Ejf Inv. Zdp 25 Discussion Threads

[davebowler] 21/6/2024 08:13

Ordinary share research by Liberum is very encouraging for backing payout next year

See EFJI thread.

[davebowler] 03/10/2023 08:52

I'm rattled by the situation of Inland Homes Zeros so am sceptical but remain a holder of these.Their GRY to 2025 is 11% p.a.

[trustman] 13/9/2023 10:35

Thanks for this Dave.
I have nibbled at EJF Zeros because I like this increasingly rare capital category without knowing that much about US CDOs but relieved to see a stabilisation of US regional banks.
Slightly unsettling to see the gentle price drift which must be offering a pretty decent yield to redemption now with good cover.
Do you feel CDOs in general offer value at the moment?
TIA

[davebowler] 27/7/2023 08:47

Liberum-
PacWest/Banc of California combination a good outcome
Analyst: Shonil Chande

Mkt Cap £66m | Share price 108.0p | Prem/(disc) -33.3% | Div yield 9.9%

Event

A definitive agreement on an all-stock merger between Banc of California and PacWest Banking was signed yesterday. As a part of the deal, Warburg Pincus and Centerbridge Partners are to invest $400m to obtain c.20% of the combined entity and warrants to acquire more shares.

EJF Investments’ combined exposure to PacWest amounts to less than 4.5% of the June 2023 NAV, on a look-through basis.

Liberum view

PacWest’s combination with a stronger bank is a good development for EJFI, alleviating the potential for a longer period of distress for PacWest. Compared to earlier instances of US banking consolidation this year, relating to First Republic, SVB, and Signature Bank, which followed regulatory intervention, the PacWest/Banc of California deal is an open bank deal.

The long-term trend consolidation trend within US has seen the banking sector decline from c.16k banks before the Global Financial Crisis, to c.4k banks today. The underlying collateral within EJFI’s securitisation portfolio is primarily issued by US community banks, which typically have more diversified sources of revenue compared to regional banks, where the issues earlier this year concentrated. The consolidation trend is expected to continue, incentivized by the Fed, with the pace dependant on the wider economy. Consolidation is an important source of returns to EJFI’s from its investments in CDO equity tranches where the underlying collateral is bank-issued debt. There is a significant pull-to-part effect when deals close.

[cc2014] 21/2/2023 10:31

I'm here. I've got enough of these and won't be subscribing.

[davebowler] 21/2/2023 10:05

Liberum;
Proposed tap issue of 2025 ZDP shares

Event

EJF Investments has announced a proposed tap issue of its 2025 ZDP shares under the existing placing programme. Proceeds from the raise will be used to take advantage of attractive investment opportunities that have been identified by the manager.

The key terms of the placing are as follows:

Price: issue price of 119.78p (in line with the accrued capital entitlement)
Yield-to-maturity: price represents a GRY of 7.0% (based on 140p final capital entitlement in June 2025)
Asset cover: estimated current gross asset cover of 5.6x on redemption (c.5.1x assuming further 2m ZDPs are issued)
Maximum size: under the existing investment policy, a maximum of c.11.2m new ZDPs can be issued (c.7m existing ZDP shares)
EJF's ordinary shares performed incredibly well in 2022, delivering a c.14% NAV total return, despite the challenging market conditions. The portfolio continues to generate attractive income in line with expectations and is well insulated from the broader economic uncertainty. The ZDPs are very well covered and have continued to benefit from the ordinary shares' growing NAV.

Given the strong cover and underlying asset performance, we view the c.330bps spread over 2-year UK Gilts as very attractive. EJF0s have the third highest cover of the existing ZDPs in issue and offer a higher GRY than NBPS and PGHZ.

[davebowler] 19/2/2021 09:30

Anybody there?!

[davebowler] 22/6/2020 14:08

New issue today