Fair Oaks Income Investors - FAIR

Fair Oaks Income Investors - FAIR

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Fair Oaks Income Limited FAIR London Ordinary Share GG00BF00L342 2017 SHS NPV
  Price Change Price Change % Stock Price Last Trade
0.0025 0.39% 0.64 08:00:08
Open Price Low Price High Price Close Price Previous Close
0.64 0.64 0.6425 0.6375
more quote information »

Top Investor Posts

grahamg8: Dividend, yesssss. See post #126. In fact 2.2c in the quarter is higher than the historic 0.7c per month. Another jump in NAV bodes well for an share price rise when the markets open. Although down on capital over my 5 year holding, when the dividends are added back I am in the black, wow. Plus traded out at the end of 2016 and bought back in early 2018 for a little extra return. Overall not too unhappy with the way things have gone. Still disgruntled with the new share issue as I can't help feeling there was a bit of sculduggery in crashing the share price and then almost immediately bringing in new investors at a rock bottom price.
grahamg8: The new investors got a good deal. The existing investors were shafted.
rambutan2: This from SMIF's march commentary: Portfolio Commentary The portfolio looks to take advantage of liquidity premium in credit markets. The managers were not expecting a viral pandemic that would result in the complete evaporation of liquidity across all fixed income sectors. In addition, the gap lower across all bond sectors, in an indiscriminate fashion, had a material effect on the underlying NAV. The forced selling from ETF accounts and margin calls being breached from levered accounts created an unprecedented period as the ‘dash for cash’ left quality assets at depressed valuations. The managers did not capitulate but saw pockets of the market as being oversold, despite appreciating the high level of uncertainty that the pandemic had created. The managers presumed that the velocity and ferocity of the market decline could not continue for too long, and that it created a medium to long term opportunity to replenish the Fund. This was in complete contrast to earlier in the year when the managers were growing concerned about re- investment risk. As a result of this opportunity, and to satisfy investor demand, the Fund issued just over 20m new shares. Market sentiment gradually improved toward the end of the month as medium term buyers emerged to add credit at new enhanced values, although liquidity remains low as many market participants work from home. The managers very selectively added risk, though offers at the quoted levels were difficult to source, indicating an underlying supportive technical backdrop, despite the ongoing uncertainty. As would be expected credit indices posted negative returns across the board in March with the Coco index at -15.13%, Euro HY -13.21%, STG HY -13.19% and US HY -11.76%; CLO markets declines surpassed the vanilla markets as liquidity disappeared. The Fund returned -20.93% during the month. CLO was the biggest detractor from performance contributing -11.05%. Market Outlook and Strategy The managers continue to add selective credit at credit spread levels that could represent the best entry point in years, thereby adding quality yield that will benefit the Fund over the medium to longer term. The managers recognize the global economy is very much in the very early stages of recession, hence the focus will be on high quality credit from the most robust sectors. Default rates are likely to spike and downgrades will be frequent, so the more speculative end of the credit spectrum is likely to perform poorly and will be avoided, despite the high yields on offer.
cerrito: Thanks rambutan2 for your detective work here. I have just caught up with the Dryden webinar which I thought was very good and reccomend people listen to it. Interested in the comment that until last Friday at least there had been no forced sellers; not surprised that they commented more than once that the market had bifurcated between high and low grade;were bracing themselves for an increase in their CCC exposure due to downgrades. The way I heard it was that they went into this with 15%CCC and reckon this will peak at 25/37%; also increase in defaults which for the European book started out at zero and will peak they estimate at 6/7%...although not clear if this was a payment default or a technical one; bid/offer trading spreads on high quality was between 2 to 3 and low quality between 5 and 10-no surprise for me there. There will be a time to get back into FAIR-though as a sterling investor I need to be aware of cable. I think it will fall further,
rambutan2: Hunting for any info/insights, so signed up for this with no hassle: FAO all European Dryden CLO investors: PGIM will be recording and uploading a market update that all current Dryden CLO investors are invited to download and listen too. The webinar will be available Friday 3rd April at 10am. Please find attached the webinar registration link below. https://investegate.co.uk/dryden-48-euro-clo--irsh-/rns/european-dryden-clos---investor-update/202004011635424752I/
rambutan2: SMIF today: Company Update The credit market has endured significant volatility over the past month as market participants have reacted to the economic uncertainty brought about by the effects of the Covid-19 pandemic. Forced and indiscriminate selling has resulted in unprecedented volatility that in turn has created the opportunity to source assets that have been otherwise unavailable to investors for almost a decade. The higher yields available for selective credits in the current market have enabled the Board of Directors of the TwentyFour Select Monthly Income Fund to approve the issue of 20.9m new shares to meet specific investor demand. The estimated mark-to-market yield of the portfolio as at Close of Business 25th March 2020 is 13.01% based on NAV (gross, GBP hedged, current yield-to-worst). https://investegate.co.uk/twtyfr-selmth-inc-fd--smif-/prn/company-update/20200330155554PCB4D/
cerrito: https://www.telegraph.co.uk/business/2018/09/02/ticking-time-bomb-could-blow-financial-crisis/ Long article in today’s Sunday Telegraph on detiorating credit standards in the US loan market-and increase in cov lite loans caused by demand from investors with CLO funds. Cite figures that in 2012 24% of loans were cov lite and 2018 YTD 76% Quotes warnings from Moodys and IMF and comment that default stats and recovery rates will be far worse than what CLO issuers have been touting. Fair points and the key is and always has been the credit skills of the Managers.
cerrito: The Interims a worthwhile read. The main takeaway for me from the Chairman's statement was the importance of having control of the CLO's and a reminder of the v good default rate. The Manager's report a v good summary of the state of play of the loan markets; struck by comment that investors not being paid to take incremental credit risk with the premium for junk bonds over senior secured bank loans too small. I am in FA14(and CIFR) and have quite alot in VTA; as a £ based investor enjoying the current FX rates.
cerrito: Been through FAIR’s interims. Given the good monthly info, not all that much new but the following from the Manager’s Outlook Statement and is of interest Quote The commitment period of the Master Fund ended on the 12 June 2016 and the Company will soon commence making principal repayments to investors. Although the bulk of the principal distributions will be made from the second half of 2018 onwards when the Master Fund expects to call its CLO equity positions, it is expected that some principal distributions will be made from quarterly cash-flows received by the Company. For illustrative purposes only, a CLO equity investment which distributes c.20% cash-flow p.a. of which c.15% p.a. is income will generate c.5% p.a. of principal. Principal distributions may be accelerated if, for example, the Master Fund were to sell CLO mezzanine positions that have traded up significantly since their purchase. Unquote Noted in the Cash flow that distributions from the Master Fund in this H1 16 were $26m up from $6m the year before. Cash and Distribution Receivable were $13m at 30.6.16 compared to HI Dividends of $18m. Too bad they did not follow CIFU’s example and tell us the sensitivity to interest rates
webclick99: Reading the latest Fact sheet, the fund will receive a distribution in June and a substantial distribution in July. Investors can expect to begin receiving principal repayments later this year. Does anyone know how this will work given its principal being returned? Will the share price reduce by the amount of the distribution or are these in effect a special dividend, so the share price not affected?
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