Invesco Bond Income Plus Limited – Annual Financial Report

PR Newswire

LONDON, United Kingdom, April 01

Invesco Bond Income Plus Limited

Annual Financial Report for year ended 31 December 2025

The following text is extracted from the Annual Financial Report of the Company
for the year ended 31 December 2025. All page numbers below refer to the Annual
Financial Report which will be made available on the Company’s website

Highlights

·Net asset value (`NAV’) and share price total returns with dividends reinvested
for the year of 8.7% and 8.0% respectively(1).

·Shares traded at a premium for majority of 2025 leading to a strong demand for
shares resulting in 34.95m shares being issued, raising gross proceeds of
£60.50m.

·In addition strong issuance demand continued in 2026 with a further 20.12m
shares issued, including a successful placing and retail offer, raising £34.97m
in gross proceeds.

·Dividend increased to 12.25p per share for 2025. Dividend target of 12.25p per
share unchanged for 2026.

·Dividend continues to be fully covered by current year net revenue along with
revenue reserve growth.

(1)Alternative Performance Measure (`APM’). See Glossary of Terms and
Alternative Performance Measures on pages 78 to 81 of the financial report for
details of the explanation and reconciliations of APMs.

Financial Information and Performance Statistics

Net asset value – total return with dividends reinvested

2025 2024
Total Return Statistics with
dividends reinvested(1)(2)
Net asset value – total 8.7% 8.5%
return with dividends
reinvested
Share price – total return 8.0% 8.8%
with dividends reinvested
Capital Statistics
At 31 December 2024 2023 change %
Net assets (£’000) 410,275 345,799 +18.6
Net asset value per ordinary 172.87p 170.87p +1.2
share(2)
Share price(1) 175.00p 174.00p +0.6
Premium(2) 1.2% 1.8%
Gearing(2)
– gross gearing 9.3% 13.1%
– net gearing 2.8% 9.9%
Performance Statistics
Year Ended 31 December 2025 2024 change %
Revenue return per ordinary 13.07p 12.08p
share
Capital return per ordinary 1.08p 1.57p
share
Total return 14.15p 13.65p
Dividend per ordinary share 12.2500p 11.6875p +4.8
for the year
Ongoing Charges Ratio(2) 0.88% 0.89%

(1)Source: LSEG Data & Analytics.

(2)Alternative Performance Measure (APM). See Glossary of Terms and Alternative
Performance Measures on pages 78 to 81 of the financial report for details of
the explanation and reconciliations of APMs.

Chairman’s Statement

High yield markets benefitted from a largely favourable macroeconomic and
political environment in 2025. Modest economic growth and subdued inflation
allowed central banks to continue to ease monetary policy and in the UK the Bank
of England reduced interest rates on four occasions while in the USA the Federal
Reserve implemented three rate cuts in 2025. In contrast to 2024 politics took
more of a backseat although President Trump’s `Liberation Day’ tariff
announcements on 2 April 2025 did result in a bout of market nervousness. High
yield markets made good progress and credit spreads – a key barometer of market
confidence – settled around the lower end of their historical ranges.

Performance

The Company’s NAV and share price total returns for the year were 8.7% and 8.0%,
respectively. The 8.7% NAV return was higher than both the 7.4% achieved by the
ICE Bank of America Merrill Lynch European High Yield Index (`the Index’) and
the average return of 7.3% for funds in the Investment Association Sterling
Strategic Bond Sector. The Company’s investment performance continues to compare
favourably with the Index over the longer term. For the five and ten years to
the end of 2025 the Company’s NAV total return was 23.9% and 76.5% respectively
compared to total returns of 25.4% and 68.6% for the Index.

Income Account

It is pleasing to report that we were once again able to increase the dividend
paid to shareholders. We announced a dividend for 2025 of 12.25p per share, a
4.8% increase on the 11.6875p per share for 2024. Our dividend yield of 7%
comfortably exceeded the rate of inflation and the dividend was 1.07x covered by
earnings.

The dividend was paid in four instalments, with the fourth dividend payment on
the 20 February 2026 in the form of an interim dividend. Paying the final
instalment in the form of an interim dividend means that it can be made earlier
than would be the case had we declared a final dividend since this would require
approval at the Annual General Meeting later in the year.

We expect to continue the Company’s long record of providing shareholders with a
high level of income relative to interest rates in 2026 and our dividend target
of 12.25p per share remains unchanged. The Company’s long-term success in
providing shareholders with a consistently high level of income is the result of
our Manager’s rigorous investment process and expertise in managing high yield
portfolios. Moreover, we are able to enhance returns by making use of the powers
available to us as an investment company, for example in our use of gearing
which I discuss in more detail later in this Statement. Lastly, we retained our
position as the largest company in our Association of Investment Companies
(`AIC’) sector and our size means that we are in a relatively good position to
spread the costs of running the Company.

Discount/Premium

The vast majority of investment trusts have traded at wide discounts to their
NAV’s since the start of 2022. Despite this backdrop, demand for the Company’s
shares remained very encouraging and our share price remained at a healthy
premium to NAV throughout 2025, ending the year at a premium of 1.2%.

Where the Board is able to reduce the gap between our share price and NAV we
will take action and in 2025 we continued to issue shares to meet the strong
demand for shares. We issued a total of 34,950,000 shares during the year and
since the start of 2026 we have issued a further 20,122,588 shares, including a
successful placing of 14.37 million shares in February.

Invesco Bond Income Plus Limited is the product of the merger in May 2021
between City Merchants High Yield Trust Limited and Invesco Enhanced Income
Limited and as we approach the fifth anniversary of the merger it is extremely
pleasing to be able to report that the Company has grown its shares in issue by
a total 40.8% in the period following the merger. New shares are issued at a
small premium to NAV which ensures that existing shareholders are not
disadvantaged while the growth in the Company also benefits shareholders by
increasing the liquidity of our shares.

Ongoing Charges

A key objective for the Board is to ensure that the costs incurred in managing
the Company are competitive and we use the Company’s ongoing charges ratio (OCR)
to measure these costs. Details of the OCR can be found on page 12 . The OCR for
the year was 0.88% compared to 0.89% in the previous year. The growth in our
shares in issue discussed in the previous paragraphs provides a further benefit
to shareholders in that it allows us to spread the Company’s fixed costs over a
larger base and hence to place downward pressure on our OCR. I am pleased to
report that our OCR remains the lowest within our AIC sector (Debt – Loans and
Bonds).

Gearing

The degree to which the portfolio is geared is determined by the Portfolio
Managers according to their assessment of the opportunities and risks within the
high yield market. The maximum amount of borrowing is 30% of total assets and
throughout the year the Company maintained a geared portfolio. As at 31 December
2025 gross gearing was 9.3% (13.1% as at the 31 December 2024). Net gearing was
2.8% at year-end compared to 9.9% at the start of the year. Our preferred method
of gearing remains the use of repurchase agreements (`repo agreements’), which
are described in more detail on page 12 .

The Board

In June this year I will complete nine years with the Board and consequently, in
accordance with good corporate governance practice, I will not seek re-election
at the 2026 AGM. As a result of our succession planning and subject to
regulatory approval, I am delighted to report that Mark Bridgeman will succeed
me as Chair. Mark will be appointed to the Board following the conclusion of the
2026 AGM. Mark’s background is in investment management and he will bring
extensive financial and leadership qualities to the Board. I have no doubt that
the Company will continue to flourish under his leadership. I would like to take
this opportunity in what is my final Chairman’s Statement to thank all
colleagues past and present who have ensured that my time with the Company has
been enjoyable and rewarding.

Marketing, Investor Engagement and Communication

A primary focus for your Board, both last year and continuing into the current
year, is to raise the Company’s profile and expand the pool of investors
familiar with its investment proposition and strong track record. Ultimately,
the Board aims to grow the Company’s size, which is expected to enhance share
liquidity and reduce the ongoing charges ratio.

As part of this focus, over the last 12 months the Board has reviewed the
Company’s marketing and communications strategy and refreshed the value
proposition and agreed improvements to the Company’s dedicated page on the
Investment Manager’s website at www.invesco.co.uk/bips.

Engaging with our shareholders is of utmost importance. Over the past year, your
Investment Manager has actively sought opportunities to meet with shareholders
and prospective investors, both virtually and in person, to discuss the
Company’s strategy, performance, and outlook. We greatly value the feedback
received. Should you wish to communicate with the Board or the Investment
Manager, please reach out via email at [email protected].

If you have not already done so, we encourage you to sign up forupdates on the
Company, its portfolio, and insights from yourPortfolio Managers. You can do
this by scanning the QRcodebelow with your smartphone or device, visiting
theCompany’s dedicated page on the Investment Manager’s website at
https://digitalservices.invesco.com/uk/en/investment-trusts-subscriptions, or by
contacting Invesco directly at [email protected].

AGM

The AGM will be held on 17 June 2026 at 9.30am at the Jersey offices of our
Company Secretary. Further details of the AGM arrangements can be found on page
35.

Outlook

The immediate outlook for high yield securities is overshadowed by events in the
Middle East. On 28 February 2026 the US and Israel launched coordinated strikes
against the Iranian leadership and key strategic assets. Iran responded with
widespread missile and drone attacks and the consequent disruption to oil
supplies resulted in a surge in oil prices and a growing risk of rising
inflation.

At the time of writing it is unclear how or when the conflict will be resolved
and hence it is extremely difficult to reach any firm conclusions on the outlook
for global economy and financial markets. There is a clear risk Iran may prevent
shipping resuming through the Gulf for an extended period with the result that
inflation would be higher and economic growth lower in 2026. On the other hand
if military action is concluded and the disruption to shipping turns out to be
short lived then I would expect the global economic backdrop in 2026 to be
broadly supportive for corporate earnings, balance sheets and credit quality.

The Company began 2026 with a relatively conservative exposure to risk compared
to its history. Net gearing is low and the overall credit exposure is tilted
towards higher quality bonds and well diversified, giving some resilience to
potential shocks. Together with this lower-risk starting point, the Company’s
closed ended structure makes it well positioned to take advantage of a sell-off
when good quality bonds could be available at deeply discounted prices, locking
in returns for the future. Furthermore, in an uncertain world a regular,
dependable source of income is key for our shareholders and despite the
challenging geopolitical outlook I have no doubt that your Company will continue
to meet this requirement in 2026.

Tim Scholefield

Chairman

31 March 2026

Portfolio Managers’ Report

Q&A

Portfolio Manager

Rhys Davies, CFA, Fund Manager

Rhys is a fund manager for the Invesco Fixed Interest Europe team, based in our
Henley office.

He began his investment career with Invesco in 2002, moving to the Henley Fixed
Interest team in 2003. He became a fund manager in 2014. He manages high yield
credit portfolios.

He holds a BSc (Honours) in Management Science from the University of Manchester
Management School. He is aCFA charterholder.

Deputy Portfolio Manager

Edward Craven, FCA, Fund Manager

Edward is a fund manager for the Invesco Fixed Interest Europe team, based in
our Henley office.

He began his career with KPMG in 2003. In 2008 he moved to The Royal Bank of
Scotland, where he worked in structured finance. He joined the team at Invesco
in 2011 as a credit analyst and became a fund manager in 2020, managing multi
-asset and high yield funds.

He holds a Master’s degree in Physics fromthe University of Bath. He is an
FCAqualified chartered accountant.

QWhat happened in the bond markets in 2025?

AInvestment in corporate bonds in 2025 was rewarded with a return well above
cash and UK government bonds. For a third year, high yield bonds delivered
returns that were positive and higher than investment grade. However, returns
were lower than in 2023 and 2024 and there was less incremental return for
investors who chose to take more credit risk.

Total return for European High Yield was 7.4%(1), compared to 4.3% for cash(2)
and 5% for UK gilts(3). The sterling investment grade market returned 7.0%(4).
Most of this 7.4% came from income. The return from price appreciation was
relatively modest. Over the course of the year, the yield to maturity of the
high yield index fell from 6.1% to 5.8%. It peaked near 9% in 2022. The credit
spread tightened from 3.2% to 2.8%. Again, this change is relatively modest – it
was 6.8% in 2022. In 2024 the average bond price in the index rose from 92.0 to
97.8. In 2025 it rose from 97.8 to 98.6.

While the high yield market as a whole outperformed investment grade, lower
credit quality did not outperform within high yield. Spreads tightened more for
higher-quality BB than for lower-quality B rated bonds. In fact, B spreads
widened slightly. So within high yield, prudence was rewarded.

The return of 7.4% for high yield is a reminder of the potential of bonds to
deliver attractive total returns in the world of higher yields we have inhabited
since 2022.

The fundamental backdrop for the market was strong. Interest rates fell. Both
the Bank of England and the European Central Bank cut four times (a total of 1%
for each). The market has priced in expectation of another one or two cuts from
the Bank of England this year. The ratio of debt to earnings and the interest
coverage ratio for European high yield companies were steady and comfortably
within the historical range(5). Issuance of bonds rose, but so did demand. Money
has been flowing into the market steadily for more than two years(6).

Viewed in the context of these factors, it makes sense that indicators of the
risk premium in corporate debt, for example the iTraxx XOVER index, are at multi
-year lows. But it is worth remembering that this support has persisted, almost
unbroken, through a year of rapid and unusual political change. Investors appear
to have shown remarkable sang-froid in the face of increased and volatile trade
tariffs, military action and geopolitical volatility in the Middle East and
challenges to the post-World War II system of global alliances.

QHow did the company perform?

AOver the 12 months to 31 December 2025 the share price rose from 174.00p to
175.00p. With dividends reinvested, the Company delivered a share price total
return of 8.0%. The net asset value per share total return with dividends
reinvested was 8.7%.

QWhat drove this return?

AOur portfolio is focused on higher yielding bonds, but with a substantial
allocation to investment grade. The starting yield in 2025 for European high
yield bonds was 6.1% and for sterling investment bonds 5.6%. These yields
provided the base for our returns, which were then enhanced by bond and market
selection, our leverage strategy and our trading.

The parts of the portfolio which made the biggest contributions to return were,
as usual, high yield corporate bonds and subordinated financial securities.
Subordinated bank debt was one of the strongest parts of the market. Although we
have become more cautious as valuations have risen, reducing our overall
allocation, we added to positions in some high yielding, smaller bank names.
Across the corporate high yield market, we exercised caution on valuation.

The ability to use gearing to increase income is a key feature of the closed
-ended structure of the investment trust. Gearing allows us to add credit
exposure. We use it as a tool for our general management approach – seeking to
align the level of risk with our view of the level of available reward. As
valuations have continued to rise over the last couple of years, we have
moderated the level of gearing. At the end of 2024, gross borrowing was 13.1%
and net gearing was 9.9%. At the end of 2025, the equivalent numbers were 9.3%
and 2.8%. We manage our leverage in line with our view of market value. This
boosted returns in 2025.

2025 was a generally strong period for our markets, but it was not without its
moments! In particular, markets were weak in the build-up to and immediate
aftermath of the US import tariff announcements in April. This was a quite short
-lived sell-off, but we used it to add to positions, both bonds we already held
and others we had chosen not to buy on the terms on which they were originally
offered to the market. This allowed us to enhance yield and boost our total
return.

Looking at the individual securities which made the largest positive
contributions to returns, financials feature – both smaller banks we added, such
as Atom and United Trust Bank (UTB), and names bought in April, such as Aviva.
Amongst the biggest detractors there is less of a sector bias. Some lost value
due to poorer operational performance (for example, the transport company Mobico
Group), others to changes in their business environment (for example, gaming
name 888.com, hit by changes to UK gambling taxation).

One additional factor which helped our returns was the decision to slightly
increase the portfolio’s sensitivity to interest rate changes. Our modified
duration averaged 3.8 over the year, which meant that we benefitted more from
government bond yields and the falling rate environment than the general high
yield market.

QHow have you managed your asset allocation?

AWe seek to align our level and type of risk to the reward available in the
market. As credit markets rallied strongly in 2023 and 2024, we reduced our
exposure to credit risk. Our allocation to high yield rated bonds fell from 80%
in late-2022 to 68% at the end of 2024. Investment grade rose.

With the much more modest change in the level of yield in 2025, our allocations
have been more stable, high yield (bonds rated BB+ and below) declining from 65%
to 58%. Investment grade has increased more modestly from 27% to around 30%.
Duration remains slightly higher than the high yield market.

Also, with a view to aligning risk with reward in a more highly valued market,
we have reduced gross portfolio leverage from 13.1% to 9.3%.

One risk we have held a bit more of in the last couple of years is liquidity
risk. As a closed-ended vehicle, the trust does not face the redemption risk of
an open-ended fund. We therefore feel that it is more appropriate in this
portfolio to hold some bonds from smaller bond deals, where there is
consequently likely to be less market liquidity if we want to sell. We have
increased our allocations to bonds in this category over the past several
quarters, to about 7% of our portfolio. The compensation for this risk is higher
coupons.

Index Credit Default Swaps are a useful tool to manage credit risk by taking
long or short exposure to a broad range of underlying bonds, as opposed to
buying or selling individual bonds in the portfolio. We have used them over the
course of 2025 to reduce credit risk, as part of our wider strategy of holding a
more defensive portfolio in an environment of tighter credit spreads.

QHow is Environmental, Social and Governance (`ESG’) integrated in the
investment process?

AThe portfolio is not bound by any specific ESG criteria. However, ESG factors
are important in our credit analysis and our investment decisions.

We incorporate ESG considerations in our process when we research companies,
when we engage with companies and as part of ongoing monitoring. Our credit
analysts assign an ESG rating to issuers they cover. One of the resources we
benefit from as part of the wider Invesco team is the data and the expertise of
the Invesco ESG team. The ESG team provides a wide range of services to us,
including portfolio monitoring and meetings with managers to assess portfolios,
along with support for meetings with companies and deep knowledge on particular
ESG issues.

Our analysts have worked hard over several years to assess and monitor the ESG
factors relating to the companies they cover. In 2025, our team had 70 ESG
engagements – either meetings dedicated to ESG issues or ESG discussions within
wider meetings. These interactions tend to cover a wide range of topics across
environmental, social and governance and vary from name to name. For example,
Invesco’s recent engagement with Anglian Water focused on environmental issues
such as pollution incidents and compliance with wastewater investigations. With
Diageo, the meeting covered emissions, biodiversity initiatives and recycling.
Governance questions tend to feature more for high yield investors than they
might for others, due to the higher proportion of privately owned companies.

