Uk Mortgages Share Discussion Threads

[rustle2] 25/3/2022 10:31

Gone through now

[future financier] 08/2/2022 11:50

Interesting - TFIF is (still) trading at a premium to NAV - so why has UKML dropped back to 78p when the indicative value of TFIF shares to be received is 83.5p? Maybe it was SteMis dumping his shares?!

[stemis] 08/2/2022 11:25

That's me out. TFIF wasn't really what I came for here but a satifactory conclusion to UKML's life. Can't argue with a 27.6% return in just under 15 months.

[boystown] 08/2/2022 11:24

Ah yes I see now thanks scburbs - have just read the RNS properly. Sorry for being the class dunce!

[scburbs] 08/2/2022 11:00

Agreed that is likely to be the main driver, but still looks better for UKML shareholders than a wind up, albeit TFIF share price could come under short term pressure if lots of UKML sellers.

[scburbs] 08/2/2022 10:55

Boystown,

That calculation is not correct as you won't get 1 TFIF share for 1 UKML share. The yield should be c. 5.5% per UKML share at 80p(using 112.8 TFIF NAV and 83.32 transaction price). In practice TFIF will probably pay a slightly higher dividend (last year 6.41p).

Calculation is (83.32/114.21*6)/80 (i.e. recalculate dividend based on reduced number of shares and then divide by share price).

[yieldsearch] 08/2/2022 10:31

agree with you re clearly in the managers interests too and that most likely the real reason.
selling junior piece of a rmbs securitisation will not take 3 years: hedge funds (cerberus, davidson kempner) and also large institutional investors (eg M&G, blackrock) have bought residential mortgage portfolios in the past (legacy stuff such as northern rock and others).

[boystown] 08/2/2022 10:28

Doesn't the yield also increase? It's 6p p.a. with TFIF, so an implied yield of 7.5% at 80p per UKML share - all being well, of course!

[scburbs] 08/2/2022 10:10

The company was to be wound up at the end of this year if it didn't trade at or above NAV (most of the improvements that they hoped would get the share price up to NAV already having been implemented). The managed wind up was expected to incur signficant costs and take 3 years!

In that context giving shareholders a near term potential exit likely above NAV (depending on TFIF share price) or the choice of a continuing investment in the merged fund seems sensible (albeit clearly in the mamagers interests too!). Certainly better than waiting for a protracted wind up!

[yieldsearch] 08/2/2022 09:54

leaving aside the price increase, not sure i like it.
ukml was a pure play on residential mortgage. tfif is a portfolio of debt instruments with longer duration.
not clear to me why both are merged, 2 different investment proposals

[playful] 08/2/2022 08:37

Im a happy sausage!

[future financier] 08/2/2022 08:22

Bang goes another of my "income" shares - but TFIF looks like a worthy successor.

[jdepp5] 30/1/2022 19:49

Seems a good safe haven in current markets given it is paying 5p div and was bid for last year. From my understanding not exposed to rates going up gradually, apart from on a default level of individual mortgage holders, which given the rise will likely be slow is not too much of a worry.
Also trading at a discount, where am i going wrong?

[stun12] 25/1/2022 15:54

The pricing of recent securitisations looks good for UKML's upcoming refinancing. Should provide another windfall. Barley Hill is due next month and priced at about +115bps - poorer quality deals are going through at nearer +80bps currently. Hopefully there won't be a swap charge this time. I never got an answer from them about why the Coventry BS deal which was called on its expected maturity incurred an unwind charge for the hedge.

[stun12] 20/1/2022 12:34

XD today. I was wondering why Google Finance showed it up a penny at 73.95p.

[playful] 08/12/2021 09:47

Here we go...

Another steady month of underlying asset growth as Keystone continued to complete further loans ahead of target, which helped the company
accrue additional income and grow. On this basis, the board have announced the intention to increase the quarterly dividend from 1.125p to
1.25p (equivalent to 5p per annum, up from 4.5p) for the three remaining quarters of the company’s financial year, with consideration of further
progression to be taken in the next financial year. This highlights the progress the company has made implementing the plans it set out at the
EGM at the end of 2020, and has fully implemented this year.

