Hwsi Realisation Share Discussion Threads

[spectoacc] 23/3/2020 16:24

Today's RNS excellent in the current circumstances - nearly half the market cap?

[scburbs] 19/2/2020 22:18

Should have served protective notice sooner, but definitely good to see active progress here.

[spectoacc] 17/2/2020 13:56

Not many trades but a healthy twitch of the corpse.

[williamcooper104] 11/2/2020 09:47

Yep - my analogy only works if the assets are actually good assets Dodgy borrower dodgy assets doesn't work Possible they've been over prudent - but not going to take a punt on this one even though the short duration of the loans is helpful

[spectoacc] 11/2/2020 09:16

@William - they've written off 100% of the two default loans tho, so "asset backed" may be a misnomer.

Still - fail to see how we'll get back less than current s/p, and hopefully nearer (current) 81p NAV.

[williamcooper104] 11/2/2020 09:07

It's an asset backed loan - plenty of decent loans have been written to dodgy borrowers with good assets (it's of course not ideal but if you want to get a high return....)

[spectoacc] 11/2/2020 08:45

Missed the RNS's yesterday.

"Further to the announcement on 9 December 2019 the Board of Hadrian's Wall Secured Investments Limited (the "Company") has concluded its strategic review of the options available to the Company. The Board has determined that the Company should be put into managed wind-down with cash returned to shareholders in a timely and efficient manner."

NAV down to 81p, with another small provision BUT the proviso that the provision could get much larger.

The single piece of good news - longest-maturing loan is late 2023, average duration just 1.9 years.

That compares to eg SQN where the average is nearer 9 years.

So hopefully our money coming back before too long, first payment in 2nd half of the year. But a lot depends on recovery from the gone-wrong loans, and the "trying to raise more cash" one.

Still - would be a struggle to receive back less than current s/p.

[cc2014] 05/2/2020 16:16

I didn't get that far SpectoAcc.

I got as far as they had lent equipment to Dawnus (UK Constrution who went bust) and although HWSL managed to get the equipment back so claim no loss that was enough for me.

I keep up to date with UK Construction and anyone lending to Dawnus was lending either in the knowledge they were close to going bust or was incompetent.


My notes in the Arenesis, Entrade, BOFL,BPFL mess, suggest I think the fund manager was not appreciating the risk. My notes aren't that clear reading back though but as I said as I already losing interest in looking any deeper.

I moved on as it wasn't worth my time. I have enough high risk debt and don't want much more. Others may have a different risk profile than me. The remaining loans may be good or they may not but I have no faith in the manager.


Edit: Sorry to hear Lanardian. I'm afraid although Shares carries lots of very useful insight, I'm not sure they are any better as a stock-picker than a pin.

[spectoacc] 05/2/2020 16:08

@Lanardian - you won't be alone. But I do think it's "cheap" down here, so far below NAV and discounting a great deal. Can't say I want to load up mind!

[lanarkian] 05/2/2020 16:04

I invested in this following a recommendation by Shares magazine. Big mistake.

[spectoacc] 05/2/2020 15:44

I think there's value but agree re high-yield corporate lenders - a glut of them, a plethora of issues, and all going wrong without even a recession/depression/financial crisis.


In their (slight) defence, plenty has gone wrong and been worked through - SQN has dealt with a few already, Snoozebox I think, one AD already, and they'd claim Suniva, where it's all gone in their favour tho with no payout yet.

Problems seem to arise when the assets they're secured on are basically useless. Eg if AD is finished as a viable business model due to an increase in feedstock costs, what value an AD plant?

Generally, where things do go wrong, they get even higher yields - or else lose the lot.

Neither SQN nor HWSL look like they'll continue.

The one thing I don't recall on HWSL, and you may have found out - what's their average duration? On SQN ords it's a preposterous c.8 years.

(Many are claiming to be looking for different managers/possibly sell loan books, but what manager is untarnished? And who on earth would buy the loans?).

[cc2014] 05/2/2020 15:33

I looked at this one last week, but not for very long once I looked at some of the outcomes to date. The issues on these super high yield "fixed interest" investment trusts go on and on.

It seems plenty of money has been thrown capital at these type of IT's but only 2-3 years after the investments (and in some cases less) things are going wrong.

Is the NAV right, who knows? When they've lent money to a company and they say an equity raise is required to pay it back who knows what value they have it at in the books and who would want to invest in an equity raise just to pay off debt. Possibly I could find out with enough research but I can't be bothered.

If there's money here to be made I'll leave it for someone else. (I suspect there might be but the opportunity cost of money if goes into run-off might well negate that).