QHow is the bond market looking as we begin 2026?

AEntering 2026, we viewed the market as well-supported but also quite fully
valued. Corporate earnings were growing and leverage and debt-affordability
metrics were far from stressed levels. In this environment, supply of bonds was
high but was matched by demand as money flowed into the asset class. We had a
broadly positive macroeconomic outlook, although perhaps not so rosy as many
economic commentators. Of greater concern was the tight level of credit
spreads, on a historical basis, and the potential for these to widen in 2026.

The outbreak of military conflict in the Persian Gulf has added a great deal of
risk to the economic outlook. This has been reflected in some market weakness,
but we think there is potential for more. Disruption in energy supplies impacts
inflation directly. Expectations for interest rates have already risen
substantially. For how long the conflict persists is a crucial unknown. It will
have a bearing on the size of the inflationary impulse and on the extent to
which growth is affected as well as inflation. Credit spreads in our market have
widened in recent weeks but they are still relatively low.

We are confident that we can deliver the income needed for the trust’s dividends
while still aligning risk with reward prudently. As set out earlier in this
report, our portfolio is relatively conservative, with substantial investment
grade exposure and less leverage. This positioning was built on the view we have
had for some time – that valuations were high and the reward for risk was not
very attractive. We think it will serve us well in the higher risk environment
we now face, offering some protection. If we see further weakness, either due to
a general heightening in risk-aversion or the deterioration of corporate
fundamentals, we will be eager to assess opportunities to add exposure to credit
-worthy bonds at attractive yields.

(1)ICE BofA European Currency High Yield Index, hedged to GBP.

(2)UK Treasury Bills 3 Months.

(3)ICE BofA UK Gilt Index.

(4)ICE BofA Sterling Corporate Index.

(5)JP Morgan, High Yield Talking Points – High Yield Issuer Fundamentals, 20
January 2026.

(6)JP Morgan, European Credit Fund Flows, 9 January 2026.

Rhys DaviesEdward Craven

Portfolio Managers

31 March 2026

Business Review

Purpose, Business Model and Strategy

Invesco Bond Income Plus Limited is a Jersey domiciled investment company which
is listed on the London Stock Exchange

The Company’s purpose is to generate returns over the long-term for its
shareholders by investing their pooled capital to achieve the Company’s
investment objective through the application of its investment policy (set out
below) and with the aim of spreading investment risk.

The strategy the Board follows to achieve the objective is to set investment
policy and risk guidelines, together with investment limits, and to monitor how
they are applied.

The business model the Company has adopted to achieve its objective is to
contract investment management and administration to appropriate external
service providers, who are subject to oversight by the Board. The principal
service providers are:

-Invesco Fund Managers Limited (the `Manager’) to manage the portfolio in
accordance with the Board’s strategy; and

-JTC Fund Solutions (Jersey) Limited (the `Company Secretary’) to provide
company secretarial, compliance and general administration services.

In addition to the management and administrative functions of the Manager and
the Company Secretary, the Company has contractual arrangements with
Computershare Investor Services (Jersey) Limited to act as registrar and the
Bank of New York Mellon (International) Limited (`BNYMIL’) as depositary and
custodian.

The Board has oversight of the Company’s service providers, and monitors them on
a formal and regular basis. The Board has a collegiate culture and pursues its
fiduciary responsibilities with independence, integrity and diligence, taking
advice and outside views as appropriate and constructively challenging and
interacting with service providers, including the Manager. The portfolio
managers responsible for the day-to-day management of the portfolio are Rhys
Davies, Portfolio Manager and Edward Craven, Deputy Portfolio Manager, supported
by the wider fixed interest team.

The Company is an alternative investment fund for the purposes of the
Alternative Investment Fund Managers Directive.

Investment Objective and Policy

Investment Objective

The Company’s investment objective is to seek to obtain capital growth and high
income from investment, predominantly in high-yielding fixed-interest
securities.

Investment Policy

The Company seeks to provide a high level of dividend income relative to
prevailing interest rates mainly through investment in bonds and other fixed
-interest securities. The Company also invests in equities and other equity-like
instruments consistent with the Investment Objective.

This Investment Policy should be read in conjunction with the descriptions of
Investment Style, Investment Limits, Derivatives and Currency Hedging, and
Borrowings set out below.

Investment Style

The Manager seeks to ensure that the portfolio is diversified, having regard to
the nature and type of securities (including duration, credit rating,
performance and risk measures and liquidity) and the geographic and industry
sector composition of the portfolio. The Company may hold both illiquid
securities (for example, securities where trading volumes are relatively low and
unlisted securities) and concentrated positions (for example, where a high
proportion of the Company’s total assets are comprised of a relatively small
number of investments).

Investment Limits

-the Company may invest in fixed-interest securities, including but not
restricted to preference shares, loan stocks (convertible and redeemable),
corporate bonds and government stocks, up to 100% of total assets;

-investments in equities may be made up to an aggregate limit of 20% of total
assets;

-the aggregate value of holdings of shares and securities in a single issuer or
company, including a listed investment company or trust, will not exceed 15% of
the value of the Company’s investments; and

-investments in unlisted investments will not exceed 10% of the Company’s total
assets for individual holdings and 25% in aggregate.

All the above limits are measured at the time a new investment is made.

Derivatives and Currency Hedging

The Company may enter into derivative transactions (including options, futures,
contracts for difference, credit derivatives and interest rate swaps) for the
purposes of efficient portfolio management. The Company will not enter into
derivative transactions for speculative purposes.

Efficient portfolio management may include reduction of risk, reduction of cost
and enhancement of capital or income through transactions designed to hedge all
or part of the portfolio, to replicate or gain synthetic exposure to a
particular investment position where this can be done more effectively or
efficiently through the use of derivatives than through investment in securities
or to transfer risk or obtain protection from a particular type of risk which
might attach to portfolio investments.

The Company may hedge against exposure to changes in currency rates to the full
extent of any such exposure.

Borrowings

The Company’s borrowing policy is determined by the Board, which has set a
maximum of 30% of the Company’s total assets. This limit may be varied from time
to time in the light of prevailing circumstances, but has not been changed since
the Company’s incorporation in its current form. The Manager has discretion to
borrow within the limit set by the Board. Any borrowings are covered by
investments in matching currencies to manage exposure to exchange rate
fluctuations.

The Board has reviewed the methods of financing available to the Company
including repo financing whereby a company participates in sale and repurchase
arrangements in connection with its portfolio. Under these arrangements, a
company sells fixed interest securities and is contractually obliged to
repurchase them at a fixed price on a fixed date, whilst retaining economic
exposure to the securities sold. The difference between the (lower) sale price
and the later purchase price is the cost (effectively interest) of the repo
financing. Our preferred method of gearing remains the use of repurchase
agreements and such repo financing agreements are in place and may be used
subject to the aggregate 30% ceiling. At the year end, the sum borrowed using
this method was £38.0 million (2024:£45.1million). This represents gross gearing
of 9.3% with cash and cash equivalents including margin of 6.5% giving net
gearing of 2.8% (2024: gross gearing of 13.1% with cash and cash equivalents
including margin of 3.2% giving net gearing of 9.9%)(1).

(1)Alternative Performance Measure (APM). See Glossary of Terms and Alternative
Performance Measures on pages 78 to 81 of the financial report for details of
the explanation and reconciliations of APMs.

Key Performance Indicators

The Board reviews performance by reference to a number of Key Performance
Indicators which include the following:

·Performance

·Dividends

·Premium/Discount

·Ongoing Charges Ratio

Performance

As the Company’s objective is to seek to obtain capital growth and high income,
the performance isbest measured in terms of total return. There is no single
index against which the Company’s performance may be meaningfully assessed.
Therefore, the Board refers to a variety of relevant dataand this is reflected
in both the Chairman’s Statement and the Portfolio Managers’ Report on pages 6
to 10. The Manager has a long-term horizon and consequently the Board pays close
attention to returns over three and five years in its assessment of investment
performance. As explained in the Chairman’s Statement, the Board has noted the
performance in the year and is satisfied with the longer term performance of the
portfolio.

Dividends and Dividend Payment Policy

Dividends form a key component of the total return to shareholders and the
Company has adopted a dividend policy to target an annualised dividend of 12.25p
per share for 2026. In the year under review all 4 interim dividends paid to
shareholders were 3.0625p totalling 12.25p. Dividends paid over the last
tenyears are shown in the table on page 4.

The Board’s Dividend Payment Policy is to pay dividends on a quarterly basis in
May, August, November and February in respect of each accounting year. The
timing of these regular three-monthly payments means that shareholders do not
have an opportunity to vote on a final dividend. Recognising the importance of
shareholder engagement, and although not required by any regulation,
shareholders are given an opportunity to vote on this policy at the forthcoming
AGM.

Premium/Discount

The Board monitors the price of the Company’s shares in relation to their net
asset value and the premium/discount at which the shares trade. Powers are taken
each year to issue and buy back shares, which can assist short term management,
however the level of discount or premium is mostly a function of investor
sentiment and demand for the shares, over which the Board may have limited
influence. The ideal would be for the shares to trade close to their net asset
value. The graph on page 12 shows the premium/discount through the year. The
Company’s shares traded at a premium for the majority of the year, with the
shares only trading at a discount during certain very limited periods of time
due to market factors, but ended the year at a premium of1.2%.

Ongoing Charges Ratio

The expenses of managing the Company are carefully monitored by the Board. The
standard measure of these is the ongoing charges ratio (OCR), which is
calculated by dividing the sum of such expenses over the course of the year,
including those charged to capital, by the average net asset value. This ongoing
charges ratio provides a guide to the effect on performance of annual operating
costs. The Company’s ongoing charges ratio for the current year was 0.88%,
compared to 0.89% for the previous year. Your Board continues to believe that
costs remain competitive compared to those of similar products.

Investment Process

At the core of the portfolio managers’ philosophy is a belief in active
investment management. They seek to invest where they see the potential for
attractive returns and to avoid risks that they do not think are well rewarded.
Fundamental principles drive a genuinely active investment approach, with a
strong emphasis on value.

The investment process comprises four key elements to deliver the information
the portfolio managers use to make their decisions:

·top down, macroeconomic analysis – examining the factors that shape the
economy;

·credit analysis using internal and external research with a view to maximising
returns from acceptable and understood credit risk exposure;

·value assessment, considering the risk/return profile of any bond in relation
to cash, core government bonds and the rest of the fixed interest universe; and

·risk considerations, analysing all holdings to allow for a comprehensive
understanding of risks involved to ensure diversification of the portfolio.

The portfolio managers enter into the majority of positions with a view to
holding them until their call or maturity date and their investment process is
based on making investments where the yield to maturity or call appears to them
to be at least an adequate reward for the risk. The nature of the high yield
market and the Company’s mandate mean that there will be occasions when the
value the portfolio managers assessed in an investment is fully realised by the
market. On these occasions, they may exit the position before maturity.

The portfolio managers believe that it is good investment practice to try and
keep the level of turnover low, whilst at the same time recognising that this
should not at any time act as a deterrent to effective portfolio management.
Turnover will generally be very low due to the long term nature of many of the
holdings, and given the closed end nature of the Company, the portfolio managers
are not presented with regular daily inflows and outflows which require
managing.

The portfolio managers also consider environmental, social and governance
(`ESG’) factors details of which are given on pages17 to 20.

Internal Control and Risk Management

The Directors have overall responsibility for the Company’s system of internal
controls and are responsible for reviewing the effectiveness of these controls.
This includes safeguarding of the Company’s assets. The Directors have carried
out a robust assessment of the principal and emerging risks facing the Company,
including those that would threaten its business model, future performance,
solvency and liquidity.

The Audit & Risk Committee (the `Committee’), on behalf of the Board, has
established an ongoing process for identifying and assessing the risks to which
the Company is exposed by reference to a risk control summary, which maps the
risks, mitigating controls in place, and monitoring and reporting of relevant
information to it. The review of the risk control summary also incorporated a
robust assessment of new and emerging risks for monitoring purposes.

As part of the process, the Committee has identified five risk categories:
strategic; investment management; third party service providers; regulation and
corporate governance; and operational. An explanation of these categories
follows.

Strategic Risk

The Board sets the Company’s strategy, including setting its objective and how
this should be achieved. The Board assesses the performance of the Company in
the context of the market and macro conditions and gives direction to, and
monitors, the Manager’s actions, and those of other third parties, on behalf of
the Company.

Investment Management Risk

Investment management covers management of the portfolio together with cash
management, gearing and hedging, all being areas the portfolio managers can
control, and which generate the Company’s investment performance.

Third Party Service Providers Risk

The Company has no employees and its Directors are appointed on a non-executive
basis. The Company is reliant on Third Party Service Providers (`TPPs’) for its
executive functions. The Company’s most significant TPPs are the Manager, to
which portfolio management is delegated as well as certain administrative
services including accounting and marketing and the Company Secretary. Other
significant TPPs are the depositary, custodian, registrar, external auditor and
corporate broker.

Regulation and Corporate Governance Risk

The Company is required to comply with many regulations. For the year under
review these included but were not limited to, the provisions of the Companies
(Jersey) Law 1991, the UKListing Rules, the Alternative Investment Fund Managers
Directive, the Market Abuse Regulation, the FCA’s Disclosure Guidance and
Transparency Rules, the UKCorporate Governance Code, the AIC Corporate
Governance Code and Statement of Recommended Practice and International
Financial Reporting Standards (`IFRS’) Accounting Standards as adopted by the
European Union.

Operational Risk

Operational risk covers the day to day operational matters mainly at the
Manager, but also at other TPPs.

A matrix of the risks, set out according to their assessed risk levels after
mitigation, enables the Directors to concentrate on those risks that are most
significant, and also forms the basis of the list of principal risks and
uncertainties on pages 14 and 15. The ratings take into account the Board’s risk
appetite and the ongoing monitoring by the Manager.

Oversight of the control environment is based on the Company’s relationship with
its TPPs, all of which have clearly defined lines of responsibility, delegated
authority, and control procedures and systems. The Company’s main TPPs, the
Manager, Fund Accounting and the Company Secretary, all have, a `Three Lines of
Defence Model’, which is embedded into their risk management systems.

The effectiveness of the Company’s internal control and risk management system
is reviewed at least twice a year by the Committee. The Committee received and
considered, together with representatives of the Manager, reports in relation to
operations and systems of internal controls of the Manager, Company Secretary,
accounting administrator, custodian and registrar. The Committee also receives
regular reports from the Company Secretary’s compliance officer and the
Manager’s internal audit and compliance departments. The Committee also received
a comprehensive and satisfactory report from the depositary at the year end
Committee meeting. The Company’s risk management policies and procedures for
financial instruments are set out in note 19 on pages 63 to 70.

Due diligence is undertaken before any contracts are entered into with any third
party service provider. The Manager regularly reviews, against agreed service
standards, the performance of TPPs through formal and informal meetings, and by
reference to third party independently audited control reports. The results of
the Manager’s reviews are reported to and reviewed by the Committee. These
various reports and reviews did not identify any significant failings or
weaknesses which were relevant to the Company during the year and up to the date
of this Annual Financial Report. If any had been identified, the required
remedial action would have been taken.

Reporting to the Board at each board meeting comprises, but is not limited to:
financial reports, including any hedging and gearing; performance against
relevant indices and the Company’s peers; the portfolio managers’ review,
including of the market, the portfolio, transactions and prospects; revenue
forecasts; and investment monitoring against investment guidelines. The
portfolio managers are permitted discretion within these investment guidelines,
which are set by the Board. Compliance with the guidelines is monitored daily by
the Manager. Any proposed variation to these guidelines is referred to the Board
for consideration and approval.

The Board, through the Management Engagement Committee, formally reviews the
performance of the Manager, the Company Secretary and the other key TPPs
annually. The Board has reviewed and accepted both the Manager’s and Company
Secretary’s whistleblowing policy under which staff of both Invesco Fund
Managers Limited (`the Manager’) and JTC Fund Solutions (Jersey) Limited (`the
Company Secretary’) can, in confidence, raise concerns about possible
improprieties or irregularities in matters affecting the Company.

Principal Risks and Uncertainties

The Board has carried out a robust assessment of the risks facing the Company,
including those that would threaten its business model, future performance,
solvency and liquidity. As part of this process, the Board conducted a full
review of the Company’s risk control summary and considered new and emerging
risks. These are not necessarily principal risks for the Company, but may have
the potential to be in the future. In carrying out this assessment, the Board
considered the emerging risks facing the Company including geopolitical risks
and uncertainties such as the ongoing conflicts in Ukraine and the Middle East,
uncertain economic outlook, especially in Europe, USA & the UK as a result of
geo-political tensions, evolving cyber threats (including risks associated with
Artificial Intelligence) and ESG, including climate risk. The principal risks
that follow are those identified by the Board as the most significant after
consideration of mitigating factors and not intended to cover all the risk
categories as shown in the Internal Control and Risk Management section on page
13.

Viability Statement

This Company is an investment company whose business consists of investing the
pooled funds of its shareholders to provide them with capital growth and a high
income over the long term, predominantly from a portfolio of high yielding fixed
income securities. Long term for this purpose is considered to be at least five
years and the Directors have assessed the Company’s viability over that period.
However, the life of the Company is not intended to be limited to that or any
other period.

The main risks to the Company’s continuation is a significant fall in markets or
a prolonged period of decline due to political uncertainty or other macro
factors outside the Company’s control. This could lead to shareholder
dissatisfaction through failure to meet the Company’s investment objective,
through poor investment performance or the investment policy not being
appropriate in prevailing market conditions, any of which could affect the
demand for and liquidity of the Company’s shares. Accordingly, market and
political/fiscal risks, are deemed by the Board to be the key principal risks of
the Company and are given particular consideration in the continuing assessment
of its long term viability.

The Company’s investment objective and policy are kept under review. The
continued relevance of the investment objective and policy are underlined by the
Company’s annual continuation vote. Last year over 99% of the votes registered
were in favour of continuation and the Board has no reason to believe that the
continuation resolution will not be passed at the forthcoming and subsequent
AGMs.

