), et en particulicr la loi modifice du 10 aofit 1915 relative aux societes commercialcs (la «Loi»), ainsi quc par Jes pr6scnts statuts de la Societe (les «Statuts» ), lesqucls specificnt en leurs articles 7, 10, 11 et 14, Jes reglcs exccptionnelles s'appliquant a la societe a responsabilite Iimitee unipcrsonnellc. Art. 2. L'objet de la Societe est d'investir dans un portcfcuillc comprenant des titres ou d'autrcs instruments (incluant mais non limitcs aux actions, warrants et autres titres) et d'investir dans des obligations, des fonds, des prets, des actions et autres instruments similaires d'cndettement, des creances commerciales ou autres formes de creances, des dettes, des obligations (notamment sans que ceci soit limitatif, des obligations de couvertures synthetiques), d'acqucrir des droits ou des participations dans des prets ou contrats sur des produits derives ou autrcs instruments, de conclurc des contrats relatifs a cc portefcuille et d'administrer, developper ct gerer cc portefeuille. La Societe peut egalcment rcunir des fonds, et notamment emettre des certificats, des titres, des obligations et autrcs

25 dcttes, utiliser des instruments financiers derives ou autres et conclure des emprunts ou tout autre forme de moyen de credit. La Societe peut egalement garantir, accorder des prets ou assister autrement des socictcs dans lesquelles elle detient une participation directe ou indirecte ou qui font partie du meme groupe de socictcs que la Societe. La Societe peut mettre en?uvre toutes mesures et executer toutes operations qui seront necessaires pour l'accomplissement ou le developpement de son objet, le tout en restant dans les limites imposees par la Loi. Art. 3. La Societe est constituee pour une dun~e illimitcc. Art. 4. La Societe a comme denomination BlueBay MULTI-STRATEGY INVESTMENTS (LUXEMBOURG) S.a r.i. Art. 5. Le siege social est etabli a Luxembourg. II pcut ctrc transfere en tout autre endroit du Grand-Dueh6 de Luxembourg par unc deliberation de l'assembl6c generate extraordinaire des associes deliberant comme en matiere de modification des Statuts, L'adressc du siege social peut etrc deplacec a l'interieur de la commune par simple decision du gcrant, ou en cas de pluralite de gerants, du conseil de gerance. La Socictc peut avoir des bureaux ct des succursales tant au Luxembourg qu'a l'etranger. Art. 6. Le capital social est fixe a deux millions de dollars US (USO ,-) rcpr6scnte par deux millc (2.000) parts sociales d'une valeur nominate de mille dollars US (USD 1.000,-) chacune. Chaque part sociale donne droit a une voix dans les assemblees generates ordinaires et assemblees generates extraordinaires. Art. 7. Le capital social peut etre modifie a tout moment par une decision de l'associe unique ou par decision de l'assemblee generate des associes de la Societe, en conformite avec!'article 14 des presents Statuts. Art. 8. Chaque part sociale donne droit a une fraction des actifs et benefices de la Societe, en proportion dirccte avcc le nombre de parts sociales existantes. Art. 9. Envcrs la Societe, Jes parts sociales sont indivisibles, de sortc qu'un seul propri6taire par part sociale est admis. Les coproprietaires indivis doivcnt designer une seule personne qui les representc auprcs de la Soci6t6. Art. 10. Dans l'hypothese ou ii n'y a qu'un seul assoeie, les parts sociales detenues par celui-ci sont librement transmissibles. Dans l'hypothese ou ii ya plusieurs associes, Jes parts soeiales detenues par chacun d'entre eux ne sont transmissibles que moyennant!'application des dispositions de!'article 189 de la Loi. Art. 11. La Societe ne sera pas dissoute par suite du deces, de la suspension des droits civils, de l'insolvabilite ou de la faillite de l'associe unique ou d'un des associes en cas de pluralite des associes. Art. 12. La Societe est geree par un ou plusieurs gerants. Si plusieurs gerants sont nommes, ils constituent un conseil de gcrance. Le(s) gerant(s) ne sont pas obligatoirement associes. Le(s) gcrant(s) sont revocablcs ad nutum. Dans lcs rapports avec!es tiers, le(s) gerant(s) a(ont) tous pouvoirs pour agir au nom de la Societe et pour effectuer et approuver tous actes et operations conformement a l'objet social et pourvu que lcs termes du present article aicnt etc respectes. Tous Jes pouvoirs non expressement reserves a l'assemblee generate des associes par la Loi ou les Statuts seront de la competence du gerant et en cas de pluralite de gerants, du conseil de gerance. La societe est engagee par la signature individuelle de l'un quelconque de ses gcrants. Le gerant, ou en cas de pluralite de gcrants, le conseil de gerance, pcut subdelcgucr une partie de ses pouvoirs pour

