Burford 24 Discussion Threads

[stewpot3] 31/8/2019 13:58

I cannot see a situation where this company default on the bonds as I wrote on the main share board. I am seriously considering buying a large tranche at present as they are an absolute bargain at these levels. Just looking at various likely scenarios in the near future before committing. I would hold to maturity assuming no change.

[the oak tree] 31/8/2019 11:43

I don't know that, but I do know these bonds are very cheap.

Obviously assumes the company survives but its been a while since the short raid and feels like its business as normal now.

Expect a rerating of the bonds once the next set of accounts are published.

[stewpot3] 31/8/2019 09:53

I think Burford may be a target for a private equity group. Does anyone happen to know if there is a change of control covenant in place?

[cc2014] 09/8/2019 10:12

I sold my remaining BUR3 last week at 101.77 which was lucky. The rest I'd been reducing since January as I'd got that feeling in the pit of my stomach that something just wasn't quite right after reading everything I could find.

For about half an hour there was the opportunity to buy back at 58p 2 days ago representing about 15% yield off the top of my head. Too much risk for me.

I can't see how BUR can raise new capital now. They may say they can but I don't think it will be that easy. After all they are already raising it through retail bonds (and private investors) rather than the wholesale market. Which means whilst they can support the cases in transit they won't be able to take on many new ones until those in transit complete as they will need the cash flow to feed the interest payments. I haven't run a cash flow projection to see how much headroom they will have but I can't be bothered now. Just too much risk to my capital

If they are good as they say they are there's no problem here but I can't sufficiently unravel it and I'm not prepared to lose my capital.

The FD not being an accountant is a big red flag for me. Someone has written this on a BB but I've not seen evidence. Having four accountants in 4 years who have resigned and then appointing the wife of the founder is odd.

I don't think this is a scam as Muddy Waters seem to imply but as I read it the accounting treatments are aggressive and portrayed in a way as to make things look the best they possibly can and then some. Some transparency over director salaries would be helpful too.

Finally the directors are talking about share buybacks. I think that says it all really. To so so they would have to buy back shares and then issue bonds. Given the share yield is 1.25% and bonds are going to cost them 6%+ it's the opposite of earnings enhancing. All a bit odd when they admit in their RNS they will need more cash. Sounds to me like directors thrashing around trying to support the share price rather than thinking about whether it is actually appropriate.

Another retail bond that's become investable for me unless things change dramatically.

I'm sure the bonds are safe enough for now but I like to sleep soundly...

[my retirement fund] 09/8/2019 09:07

Cracking value if you think its a Bona fide business. If being the key word! Sadly this has been relegated to the same ilk as ERO1 for me.

[tightfist] 08/8/2019 11:38

BUR1 is 90.1p to Buy

[tightfist] 08/8/2019 11:37

I find it IMO tempting too and picked up some BUR2 yesterday mid-morning. Unfortunately BUR2 has now just ticked-up......

[the oak tree] 08/8/2019 10:22

Fixed Income Stock just needs a solvent company:

We'll know more once the company issues its report, but surely if we think its SOLVENT and its a big IF.......then the fixed interest stock must be a BUY at current levels?

You can buy the 5% maturing in 2026 for £81.
The 6.5% maturing in 2022 at £85. Not long to wait!

IMHO
(Im talking my own book up here!)

[my retirement fund] 07/8/2019 11:14

See the Muddy Walters youtube video about the fake win uncovered...

[my retirement fund] 07/8/2019 11:09

They lost one big expensive case but booked it in advance as a win then spent 4 years trying to square the accounts. How many more fake wins are there and where an earth has all that money been going theve been raising again and again? Looks like a house of cards!

[edwardt] 07/8/2019 10:33

not sure on that. it has no assets because it is lawyers litigating finance - ergo they do not have plant and machinery etc. it is niche for sure- i doubt very much it is insolvent given their good hit rate on cases. we will see..

[jaws6] 16/5/2016 15:04

Thanks for new thread. still doing catch up with BUR 1 near 103

[jonwig] 06/5/2016 18:46

A price now of 115 would have lifetime GRY of 4%.
A price in 4 years time of 109 would have a rest-of-life GRY of approx. 4%.
How do you make it 130?

However, you have a valid point: any risk of redemption would prevent the bond price from gaining much above par.
Under what circumstances would they want to redeem? If they had sufficiently high profits and were unable todeploy them profitably enough, or their profits had a bad run and the coupon was a drag - two opposing scenarios.

[a0002577] 06/5/2016 17:27

"Optional early redemption by Burford Capital PLC: The Bonds may be redeemed (i.e. repaid) early (in whole but not in part), at any time, if Burford Capital PLC chooses to do so, at 100% of their principal amount"

does not sit well with "and these bonds will trade at a GRY of around 4%" - implying a price of £1.30 or so with the risk they will be bought back for £1.00.

[jonwig] 03/5/2016 17:30

Burford needed more capital for expansion. They told me the banks wouldn't touch them, and raising new equity was a poor bet as their shares were (they thought) much undervalued. Hence retail bonds. This one has been very well received, and 6% must represent cheap capital for them, given their margins.

At some point, they will be able to raise bank or debt finance for a fraction of this rate, and these bonds will trade at a GRY of around 4%.

That's my view, anyway, as a long term holder of the ords.

[speedsgh] 03/5/2016 17:20

Burford Capital 6.125% 26/10/2024 retail bond

Information Booklet -

Prospectus -

Fixed Income Investor: Bond of the Week (12/4/16) -

Interest payments: Interest will be paid in two instalments a year on 26 April and 26 October in each year, starting on 26 October 2016 up to and including the Maturity Date (26 October 2024).

Term of the Bonds: 8.5 years

Optional early redemption by Burford Capital PLC: The Bonds may be redeemed (i.e. repaid) early (in whole but not in part), at any time, if Burford Capital PLC chooses to do so, at 100% of their principal amount or, if higher, an amount calculated by reference to the then current yield of the United Kingdom Government Treasury Stock due 2024 plus a margin of 1.00%, together with any accrued interest. Investors in the Bonds should note this optional right is only available to Burford Capital PLC and not to investors in the Bonds.

[speedsgh] 03/5/2016 17:20

Burford Capital 6.125% 26/10/2024 retail bond

Information Booklet -

Prospectus -

Fixed Income Investor: Bond of the Week (12/4/16) -

Interest payments: Interest will be paid in two instalments a year on 26 April and 26 October in each year, starting on 26 October 2016 up to and including the Maturity Date (26 October 2024).

Term of the Bonds: 8.5 years

Optional early redemption by Burford Capital PLC: The Bonds may be redeemed (i.e. repaid) early (in whole but not in part), at any time, if Burford Capital PLC chooses to do so, at 100% of their principal amount or, if higher, an amount calculated by reference to the then current yield of the United Kingdom Government Treasury Stock due 2024 plus a margin of 1.00%, together with any accrued interest. Investors in the Bonds should note this optional right is only available to Burford Capital PLC and not to investors in the Bonds.