Performance derives from returns for risk taken. The Portfolio Managers’ Report
on pages 9 and 10 sets out the current investment strategy of the portfolio
managers. Whilst there has been an increase in the credit quality of the
portfolio during the year, it remains the case that the portfolio continues to
contain a high level of relatively high-yielding non-investment grade bonds and
these carry a higher risk of default than investment grade paper. This is
discussed further in note 19 to the financial statements. The Board has adopted
investment limits within which the portfolio managers operate. The Directors and
the portfolio managers constantly monitor the portfolio, its ratings and default
risk. A bond rating analysis of the portfolio at the year end is shown on page
23. Exposure is weighted towards higher quality issuers where the risk of
default is considered to be more remote.

Performance has been strong for many years through different, and difficult,
market cycles – as shown by the ten year total return performance graph on page
12. The investment policy has been stress tested by market events in recent
times by both global and domestic events such as the pandemic and the conflicts
in Ukraine and the Middle East. Theseevents affected performance, but at no time
in the past did they threaten the viability of the Company. Whilst past
performance may not be indicative of performance in the future, the investment
policy has been consistent throughout those past periods.

Performance and demand for the Company’s shares are not things that can be
forecast. Indeed, whilst recent geopolitical and macroeconomic events may impact
the Company, there are no current indications that performance or demand for the
Company’s shares may be permanently affected by such events over the next five
years so as to affect the Company’s viability.

The Company is permitted to borrow up to a maximum of 30% of the Company’s total
assets and currently has no long-term debt obligations. Current borrowing is in
the form of repo financing spread over a number of good quality counterparties
whose credit-standing is reviewed periodically by the Manager. There is a
maximum limit allowed with any one counterparty, and the repo entered into must
have a maturity tenor of three months or less. Debt levels have been stress
tested with more than adequate debt cover in place.

As described in note 19.2 to the financial statements on pages67 to 68 liquidity
risk is not viewed by the Directors as a significant risk. The majority of the
Company’s assets are readily realisable and amount to many times the value of
its short term liabilities and annual operating costs.

Based on the above analysis, the Directors confirm that they have a reasonable
expectation that the Company will be able to continue in operation and meet its
liabilities as they fall due over the fiveyear period of their assessment and
the Directors consider that the Company’s investment strategy will continue to
serve shareholders well over the longer term.

Investment Management

As noted earlier, the Manager provides investment management and certain
administrative services to the Company. The agreement is terminable by either
party giving no less than threemonths’ prior written notice and subject to
earlier termination without compensation in the event of a material breach of
the agreement or the insolvency of either party. The management fee is payable
quarterly in arrears and is equal to 0.1625% of the value of the Company’s total
assets under management less current liabilities at the end of the relevant
quarter. In addition, the Manager was paid a fee of £103,000 during the year
for marketing services (2024: £103,000).

The portfolio managers responsible for the day-to-day management of the
portfolio are Rhys Davies, Portfolio Manager and Edward Craven, Deputy Portfolio
Manager.

The Manager’s Responsibilities

The Directors have delegated to the Manager the responsibility for the
investment management activities of the Company, for seeking and evaluating
investment opportunities and for analysing the accounts of investee companies.
The Manager has full discretion to manage the assets of the Company in
accordance with the Company’s stated objectives and policies as determined from
time to time by the Board and approved by shareholders. Within the guidelines
specified by the Board, the Manager has discretion to make purchases and sales,
make and withdraw cash deposits, enter into underwriting commitments and
exercise all rights over the investment portfolio. The Manager also advises on
currency exposures and borrowings.

Assessment of the Manager

The performance of the Manager is reviewed continuously by the Board and the
ongoing requirements of the Company and services received are assessed annually
with reference to key performance indicators as set out on page 12.

The Management Engagement Committee is responsible for reviewing the Manager.
Based on its recent review of activities, the Board believes that the continuing
appointment of Invesco Fund Managers Limited remains in the best interests of
the Company and its shareholders.

Financial Position

The Company’s balance sheet on page 54 shows the assets and liabilities at the
year end. TheCompany has repo financing agreements in place, with an amount of
£38.0 million (2024: £45.1million) borrowed at year end, representing gross
gearing of 9.3% (2024: 13.1%) and net gearing of 2.8% (2024: 9.9%), after taking
cash and cash equivalents including margin into account, as at 31December 2025.

Performance and Future Development

The performance and future development of the Company depend on the success of
the Company’s investment strategy. Areview of the Company’s performance, market
background, investment activity and strategy during the year, together with the
investment outlook are provided in the Chairman’s Statement and Portfolio
Managers’ Report on pages 6 to 10.

Annual Continuation Vote

The Articles of Association of the Company require that unless an ordinary
resolution is passed at or before the Annual General Meeting (`AGM’) each year
releasing the Directors from the obligation to do so, the Directors shall
convene a general meeting within six months of the AGM at which a special
resolution would be proposed to wind up the Company. Having reviewed the
performance of the Company, the Directors have no reason to believe that a
resolution to release them from that obligation will not be passed at the AGM to
be held later in the year. Further details can be found in note 2 (a) (ii) on
page 56.

Substantial Holdings in the Company

The Company has been notified of the following holdings of 3% and over of the
Company’s ordinary share capital carrying unrestricted voting rights:

As at As at As at

28 February 2026 31 December 2025 31 December 2024
Fund Holding % Holding % Holding %
Manager/Registered
Holder
Hargreaves 49,293,992 19.19 44,928,699 18.96 38,088,524 18.83
Lansdown,
stockbrokers (EO)
Interactive 36,794,502 14.33 34,140,629 14.41 25,386,222 12.55
Investor (EO)
AJ Bell, 24,666,816 9.60 20,817,911 8.79 14,946,175 7.39
stockbrokers (EO)
Invesco* 17,540,155 6.83 17,540,155 7.40 17,540,155 8.67
Redmayne Bentley, 15,540,868 6.05 14,683,425 6.20 10,622,010 5.25
stockbrokers
Charles Stanley 10,891,138 4.24 10,515,903 4.44 10,063,995 4.98
HSDL, stockbrokers 8,803,620 3.43 8,325,810 3.51 6,976,268 3.45
(EO)

EO: Execution only.

* Held across a number of Invesco Funds. Invesco is not considered a related
party. For further information see Related Party Transactions and Transactions
with Manager note 23 on page 72.

Board’s Duty to Promote the Success of the Company

The Directors have a fiduciary duty to act, in good faith, for the benefit of
shareholders taken as awhole. In the UK, section 172 of the Companies Act 2006
seeks to codify this duty and to widen the responsibility to incorporate the
consideration of wider relationships that are necessary for the Company’s
sustainability. Although the Company is not incorporated in the UK, its ordinary
shares are listed on the London Stock Exchange, hence the Board deems it
appropriate for the Company to report against this UK statutory duty, being that
the Directors have a duty to promote the success of the Company, whilst also
having regard to certain broader matters, including the need to engage with
employees, service providers, customers and others, and to have regard to their
interests. This is reflected in the summary of the Board’s responsibilities on
pages 38 and 39.

In fulfilling these duties, and in accordance with the Company’s nature as an
investment company with no employees and no customers in the traditional sense,
the Board’s principal concern has been, and continues to be, the interests of
the Company’s shareholders taken as a whole. Notwithstanding this, the Board has
a responsible governance culture and also has due regard for broader matters so
far as they apply. In particular, the Board engages with the Manager and Company
Secretary at every Board meeting and the Management Engagement Committee also
reviews the Company’s relationships with these and other service providers, such
as the registrar, corporate broker, depositary and custodian, at least annually.
Theassessment of the Manager consequent to these reviews is set out above.

The Company formally communicates with its shareholders at least three times a
year providing information about shareholder meetings, dividend payments and
half-yearly and annual financial results. As set out on page 34, the Company
uses a number of methods to engage with its shareholders via regular
communications such as the monthly factsheet and through investor events and
other media channels. The annual general meeting of the Company provides
shareholders with the opportunity to attend and meet with the Directors and the
Manager. The Company’s AGM will be held on 17 June 2026 at 9.30am at the offices
of JTC Fund Solutions (Jersey) Limited. Shareholders are welcome to attend the
AGM in person. Shareholders who cannot attend in person are encouraged to submit
their votes by proxy.

Board Diversity

The Company’s policy on diversity is set out on page 39, under the section
`Nomination and Remuneration Committee’. The Board considers diversity,
including the balance of skills, knowledge, experience, gender and ethnicity
amongst other factors when reviewing its composition and appointing new
directors. The Board continues to recognise the importance of having a range of
skilled, experienced individuals with the right knowledge represented on the
Board in order to allow it to fulfil its obligations.

In view of its relatively small size, the Board will continue to ensure that all
appointments are made on the basis of merit against the specification prepared
for each appointment. In doing so, the Board will seek to meet the targets set
out in the FCA’s UK Listing Rule 6.6.6R (9)(a), which are summarised below. In
accordance with UK Listing Rule 6.6.6R (9), (10) and (11) the Board has provided
the following information in relation to its diversity as at 31 December 2025,
being the financial year-end of the Company. The information included in the
tables below has been obtained following confirmation from the individual
Directors.

Board Gender as at 31 December 2025

Number of Percentage of Number of Number in Percentage of

Board the Board senior positions executive executive

members on the Board managementA managementA
Men 2 40% 1 n/a n/a
Women 3 60%B 1C,D n/a n/a

A the Company does not disclose the number of directors in executive management
as this is not applicable for an investment trust.

B meets the target of 40% as set out in UKLR 6.6.6R (9)(a)(i).

C the positions of Senior Independent Director and Chair of the Audit & Risk
Committee are held by the same woman (Heather MacCallum). The latter position is
not currently defined as a senior position under LR 9.8.6R (9)(a)(ii).

D meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(ii).

Board Ethnic Background as at 31 December 2025

Number Percentage Number of Number in Percentage of
of of
senior executive executive
Board the Board positions
managementA managementA
members on the
Board
White British or 4 80% 2 n/a n/a
other White

(including
minority-white
groups)
Minority ethnic 1B 20% 0 n/a n/a

A the Company does not disclose the number of directors in executive management
as this is not applicable for an investment trust.

B meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(iii).

There have been no changes since the year end that have affected the Company’s
ability to meet the targets set in UKLR 6.6.6R (9)(a).

Modern Slavery Act 2015

The Company is an investment vehicle and does not provide goods or services in
the normal course of business, or have customers. Accordingly, the Directors
consider that the Company is not required to make any slavery or human
trafficking statement under the Modern Slavery Act 2015.

Sustainability-relatedMatters

In relation to the portfolio, the Company has delegated the management of the
Company’s investments to the Manager. The Manager’s approach to investment
stewardship and to the use of sustainability-related information is outlined in
its UK Stewardship Code Report, which sets out a number of principles that are
intended to be considered in the context of its responsibility to manage
investments in the financial interests of shareholders. Agreenhouse gas
emissions statement is included in the Directors’ Report on page 34.

The Manager forms part of the Invesco Ltd group, which is a signatory to, the
United Nations Principles for Responsible Investment (`PRI’), Invesco scored
four stars for its Investment & Stewardship Policy in its most recent PRI
assessment. In addition, Invesco is an active member of the UK Sustainable
Investment and Finance Association as well as a supporter of the Task Force on
Climate-related Financial Disclosure (`TCFD’) since 2019 and Invesco’s latest
iteration of its Global TCFD Report is available at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd
-report.pdf.

The Manager’s investment team may take sustainability-related information
(including selected environmental, social and governance data) into account as
one input among many when evaluating investments, where relevant to the
investment thesis and the Company’s objectives. Third-party data and ratings may
inform analysis but do not determine investment decisions. Investment
professionals are supported by the Manager’s investment stewardship function,
which provides research and engagement support.

Regarding stewardship, the Board considers that the Company has a responsibility
as an investor towards ensuring that appropriate standards of corporate
governance are maintained in the companies in which it invests. To achieve this,
the Board does not seek to intervene in daily management decisions, but aims to
support high standards of governance and, where necessary, will take the
initiative to ensure those standards are met.

The Company’s stewardship functions have been delegated to the Manager. The
Manager has adopted a clear and considered policy towards its responsibility as
an investor on behalf of the Company. As part of this policy, the Manager takes
steps to satisfy itself about the extent to which the companies in which it
invests look after shareholders’ value and comply with local recommendations and
practices, such as the UK Corporate Governance Code. The Manager is also a
signatory of the Financial Reporting Council’s Stewardship Code, which seeks to
improve the quality of engagement between institutional investors and companies
to help improve long-term returns to shareholders and the efficient exercise of
governance responsibilities.

A copy of the current Manager’s UK Stewardship Code Report can be found at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/2024-uk-stewardship-code
-report.pdf

How the investment team incorporates sustainable investing in its process

The Invesco Fixed Income team (`IFI’), of which the portfolio managers are a
part, has managed ESG-aware portfolios for more than two decades and their
approach has consistently evolved. Exclusion based screening once dominated the
ESG landscape, but has since been augmented by positive selection-based criteria
for holdings as well as embedding decarbonisation objectives. This reflects how
industry dynamics have changed and how the appetite for more sophisticated and
targeted sustainability-linked outcomes has grown among clients.

IFI believes that evaluating ESG criteria leads to better long-term risk
-adjusted returns. With this in mind, IFI looks for a combination of
materiality, momentum, and engagement.

Materiality means being clear about the ESG considerations that have the
potential to most impact an issuer’s ability to meet its debt obligations. IFI
integrate these ESG considerations into their fundamental research processes by
providing an independent assessment of each investment, complementing third
-party ESG ratings and expanding the investable universe to include issuers that
lack external coverage. IFI maintain global standards for research and
investment decision-making, allowing ESG considerations to be applied across
asset classes where appropriate and enhancing comparability across multi-sector
fixed income portfolios.

Momentum means using expert analysis to determine which issuers are outpacing
their peers in terms of making progress on ESG considerations. IFI believes that
a link may exist between positive momentum in ESG characteristics and improving
creditworthiness, which is potentially advantageous for fixed income prices and
investment returns.

Engagement means encouraging momentum by working with Invesco’s Sustainable
Investing Services team and other experts to engage with issuers to provide our
views on matters such as strategy, transparency, capital allocation and ESG
concerns. IFI view active ownership as a vital element of our fiduciary
responsibilities to clients.

The fixed income landscape is broad and varied. It encompasses government
securities issued by countries, securitised debt, loans undertaken by private
companies, and many other forms of asset. Geographical, structural, and
regulatory differences mean that data availability, ESG factors, and management
engagement levels are highly diverse.

As a result, while the underlying approach taken by IFI to ESG is consistent,
the path to arriving at an ESG-based assessment differs to account for the
constraints and challenges posed by a particular asset class. It is important to
highlight that integration is an ongoing strategic effort and these approaches
will continue to evolve.

ESG overview

Although ESG integration forms part of the investment process, the Company is
not managed to sustainable ESG objectives, constraints or outcomes.

The portfolio managers’ approach is centred on macroeconomic and corporate
credit research and focuses on fundamental valuation to support the active
management of portfolios. The Manager has always incorporated ESG analysis into
its investment research because it believes that non-financial risks can have a
material impact on credit risk and by identifying those risks, it can improve
its credit risk assessment and produce better risk-adjusted returns in
portfolios.

The core objective of the Manager’s ESG approach is to assess issuers’
performance across environmental, social and governance factors and to determine
where those risks are potentially material or mispriced.

The fixed income universe is broad and varied. Geographical, structural and
regulatory differences mean that data availability, ESG awareness and management
engagement levels can vary greatly. As a result, while the investment team’s
commitment to ESG risk assessment is constant, the path to arriving at an ESG
-based assessment necessarily differs to account for the constraints and
challenges of different circumstances.

Common Principles for ESG Research

The Invesco team’s approach to ESG is based on a belief that incorporating
material environmental, social and governance risks into a broader risk
assessment, leads to better long-term risk-adjusted returns. In order to do
this, the team considers materiality and momentum.

ESG analysis for corporate bonds

IFI’s credit analysts are tasked with understanding the ESG drivers for the
companies they cover and conducting ESG-based analysis along with their
fundamental financial analysis. This applies across corporate credit research
teams in North America, Europe, and Asia.

IFI’s corporate research follows the same set of standards globally,
encompassing investment grade and high yield issuers, whether an issuer is based
in a developed or an emerging market country. This approach is also applied to
short-dated securities held in IFI-managed global liquidity products. Analysts
are primarily focused on identifying risk factors that could be financially
material, and these may be common to all industry participants or unique to a
specific issuer.

The starting point for ESG assessment is at the industry level. Global sector
teams set out common ESG risk factors for each industry, and individual analysts
work within this framework on each issuer in their coverage area, while also
seeking to identify idiosyncratic ESG risks to which individual issuers might be
exposed.

IFI also use third-party research and data to provide broad market context and
transparency. These external sources supplement our proprietary research and
assist analysts in identifying areas or issues of interest where engagement with
company management is warranted. We engage directly with companies to better
understand their positions and their future intentions. IFI and industry
participants’ increased focus and engagement on ESG factors has resulted in
material improvements in ESG-related issuer reporting and heightened management
focus on governance practices.

IFI has developed its own ESG methodology and grading system to provide clear
and consistent outputs for portfolio managers. Each issuer receives a
proprietary overall ESG grade, accompanied by sub-grades covering the three
pillars of E, S and G. In addition, ESG momentum is captured through trend
assessments, which add further useful information for portfolio managers in the
same way that creditworthiness trend assessments do for fundamental credit
ratings. All ESG research is stored on the Manager’s research platform so that
portfolio managers across asset classes may easily access it.

IFI is committed to continuous innovation and improvement in its ESG corporate
research process. For example, with the increased issuance of green bonds and
growing client interest, we have recently developed specialised templates to aid
in analysing such bonds.

Within the investment team, ESG views are formed by credit analysts and feed
into their fundamental investment recommendations. Analysts work with their
colleagues at a sector level across our global platform to identify key ESG
metrics per sector to consider when analysing individual companies. This all
forms part of the toolkit which portfolio managers have at their disposal when
constructing portfolios.

IFI believes that evaluating ESG criteria leads to better long-term risk
adjusted returns. IFI follows an investment approach that integrates ESG into
the fundamental research carried out by Invesco’s credit research analysts.
Integrating ESG criteria into research provides an independent assessment of
each investment’s suitability for responsible investment strategies to
complement ratings from third party providers or indeed, expand the investable
universe for issuers not yet covered by external providers.

External ESG resources

Invesco has a range of third-party research and data available as an input to
support the analysts in their ESG risk assessment.