26 des taches specifiques a Un OU plusieurs agents ad hoc. Le gerant, ou en cas de pluralite de gerants, le conseil de gerance, determine les responsabilites et la remuneratiou (s'il y en a) de ces agents, la dun.~e de leurs mandats ainsi que toutes autres conditions de leur mandat. Si plusieurs gerants ont ete designes, tout gerant pcut participer aux reunions du conseil de gerance par audioconfcrcncc, videoconference ou tout autre moyen similaire de communication permettant a touts Jes personnes de prendre part a la reunion et de s'entendre. La participation a une reunion par ces moyens est equivalente a une participation par presence physique de cette personne a une telle reunion. Le conseil de gerance pourra, a l'unanimite, prendre ses resolutions par voir circulaire en exprimant son approbation au moyen d'un ou de plusieurs ecrits ou par cable, telegramme, telex, telecopieur ou tout autre moyen de communication similaire, le tout ensemble constituant le proces-verbal faisant preuve de la decision intervenue. En cas de pluralite de gerants, Jes resolutions du conseil de gerance sont adoptees a la majorite des gerants presents ou representes. Art. 13. Le ou Jes gerants ne contractent a raison de leur fonction, aucune obligation personnelle relativement aux engagements regulierement pris par eux au nom de la Societe. Art. 14. L'associe unique exerce tous pouvoirs qui lui sont conferes par l'assemblee generale des associes. En cas de pluralite d'associes, chaque associe peut prendre part aux decisions collectives, quel que soit le nombre de parts qu'il detient. Chaque associe possede des droits de vote en rapport avec le nombre de parts dctenues par Jui. Les decisions collectives ne sont valablement prises que pour autant qu'elles soient adoptees par des associes detenant plus de la moitie du capital social. Toutefois, Jes resolutions modifiant les statuts de la Societe ne peuvent etre adoptes que par une majorite d'associes detenant au moins Jes trois quarts du capital social, conformement aux prescriptions de la Loi. Art. 15. L'annee sociale commence le premier janvier et se tennine le trente et un decembre de chaquc annee. Art. 16. Chaque annee, a la fin de l'exercice social, Jes comptes de la Societe sont etablis et le gerant, OU en cas de pluralite de gerants, le conseil de gerance prepare un inventaire comprenant }'indication de la valeur des actifs et passifs de la Societe. Tout associe peut prendre connaissance desdits inventaires et bilan au siege social. Art. 17. Les profits bruts de la Societe repris dans les comptes annuels, apres deduction des frais generaux, amortissements et charges constituent le benefice net. Sur le benefice net, ii est preleve cinq pour cent (5%) pou la constitution de la reserve legale, jusqu'a ce que celle-ci atteigne dix pour cent (10%) du capital social. Le solde des benefices nets peut etre distribue aux associes en proportion avec leur participation clans le capital de la Societe. Art. 18. Au moment de la dissolution de la Societe, la liquidation sera assuree par un ou plusieurs liquidateurs, associes ou non, nommes par les associes qui determineront leurs pouvoirs et remunerations. Art. 19. Pour tout ce qui ne fait pas l'objet d'une disposition specifique dans les Statuts, ii est fait reference a la Loi. Disposition transitoire Le pr,ernier exercice social commence le jour de la constitution et se tennine le trente et un decembre Souscription - Liberation L'ensemble des deux mille (2.000) parts sociales a ete souscrit par THE BlueBay MULTI-STRATEGY (MASTER) FUND LIMITED.