Gcp Asset Backed Income Share Discussion Threads

[cc2014] 13/12/2023 10:03

At the end of the day GABI will have fully paid down the RCF in Q1 2024.

And then what? Share buybacks I would have thought.

[2wild] 13/12/2023 09:47

Still on 30% discount to nav at 65 pence. With Firm Proposals due in 5 weeks, should have further to go, especially with UK 5 year gills falling below 3.85%

[cc2014] 13/12/2023 09:39

lol. Good point Chucko. How embarrassing. Too much going on this morning with GABI, GCP, TENT at it as well.

GCP another one that's undervalued although perhaps by not as much as GABI

[chucko1] 13/12/2023 09:27

Are you referring to GCP? This is not GABI's portfolio.

[cc2014] 13/12/2023 09:11

The portfolio has significantly transitioned away from property over the last couple of years. Only about 35% is now "property". 65% is focussed on the renewable sector.

It's now

Geothermal 1%
Solar 25%
PPP/PFI 24%
Supported Living 11%
Hydro 2%
Gas Peaking 1%
Biomass 9%
Electric Vehicles 1%
Wind 17%
Anaerobic Digestion 9%

[chucko1] 13/12/2023 08:39

On LTV, it is worth considering a few things here:

it is essentially an asset backed project lender, but there is certainly a large fraction of its portfolio which is deemed "property". They look at their risk through the lens of project and infrastructure finance, and so it is the analysis of cashflows which is their focal point/language.

However, if you go to page 60 of the 2022 annual report, they do cite an average LTV of c. 70%, so in line with (a little higher, in fact) RECI whose sole business is property lending.

It is the combination of management quality (as I always cite with RECI) and other risk analysis (and there will be substantial amounts of this) which dilutes any concerns I would have re. the LTV matter.

I do not mind what I see re. management and in any event, 56p to buy (as was a few weeks back) was far more than generous in rewarding me for those ever-present uncertainties.

Sold out of a few this morning as we have seen this movie on "strategic reviews" often on ITs with an initial oomph and then a mild thud. That said, the entirety of the announcement this morning is something rather more than just this, especially considering the previous statements they have made regarding the May 2024 AGM where the continuation vote was to be held and they are even now acting as though it is not going to continue. This is clear from all the language in the various reports published the past few months and the zero new money spent on lending together with the intention to remove the RCF with all due speed.

[speedsgh] 13/12/2023 08:30

They kept rather quiet about this...

"On 6 October 2023, the Board received a non-binding proposal from a US-listed investment company (the "Possible Offeror") to acquire the entire issued share capital of the Company. The proposal comprised a cash offer at a level of 68 pence per share in the Company, paired with an alternative pursuant to which shareholders could elect to receive US listed shares in the Possible Offeror for each share held in the Company, with an exchange ratio to be set at a point prior to any firm offer announcement to equate to a value of 76 pence per share. The proposal was unanimously rejected by the Board, following which on 27 November 2023 a second conditional and non-binding proposal comprising a cash offer at a level of 72 pence per share in the Company, paired with a share alternative offer at a level of 78 pence per share was received. The Board agreed to provide the Possible Offeror access to confirmatory due diligence. Prior to accessing such information, on 11 December 2023 the Possible Offeror notified the Company that it would be withdrawing its proposal."

[cc2014] 13/12/2023 08:29

Indeed. But what I'm struggling with most is why GABI is trading at 64p either before or after the announcement.

The NAV is 94p and most of the loans are short term making GABI a natural candidate to be wound up. I thought the market had already decided that was what it wanted.

It's difficult to price anything in this market but in my head even buying at 75p would give very reasonable scope to make money on this.

Perhaps I would say that though as it's one of my largest holdings and I've got a decent average entry price of 55p

[chucko1] 13/12/2023 07:58

Likely you will be chewing a long time on that announcement.

[spectoacc] 13/12/2023 07:08

Plenty to chew over this morning.

[williamcooper104] 12/12/2023 23:36

That and the loans to connected party were the two red flags for me I couldn't see any LTV info

[mwj1959] 12/12/2023 18:16

Is there any LTV related info available on the loans in the fund? RECI, for example, provides a detailed analysis of this? Without this information its difficult to make an informed investment decision, particularly when RE related concerns are elevated.

[chucko1] 29/11/2023 17:52

Indeed. I have quite a few at present, but once there is resolution regarding the continuation vote and the consequences of the outcome laid out, I can see a case to buy more in the event of a wind down.

For now, I am sitting collecting an 10.5% yield watching the warm-up band doing its thing.

[2wild] 29/11/2023 14:46

I'd rather price stay low so I can accumulate even more. One of my favourite places to reinvest profits .

[cc2014] 29/11/2023 14:08

I will be glad when the seller at 60p is finished. I sense he's slowing down as at least he's no longer always ripping off the volume at 60p instantly.

Indeed the share price began with a 6 for over an hour for part of this morning.

I hold no illusions that he's finished but the slower sell speed gives me some hope.

[speedsgh] 08/11/2023 13:15

Dividend Declaration -

The Board of GCP Asset Backed, which invests in asset backed loans, is pleased to announce a quarterly dividend in respect of the period from 1 July 2023 to 30 September 2023 of 1.58125 pence per ordinary share (the "Q3 Dividend").

The ordinary shares will go ex-dividend on 16 November 2023 and will be paid on 15 December 2023 to holders of ordinary shares recorded on the register as at close of business on 17 November 2023.

[panshanger1] 13/10/2023 13:56

Pretty unloved atm

[belgraviaboy] 18/9/2023 07:19

GABI merger off

[2wild] 11/8/2023 13:01

Combined entity Looks really interesting with reduced costs, repayments to expensive revolving credit agreement and large buybacks will increase NAV and hopefully Reduce discount.

[panshanger1] 11/8/2023 08:06

Proposed merger with GCP Infrastructure

[speedsgh] 25/7/2023 19:00

GCP Asset Backed Income flags more bad loans, but hires CIO -

[williamcooper104] 20/7/2023 14:20

That's true; not hard to find high yields now

[hugepants] 20/7/2023 14:19

Yes hold reci also. There's a few very large yielders about just now.

[williamcooper104] 20/7/2023 13:56

But for not a lot less yield you can get superior assets and management at RECI

[hugepants] 20/7/2023 13:47

Yes quite a lot of bad loans factored in at this yield and discount.