Examples:

·MSCI ESG Scores, industry percentiles and weights

·CDP carbon and scoring data

·Sustainalytics Risk scores and category summary data

·Global Compact compliance or violation fields (MSCI and Sustainalytics)

·ISS Climate Solutions – Scope 1 to 3 emissions and science-based emission
targets

·Controversies – MSCI & Sustainalytics data feeds

Invesco’s Stewardship resources

Invesco’s Global Sustainable Investing Services team has resources in research,
portfolio analytics and management engagement.

Furthermore, Invesco’s own proprietary developed tool – ESGCentral – brings
together multiple external and internal datasets and maps them to portfolios and
benchmarks to provide portfolio and issuer-level sustainability analytics and
screening capabilities for strategies and clients that request such analysis.
Availability varies by dataset, license, and mandate.

In addition to portfolio views, ESGCentral can surface issuer-level analytics
linked to portfolio holdings (and, where relevant, benchmark constituents).
These issuer views provide snapshots of selected indicators, disclosures, and
controversies (with source and date), peer comparisons and point-in-time vs
historical perspectives. Issuer-level analytics are analytical reference views
to support research and stewardship workflows; they do not impose firmwide
criteria or generate compliance determinations.

While disclosure levels vary greatly by the issuer due to sector, size and
regional factors, these data analytics can provide acomprehensive picture of
each issuer’s performance.

The importance of fundamental ESG analysis

At the issuer level, data availability, disclosure rules and management
engagement levels can vary across each global sector. Raw ESG data can sometimes
present a partial or even misleading picture. When placed alongside the fact
that issuers themselves have unique features in terms of business models, the
weighting of ESG factors in each issuer assessment must be interpreted and
understood in a broader context.

In our research process, the qualitative judgement of the credit analyst is
therefore central to determining whether an ESG factor is evolving in a manner
that may compromise an issuer’s financial indicators and ultimately, its
creditworthiness.

ESG in credit selection

Once a credit analyst has undertaken their credit assessment, including that of
the materiality and momentum of ESG risks, then credit research is presented to
portfolio managers.

The portfolio managers need to assess the type and materiality of any ESG risk
and set that against the potential investment return in the context of the
Company’s objectives.

Other than the exclusions related to certain types of munitions, there are no
pre-determined rules on how securities are selected in light of any ESG risks.
Each investment case is likely to have its own unique set of risks. The
investment team’s credit selection emphasises fund manager judgement and each
case is considered on its own merits.

Engagement with issuers

Invesco engages directly with companies to better understand their positions and
their future intentions and lobby for change where Invesco believe it is
necessary. Although engagement as pure debt investors can be challenging,
Invesco’s ownership of both equity and debt can often be used to increase our
voice as a stakeholder. Engagement is carried out on a case by case basis by
relevant analysts and strategically with co-ordination through Invesco’s
Sustainable Investing Services Team.

Invesco’s Sustainable Investing Services Team is led by the Global Head of ESG.
Reporting to the Global Head of ESG is the Director of ESG Research, who leads
the ESG analyst team who in turn focus on ESG company engagement activity.
Invesco has established a global process to ensure that its ESG-targeted
engagements are a collaboration between its Sustainable Investing Services Team
and the investment teams across Invesco who may have interest in the issuer:

i. Internal assessment and coordination: the Sustainable Investing Services Team
consults with the investment teams and reviews the ESG Engagement focus list and
decides whether to: (a) gather feedback on a topic and provide that feedback to
an issuer; (b) schedule a call with the issuer if it is deemed to be necessary;
or (c) engage directly with the issuer and serve as a liaison. Invesco’s
Sustainable Investing Services Team will arrange contact between the relevant
investment teams and issuers when and if it is deemed necessary. Any ESG
engagement meeting is added to a centralised calendar that investment teams can
access.

ii. Research and follow up: the Sustainable Investing Services Research team
conducts in-depth ESG research in preparation for these meetings and discusses
with the relevant investment teams across Invesco to ensure that companies are
questioned on the key ESG topics. The Sustainable Investing Services Team
produces an Engagement Report for these meetings which is shared via the
Bloomberg platform for all relevant investment teams to access. Invesco is also
a member of several organisations that facilitate collective dialogue with
companies and continues to assess other collective engagements that we would
like to work more closely with in the future.

ESG portfolio reviews

Dedicated ESG-focused portfolio reviews are in place to complement the existing
risk-return portfolio review process. Invesco’s Global Sustainable Investing
Services team leads each review meeting which is attended by fund managers and
credit research analysts. Portfolios are reviewed on the basis of a wide range
of ESG metrics on an absolute basis and also relative to benchmarks where
appropriate.

ESG portfolio monitoring includes measurement, based on Sustainalytics ESG
research data, of total portfolio ESG risk and identification of holdings with
the highest and lowest ESG risk. As of the end of 2025, holdings with the
highest ESG risk were concentrated in the energy sector. The holdings with the
lowest ESG risk were spread across several sectors.

Invesco also carry out Carbon Footprint Analysis of the portfolio, in absolute
terms and compared to the wider high yield market, using data from ISS Climate
Solutions.

Task Force on Climate-related Financial Disclosures (`TCFD’)

Whilst TCFD is currently not applicable to the Company, theManager has produced
a product level report on the Companyin accordance with the Financial Conduct
Authority’s (`FCA’) rules and guidance regarding the disclosure of climate
-related financial information consistent with TCFD Recommendations and
Recommended Disclosures. These disclosures are intended to help meet the
information needs of market participants, including institutional clients and
consumers of financial products, in relation to the climate-related impact and
risks of the Manager’s TCFD in-scope business. The product level report on the
Company is available on the Managers’ website at www.invesco.co.uk/bips. Key
elements of the product level report include a scenario analysis of how climate
change is likely to impact the portfolio valuation under net zero 2050, delayed
transition and hothouse scenarios, and a discussion of the most significant
drivers of performance under those scenarios.

Invesco’s Group Level Task Force on Climate-Related Financial Disclosures
(`TCFD’) is available on the Managers’ Website at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd
-report.pdf.

In addition the Managers’ Entity Level TCFD Report is available at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/IFML_and_IAML_tcfd
-entity-level_report.pdf.

The reports noted above are in the process of being updated for the period to 31
December 2025 and will be made available via the respective websites by 30 June
2026.

Investments in Order of Valuation

at 31 December 2025

Ma
rket
Country of
Value % of
Issuer/issue Rating(1) Industry Incorporation
£’000 Portfolio
Lloyds Banking Group Financials UK
7.875% FRN Perpetual (AT1) Baa3/BBB-/
7,200 1.7
BBB
8.5% Cnv FRN Perpetual (AT1) Baa3/BBB-/
3,275 0.8
BBB
8.5% Cnv FRN 27 Mar 2071 Baa3/BBB-/
1,478 0.4
(AT1) BBB
11
,953 2.9
Nationwide Financials UK
7.875% FRN Perpetual (AT1) Baa3/NR/BB
4,401 1.1
B
10.25% Perpetual (CCDS) NR/NR/NR
3,911 0.9
7.5% Cnv FRN Perpetual (AT1) Baa3/BB+/B
3,493 0.8
BB
11
,805 2.8
Barclays Financials UK
9.25% Cnv FRN Perpetual (AT1) Ba1/BB+/BB
5,334 1.3

FRN 14 Nov 2032 Baa1/BBB/B
3,825 0.9
BB
8.5% FRN Perpetual (AT1) Ba1/BB+/BB
965 0.2

8.875% Cnv FRN Perpetual Ba1/BB+/BB
767 0.2
(AT1)
10
,891 2.6
Aviva Financials UK
6.875% Cnv FRN Perpetual Baa2/NR/BB
5,782 1.4
B
7.75% FRN Perpetual Baa2/NR/BB
4,739 1.1
B
10
,521 2.5
Co-Operative Bank Financials UK
11.75% 22 May 2034 Baa2/NR/BB
4,129 1.0
B
9.5% Cnv FRN 24 May 2028 Baa2/NR/BB
1,647 0.4
(SNR) B
6% FRN 06 Apr 2027 (SNR) Baa2/NR/BB
1,421 0.3
B
7.5% FRN 08 Jul 2026 NR/BB-/BB
1,008 0.3
8,
205 2.0
Eléctricité De France Utilities France
7.375% FRN Perpetual Ba2/B+/BB
2,976 0.7
5.875% Perpetual Ba2/B+/BB
1,804 0.4
6% Perpetual Baa1/BBB/B
1,503 0.4
BB
7.5% FRN Perpetual Ba2/B+/BB
951 0.2
5.625% FRN Perpetual Ba2/B+/BB
908 0.2
8,
142 1.9
Thames Water Finance Utilities UK
7.75% 30 Apr 2044 Caa3/CCC/C
4,869 1.1
CC
8.25% 25 Apr 2040 (SNR) Caa3/CCC/C
2,024 0.5
CC
9.75% 10 Oct 2027 B2/NR/B
1,145 0.3
0% 22 Mar 2027 NR/NR/NR
63 0.0
4.625% 19 May 2026 (SNR) NR/NR/NR
20 0.0
8,
121 1.9
BNP Paribas Financials France
9.25% FRN Perpetual (AT1) Ba1/BBB-/B
6,503 1.6
BB
FRN Perpetual (AT1) Ba1/BBB-/B
1,358 0.3
BB
7,
861 1.9
OSB Financials UK
7.75% FRN Perpetual (AT1) Ba2/NR/BB
3,599 0.8
8.875% Cnv 16 Jan 2030 (SNR) Baa2/NR/BB
1,952 0.5
B
Cnv FRN 27 Jul 2033 Baa3/NR/BB
1,653 0.4
B
7,
204 1.7
Engineering Ingegneria Technology Italy
Informatica
11.125% 15 May 2028 B3/B-/B
4,150 1.0
FRN Perpetual B3/B-/B
1,951 0.5
8.625% 15 Feb 2030 (SNR) B3/B-/B
934 0.2
7,
035 1.7
Market Bidco Finco Consumer Goods UK
8.75% 31 Jan 2031 (SNR) B1/B+/B
3,943 1.0
6.75% 31 Jan 2031 (SNR) B1/B+/B
3,032 0.7
6,
975 1.7
Ineos Quattro Basic Materials UK
7.25% 31 Mar 2031 (SNR) B2/BB-/BB
2,999 0.7
6.75% 15 Apr 2030 (SNR) B3/BB-/BB
1,602 0.4
8.5% 15 Mar 2029 (SNR) B3/BB-/BB
1,038 0.2
7.5% 15 Apr 2029 (SNR) B2/BB-/BB
754 0.2
9.625% 15 Mar 2029 (SNR) B3/BB-/BB
309 0.1
6,
702 1.6
Jerrold Finco Financials UK
7.875% 15 Apr 2030 NR/BB/BB
3,551 0.9
7.5% 15 Jun 2031 (SNR) NR/BB/BB
3,067 0.7
6,
618 1.6
Techem Consumer Services Germany
FRN 15 Jul 2032 (SNR) B2/B+/B
6,592 1.6
Zopa Group Financials UK
14.4% FRN 25 Nov 2033 NR/NR/NR
4,459 1.1
12.875% FRN Perpetual (AT1) NR/NR/NR
2,120 0.5
6,
579 1.6
UK Treasury Bill Government Bonds UK
0.5% 22 Oct 2061 Aa3/AA/AA
3,129 0.7
3.75% 22 Oct 2053 Aa3/AA/AA
2,356 0.6
4% 22 Oct 2063 Aa3/AA/AA
772 0.2
6,
257 1.5
Natwest Financials UK
7.5% Cnv FRN Perpetual (AT1) Baa3/NR/BB
3,665 0.9
B
7.625% FRN Perpetual (AT1) Baa3/NR/BB
1,475 0.4
B
Cnv FRN 6 Jun 2033 Baa1/BBB+/
947 0.2
BBB
6,
087 1.5
Saffron Building Society Financials UK
Cnv FRN 19 Oct 2034 NR/NR/NR
5,996 1.4
Volkswagen Financial Services Consumer Goods Netherlands
5.994% FRN Perpetual Baa3/BBB-/
5,867 1.4
BBB
Atom Financials UK
Cnv FRN 08 Jan 2035 NR/NR/NR
5,663 1.4
Vodafone Group Basic Materials UK
8% FRN Perpetual (SUB) Ba1/BB+/BB
5,450 1.3

888.com Consumer Services Gibraltar
10.75% 15 May 2030 (SNR) B2/B-/B
3,772 0.9
8% 30 Sep 2031 (SNR) B2/B-/B
1,560 0.4
5,
332 1.3
Virgin Media O2 Telecommunications Ireland
7.875% 15 Mar 2032 NR/NR/NR
5,159 1.2
Newcastle Building Society Financials UK
12.25% Cnv FRN Perpetual NR/NR/NR
5,004 1.2
CPUK Finance Consumer Services Jersey
7.875% 28 Aug 2055 NR/B/B
2,197 0.5
6.875% 28 Aug 2032 NR/B/B
1,472 0.4
4.5% 28 Aug 2027 NR/B/B
1,176 0.3
4,
845 1.2
UTB Partners Financials UK
13% FRN Perpetual (AT1) NR/NR/NR
4,472 1.1
Kane Bidco Financials Jersey
7.75% 15 Jul 2031 (SNR) B1/B+/B
2,852 0.7
FRN 15 Jul 2032 (SNR) B1/B+/B
1,547 0.4
4,
399 1.1
Legal & General Financials UK
5.625% FRN Perpetual Baa2/BBB/B
4,379 1.1
BB
DNO ASA Oil and Gas Norway
9.25% 04 Jun 2029 (SNR) NR/NR/NR
2,510 0.6
8.5% 27 Mar 2030 (SNR) NR/NR/NR
1,684 0.4
4,
194 1.0
Atos Technology France
5% Var 18 Dec 2030 (SNR) NR/CCC/CCC
2,153 0.5

9% Var 18 Dec 2029 NR/B+/B
1,996 0.5
4,
149 1.0
Waga Bond Consumer Services Jersey
8.5% 15 Jun 2030 (SNR) B2/B/B
4,111 1.0
Punch Finance Consumer Services UK
7.8755% 30 Dec 2030 (SNR) B3/NR/B
4,077 1.0
Ford Motor Credit Consumer Goods USA
6.86% 05 Jun 2026 Ba1/BBB-/B
4,063 1.0
BB
Lion/Polaris Consumer Goods Luxembourg
FRN 01 July 2029 (SNR) B2/B/B
4,026 1.0
Sainsbury’s Bank Financials UK
10.5% FRN 12 Mar 2033 Ba1/NR/BB
4,016 1.0
Deutsche Bank Financials Germany
FRN Perpetual (AT1) Ba2/BB/BB
3,446 0.8
8.125% Cnv FRN Perpetual Ba2/BB/BB
568 0.1
(AT1)
4,
014 0.9
Bertrand Franchise Consumer Goods France
FRN Perpetual (SNR) B3/B-/B
3,980 0.9
Fiber Bidco Industrials Italy
FRN 15 Jan 2030 (SNR) B3/B-/B
2,134 0.5
5.125% 30 Jan 2032 (SNR) Ba1/BB+/BB
1,773 0.4

3,
907 0.9
Rino Mastrotto Consumer Goods Italy
FRN 31 Jul 2031 (SNR) B2/B/B
3,797 0.9
RL Finance Financials UK
10.125% Cnv FRN Perpetual Baa3/BBB/B
3,741 0.9
BB
Haleon Health Care UK
9.5% Preference NR/NR/NR
3,654 0.9
Bayer Health Care Germany
7% FRN Perpetual (SUB) Ba1/BB+/BB
1,917 0.5

5.5% FRN Perpetual (SUB) Baa3/BB+/B
1,713 0.4
B
3,
630 0.9
ING Financials Netherlands
6.25% Cnv FRN 20 May 2033 Baa2/BBB+/
3,604 0.9
BBB
IHO Verwaltungs Consumer Goods Germany
6.75% 15 Nov 2029 (SNR) Ba2/BB-/BB
1,929 0.5

8% 15 Nov 2032 (SNR) Ba2/BB-/BB
1,604 0.4

3,
533 0.9
ASG Finance Design Consumer Services Ireland
9.75% 15 May 2029 (SNR) NR/BB-/BB
3,461 0.8
IM Group Consumer Services France
8% 01 Mar 2028 (SNR) Caa1/CCC+/
3,430 0.8
CCC
Pension Insurance Financials UK
7.375% FRN Perpetual NR/NR/BBB
3,269 0.8
Telefonica Telecommunications Netherlands
FRN Perpetual Ba2/BB/BB
2,174 0.5
6.75% FRN Perpetual (SUB) Ba2/BB/BB
868 0.2
3,
042 0.7
JP Morgan Chase Financials USA
FRN Perpetual (SNR) (AT1) Baa1/BBB/B
3,026 0.7
BB
Maison Industrials UK
6% 31 Oct 2027 (SNR) NR/B/B
2,974 0.7
Grupo Antolin Consumer Goods Spain
10.375% 30 Jan 2030 (SNR) B3/B-/B
2,952 0.7
Teva Pharmaceutical Finance Health Care Netherlands
6.75% 01 Mar 2028 (SNR) Ba1/BB+/BB
2,315 0.6

5.125% 09 May 2029 (SNR) Ba1/BB+/BB
585 0.1

2,
900 0.7
Pinewood Finance Consumer Services UK
6% 27 Mar 2030 (SNR) NR/BB+/BB
2,855 0.7
BT Telecommunications UK
8.375% FRN Perpetual Ba1/BB+/BB
2,672 0.6

