T2 Income Fund Share Discussion Threads

[crawford] 16/9/2009 15:29

Thanks Aleman,
with such a large discount to assets, this could be viewed very positively with an uplift from here - even with the dilution.

[aleman] 16/9/2009 14:39

I'm pretty sure "including some existing shareholders" means large shareholders and not small PIs. Including small shareholders adds cost and time.

I'm happy as I suspect there is a chance to buy some assets at better values if they act quickly. This will generate cashflows needed to give the parent company more flexibility. I suspect traded debt markets are recovering and the process of tranferring cashflows from CLO to parent will get less cheap with time. More cashflow to the parent now means greater power to keep the CLO within its covenants so that cash to pay dividends keeps flowing. I do wonder what price the placing will be at but it doesn't look to be set yet. I'm guessing the dilution won't hit us too hard from here as the shares could well strengthen but I really don't know. I can just see value in the bigger picture of the CLO's cashflows being unlocked sooner.

[crawford] 16/9/2009 13:47

Aleman,
will PI's get a chance to take part in the placing? It doesn't look like it to me.

[aleman] 16/9/2009 12:34

2 RNSs today. First one says no defaults as yet so interest still accruing and that if the same results were achieved on October 2nd - not a foregone conclusion but not far away - the parent company would receive its interest payment and one hopes that means shareholders would get another dividend.

The 2nd RNS is to raise cash which can be used for opportunistic purchases of the CLO's debt where it becomes available and also to buy assets from the CLO to improve its test results. CLO debt notes are not traded much so this could be a bit hit and miss but should be profitable where it occurs. Currently, downgraded debt notes within the CLO can hit test results and its ability to pay out the interest to the parent so it is having to sell the poorest quality notes into the market at a loss and lose the high rates of interest they carry at market values. If the parent company had the cash to buy them instead, there is no capital loss and the interest payment still goes to shareholders and avoids any restrictions that might hold it within the CLO, making it available for any use, including dividend payments. £20m raised should generate a great deal of flexibility as the act of improving the CLO's asset mix so it can pay interest also generates independent assets for the parent company giving it new sources of cash generation.

Although the £20m placing may create some dilution, it generates the flexibility to unlock the substantial interest payments from the CLO and this looks like good news to me. On top of that, there is good news of the possibility that the CLO could meet tests leading to a Q3 dividend anyway, and the news that there have been no actual defaults on any notes despite credit rating downgrades. I think there is enough value here that I have topped up, although it is still only a relatively modest holding in my overall portfolio of investments.

[aleman] 11/9/2009 16:11

I'm back in for a few. This is an interesting piece of financial engineering. Clearly there is some risk from rising bad debts but the discount and extra profit from buying up its own debt seem to make up for it and there must be some confidence to reinstate the dividend. I can imagine it will come good in the end although I won't be buying too many.

[andrbea] 23/7/2009 07:50

this CLO mechanism of theirs seems to be providing a nice cushion from the credit crunch:

The quarterly results as of 2 July 2009 indicate that the CLO met all of the
covenant tests necessary for a full interest payment to be made to the Company,
and $2.4 million has been received from the trustee. The Board will make an
announcement of its intention with regard to its dividend policy before the end
of August at the same time as the Board releases the net asset value as at the
end of June.

[andrbea] 22/7/2009 09:32

60k (vol) buy (10.5k pounds)

[andrbea] 22/7/2009 08:08

lots of positives in the AGM statement:

As at the end of the 2Q 2009 the CLO met all of the covenant tests necessary for
a full interest payment to be made to the Company, and $2.4m has been received
from the trustee. Having received a full payment for the first time (on July 15,
2009) since the third quarter of 2008, the Board will make an announcement of
its intention with regard to its dividend policy before the end of August at the
same time as the Board releases the net asset value as at the end of June.

[dot com] 11/6/2009 15:45

Looking good for full recovery.

[future financier] 11/6/2009 11:43

True NAV c. 40p - discount for small IT status - say 32p. Discount for poor marketability - say 25p should be a fair price for these. Bought a few - but ripped off at 14.5p (never mind so long as my analysis correct). Agree about delayed buys.

[andrbea] 11/6/2009 11:09

60% up now

maybe the 2 sells are delayed buys

otherwise why the jump?

[andrbea] 10/6/2009 16:17

results yesterday

As of 31 December 2008, the Company had invested assets with a fair value of
approximately GBP126.6 million. The portfolio is comprised of variable rate
investments and, on a weighted average basis, carried a spread of approximately 406 basis points over LIBOR at year-end. The Company's Net Asset Value per Share as of 31 December 2008 was GBP1.25. For the year ended 31 December 2008 the Company recorded a profit, including the combination of net unrealized losses on assets and net unrealized gains on liabilities, of approximately GBP16.4 million.

[andrbea] 10/6/2009 16:11

In the last year T2 Income Fund Ltd.'s share price has ranged from 2.00p to 87.00p.

[andrbea] 10/6/2009 10:09

3 buys and a tick-up

[andrbea] 04/6/2009 07:56

awful spread still

green pre-market today

looking back:

125k in buys on June 2

maybe someone likes the new director appointment (June 1)?

or maybe it's the new director buying.

[andrbea] 24/2/2009 08:48

spread now 4 to 6

Last Friday it was 1 to 3

So someone who bought on Friday is in profit (at last)...


moving north on tiny quantities of stock

there was a 100k buy on Friday

[andrbea] 23/2/2009 11:09

last unknown trade could be a disguised buy IMO
they do this sometimes to mess up a solid wall of buys

[andrbea] 23/2/2009 09:35

spread awful
but was too when the rise began

Last Friday morning (before any buying), it was a spread of 1 to 3
Then 2 to 4
currently 3 to 5

[andrbea] 20/2/2009 15:30

12p in Jan 09
40p in nov 08
80p in Sept 08

[andrbea] 20/2/2009 15:26

NSAM upped its stake

agreed?