European Equity Tranche Income Share Discussion Threads

[arthur_lame_stocks] 12/8/2008 17:59

erstwhile

Where do you get your figures from?

[tiltonboy] 12/8/2008 12:58

The key is whether they can refinance at a decent rate.

[isa23] 12/8/2008 12:51

I hold so many of these if I add any further I may end up owning the company!! No topping up for me (except looking forward to divi re-investment) but with inflation coming down & rates soon following commodity prices lower this may be an attractive investment

[cerrito] 12/8/2008 10:57

Seriously looking at following the example of the Chairman and top up; it seems to me the prices discount a worst case scenario in terms of refinancing(though if I was the board I would cut the dividend completely so that borrowings can be cut) and Italian prepayments(and it was interesting to read in the July 23 RNS that prepayments have meant a E30m provision?.
Continues justifying close studying.

[isa23] 07/7/2008 08:26

Erst, my sympathies are still with those who sold at 14 because a few days later the price rose to 27p. Share price went up on no news, no volume, no nothing, just as it is going down (and up again as I'm writing) on no news, no volume etc. My point: as long as you know what you're buying into, have a long term horizon, and your investment is only a small part of a well-diversified portfolio, you shouldn't pay too much attention to price movements and certainly not be spooked by people talking down the share price for the benefit of their own pockets

[arthur_lame_stocks] 06/7/2008 15:11

EET claim that the underlying loans their CDO's are secured against are all prime rated and on modest LTV's, but then it turns out that in the case of the UK ones the issuer has been lying!

This is in interesting situation worthy of further research, although obviously very high risk.

The problems I can think of are: high financial gearing only secured for another 18 months, investments highly geared to default and recoverability after default (ie house prices), doubts over whether actual quality of assets is as good as issuers claim, no current market in assets so currently forced to hold.

On the plus side: very large discount to stated NAV, currently generating large amounts of cash relative to ev.

I think the thing with this is to have alook at the underlying issues these hold and see whether they look like good quality loans, they're claiming that they're mostly 60-80% LTVs and ~3 years maturity. If you think that they won't see high levels of default and that the LTV's are likely to provide for full recovery evem in a weak property market then this might be worth a punt.

It might be worth writing off the Spanish and UK investments as a start though and then concentrating on the rest.

[deswalker] 04/7/2008 08:59

I've got this on my monitor because the management at LDSG (which I hold) decided to buy 250k's worth at 26p. Not a good call :(

[cnx] 04/7/2008 03:13

no reports, no news, no bb comments yet down 40% in 6 weeks

anyone interested?

[isa23] 14/5/2008 08:21

That's what I said in my previous post. My sympathies to all those poor chaps who sold out at 14p

[cerrito] 13/5/2008 18:41

I do not have L2...does anyone with one have a feel for what is going on??I assume the forced sellers have left.

[isa23] 08/5/2008 13:36

I think the idea is to flush out the last remaining shaky hands. Soon every retail investor who'd wanted to sell will exit and share price could then move up. That's why you can now sell as many as 25000 shares in this illiquid market but can only buy 5000 shares online.
Too much debt and potential breach of covenant was my main worry. Now that the company is reducing debt (albeit at the expense of divi) I am happier than ever to hold. EET still generates a healthy income, and at current price yields 9.4%

[cerrito] 08/5/2008 12:54

I go on the basis that the company will rns anything newsworthy so more by luck than judgement have just caught up with the following May 1 announcement


I note the board's comment that in their view the situation is brighter than the sprice would indicate, even though I see another weakening today.
To me the decision to cut the dividend makes sense

[isa23] 29/4/2008 08:54

seems to be finally moving up. As they say, shares can go down as well as up!!!!!!

[ianbrewster] 31/3/2008 14:33

The 9% (and likely to rise) seems to tie in with the 10% figure that the co has used to re-value the Italian portfolio (from 1/2 year results).

[ianbrewster] 31/3/2008 14:31

Italian CPRs on rise but RMBS ratings unaffected following legal change - Fitch

MUMBAI (Thomson Financial) - Fitch Ratings has said Italian mortgage
prepayments, as measured by constant prepayment rates or CPRs, are on the rise
following the introduction of Law 40 in Jan. 2007, but said it does not expect
the change in CPRs to have an impact on the ratings of Italian Residential
Mortgage-Backed Securities.
"The present level and trend of the Italian CPR does not affect the ratings
currently assigned by Fitch to Italian RMBS, as they are still below the
increasing CPR stresses applied by Fitch in its quantitative analysis," the
rating agency said.
The average CPR of securitised Italian mortgage portfolios has jumped from
about 5.2 percent in Nov. 2006 to 9.0 percent in Nov. 2007 on an annualised
basis, following the introduction of the law.
Law 40, which was enacted during a period of increasing interest rates and
affordability pressures for floating-rate borrowers, significantly reduces the
taxes and notary fees for re-mortgages and eliminates prepayment penalties on
loans originated after Feb. 2007.
It also sets a cap on penalties that could be applied to existing loans,
despite existing contractual terms.
The law further facilitated 'loan portability', allowing borrowers to change
their lender more easily. The main barriers to borrower refinancing have
therefore been removed, resulting in catalysing competition for re-mortgaging
business in Italy.
CPRs are thus likely to increase further as more borrowers take advantage of
Law 40's provisions, Fitch said, but added that it expects they will stabilise
once the competition for the existing borrower base becomes less intense.

[cerrito] 30/3/2008 20:19

Yes ilancas there was no good news except to the extent that there was the absence of bad news of deterioration of the portfolio, though I agree that prepayments continue to be a cause for concern.
Got in too early..average price just below 29p but not looking to sell despite steady drift down....and indeed will soon look at buying more.
I appreciate their negotiating position with Citibank is at the moment very week and I have braced myself for them to have to pay the higher spread next year which ceteris paribus will mean a dividend reduction to Eo.5 pa...if my maths is correct.I also appreciate that as they themselves recognize their NAV calculations are more a matter of art rather than science.
That having been said my view is that all the above downers are in the price.

[ilancas] 27/3/2008 17:32

No good news in today's interims. I assume participants on this thread had the foresight to sell up before now.

[simon gordon] 13/3/2008 12:24

'More money has been lost reaching for yield than at the point of a gun.'

EET is another example of this truism.

Good fortune!

[ianbrewster] 13/3/2008 11:46

The problems at Carlyle Capital won't be helping either.

Carlyle's troubles have amplified fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further.

[cerrito] 12/3/2008 10:31

Today's announcement of further reduction by Investec explains recent price softening

[cerrito] 05/3/2008 10:55

In the QWIL conference call, an explanation as to why QWIL is not being hit by Italian prepayments like EET are.
EET have later tranches of the sestante deals whereby all prepayments go to senior bondholders wheras in the tranche that QWIL is in the first all prepayments remain in the pool.