ZF Group Consumer Goods Netherlands
7% 12 Jun 2030 (SNR) Ba2/BB-/BB
1,836 0.4

6.125% 13 Mar 2029 (SNR) Ba2/BB-/BB
452 0.1

7.125% 14 Apr 2030 (SNR) Ba2/BB-/BB
375 0.1

2,
663 0.6
Codere New Topco Consumer Services Luxembourg
11% PIK 31 Dec 2028 NR/NR/NR
1,707 0.4
A1 Shares NR/NR/NR
639 0.1
A2 Shares NR/NR/NR
302 0.1
2,
648 0.6
Allwyn Entertainment Consumer Services UK
7.875% 30 Apr 2029 (SNR) NR/BB/BB
1,780 0.4
7.25% 30 Apr 2030 NR/BB/BB
830 0.2
2,
610 0.6
Flora Food Management Consumer Goods Netherlands
6.875% 02 Jul 2029 (SNR) B2/B/B
2,606 0.6
RLGH Finance Bermuda Financials Bermuda
8.25% 17 Jul 2031 Baa2/NR/BB
2,604 0.6
B
CaixaBank Financials Spain
8.25% Cnv FRN Perpetual (AT1) NR/BB+/BB
2,526 0.6
Dana Financing Luxembourg Consumer Goods Luxembourg
8.5% 15 Jul 2031 (SNR) B1/BB-/BB
2,508 0.6
Société Générale Financials France
7.875% Cnv FRN Perpetual Ba2/BB/BB
1,509 0.4
(AT1)
FRN Perpetual (AT1) Ba2/BB/BB
890 0.2
2,
399 0.6
Voyager Parent Consumer Services USA
9.25% 01 Jul 2032 (SNR) B1/B/B
2,367 0.6
Boots Group Finco Health Care USA
7.375% 31 Aug 2032 (SNR) B1/B+/B
1,447 0.4
5.375% 31 Aug 2032 (SNR) B1/B+/B
901 0.2
2,
348 0.6
Petra Diamonds Basic Materials UK
10.5% PIK 08 Mar 2026 NR/B-/B
2,289 0.6
Common Stock NR/NR/NR
55 0.0
2,
344 0.6
HSBC Financials UK
FRN 13 Nov 2034 (SUB) Baa1/BBB+/
1,885 0.5
BBB
5.25% 14 Mar 2044 Baa1/BBB+/
444 0.1
BBB
2,
329 0.6
Eutelsat Telecommunications France
9.75% 13 Apr 2029 (SNR) Ba3/NR/BB
2,304 0.6
DeepOcean Oil and Gas Jersey
6% 08 Apr 2031 (SNR) B1/BB-/BB
2,234 0.5
New Frigoglass Group Industrials Netherlands
11% PIK 27 Mar 2026 NR/NR/NR
1,145 0.3
11% 20 Apr 2028 NR/NR/NR
877 0.2
0% 27 Mar 2028 NR/NR/NR
187 0.0
Common Stock NR/NR/NR 5
0.0
2,
214 0.5
Heathrow Finance Financials UK
6.625% 01 Mar 2031 (SNR) B1/NR/B
1,267 0.3
4.125% 01 Sep 2029 (SNR) B1/NR/B
938 0.2
2,
205 0.5
Aston Martin Consumer Goods Jersey
10.375% 31 Mar 2029 (SNR) Caa1/CCC+/
1,821 0.4
CCC
10% 31 Mar 2029 (SNR) Caa1/CCC+/
346 0.1
CCC
2,
167 0.5
Beazley Financials Ireland
5.875% 04 Nov 2026 NR/NR/BBB
2,147 0.5
Benteler International Consumer Goods Austria
7.25% 15 Jun 2031 (SNR) Ba3/BB-/BB
2,089 0.5

Lancashire Financials Bermuda
5.625% 18 Sep 2041 (FRN) Baa3/BBB-/
2,087 0.5
BBB
MAHLE Consumer Goods Germany
7.125% 15 Jul 2032 (SNR) Ba2/BB-/BB
1,607 0.4

6.5% 02 May 2031 (SNR) Ba2/BB-/BB
453 0.1

2,
060 0.5
BP Capital Financials UK
4.25% FRN Perpetual A3/BBB/A
2,037 0.5
Galaxy Bidco Financials UK
8.125% 19 Dec 2029 (SNR) B2/B/B
2,036 0.5
Forvia Consumer Goods France
8% 15 Jun 2030 (SNR) B1/BB-/BB
1,990 0.5
ContourGlobal Utilities Luxembourg
6.75% 28 Feb 2030 (SNR) NR/BB/BB
1,946 0.5
Currenta Group Basic Materials Luxembourg
5.5% 15 May 2030 (SNR) Ba3/BB-/BB
1,937 0.5

Albion Finance Consumer Services Luxembourg
7% 21 May 2030 (SNR) B1/BB-/BB
980 0.2
5.375% 21 May 2030 (SNR) B1/BB-/BB
898 0.2
1,
878 0.4
Nexture Consumer Goods Italy
FRN 30 Jul 2032 (SNR) B2/B/B
1,872 0.4
Marb Bondco Consumer Services UK
3.95% 29 Jan 2031 (SNR) NR/BB+/BB
1,804 0.4
Petroleos Mexicanos Oil and Gas Mexico
9.5% 15 Sep 2027 (SNR) B1/BBB/BB
788 0.2
6.95% 28 Jan 2060 (SNR) B1/BBB/BB
548 0.1
6.75% 21 Sep 2047 (SNR) B1/BBB/BB
428 0.1
1,
764 0.4
TGS ASA Oil and Gas Norway
8.5% 15 Jan 2030 (SNR) Ba3/BB-/BB
1,738 0.4

AA Bond Co Consumer Services Jersey
7.375% 31 Jul 2050 (SNR) NR/BBB/BBB
1,353 0.3

8.45% 31 Jul 2050 (SNR) NR/BBB/BBB
366 0.1

1,
719 0.4
Enel Utilities Netherlands
7.75% 14 Oct 2052 (SNR) Baa1/BBB/B
1,716 0.4
BB
Monitchem Basic Materials Luxembourg
8.75% 01 May 2028 (SNR) B3/B/B
1,661 0.4
Stora Enso Industrials Finland
7.25% 15 Apr 2036 Baa3/NR/BB
1,645 0.4
B
Intesa Financials Italy
6.375% Cnv FRN Perpetual Ba2/BB/BB
1,642 0.4
(AT1)
Telecom Italia Telecommunications Italy
7.875% 31 Jul 2028 (SNR) Ba2/BB/BB
1,053 0.3
7.721% 04 Jun 2038 (SNR) Ba2/BB/BB
537 0.1
1,
590 0.4
Viridien Oil and Gas France
10% 15 Oct 2030 (SNR) B2/B/B
1,567 0.4
Genesis Energy Oil and Gas USA
8.875% 15 Apr 2030 (SNR) B3/B/B
1,563 0.4
Gatwick Airport Finance Financials UK
6% 21 Nov 2030 (SNR) Ba2/NR/BB
1,560 0.4
Morgan Stanley Financials USA
Depositary Shares (AT1) Baa3/BBB-/
1,551 0.4
BBB
Quick Top Technology Sweden
FRN 21 Mar 2030 (SNR) B2/B/B
1,518 0.4
Saturn Holdings Financials UK
9% FRN 26 Feb 2036 NR/NR/NR
1,511 0.4
Preem Oil and Gas Sweden
12% 30 Jun 2027 (SNR) B2/BB-/B
1,444 0.4
Ecclesiastical Insurance Financials UK
Office
8.625% Preference NR/NR/NR
1,440 0.3
Altice Telecommunications France
5.625% 15 Jun 2032 (SNR) Caa1/CCC+/
958 0.2
CCC
7.25% 01 Nov 2029 (SNR) Caa1/CCC+/
333 0.1
CCC
Common Stock NR/NR/NR
135 0.0
1,
426 0.3
Lottomatica Consumer Services Italy
4.875% 31 Jan 2031 (SNR) Ba2/BB/BB
1,404 0.3
FR Bondco Consumer Goods France
6.875% 31 Oct 2032 (SNR) Caa1/CCC+/
1,394 0.3
CCC
Vattenfall Utilities Sweden
6.875% FRN Perpetual (SUB) Baa2/BB+/B
1,375 0.3
B
Coventry Building Society Financials UK
8.75% Cnv FRN Perpetual (AT1) Ba1/NR/BB
1,370 0.3
GTCR Technology Netherlands
8.5% 15 Jan 2031 (SNR) Ba3/BB/BB
1,364 0.3
Valeo Consumer Goods France
5.125% 20 May 2031 (SNR) Ba1/BB/BB
1,348 0.3
Virgin Money Financials UK
Cnv FRN 23 Aug 2029 (SNR) A3/BBB+/A
1,332 0.3
Mobico Group Consumer Services UK
4.875% 26 Sep 2031 (SNR) B2/NR/B
690 0.2
FRN Perpetual Caa1/NR/CC
626 0.1
C
1,
316 0.3
OEG Finance Oil and Gas UK
7.25% 27 Sep 2029 (SNR) B1/NR/B
1,307 0.3
CIRSA Finance Consumer Services Luxembourg
7.875% 31 Jul 2028 (SNR) B1/NR/B
1,282 0.3
John Lewis Consumer Services UK
4.25% 18 Dec 2034 (SNR) NR/NR/NR
1,272 0.3
Aegon Financials Bermuda
5.625% FRN Perpetual Baa3/BB+/B
1,256 0.3
B
Alexandrite Lake Lux Holdings Financials Luxembourg
6.75% 30 Jul 2030 (SNR) NR/B+/B
1,254 0.3
Dynamo Consumer Goods Germany
6.25% 15 Oct 2031 (SNR) B2/B/B
1,209 0.3
Quilter Financials UK
8.625% FRN 18 Apr 2033 NR/NR/BBB
1,116 0.3
Centrica Utilities UK
7% 19 Sep 2033 (SNR) Baa2/BBB/B
1,108 0.3
BB
Commerzbank Financials Germany
7.5% FRN Perpetual (AT1) Ba1/BB/BB
1,093 0.3
Bank Of Ireland Financials Ireland
7.594% FRN 06 Dec 2032 Baa1/BBB/B
1,046 0.2
BB
FiberCop Technology Italy
7.721% 04 Jun 2038 (SNR) Ba1/BB+/BB
1,004 0.2

Hammerson Financials UK
5.875% 08 Oct 2036 Baa2/NR/BB
1,000 0.2
B
Alpha Services & Holdings Consumer Goods Greece
11.875% Cnv FRN Perpetual Ba3/NR/BB
970 0.2
(AT1)
Castello BC Bidco Consumer Services Italy
FRN 14 Nov 2031 (SNR) B2/B/B
879 0.2
Chesnara Financials UK
8.5% FRN Perpetual NR/NR/BBB
867 0.2
Germany (Federal Republic Of) Government Bonds Germany
2.5% 15 Feb 2035 NR/AAA/AAA
851 0.2

AXA Financials France
6.379% FRN Perpetual A2/BBB+/BB
850 0.2
B
B&M Consumer Services Luxembourg
4% 15 Nov 2028 (SNR) Ba1/BB+/BB
833 0.2

Bausch & Lomb Consumer Services USA
FRN 15 Jan 2031 (SNR) B1/NR/B
813 0.2
National Bank Of Greece Financials Greece
Cnv FRN 28 Jun 2035 Ba1/NR/BB
777 0.2
CCO Holdings Telecommunications USA
7.375% 01 Mar 2031 (SNR) B1/BB-/BB
759 0.2
US Treasury Note Government Bonds USA
3.875% 15 Aug 2033 Aa1/AA+/AA
739 0.2

Zurich Finance Financials Ireland
5.125% FRN 23 Nov 2052 A1/A+/A
710 0.2
CNP Assurances Financials France
4.875% FRN Perpetual Baa2/BBB/B
693 0.2
BB
Phoenix Financials UK
FRN Perpetual NR/NR/BBB
648 0.2
La Financière ATALIAN Consumer Services France
8.5% PIK 30 Jun 2028 Caa3/CCC+/
646 0.2
CCC
PGH Capital Financials UK
5.375% 06 Jul 2027 NR/NR/BBB
624 0.1
Cerved Consumer Services Italy
FRN 15 Feb 2029 (SNR) B3/B/B
614 0.1
Nickel Industries Basic Materials Australia
9% 30 Sep 2030 (SNR) B1/NR/B
611 0.1
UBS Financials Switzerland
9.75% FRN Perpetual (AT1) NR/NR/NR
384 0.1
4.5% FRN Perpetual (AT1) NR/NR/NR
171 0.0
55
5 0.1
Spectrum Management Telecommunications USA
4.5% 15 Sep 2042 (SNR) Ba1/BBB-/B
516 0.1
BB
RAC Bond Consumer Goods UK
FRN 04 Nov 2046 (SNR) NR/B+/B
496 0.1
Peel Land & Property Financials UK
Investments
8.375% Var 30 Apr 2040 NR/BBB/BBB
494 0.1

Italy (Republic Of) Government Bonds Italy
3.65% 01 Aug 2035 Baa2/BBB/B
443 0.1
BB
Spain (Kingdom Of) Government Bonds Spain
3.15% 30 Apr 2035 NR/A+/A
433 0.1
Kosmos Energy Oil and Gas USA
7.75% 01 May 2027 (SNR) Caa3/CCC+/
338 0.1
CCC
Total investments held at
420,214 100.6
fair value through profit or
loss
Derivative Instruments –
Credit Default Swaps

Market
Coupon
Value % of
Company Nominal % Maturity
£’000 Portfolio
Date
iTraxx Europe Crossover
Series 42 5% 5 Year €6,000,000 5.00 20 Dec
(1,857) (0.5)
2030
Series 42 5% 5 Year €19,000,000 5.00 20 Dec
(586) (0.1)
2030
Total derivatives held at
fair value
through profit or loss
(2,443) (0.6)
Total investments and
derivatives held
at fair value through profit
417,771 100.0
or loss

(1)Moody’s/Standard & Poor’s (S&P)/Equivalent average rating. Please see Credit
Ratings Definitions on page 81 for further information.

Abbreviations used in the above valuation:

Cnv:Convertible

FRN:Floating Rate Note

SNR:Senior

SUB:Subordinated Notes

PIK:Payment in Kind

Var:Variable

CCDS:Core Capital Deferred Shares

AT1:Additional Tier 1 bond

Directors’ Responsibilities Statement

The Directors are responsible for preparing the Company’s Annual Financial
Report in accordance with applicable laws and regulations.

The Companies (Jersey) Law 1991 requires the Directors to prepare financial
statements for each financial period. Under that law the Directors have elected
to prepare the financial statements in accordance with International Financial
Reporting Accounting Standards issued by the International Financial Reporting
Standards as adopted by the European Union (`IFRS’ Accounting Standards as
adopted by the EU). The financial statements are required by law to give a true
and fair view of the state of affairs of the Company and of the profit or loss
of the Company for that period.

International Accounting Standard 1 requires that financial statements present
fairly for each financial year the Company’s financial position, financial
performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and
expenses set out in the International Accounting Standards Board’s `Framework
for the preparation and presentation of financial statements’. In virtually all
circumstances, a fair presentation will be achieved by compliance with all
applicable IFRS Accounting Standards as adopted by the EU.

In preparing these financial statements, the Directors are required to:

-properly select and apply accounting policies and then apply them consistently;

-present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;

-provide additional disclosures when compliance with specific requirements in
IFRS Accounting Standards are insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the entity’s
financial position and financial performance; and

-make an assessment of the Company’s ability to continue as a going concern.

The financial statements have been prepared on a going concern basis. When
considering this, the Directors took into account the annual shareholders’
continuation vote (as explained in detail on page 56) and the following: the
Company’s investment objective and risk management policies, the nature of the
portfolio and expenditure and cash flow projections. As a result, they
determined that the Company has adequate resources, an appropriate financial
structure, readily realisable fixed assets to repay current liabilities and
suitable management arrangements in place to continue in operational existence
for the foreseeable future.

The Directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and which enable them to ensure that the accounts comply with the
Companies (Jersey) Law 1991. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for
preparing a Corporate Governance Statement and a Directors’ Report that comply
with that law and those regulations.

The Directors of the Company, who are listed on page 33, each confirm to the
best of their knowledge that:

-the financial statements, which have been prepared in accordance with
applicable accounting standards, give a true and fair view of the financial
position and profit or loss of the Company;

-this Annual Financial Report includes a fair review of the development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that it faces;

-this Annual Financial Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess
the Company’s position and performance, business model and strategy; and

-there is no relevant audit information of which the Company’s auditor is
unaware, and each Director has taken steps that they ought to have taken as a
Director to make themselves aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.

Signed on behalf of the Board of Directors

Heather MacCallum

Audit & Risk Committee Chair

31 March 2026

a.The directors have delegated responsibility for the maintenance and integrity
of the Invesco Bond Income Plus Limited website to the Manager; the work carried
out by the auditors does not involve consideration of these matters and,
accordingly, the auditor accept no responsibility for any changes that may have
occurred to the financial statements since they were initially presented on the
website.

b. Legislation in Jersey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.

Statement of Comprehensive Income

Year Year
ended ended
31 31
December December
2025 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Net gains
on
investments
held at
fair value
through 11 – 3,548 3,548 – 2,093 2,093
profit or
loss
Net gains
on
derivative
instruments
–
forward 13 – 3,273 3,273 – 943 943
currency
contracts
and CDS
Exchange – (2,717) (2,717) – 1,965 1,965
differences
Income 4 30,853 – 30,853 26,370 – 26,370
Investment 5 (1,230) (1,230) (2,460) (1,090) (1,090) (2,180)
management
fee
Other 6 (815) (14) (829) (856) (40) (896)
expenses
Profit 28,808 2,860 31,668 24,424 3,871 28,295
before
finance
costs and
taxation
Finance 7 (534) (534) (1,068) (826) (826) (1,652)
costs
Profit 28,274 2,326 30,600 23,598 3,045 26,643
before
taxation
Tax on 8 (89) – (89) (61) – (61)
ordinary
activities
Profit 28,185 2,326 30,511 23,537 3,045 26,582
after
taxation
Earnings 9 13.07p 1.08p 14.15p 12.08p 1.57p 13.65p
per
ordinary
share

The total columns of this statement represent the Company’s statement of
comprehensive income, prepared in accordance with International Financial
Reporting Standards (`IFRS’) Accounting Standards adopted by the European Union.
The profit after taxation is the total comprehensive income. The supplementary
revenue and capital columns are both prepared in accordance with the Statement
of Recommended Practice issued by the Association of Investment Companies. All
items in the above statement derive from continuing operations of the Company.
No operations were acquired or discontinued in the year.

The accompanying accounting policies and notes are an integral part of these
financial statements.

Statement of Changes in Equity

Stated Capital Revenue
Capital Reserve Reserve Total
Notes £’000 £’000 £’000 £’000
At 31 December 316,793 (22,018) 9,854 304,629
2023
Profit after – 3,045 23,537 26,582
taxation
Dividends paid 10 (514) – (21,660) (22,174)
Net proceeds from 16 36,762 – – 36,762
issue of new
shares
At 31 December 353,041 (18,973) 11,731 345,799
2024
Profit after – 2,326 28,185 30,511
taxation
Dividends paid (642) – (25,491) (26,133)
Net proceeds from 16 60,098 – – 60,098
issue of new
shares
At 31 December 412,497 (16,647) 14,425 410,275
2025

The accompanying accounting policies and notes are an integral part of these
financial statements.