[playful] 08/12/2021 09:43

The October factsheet should be published on their website in 5 minutes. I have no idea why I need to chase them up on this but hey-ho.

[stemis] 19/11/2021 13:17

Good news re dividend



Considering this strong performance backdrop, and the positive outlook for
asset performance, it is the Board's intention to declare an increased dividend
of 1.25p per share in respect of the remaining three quarters of the Company's
financial year ending 30 June 2022. Additionally it is currently intended,
conditional on the Board's assessment of actual and prospective performance,
that further progression in the dividend per share will be possible in respect
of the Company's financial year ending 30 June 2023.

Current yield is 7.1%

[future financier] 17/11/2021 16:30

Now just need to get the share price up so that managements hands are not tied by the "wind down" clauses implemented last year!

SP could benefit from a transfer of funds from LLPC if/when these are re-purchased leaving shareholders looking for other stocks with FI characteristics.

[playful] 17/11/2021 16:18

All bodes well…

Notably, regardless of the above additional contributors to NAV performance this month, plus some other small sundries, the Company’s income continues to run at a rate well in excess of the 0.375 pence per share required to cover the monthly dividend equivalent.

[playful] 20/10/2021 16:17

Final (Q4) dividend
Ex date 21/10/21
Record date 22/10/21
Pay date 5/11/21
Amount 1.125p

[rambutan2] 30/8/2021 16:33

The UKML NAV per share was calculated for June 2021 month end at 77.79 pence
per share, an increase of 1.15 pence per share.

As highlighted in last month's NAV release commentary, this includes the final
two elements from the sales of the two Coventry portfolios; the share tender
discount realisation and the Expected Credit Loss (ECL) provision release, both
of which made a positive contribution to the NAV.

The uplift from the most recent share tender, contributed 0.20 pence per share
to the NAV, as referred to in last month's NAV commentary.

Furthermore, with the June NAV coinciding with Company's year-end, this also
included a recalculation of the ECL provision, which occurs semi-annually under
IFRS 9 accounting standards. This led to a 0.55 pence per share improvement in
the NAV, driven by a combination of the existing provision for the Coventry
portfolios being discharged following the portfolio sales plus the release of a
portion of the previous provision, subject to final audit, following a
recalibration of the modelled scenarios and weightings to reflect the improving
economic conditions.

The remainder of the positive monthly NAV movement came as a result of the
running income generated by the Company's underlying investments, net of a
minor adjustment from the semi-annual hedge effectiveness calibration.

The Company's remaining investments continue to perform in line with
expectations. More details will be available in the Company's next factsheet to
be published shortly.

[rambutan2] 30/8/2021 16:27

Brief video update. Manager upbeat:

[future financier] 09/7/2021 10:15

sounds like we have some people on this board who genuinely know what they are talking about!

How rare!

[yieldsearch] 09/7/2021 09:40

FF and Stun12: yes UKML is the retention piece of rmbs securitisation/ junior piece, and also pre securitisation, the warehouse line. it is a very leverage position: getting this yield from portfolio of resi mortgage can only obtained by leverage (just look at the cost of your mortage and calculate how much leverage you need to get to this..)

You need a number of residential mortgage loans to default and make a loss to start impact this. Historically default are linked to divorce rate and employment. My belief (i may be wrong) is that the UK government will do "whatever it takes" to maintain and prop up UK resi prices (stamp duty holiday, help to buy, cheap funding for banks through TLTRO, low capital adequacy, may be Miras eventually..) so really you are exposed to a macro risk.
Reci is comprising leverage position on mainly commercial properties. commercial properties are riskier than resi (just look at shopping centre and retail). so you are more exposed to single risk (one tenant not paying) or event risk ( a property development going bust)

greater risk RECI vs UKML, but there is a dvd premium
I hold both.