[spectoacc] 31/1/2020 13:29

"The Board is continuing its strategic review of the options available to it as announced on 9 December 2019, and anticipates being in a position to provide a further update in the New Year. This exercise will include a review of the ongoing role of Hadrian's Wall Capital Limited, with the overall objective of maximising Shareholder value. "

That was 17th December. Today is the last day of January. "New year"?

Had they planned to switch the manager to SQN I wonder?

Agree re possible length of time of run-off, certainly years not months, but the written-down NAV is c.82p, I fancy 50.5p is a reasonable price.

To say these corporate loan-ers are struggling atm is an understatement - SSIP likely to wind up, SQN/X facing a lost continuation vote next Nov, HWSL on its way out.

Imagine if we'd had a recession...

[williamcooper104] 31/1/2020 13:12

Run off likely to be a v v long time - infra loans/assets not usually short/medium tenor Also would have thought was management preferred course of action as fees will run on and on

[chucko1] 31/1/2020 11:31

Is the loan book anywhere to inspect? Not investigated this one yet. Seems worth the time down at this price.

[spectoacc] 31/1/2020 08:46

Inching down towards an irresistible level - but who understands the loan book sufficiently to take a punt?

From over 6 weeks ago:

"The Board has asked Hadrian's Wall Capital Limited, the Company's investment adviser (the "Investment Adviser"), to look at the possible options for realising value from the Company's portfolio. These options might include sales of individual investment assets, mainly structured as loans and leases, or running off the portfolio in accordance with the existing terms of the investments or a combination of both. The Board recognises that the illiquid nature of the Company's investment assets means it could take some time to realise value from the portfolio. "

Last NAV 82p, fair to see no one believes it but at 50p? How long will run-off take, if that's the likely option? (I think it is - no one's buying HWSL's loans IMO).

Edit - seemed to have convinced myself, bought a token few more at 50.5p.

[acquisitor] 13/1/2020 16:27

I would like to take a look at the accounts, to see how much the managers are taking. It could be like Woodford. Not sure why I care, as I'm watching this from a distance with no thoughts about getting involved.

Similarly, Funding Circle served a whole lot of reality on a spooked market. The model shows that clients go through the sausage machine in about two years and the ones who stay the full term are the dodgy ones.

[spectoacc] 13/1/2020 15:30

Thought same when I read it BUT still doesn't justify the discount, even if the whole lot got written off (& they've provided for some of it).

Shows the dubious business model of all these lenders tho - "You owe the bank £1m, you've got a problem. Owe it £100m, the bank's got a problem".

Which was it who had to keep bailing out Snoozebox? SQN maybe?

But - still - I think a winding-up HWSL is worth more than this.

[hugepants] 13/1/2020 12:17

Don't like the sound of this much. Given what's just happened to one major loan I don't think Id be giving this lot the benefit of the doubt.

"The Company announced on 27 June 2019 that one of the Company's borrowers was in the process of undertaking an equity raise or company sale. This is progressing, and it is hoped that it will conclude in the first quarter of 2020, which should ensure full repayment of the loan at its face value of GBP13 million, plus accrued interest of approximately GBP1 million, together with an early repayment fee such that it repays at more than face value. The Investment Adviser believes it more likely than not that the equity raise or company sale will conclude in the anticipated timeframe but, in the event that it does not, it is possible that the borrower might request the Company to provide additional capital for working capital purposes. Given the inherent uncertainty connected with any company sale or fund raise, the IFRS 9 general loss reserve has been increased from GBP1.3 million to GBP2 million (the increase being equivalent to 0.49 pence per Ordinary Share). Whilst the indicated valuations of the portfolio company support a full recovery, and the timeframe appears achievable, the borrower has limited liquidity and consequently a delay in the capital raise could expose the Company to the risk of further material loss. The Board continues to monitor this situation closely given the significance of this loan in the overall position of the Company's loan portfolio"

[spectoacc] 12/1/2020 16:09

I've noted before with P2P, SQN, HWSL, FCH's IT, & others - they've effectively come a cropper even without a recession! Or a depression. Or another financial crisis.

There's a whole generation growing up knowing nothing but ever-rising house prices, chronically low interest rates, and bailed-out stock markets, with no recessions/depressions/crises.

Will certainly be interesting at some point...

(But I still say enough is in the HWSL price already :) )

[spectoacc] 11/1/2020 21:05

Certainly the loans that have gone wrong seem to have gone very wrong, whatever they say about possible recoveries - but in their defence, they've written off the entire loan against NAV.

I struggled to believe there's many more like that in there. But I'm also not (yet) buying more.

[williamcooper104] 11/1/2020 16:04

All the security in the world doesn't make a bad loan good Security is of itself little value It's what's the security is secured on that counts Secured and guaranteed are often misused/misunderstood