Balance Sheet

At At
31 December 31 December
2025 2024
Notes £’000 £’000
Non-current assets
Investments held at fair 11 420,214 376,963
value through profit or
loss

Current assets
Other receivables 12 13,783 9,939
Derivative financial 13 1,729 415
instruments – receivable
Cash and cash equivalents 21,232 8,153
36,744 18,507
Current liabilities
Other payables 14 (6,198) (1,000)
Derivative financial 13 (24) (2,321)
instruments – payable
Securities sold under 15 (38,018) (45,127)
agreements to repurchase
(44,240) (48,448)
Net current liabilities (7,496) (29,941)
Total assets less current 412,718 347,022
liabilities
Non-current liabilities
Derivatives held at fair 13 (2,443) (1,223)
value through profit or
loss
Net assets 410,275 345,799
Capital and reserves
Stated capital 16 412,497 353,041
Capital reserve 17 (16,647) (18,973)
Revenue reserve 17 14,425 11,731
Total shareholders’ funds 410,275 345,799
Net asset value per 18 172.87p 170.87p
ordinary share

The financial statements were approved and authorised for issue by the Board of
Directors on 31 March 2026.

Signed on behalf of the Board of Directors

Heather MacCallum

Audit & Risk Committee Chair

The accompanying accounting policies and notes are an integral part of these
financial statements.

Statement of Cash Flows

Year ended Year ended
31 December 31 December
2025 2024
£’000 £’000
Cash flow from operating activities
Profit before finance costs and 31,668 28,295
taxation
Tax on overseas income (89) (61)
Adjustment for:
Purchases of investments (164,225) (139,225)
Sales of investments 129,737 99,926

(34,488) (39,299)
Decrease from securities sold under (7,109) (2,941)
agreements to repurchase
Net gains through profit or loss on (3,548) (2,093)
investments held at fair value
Net movement from derivative (2,391) 4,519
instruments – forward currency
contracts and CDS
Increase in other receivables (3,446) (1,336)
Increase in other payables 80 101
Effect of foreign exchange rate changes 545 135
Net cash outflow from operating (18,778) (12,680)
activities
Cash flow from financing activities
Finance cost paid (1,167) (1,669)
Net proceeds from issue of new shares – 60,103 36,856
note 16
Dividends paid – note 10 (26,133) (22,174)
Cost of shares issued – note 16 (401) (183)
Net cash inflow from financing 32,402 12,830
activities
Net increase in cash and cash 13,624 150
equivalents
Cash and cash equivalents at start of 8,153 8,138
the year
Effect of foreign exchange rate changes (545) (135)
Cash and cash equivalents at the end of 21,232 8,153
the year
Reconciliation of cash and cash
equivalents to the Balance Sheet is as
follows:
Cash held at custodian 5,114 7,903
Invesco Liquidity Funds plc – Sterling 16,118 250
Cash and cash equivalents 21,232 8,153
Cash flow from operating activities
includes:
Dividends received 642 627
Interest received 29,073 24,984

Reconciliation of net debt

At At
1 January Cash Non-cash 31 December
2025 flows movement 2025
£’000 £’000 £’000 £’000
Cash and cash 8,153 13,624 (545) 21,232
equivalents
Securities sold under (45,127) 7,109 – (38,018)
agreements to
repurchase
Total (36,974) 20,733 (545) (16,786)

Notes to the Financial Statements

1.Principal Activity

The Company is a closed-end investment company incorporated in Jersey and
operates under the Companies (Jersey) Law 1991. The principal activity of the
Company is investment in a diversified portfolio of high-yielding fixed-interest
securities as set out in the Company’s Investment Objective and Policy.

2.Principal Accounting Policies

The principal accounting policies describe the Company’s approach to recognising
and measuring transactions during the year and the position of the Company at
the year end.

The principal accounting policies adopted in the preparation of these financial
statements are set out below. These policies have been consistently applied
during the current year and preceding year, unless otherwise stated. The
financial statements have been prepared on a going concern basis as noted below.

(a)Basis of Preparation

(i)Accounting Standards Applied

The financial statements have been prepared on a historical cost basis, except
for the measurement at fair value of investments and derivatives, and in
accordance with the applicable International Financial Reporting Standards as
adopted by the European Union (`IFRS’ Accounting Standards as adopted by the
EU). The standards are those endorsed by the European Union and effective at the
date the financial statements were approved by the Board.

Where presentational guidance set out in the Statement of Recommended Practice
(SORP) `Financial Statements of Investment Trust Companies and Venture Capital
Trusts’, updated by the Association of Investment Companies in July 2022, is
consistent with the requirements of IFRS Accounting Standards as adopted by the
EU, the Directors have prepared the financial statements on a basis compliant
with the recommendations of the SORP. The supplementary information which
analyses the statement of comprehensive income between items of a revenue and a
capital nature is presented in accordance with the SORP.

(ii)Going Concern

As explained on page 16, the Company has an Annual Continuation Vote and the
Directors believe shareholders will vote for the Company to continue.
Accordingly, the Directors have determined that the financial statements should
and have been prepared on a going concern basis, which does not include any
adjustments that might arise from cessation of the Company. The Articles of
Association of the Company require that unless an ordinary resolution is passed
at or before the Annual General Meeting (`AGM’) each year releasing the
Directors from the obligation to do so, the Directors shall convene a general
meeting within six months of the AGM at which a special resolution would be
proposed to wind up the Company. The directors plan on presenting an ordinary
resolution at the forthcoming AGM for which a 50% majority is needed for
aspecial resolution regarding continuance not to be held.

If a special resolution was held regarding a continuation vote a 75% majority of
the shareholders need to vote for the Company not to continue.

Last year nearly 100% of the votes registered at the AGM were in favour of
releasing the obligation to hold a continuation vote.

Based upon the current financial performance and financial position of the
Company including the net current liability position at the balance sheet date
along with the AGM vote outcome last year and ongoing dialogue with investors,
the Directors do not have any concerns regarding the outcome of the forthcoming
ordinary resolution and hence do not consider there to be a material uncertainty
over going concern.

If a continuation vote was held and was unsuccessful, the basis of preparation
would be switched at that date to a basis other than going concern and the NAV
impacting adjustments would not be material as the majority of investments are
Level2, based on observable market prices and investments are classified as held
at fair value through profit or loss.

(iii)Adoption of New and Revised Standards

There were no new nor revised standards and interpretations that became
effective during the year having a significant impact on the amounts reported in
these financial statements.

During the year the following standards were issued but were not effective and
the Company has chosen not to early adopt:

·IFRS 18, `Presentation and Disclosure in Financial Statements’ – effective 1
January 2027 (early adoption is permitted).

·Amendments to the Classification and Measurement of Financial Instruments –
Amendments to IFRS 9 and IFRS 7 – effective 1 January 2026.

(iv)Critical Accounting Estimates and Judgements

The preparation of the financial statements may require the Directors to make
estimations where uncertainty exists. It also requires the Directors to exercise
judgement in the process of applying the accounting policies. The Directors,
having taken into account the factors in note 2a(ii), judge it appropriate to
continue to use the going concern basis to prepare the financial statements
given the Annual Continuation Vote.

The area requiring the most significant judgement and estimation in the
preparation of the financial statements is: accounting for the value of Level 3
investments. Further details can be found in note 20 on pages 70 and 71.

(b)Foreign Currency

(i)Functional and Presentation Currency

The financial statements are presented in sterling, which is the Company’s
functional and presentation currency and the currency in which the Company’s
stated capital and expenses are denominated, as well as a certain proportion of
its income, assets and liabilities.

(ii)Transactions and Balances

Transactions in foreign currency, whether of a revenue or capital nature, are
translated to sterling at the rate of exchange ruling on the date of such
transactions. Foreign currency assets and liabilities are translated to sterling
at the rates of exchange ruling at the balance sheet date. Foreign exchange
gains and losses relating to non investments are presented in the statement of
comprehensive income within `exchange differences’. Foreign exchange gains and
losses relating to the financial assets and liabilities carried at fair value
through profit or loss are presented in the statement of comprehensive income
within ‘net gains on investments held at fair value through profit or loss’. All
profits and losses, whether realised or unrealised, are recognised in the
statement of comprehensive income and are taken to capital reserve or revenue
reserve, depending on whether the gain or loss is capital or revenue in nature.

(c)Financial Instruments

(i)Recognition of Financial Assets and Financial Liabilities

Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the instrument. These are
offset if the Company has a legally enforceable right to set off the recognised
amounts and interests and intends to settle on a net basis.

(ii)Derecognition of Financial Assets

Financial assets are derecognised when the contractual rights to the cash flows
from the asset expire, or it transfers the right to receive the contractual cash
flows on the financial asset in a transaction in which substantially all the
risks and rewards of ownership of the financial asset are transferred. Any
interest in the transferred financial asset that is created or retained by the
Company is recognised as an asset.

(iii)Derecognition of Financial Liabilities

Financial liabilities are derecognised when the Company’s obligations are
discharged, cancelled or expired.

(iv)Trade Date Accounting

Purchases and sales of financial assets are recognised on trade date, being the
date on which the Company commits to purchase or sell the assets.

(v)Classification of Financial Assets and Financial Liabilities

Financial assets

Investments are classified as held at fair value through profit or loss as the
investments are managed and their performance evaluated on a fair value basis in
accordance with the Company’s documented investment strategy and this is also
the basis on which information about investments is provided internally to the
Board.

Financial assets held at fair value through profit or loss are initially
recognised at fair value, which is taken to be their cost, with transaction
costs expensed in the statement of comprehensive income, and are subsequently
valued at fair value. Changes in fair value including the related foreign
exchange gains and losses are recognised in the statement of comprehensive
income under net gains and losses on investments.

For investments that are actively traded in organised financial markets, fair
value is determined by reference to stock exchange quoted bid prices at the
balance sheet date. For investments that are not actively traded or where active
stock exchange quoted bid prices are not available, fair value is determined by
reference to a variety of valuation techniques including broker quotes and price
modelling.

Financial Liabilities

Financial liabilities, including borrowings, are initially measured at fair
value, net of transaction costs and are subsequently measured at amortised cost
using the effective interest method, where applicable.

(d) Derivatives and Hedging

Derivative instruments are valued at fair value in the balance sheet. Hedge
accounting has not been adopted.

Forward currency contracts entered into for hedging purposes are valued at the
appropriate forward exchange rate ruling at the balance sheet date and any
profits and losses are recognised in the statement of comprehensive income and
taken to capital.

The treatment of the earnings from credit default swaps depends upon the nature
of the transaction. Both motives and circumstances are used to determine whether
earnings should be treated as capital or revenue. Given that the primary
rationale for holding credit default swaps is capital protection, any
gains/(losses) and premiums paid are reflected within net gain/(losses) on
derivative instruments and taken to capital. Prior to 1 January 2025 the expense
element was reflected within revenue in other expenses within the statement of
comprehensive income.

(e)Cash and Cash Equivalents

Cash and cash equivalents may comprise cash (including short term deposits which
are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value) as well as cash equivalents, including
money market funds.

(f)Securities Sold Under Agreements to Repurchase (`repo financing’)

The Company participates in repo financing arrangements in connection with its
investment portfolio. Under these arrangements, the Company sells fixed interest
securities but is contractually obliged to repurchase them at a fixed price on a
fixed date. Securities which are the subject of repofinancing arrangements are
included in investments in the balance sheet at their fair value and the
associated liability is recognised at amortised cost, being the capital amounts
owing under the repo financing arrangements. The difference between sale and
repurchase prices for such transactions is reflected in the statement of
comprehensive income over the lives of the transactions, within finance costs
which is allocated 50% to capital and 50% to revenue (2024: 50% capital; 50%
revenue). This accounting has been adopted because the repurchase price results
in a lender’s return for the transferee as the Company has retained
substantially all the risks and rewards of ownership of the asset.

(g)Income Recognition

All income is recognised in the statement of comprehensive income. Interest
income arising from fixed income securities classified as fair value through
profit or loss is recognised in the statement of comprehensive income based on
the contractual interest rate. Interest income is recognised as it accrues,
using the coupon rate specified in the bond terms. Dividend income arises from
equity investments held and is recognised on the date investments are marked `ex
-dividend’. Deposit interest is taken into account on an accruals basis.

Special dividends are considered individually to ascertain the reason behind the
payment. This will determine whether they are treated as income or capital in
the statement of comprehensive income.

(h)Expenses and Finance Costs

All expenses are accounted for on an accruals basis and are recognised in the
statement of comprehensive income. Investment management fees and finance costs
are allocated 50% to capital and 50% to revenue (2024: 50% capital; 50% revenue)
in accordance with the Board’s expected long-term split of earnings, in the form
of capital gains and income respectively, from the investment portfolio. Except
for custodian dealing costs, all other expenses are charged through revenue.

(i)Taxation

Overseas interest and dividends are shown gross of withholding tax and the
corresponding irrecoverable tax is shown as acharge in the statement of
comprehensive income.

(j)Dividends payable to shareholders

Interim dividends are recognised in the period in which they are paid and are
dealt with in the statement of changes in equity.

(k)Stated Capital

Stated Capital represents the total value of shares in issue, including net
issue proceeds resulting from share issuances and if appropriate, payments as a
result of share buybacks. Stated Capital can be used for distributions under the
Companies (Jersey) Law 1991.

Because the criteria in paragraphs 16C and 16D of IAS 32 Financial Instruments:
Presentation, have been met, the stated capital of the Company is classified as
equity even though there is a continuation vote.

3.Segmental Reporting

No segmental reporting is provided as the Directors are of the opinion that the
Company is engaged in asingle segment of business of investing in debt and, to a
significantly lesser extent, equity securities.

4.Income

This note shows the income generated from the portfolio (investment assets) of
the Company and income received from any other source.

2025 2024
£’000 £’000
Income from investments
UK investment income – interest 14,122 12,412
UK dividends 367 436
Overseas investment income – interest 15,806 13,067
Overseas dividends 252 182
30,547 26,097
Other income
Deposit interest 199 212
Other income 107 61
306 273
Total income 30,853 26,370

5.Investment Management Fee

This note shows the fees paid to the Manager, which are calculated quarterly on
the basis of the value of the assets being managed.

2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 1,230 1,230 2,460 1,090 1,090 2,180

Details of the investment management and secretarial agreement are given on page
35 in the Directors’ Report.

At 31 December 2025, £667,000 (2024: £562,000) was accrued in respect of the
investment management fee.

The management fee is payable quarterly in arrears and is equal to 0.1625% of
the value of the Company’s total assets under management less current
liabilities at the end of the relevant quarter.

6.Other Expenses

The other expenses of the Company are presented below; those paid to the
Directors and the auditor are separately identified.

2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Directors’ remuneration(i) 182 – 182 177 – 177
Auditors’ fees(ii):
-for audit of the Company’s
annual financial statements 70 – 70 57 – 57
Other expenses(iii) 563 14 577 622 40 662
815 14 829 856 40 896

(i)The maximum Directors’ fees authorised by the Articles of Association are
£250,000 (2024: £250,000) per annum. The Directors’ Remuneration Report on page
43, provides further information on Directors’ fees.

(ii)Auditor’s fees include out of pocket expenses. There was a £6,500 additional
fee in relation to Level 3 investments incurred in respect of the year to 31
December 2024 audit, paid in the year to 31 December 2025.

(iii)Other expenses include:

·custodian transaction charges of £3,000 (2024: £4,000). These are charged to
capital.

·legal and administrative fees of £11,000 related to the adoption of updated
Articles of Association (2024: £36,000 share placing). These were charged to
capital.

·amounts due to JTC Fund Solutions (Jersey) Limited who acted as Administrator
and Company Secretary to the Company under an agreement starting from 10
December 2019. The fee paid for company secretarial and administration services
in the current year was £143,000 (2024: £139,000).

·A fee of £103,000 was paid to the Manager for marketing services on behalf of
the Company (2024: £103,000).

·A premium of £38,000 was paid from revenue, during the year to 31 December
2024, on credit default swaps. From 1 January 2025 onwards premiums paid are
reflected in capital within net gains on derivative instruments. Further details
are shown in note 2(d) and note 13

7.Finance Costs

Finance costs arise on any borrowing the Company has and comprises of interest
due under repo financing, being the Company’s preferred method of borrowing.

2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Interest due 534 534 1,068 826 826 1,652
under repo
financing
534 534 1,068 826 826 1,652

The Company has repo financing arrangements in place which were used during the
year. For repos that are denominated in currencies where the interest rate is
negative, the interest is receivable and has been netted against repo interest
payable within finance costs, as they relate to borrowing costs.

8Taxation

As a Jersey investment company no tax is payable on capital gains and, as the
Company principally invests in assets which do not result in a revenue tax, the
only overseas tax arises on assets domiciled in countries with which Jersey has
no double-taxation treaty.

2025 2024
£’000 £’000
Overseas taxation 89 61

The Company is subject to Jersey income tax at the rate of 0% (2024: 0%). The
overseas tax charge consists of irrecoverable withholding tax suffered.

9.Earnings per Ordinary Share

Earnings per ordinary share is the amount of gain generated for the financial
year divided by the weighted average number of ordinary shares in issue.

The basic revenue, capital and total earnings per ordinary share is based on
each of the earnings on ordinary activities after taxation and on 215,592,679
(2024: 194,765,138) ordinary shares, being the weighted average number of
ordinary shares in issue throughout the year.

10.Dividends on Ordinary Shares

Dividends are usually paid from the income less expenses. Dividends are paid as
an amount per ordinary share held.

The fourth interim dividend shown below is based on shares in issue at the
record date or, if the record date has not been reached, on shares in issue on
the date the balance sheet is signed. The fourth interim dividend was paid after
the balance sheet date.

2025 2024
Pence £’000 Pence £’000
Dividends paid and recognised in the year:
Fourth interim 3.0625 6,206 2.8750 5,212
First interim 3.0625 6,294 2.8750 5,554
Second interim 3.0625 6,677 2.8750 5,625
Third interim 3.0625 6,956 2.8750 5,783
12.2500 26,133 11.5000 22,174

Dividends paid in respect of the year have been charged to revenue except for
£642,000 (2024: £514,000) which was charged to stated capital. This amount is
equivalent to the cumulative income accrued on the new shares issued in the
year. When new shares are issued there is an element of income accrued in the
issuance price paid, with proceeds fully taken to capital. As a result, the
accrued income element is then used as part of dividend payments from stated
capital. This has the effect of reducing the amount of revenue used for dividend
payments.

2025 2024
Pence £’000 Pence £’000
Dividends payable in respect of the year:
First interim 3.0625 6,294 2.8750 5,554
Second interim 3.0625 6,677 2.8750 5,625
Third interim 3.0625 6,956 2.8750 5,783
Fourth interim 3.0625 7,372 3.0625 6,206
12.2500 27,299 11.6875 23,168

The fourth interim dividend for 2025 was paid on 20 February 2026 to
shareholders on the register on 16 January 2026.

11.Investments Held at Fair Value Through Profit and Loss

The portfolio is principally made up of investments which are listed and traded
on regulated stock exchanges. Profits and losses are either:

·realised, usually arising when investments are sold; or

·unrealised, being the difference from cost of those investments still held at
the year end.

(a)Analysis of investment profits in the year.

2025 2024
£’000 £’000
Opening book cost 386,556 352,292
Opening investment holding losses (9,593) (16,759)
Opening valuation 376,963 335,533
Movements in year:
Purchases at cost 169,440 139,225
Sales – proceeds (129,737) (99,888)
Net gains on investments held at 3,548 2,093
fair value through profit or loss
Closing valuation 420,214 376,963
Closing book cost 423,811 386,556
Closing investment holding losses (3,597) (9,593)
Closing valuation 420,214 376,963

The Company received £129,737,000 (2024: £99,888,000) from investments sold in
the year. The book cost of these investments when they were purchased was
£131,942,000 (2024: £104,961,000) realising a loss of £2,205,000 (2024:
£5,073,000). These investments have been revalued over time and until they were
sold any unrealised profits/losses were included in the fair value of the
investments.

(b)Registration of investments

The investments of the Company are registered in the name of the Company or in
the name of nominees and held to the account of the Company.

(c)Securities sold under agreements to repurchase

Included in the valuation above are securities under agreements to repurchase
which had a market value of £44,796,000 (2024: £51,461,000). Included within
current liabilities are Securities sold under agreements to repurchase
£38,018,000 (2024: £45,127,000), further details are shown in note 15.

12.Other Receivables

Other receivables are amounts which are due to the Company, such as income which
has been earned (accrued) but not yet received and monies due from brokers for
investments sold.

2025 2024
£’000 £’000
Margin held at brokers 5,141 2,783
Proceeds due from issue of new shares 658 260
Prepayments and accrued income 7,984 6,896
13,783 9,939

13.Derivative Financial Instruments

Derivative financial instruments are financial instruments that derive their
value from the performance of another item, such as an asset or exchange rates.
They are used to manage the risk associated with fluctuations in the value of
certain assets and liabilities. The Company can use derivatives to manage its
exposure to fluctuations in foreign exchange rates or to mitigate credit risk.

Derivative financial instruments comprise forward currency contracts and credit
default swaps.

2025 2024
Net derivative financial instruments £’000 £’000
Forward currency contracts:
Forward currency contracts – receivable 1,729 415
Forward currency contracts – payable (24) (2,321)
1,705 (1,906)
2025 2024
£’000 £’000
Credit default swaps (`CDS’):
Opening net CDS liabilities held at (1,223) –
fair value as shown in balance sheet
Movements in year :
Purchases at cost (4,539) (1,356)
Sales – proceeds 3,494 –
Net realised gains relating to 112 –
underlying price movements
Net change in unrealised (losses)/gains (283) 156
relating to underlying price movements
Add: Prior year notional interest 23 –
arising on derivatives
Less : Notional interest arising on (27) (23)
derivatives
Closing net CDS liabilities held at (2,443) (1,223)
fair value as shown in balance sheet

Net gains on derivative instruments – forward currency contracts and CDS
consists of:

2025 2024
£’000 £’000
Movement in derivative holding gains 3,611 (3,296)
– forward currency contracts
Net realised gains on derivative 112 –
instruments – CDS
Movement in derivative holding gains (283) 156
– CDS
Premium paid – CDS(i) (917) –
Net realised gains on derivative 750 4,083
instruments – forward currency
contracts
Net gains on derivative instruments 3,273 943
– forward currency contracts and CDS

(i)Premiums paid on CDS are reflected within net gains on derivative instruments
and taken to capital. Prior to 1 January 2025 the expense element was reflected
within revenue in note 6.

14.Other Payables

Other payables are amounts which must be paid by the Company, and include
amounts owed to suppliers, such as the Manager and auditor, and any amounts due
to brokers for the purchase of investments.

2025 2024
£’000 £’000
Amounts due to brokers 5,215 –
Amounts payable relating to issue of new shares 3 1
Accruals 980 999
6,198 1,000

15.Securities sold under agreements to repurchase

2025 2024
£’000 £’000
Securities sold under agreements to repurchase 38,018 45,127

During the year, the Company entered into repo financing arrangements whereby
securities are sold under agreements to repurchase. Included within Investments
Held at Fair Value Through Profit and Loss (note 11) are securities under
agreements to repurchase which had a market value of £44,796,000 (2024:
£51,461,000). Further details are shown in note 2(f) and note19.3.

16.Stated Capital

The stated capital represents the total number of shares in issue and their
attributed value. Stated capital can be used for distributions under Jersey Law.

2025 2024
Number £’000 Number £’000
Allotted ordinary
shares of no par
value:
Brought forward 202,379,323 353,041 180,702,596 316,793
Net issue proceeds 34,950,000 60,098 21,676,727 36,762
Dividends paid from – (642) – (514)
stated capital
237,329,323 412,497 202,379,323 353,041

At 31 December 2025, the Company’s stated capital consisted of 237,329,323
ordinary shares of no par value, allotted and fully paid.

For the year to 31 December 2025, 34,950,000 (2024: 21,676,727) new ordinary
shares were issued to the Company’s corporate broker, Winterflood Securities
Limited, for onward transmission to their clients. These shares were issued in
tranches of various quantities throughout the year to satisfy secondary market
demand. The gross issue proceeds were £60,502,000 (2024: £36,946,000), at an
average price of 173.11p (2024: 170.44p), and the net proceeds after issue costs
were £60,098,000 (2024: £36,762,000). The net proceeds included an aggregate
amount of £232,000 (2024: £18,000) which arose from the income accrued component
of the net asset value at the date of issue of the new shares.

Subsequent to the year end and up to 27 March 2026 (being the latest practicable
date prior to the publication of this report) 20,122,588 ordinary shares were
issued at an average price of 173.78p.

17.Reserves

This note explains the different reserves attributable to shareholders. The
aggregate of the reserves and stated capital (see previous note) make up total
shareholders’ funds.

The capital reserve includes unrealised net gains and losses on investments held
at fair value through profit and loss, being the difference between cost and
market value at the balance sheet date, as well as gains and losses on disposal
of investments held at fair value through profit and loss. In addition, costs
allocated to capital are recognised in the capital reserve. The revenue reserve
shows the net revenue after payment of any dividend from the reserve. Both the
capital and revenue reserves are distributable.

18.Net Asset Value per Ordinary Share

The Company’s total net assets (total assets less total liabilities) are often
termed shareholders’ funds and are converted into net asset value per ordinary
share by dividing by the number of shares in issue.

The net asset value per share and the net asset values attributable at the year
end were as follows:

Net asset value Net assets
per ordinary share attributable
2025 2024 2025 2024
Pence Pence £’000 £’000
Ordinary shares 172.87 170.87 410,275 345,799

Net asset value per ordinary share is based on net assets at the year end and on
237,329,323 (2024: 202,379,323) ordinary shares, being the number of ordinary
shares in issue (excluding treasury) at the year end.

19.Risk Management: Financial Assets and Liabilities

Financial instruments comprise the Company’s investment portfolio and derivative
financial instruments (for the latter see note 13) as well as any cash,
borrowings (i.e. securities sold under agreements to repurchase otherwise known
as `repo financing’), other receivables and other payables. The following note
explains the risks that affect the Company’s financial instruments and looks at
the Company’s exposure to these various risks.

Risk Management Policies and Procedures

The Business Review details the Company’s approach to investment management
risks on page 13 and the accounting policies in note 2 explain the Company’s
valuation basis for investments and currency.

As an investment company, the Company invests in loan stocks, corporate bonds,
government stocks, preference shares and equities which are held for the long
-term in order to achieve the Company’s Investment Objective in accordance with
its Investment Policy. In pursuing these, the Company is exposed to a variety of
risks that could result in either a reduction in the Company’s net assets or a
reduction in the profits available for payment as dividends.

The Company’s principal financial instruments at risk comprise its investment
portfolio. Other financial instruments at risk include cash and cash
equivalents, borrowings (including repo financing), other receivables and other
payables that arise directly from the Company’s operations.

The Company may enter into derivative transactions, including credit default
swaps, for efficient portfolio management. Derivative instruments can be highly
volatile and expose investors to a high risk of loss. Where used to hedge risk
there is a risk that the return on a derivative does not exactly correlate to
the returns on the underlying investment, obligation or market sector being
hedged against. If there is an imperfect correlation, the Company may be exposed
to greater loss than if the derivative had not been entered into. During the
year the only derivatives entered into were forward currency contracts and
credit default swaps. As at the year end, credit default swaps with a market
value of £(2,443,000) were held by the Company (2024: £(1,223,000)).

These risks and the Directors’ approach to managing them are set out below, and
have not changed from those applied in the comparative year.

Risk management is an integral part of the investment management process. The
Manager controls risk by ensuring that the Company’s portfolio is appropriately
diversified and the portfolio managers actively monitor both the ratings and
liquidity of the fixed-interest securities taking into account the Company’s
financing requirements. In-depth and continual analysis of market and security
fundamentals give the portfolio managers the best possible understanding of the
risks associated with a particular security. The portfolio managers assess the
exposure to market risk when making each investment decision, and monitor the
overall level of market risk on the whole of the portfolio on an ongoing basis.

High-yield fixed-interest securities are subject to a variety of risks,
including credit risk (note 19.3).

The day to day management of the investment activities, borrowings and hedging
of the Company has been delegated to the Manager, and is the responsibility of
the portfolio managers to whom the Board has given discretion to operate within
set guidelines. Any proposed variation outside those guidelines is referred to
the Board and the guidelines themselves are reviewed at every board meeting.

19.1Market Risk

Market risk arises from changes in the fair value or future cash flows of a
financial instrument. Market risk comprises three types of risk: currency risk
(note 19.1.1), interest rate risk (note 19.1.2) and other price risk (note
19.1.3).

19.1.1Currency Risk

The Company has assets, liabilities and income which are denominated in
currencies other than sterling and movements in exchange rates will affect the
sterling value of those items.

Management of the Currency Risk

The Board meets at least quarterly to assess risk and review investment
performance. The portfolio managers monitor the Company’s exposure to foreign
currencies on adaily basis and exposure is reviewed by Directors at each Board
meeting. The Company may use forward currency contracts to mitigate currency
risk. In addition, non-sterling credit default swaps will either mitigate or
increase currency risk depending on whether the Company has sold or bought the
credit default swap as well as exchange movements. Repo financing is matched to
the currency of the underlying assets, which minimises currency risk on the
movement of exchange rates affecting the underlying investments. Non-sterling
investments that are not pledged under repo financing can be hedged using
forward currency contracts. All borrowings and derivative contracts are limited
to currencies and amounts commensurate with asset exposure to those currencies.

Income denominated in foreign currencies is converted to sterling on receipt.
The Company does not use financial instruments to mitigate the currency exposure
in the period between the time that income is included in the financial
statements and its receipt.

Currency Exposure

The following table shows the fair values of the Company’s monetary items that
have foreign currency exposure at 31December. Where the Company’s investments
(which are not monetary items) are priced in a foreign currency, they have been
included separately in the analysis to show the overall level of exposure.

US
Euro Dollar
£’000 £’000
31 December 2025
Investments at fair value through profit
or loss that are monetary items
(fixed and floating interest) 128,645 66,355
Forward currency contracts (92,958) (69,411)
Other receivables (due from brokers and 5,828 1,494
dividends)
Cash and cash equivalents 2,081 715
Derivative liabilities held at fair (2,443) –
value through profit or loss
Other payables (due to brokers and (133) –
accruals)
Securities sold under agreement to (34,939) –
repurchase
Foreign currency exposure on net 6,081 (847)
monetary items
Investments at fair value through profit 1,060 1,551
or loss (preference shares and equities)
Total net foreign currency 7,141 704

US
Euro Dollar
£’000 £’000
31 December 2024
Investments at fair value through profit
or loss that are monetary items
(fixed and floating interest) 90,634 82,395
Forward currency contracts (40,357) (78,983)
Other receivables (due from brokers and 3,606 1,406
dividends)
Cash and cash equivalents 5,623 1,147
Derivative liabilities held at fair (1,223) –
value through profit or loss
Other payables (due to brokers and (243) –
accruals)
Securities sold under agreement to (45,127) –
repurchase
Foreign currency exposure on net 12,913 5,965
monetary items
Investments at fair value through profit 2,795 1,678
or loss (preference shares and equities)
Total net foreign currency 15,708 7,643

The above may not be representative of the exposure to risk during the year
reported because the levels of monetary foreign currency exposure may change
significantly throughout the year.

Currency Sensitivity

The effect on the Statement of Comprehensive Income and the net asset value that
changes in exchange rates have on the Company’s financial assets and liabilities
is based on the following currencies. These changes have been calculated by
reference to the volatility of exchange rates during the period using the
standard deviation of currency fluctuations against the mean.

2025 2024
£/Euro ±1.9% ±1.2%
£/US Dollar ±3.0% ±1.7%

The following sensitivity analysis is based on the Company’s monetary foreign
currency financial instruments held at the balance sheet date, taking account of
any forward foreign exchange contracts that offset the effects of changes in
currency exchange rates, and the income receivable in foreign currency in the
year.

If sterling had strengthened by the changes in exchange rates shown above, this
would have had the following effect:

US
Euro Dollar
£’000 £’000
2025
Effect on Statement of Comprehensive
Income – profit/(loss) after taxation
Revenue loss (198) (170)
Capital loss (22) 12
Total loss after taxation for the (220) (158)
year
Effect on net asset value -0.1% 0.0%

If sterling had weakened by the same amounts, the effect would have been the
converse.

US
Euro Dollar
£’000 £’000
2024
Effect on Statement of Comprehensive
Income – profit/(loss) after taxation
Revenue loss (89) (103)
Capital loss (140) (104)
Total loss after taxation for the (229) (207)
year
Effect on net asset value -0.1% -0.1%

If sterling had weakened by the same amounts, the effect would have been the
converse.

In the opinion of the Directors, the above sensitivity analysis is not
representative of the year as a whole, since the level of exposure changes
frequently as part of the currency risk management process of the Company.

19.1.2Interest Rate Risk

The Company is exposed to interest rate risk in a number of ways. Movements in
interest rates may affect the fair value of fixed-interest rate securities,
income receivable on cash deposits and floating rate securities, and interest
payable on variable rate borrowings, including repo financing. Interest rate
risk is related above all to long-term financial instruments.

Whilst a significant proportion of the portfolio at both current and prior
financial year ends contains securities designated as floating rate, many of
these securities include a fixed interest rate period resulting in a more
predictable income stream than their technical designation would suggest.

Management of Interest Rate Risk

The possible effects on fair value and cash flows that could arise as a result
of changes in interest rates are taken into account as part of the portfolio
management and borrowings processes of the Manager. The Board reviews on a
regular basis the investment portfolio and borrowings. This encompasses the
valuation of fixed-interest and floating rate securities.

When the Company has cash balances, they are held in variable rate bank accounts
yielding rates of interest dependent on the base rate of the Custodian, the Bank
of New York Mellon (International) Limited. Holdings in Invesco Liquidity Funds
plc – Sterling are subject to interest rate changes.

The Company has available repo financing arrangements it can use to finance
investment activity, details of which are shown in notes 7 and 15. The Company
uses these at levels approved and monitored by the Board.

Interest Rate Exposure

The following table shows the Company’s exposure to interest rate risk at the
balance sheet date arising from its monetary financial assets and liabilities.

Within More than
one year one year Total
£’000 £’000 £’000
2025
Exposure to floating interest
rates:
Investments held at fair value 1,008 202,375 203,383
through profit or loss
Cash and cash equivalents(i) 21,232 – 21,232
Margin held at brokers 5,141 – 5,141
(including collateral pledged
on CDS)
27,381 202,375 229,756
Exposure to fixed interest
rates:
Investments held at fair value 7,375 201,675 209,050
through profit or loss
Derivatives held at fair value – (2,443) (2,443)
through profit or loss
Securities sold under (38,018) – (38,018)
agreements to repurchase
(30,643) 199,232 168,589
Net exposure to interest rates (3,262) 401,607 398,345
Within More than
one year one year Total
£’000 £’000 £’000
2024
Exposure to floating interest
rates:
Investments held at fair value – 164,673 164,673
through profit or loss
Cash and cash equivalents(i) 8,153 – 8,153
Margin held at brokers 2,783 – 2,783
(including collateral pledged
on CDS)
10,936 164,673 175,609
Exposure to fixed interest
rates:
Investments held at fair value 1,509 199,749 201,258
through profit or loss
Derivatives held at fair value – (1,223) (1,223)
through profit or loss
Securities sold under (45,127) – (45,127)
agreements to repurchase
(43,618) 198,526 154,908
Net exposure to interest rates (32,682) 363,199 330,517

(i)Includes £16,118,000 (2024: £250,000) held in Invesco Liquidity Fund plc –
Sterling.

The nominal interest rates on the investments at fair value through profit or
loss are shown in the portfolio list on pages24 to 31. The weighted average
effective interest rate on these investments is 7.9% (2024: 7.6%). The weighted
average effective interest rate on cash and cash equivalents is 3.21% (2024:
4.07%).

Interest Rate Sensitivity

The following table illustrates the sensitivity of the profit or loss after
taxation for the year to a 3.25% (2024: 3.25%) increase in interest rates in
regard to the Company’s financial assets and financial liabilities. As future
changes cannot be estimated with any degree of certainty, the sensitivity
analysis is based on the Company’s financial instruments held at the balance
sheet date, with all other variables held constant.

2025 2024
£’000 £’000
Effect on Statement of
Comprehensive Income – profit
after taxation
Revenue profit 857 355
Capital loss (52,169) (47,570)
Total loss after taxation for the (51,312) (47,215)
year
Effect on NAV per ordinary share (25.4)p (23.3p)

If interest rates had decreased by 3.25% (2024: 3.25%), this would have had an
equal and opposite effect.

The above exposure and sensitivity analysis are not representative of the year
as a whole, since the level of exposure changes frequently as borrowings, which
are predominantly from repo financing arrangements, can vary throughout the
year.

19.1.3Other Price Risk

Other price risk includes changes in market prices, other than those arising
from currency risk or interest rate risk, which may affect the value of the
investment portfolio, whether by factors specific to an individual investment or
its issuer, or by factors affecting the wider market.

Management of Other Price Risk

It is the portfolio managers’ responsibility to manage the portfolio and
borrowings in accordance with the investment objective and policy, and in
accordance with the investment policy guidelines set by the Board. The Board
manages the market price risks inherent in the investment portfolio by meeting
regularly to monitor on a formal basis compliance with these. The Board also
reviews investment performance. Because the Company’s portfolio is the result of
the portfolio managers’ investment process, performance may not closely
correlate with the markets in which the Company invests.

The Company’s exposure to other changes in market prices at 31 December on its
investments is shown in the fair value hierarchy table on pages 70 and 71.

Concentration of Exposure to Other Price Risks

The Company’s investment portfolio is not concentrated in any single country of
domicile, however, it is recognised that an investment’s country of domicile or
listing does not necessarily equate to its exposure to the economic conditions
in that country.

Other Price Risk Sensitivity

Excluding fixed interest securities and convertibles, at the year end the
Company held other investments of £7,781,000 (2024: £11,032,000). The effect of
a 10% increase or decrease in the fair values of these investments (including
any exposure through derivatives) on the profit after taxation for the year is
£778,000 (2024: £1,103,000). This level of change is considered to be reasonably
possible based on the observation of market conditions during the financial
year.

19.2Liquidity Risk

This is the risk that the Company may encounter difficulty in meeting its
obligations associated with financial liabilities i.e. when realising assets or
raising/replacing repo financing to meet financial commitments. A lack of
liquidity in the portfolio may make it difficult for the Company to realise
assets at or near their purported value in the event of a forced sale.

Management of Liquidity Risk

Liquidity risk is not viewed by the Directors as a significant risk because the
majority of the Company’s assets comprise readily realisable securities,
although a lack of liquidity in non-investment grade securities may make it
difficult to rebalance the Company’s investment portfolio as and when the
portfolio managers believe it would be advantageous to do so. On a daily basis
the portfolio managers ascertain the Company’s cash and borrowing requirements
by reviewing future cash flows arising from purchases and sales of investments,
interest and dividend receipts, expenses and dividend payments, and available
financing (including repo financing).

Liquidity Risk Exposure

The contractual maturities of the financial liabilities at 31 December, based on
the earliest date on which payment can be required, was as follows:

2025 2024
Less More Less than More
than
three than one three than one
months year Total months year Total
£’000 £’000 £’000 £’000 £’000 £’000
Amounts due to 5,215 – 5,215 – – –
brokers (note 14)
Accruals and amounts
payable relating to
issue of new shares 983 – 983 1,000 – 1,000
(note 14)
Derivative financial
instruments – payable
(note 13) 24 2,443 2,467 2,321 1,223 3,544
Securities sold under
agreements to
repurchase (note 15) 38,018 – 38,018 45,127 – 45,127
44,240 2,443 46,683 48,448 1,223 49,671

19.3Credit Risk

Credit risk is the risk that the failure of the counterparty to a transaction to
discharge its obligation under that transaction could result in a loss to the
Company. The Company’s principal credit risk is the risk of default on the non
-investment grade debt. The Company’s other main credit risk arises from the
repo financing arrangements whereby, if a counterparty failed to sell the
required assets to the Company on the repurchase date, the Company would be left
with the claim against the defaulting counterparty for the stock and, if
applicable, any margin held by the counterparty and not returned.

At the year end 57.7% (2024: 64.5%) of the Company’s portfolio consisted of non
-investment grade securities. To the extent that the Company invests in non
-investment grade securities, the Company may realise a higher current yield
than the yield offered by investment grade securities. On the other hand,
investments in such securities involve a greater volatility of price and a
greater risk of default by the issuers of such securities, with consequent loss
of interest payments and principal. Non-investment grade securities are likely
to be subject to greater uncertainties from exposure to adverse conditions and
will be speculative with respect to an issuer’s capacity to meet interest
payments and repay principal in accordance with its obligations.

Investment grade and non-investment grade securities totalled 87.7% (2024:
91.2%) of the portfolio at the year end. Adverse changes in the financial
position of an issuer of such high-yield fixed-interest securities or in general
economic conditions may impair the ability of the issuer to make payments of
principal and/or interest or may cause the liquidation or insolvency of an
issuer.

The portfolio may be adversely affected if the Company’s custodian suffers
insolvency or other financial difficulties. The appointment of a depositary has
substantially lessened this risk. The Board reviews the custodian’s annual
controls report and the Manager’s management of the relationship with the
custodian.

Management of and Exposure to Credit Risk

Almost all of the Company’s assets are subject to credit risk. Where the
portfolio managers make an investment in a bond, corporate or otherwise, the
credit rating of the issuer is also considered when assessing the risk of
defaults. Investments in bonds are across a variety of industrial sectors and
geographical markets to avoid concentration of credit risk. Counterparties for
derivative transactions are also a source of credit risk. Transactions involving
derivatives are entered into only with banks whose credit ratings are taken into
account to minimise default risk. The credit ratings of the derivatives
counterparties range from Aa3 through to Baa1. In addition, the Company may use
credit default swaps to offset the credit risk of the portfolio. At the year
end, credit default swaps with a market value of £(2,443,000) were held by the
Company (2024: £(1,223,000)).

Details of the Company’s investments, including their credit ratings, are shown
below. Credit risk for transactions involving derivatives and equity investments
is minimised as the Company only uses approved counterparties.

2025 2024

% of Cumulative % of Cumulative
Rating Portfolio Total % Portfolio Total %
Investment Grade:
AAA 0.2 0.2 – –
AA+ 0.2 0.4 0.2 0.2
AA 1.5 1.9 2.6 2.8
A+ 0.3 2.2 0.2 3.0
A – 2.2 0.1 3.1
BBB+ 2.2 4.4 0.6 3.7
BBB 17.4 21.8 19.0 22.7
BBB- 8.2 30.0 4.0 26.7
Non-investment Grade:
BB+ 9.1 39.1 7.5 34.2
BB 10.4 49.5 15.4 49.6
BB- 8.7 58.2 13.6 63.2
B+ 7.4 65.6 5.5 68.7
B 12.0 77.6 14.1 82.8
B- 5.7 83.3 4.9 87.7
CCC+ 2.2 85.5 0.7 88.4
CCC 2.2 87.7 0.7 89.1
CC – 87.7 2.1 91.2
NR (including equity and CDS) 12.3 100.0 8.8 100.0
100.0 100.0
Summary of Analysis
Investment Grade 30.0 26.7
Non-investment Grade 57.7 64.5
NR (including equity and CDS) 12.3 8.8
Total 100.0 100.0

NR: not rated.

The Company manages the credit risk inherent in repo financing by only dealing
with good quality counterparties whose credit-standing is reviewed periodically
by the Manager. There is amaximum limit allowed with any one counterparty, and
the repo entered into must have a maturity tenor of three months or less. The
Company has exposure to credit risk on securities pledged under repo financing
held, with 4 counterparties, as follows (2024: 3 counterparties):

2025 2024
Market
Market
value of Net
value of Net
Amounts securities credit Amounts
securities credit
borrowed pledged exposure borrowed
pledged exposure
under under to under
under to
repo repo counter repo repo
counter
financing financing party financing
financing party
Counterparty Rating Location £’000 £’000 £’000 £’000
£’000 £’000
Barclays A1/A+ UK 3,573 4,201 628 – –
–
BNP UK A1/A+ UK 21,678 25,393 3,715 35,991
40,440 4,449
Morgan A1/A- UK 6,444 7,576 1,132 4,852
5,977 1,125
Stanley
HSBC A1/A+ UK 6,323 7,626 1,303 4,284
5,044 760
38,018 44,796 6,778 45,127
51,461 6,334
Net credit 1.7% 1.8
exposure
as % of net
assets

2025 2024
Receivable/ Cash Receivable/
Cash
collateral
collateral
Counterparty (payable) pledged/ Counterparty (payable)
pledged/
for for
country of derivatives (received) country of derivatives
(received)
Name of incorporation £’000 £’000 incorporation £’000
£’000
counterparty
Bank Of United States (2,443) 3,289 United States (1,223)
2,021
America

Cash balances are held with approved deposit takers only and are limited to a
maximum of 4% of the Company’s net asset value with any one deposit taker.
Balances held with Invesco Liquidity Funds plc, a triple-A rated money market
fund, are limited to a maximum of 10% of the Company’s net asset value. At the
balance sheet date the Company had £5.11 million (2024: £7.90million) held at
the custodian and £16.12 million held in Invesco Liquidity Funds plc – Sterling
(2024: £0.25 million).

There are no financial assets that are past due or impaired at the year end
(2024: none).

Fair Values of Financial Assets and Financial Liabilities

Financial assets are either carried in the balance sheet at their fair value
(investments and derivatives), or the balance sheet amount is a reasonable
approximation of fair value (due from brokers, dividends receivable, accrued
income, due to brokers, accruals and cash).

Financial liabilities are carried at amortised cost except for derivatives,
which as stated above are carried at fair value.

20.Classification Under Fair Value Hierarchy

The valuation techniques used by the Company are explained in the accounting
policies note 2(c). The table that follows sets out the fair value of the
financial instruments. The three levels set out in IFRS7 hierarchy follow:

Level 1 – The unadjusted quoted price in an active market for identical assets
or liabilities that the entity can access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or liability, either
directly or indirectly.

Level 3 – Inputs are unobservable (i.e. for which market data is unavailable)
for the asset or liability.

Categorisation within the hierarchy is determined on the basis of the lowest
level input that is significant to the fair value measurement of each relevant
asset/liability.

Normally investments would be valued using stock market active prices, with
investments disclosed as Level 1 and this is the case for the quoted equity
investments that the Company holds. However, the majority of the Company’s
investments are non-equity investments. Evaluated prices from a third party
pricing vendor are used to price these securities, together with a price
comparison made to secondary and tertiary evaluated third party sources.
Evaluated prices are in turn based on a variety of sources including broker
quotes and benchmarks. As a result, the Company’s non-equity investments have
been shown as Level2 – recognising that the fair values of these investments are
not as visible as quoted equity investments and their higher inherent pricing
risk. However, this does not mean that the fair values shown in the portfolio
valuation are not achievable at point of sale.

Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
2025
Financial assets designated at fair value
through profit or loss:
Quoted Investments:
-Fixed interest securities(i) – 338,116 1,332 339,448
-Convertibles – 64,695 – 64,695
-Government – 8,290 – 8,290
-Preference 2,991 – 3,654 6,645
-Equities 55 135 946 1,136
Derivative financial instruments:
-Currency hedges – 1,705 – 1,705
-Credit default swaps – (2,443) – (2,443)
Total for financial assets 3,046 410,498 5,932 419,476

A reconciliation of the fair value of Level 3 is set out below.

2025
£’000
Opening fair value 7,420
Transfers from Level 2 to Level 3(ii) 5
Purchases at cost 308
Sales
– proceeds (629)
– net realised losses (1,433)
Movement in holding gains/(losses) 261
Closing fair value of Level 3 5,932

(i)Fixed interest securities include both fixed and floating rate securities.
The directors consider the floating rate securities held by the Company to be
fixed in nature due to their characteristics, including a predictable income
stream.

(ii)Frigoglass Common Stock was reclassified from Level 2 to Level 3 of the fair
value hierarchy during the year. The transfer reflects reduced market
observability of key valuation inputs, resulting in the fair value measurement
now relying on significant unobservable inputs.

Level 3 investments are investments for which inputs are unobservable (i.e. for
which market data is unavailable). The Level 3 investments in the portfolio and
their respective values at the year end were Haleon 9.5% Preference £3,654,000
(2024: £3,661,000), Frigoglass 11% PIK 27 Mar 2026 £1,145,000 (2024: £969,000),
Frigoglass 0% 27 Mar 2028 £187,000 (2024: £nil), Frigoglass Common Stock £5,000
(2024: £5,000 shown as Level 2), Codere A1 Shares £639,000 (2024: £2,132,000)
and Codere A2 Shares £302,000 (2024: £658,000). Haleon 9.5% Preference price is
based on a single private indicative broker quote with no publicly observable
market price available, therefore as the price is unobservable this investment
has been classified as Level 3. Frigoglass 11% PIK 27 Mar 2026, Frigoglass 0% 27
Mar 2028: judgement involved assessing the seniority of this security (regarded
as “Super Senior” in relation to the other Frigoglass traded debt securities)
which would be a key consideration should the company fail, with a resultant
higher price level compared to comparable Frigoglass traded debt securities,
further justified by its short-term maturity. The Codere A1 and A2 securities,
which were taken on as part of a second restructuring where the Portfolio
Manager agreed to participate in short-term financing, are priced based on
private indicative broker quotes as no publicly observable market price is
currently available for these securities. Given the restricted nature of these
quotes, being generally unobservable, that trading may not be visible due to
trading taking place on the OTC market, a cautious judgement was applied, taking
the lowest bid quote available.

Any non-actively traded investments are reviewed relative to appropriate
supporting evidence. The Board reviews detailed portfolio valuations on a
regular basis throughout the year and receives confirmation from the Manager
that the pricing basis is appropriate and in line with relevant accounting
standards as adopted by the Company.

The categorisation of an investment within the hierarchy is based upon the
pricing transparency of the investment and does not necessarily correspond to
the Directors’ perceived risk of that investment.

Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
2024
Financial assets designated at fair value
through profit or loss:
Quoted Investments:
-Fixed interest securities(i) – 289,607 969 290,576
-Convertibles – 64,897 – 64,897
-Government – 10,458 – 10,458
-Preference 4,513 – 3,661 8,174
-Equities 63 5 2,790 2,858
Derivative financial instruments:
-Currency hedges – (1,906) – (1,906)
-Credit default swaps – (1,223) – (1,223)
Total for financial assets 4,576 361,838 7,420 373,834

A reconciliation of the fair value of Level 3 is set out below.

2024
£’000
Opening fair value –
Securities resulting from restructure 6,913
Purchases at cost 3,694
Movement in holding gains/(losses) (3,187)
Closing fair value of Level 3 7,420

21.Capital Management

The Company’s capital, or equity, is represented by its net assets which are
managed to achieve the Company’s investment objective set out on page 11.

The main risks to the Company’s investments are shown in the Business Review
under the `Principal and Emerging Risks and Uncertainties’ section on pages 14
and 15. These also explain that the Company is able to gear and that gearing
will amplify the effect on equity of changes in the value of the portfolio.

The Board can also manage the capital structure directly since it has taken the
powers, which it is seeking to renew, to issue and buy-back shares and it also
determines dividend payments.

The Board regularly monitors the level of borrowing used by the Company and has
imposed limits within which borrowings should be managed.

Total equity at 31 December 2025, the composition of which is shown on the
balance sheet on page 54, was £410,275,000 (2024: £345,799,000).

22.Contingencies, Guarantees and Financial Commitments

Liabilities the Company is committed to honour but which are dependent on a
future circumstance or event occurring would be disclosed in this note if any
existed.

There were no contingencies, guarantees or other financial commitments of the
Company as at 31 December 2025 (2024: nil).

23.Related Party Transactions and Transactions with Manager

A related party is a company or individual who has direct or indirect control or
who has significant influence over the Company.

Under IFRS Accounting Standards as adopted by the EU, the Company has identified
the Directors and their dependents as related parties. Directors fees paid have
been disclosed in the Directors’ Remuneration Report on pages 43 and 44 with
additional disclosure in note 6. Full details of Directors’ interests are set
out in the Directors’ Remuneration Report on page 44. No other related parties
have been identified.

Invesco Fund Managers Limited and Invesco Asset Management Limited, both of
which are wholly owned subsidiaries of Invesco Limited, provided investment
management and administration services to the Company. Invesco Limited or its
subsidiaries are not considered related parties as they do not have direct or
indirect control nor significant influence over the Company. Details of the
services and fees are disclosed in the Business Review and management fees
payable are shown in note 5.

24.Post Balance Sheet Events

Any significant events that occurred after the end of the reporting period but
before the signing of the balance sheet will be shown here.

There was a successful placing and Winterflood Retail Access Platform (`WRAP’)
retail offer, announced on 29January 2026 raising total proceeds (net of
commission) of £24,780,000. The Company has issued a total of 14,372,588 new
ordinary shares of no par value in the capital of the Company at a price of
173.28p per New Share, representing a 0.75% premium to the cum-income NAV per
Share as at 10 February 2026, being the last published NAV per Share prior to
the close of the Placing and the WRAP Retail Offer. 7,710,707 New Shares were
issued pursuant to the Placing and 6,661,881 New Shares were issued pursuant to
the WRAP Retail Offer.

This annual financial report announcement is not the Company’s statutory
accounts.The statutory accounts for the period ended 31 December 2025 have been
audited and approved but are not yet filed.They received an audit report which
is unqualified and does not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying the report.

The audited annual financial report will be posted to shareholders
shortly.Copies may be obtained during normal business hours from the Company’s
Registered Office, JTC Fund Solutions (Jersey) Limited, PO Box 1075, 28
Esplanade, St Helier, Jersey JE4 2QP or the Manager’s website via the directory
found at the following link:www.invesco.co.uk/bips.The Annual General Meeting of
the Company will be held at 9.30am on 17 June 2026 at the Company’s Registered
Office.
A copy of the annual financial report will besubmitted shortly to the National
Storage Mechanism (“NSM”) and will be available for inspection at the NSM, which
is situated athttps://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Claire Brazenall

JTC Fund Solutions (Jersey) Limited

Company Secretary

Telephone: 01534 700000

31 March 2026

LEI: 549300JLX6ELWUZXCX14

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