Icg-longbow Senior Secur... Share Discussion Threads

[jonwig] 17/11/2014 14:42

mad - received, thanks, and replied a few minutes ago. Fuller reply later.

[mad foetus] 17/11/2014 14:28

Thanks Jonwig - have tried again. I was interpreting it phonetically the first few times - too clever (or stupid) by half!

[jonwig] 17/11/2014 14:22

Hi mad - no worries, try this:

[mad foetus] 17/11/2014 13:00

many thanks skyship, have sent you an email directly.
Jonwig - I have struggled with your email address. Will try other variants but obviously my grey matter is not what it once was!

[skyship] 14/11/2014 13:30

MF - sending you a secure message soon - should you not have used before you'll find it at the top-left hand corner of the Monitor screen...beneath the ADVFN logo.

[mad foetus] 14/11/2014 13:12

Thanks Jon, have your address, will drop you a line.

[mad foetus] 14/11/2014 12:05

Hi jon,
You crop up on a lot of threads that I am interested in. If you don't mind me asking, what sort of annual return do you aim for across your portfolio and what do you generally manage to achieve? I am looking for steady growth without too many surprises and would value knowing what others who seem to operate in the same investment universe are aiming for.

My money was managed by a third party until about a year ago and so I'm relatively new at investing sensibly (I've been having reckless punts for years though!). I'm aiming for around 10% with a balance of property, infrastructure and share based collectives, though I need to introduce some PE and possibly debt.

[jonwig] 14/11/2014 11:55

They go into some detail about the re-deployment in the July 2014 fact sheet (page 5) which just about coincides with the H1 results:

It is anticipated that the aggregate prepayment pro
ceeds discussed above (£2.1million) will be redeployed
within the existing loan portfolio to finance value
enhancing capital expenditure.
The 10 loans in the
portfolio have a weighted coupon of 7.39% and a projected IRR
of 8.41%

[tiltonboy] 14/11/2014 11:35

They will probably return capital to shareholders, and the dividend will be reduced in absolute terms, but the yield will remain the same on the smaller base.

[jonwig] 14/11/2014 11:29

Ptolemy - they raised "New capital" in April via a share placing. They see no prospect of further capital raisings in the foreseeable future.

However, they have managed to recycle some existing capital via some of their loan repayments (probably because they were amortisation loans rather than bullet) and intend re-deploying it as the opportunity arises. (Naturally, either that or return it to us shareholders!)

I think that clarifies their dividend statement, maybe?

[grahamburn] 14/11/2014 11:01

Think the answer lies in two different words - "deploy" and "redeploy".

[ptolemy] 14/11/2014 10:50

Been looking at this one. Could anyone reconcile these two statements, a paragraph apart in the recent update:

"we do not currently foresee the opportunity to deploy any further new capital at levels which would be accretive to investors"

"We are actively looking at possibilities for redeploying this capital and I look forward to being able to report to you further on this in due course."

They also state that the dividend is maintainable, but with capital being returned to them and (according to the quote above) with no foreseeable opportunity to reinvest, just how will they manage to maintain the divi?

[skyship] 14/11/2014 09:21

YES - bought in just under 2weeks ago @ 103.85p; a small allocation to a slow-burner.

I quite like yesterday's pop above the 104p parapet. Technically looks as though we might anticipate some small capital gain to add to the income.

[tiltonboy] 13/11/2014 16:07

Back to sleep for 6 months!

[badtime] 13/11/2014 15:27

Ok...just checking

[badtime] 13/11/2014 13:41

Anyone here? :)

[jonwig] 28/4/2014 06:31

Their results to Jan 2014 are out.
They tell us, more than once:

On 25 April 2014, the Directors declared
a dividend in respect of the quarter ended
31 January 2014 of 1.25 pence
per Ordinary Share.

If "declare" means issue a statement, I certainly can't find it - I'm looking for ex and pay dates.

Incidentally, they tell us (pdf p5):

a weighted average original loan term of 5.2 years

which may answer the point in post #8.

[jonwig] 16/4/2014 05:58

Interesting point - another senior loan company [HSLE, though not property oriented] classifies its loans as 'A' (amortising) and 'B' (bullet). The vast majority are 'B'. Also, as loans mature, it is returning capital.

This may need to be the path such as LBOW, SWEF take. On the other hand, as interest rates rise, loan rates are less likely to fall?

[cerrito] 15/4/2014 22:12

I have looked at this; I take Investec's point that the risk/reward ratio is attractive at the moment.
What concerns me is how much longer will we be able to get these attractive deals. For all our sakes and the health of the UK economy I hope that the lending market loosens up over the next few years which would mean that when these loans run off then the rates that can be obtained will be much lower ie the market conditions of today are not representative of what they will be in the coming years.
In their last IMS they suggest that the loan life is 5.2 years and the recent York Best Western Loan has a Dec 18 maturity-what I do not know from the RNS is if these loans have a bullet maturity or are repaying in instalments ie what is the average life of the whole loan portfolio.

[davebowler] 10/4/2014 09:03

Investec Insights

¢ Today's announcement is excellent news and takes LBOW to substantially fully-invested, and more-or-less within the time-frame set out at launch (12 months). This is in contrast with SWEF which has struggled to deploy the capital it raised at launch. We understand the property-lending space remains competitive – and we prefer the regional UK exposure the LBOW team offer, rather than a London-centric approach.

¢ The underlying loan metrics mean the company's target return of a 6% pa dividend should be more than fully met going forwards. Net of fees and expenses, we believe a run-to-maturity IRR of 7.2% pa looks achievable. We think ICG Longbow have now demonstrated they are amongst the market leaders in UK Commercial Property Senior Secured Lending.

¢ We continue to like the property debt space and think LBOW highlights the very attractive risk / reward profile experienced managers can offer to investors right at the top of the capital structure with low LTVs. (In all cases, LBOW's loans are given the senior secured position and the average portfolio LTV is 61%, with 160% interest coverage ratio.)

¢ We note the potential tenth investment opportunity and look forward to an announcement on it (in the near future. We also expect the company's maiden set of final results soon.

¢ Looking at the other funds within the property debt space – which, to reiterate, we main bullish on – LBOW offers the purest senior-loan exposure but we also believe RECI's more diverse strategy of bond and loan exposure offers investors excellent returns; a 12 month dividend yield of 6.1% with the shares trading around par. This is a much more attractive proposition, in our view, than SWEF which is currently 71% committed and trades at a premium of 3.4% and yields 3% (although this should increase when the fund becomes fully invested).

[davebowler] 17/3/2014 10:41

Liberum;
ICG Longbow (NR)

95% invested

Event

LBOW has committed to a £10m loan to Lanos (York) Ltd secured by a first charge on the Best Western York Monkbar Hotel. The facility has a maturity date of 31 December 2018. Part of the facility will be used to fund a refurbishment and 27 bedroom extension to the hotel.

The deal is LBOW's ninth transaction with total commitments to date of £97.3m (94.9% of available capital). The average coupon and IRR on the portfolio is 7.3% and 8.4% pa respectively. The portfolio has a weighted average LTV of 62% and interest cover ratio of 1.6x.

Liberum view

The completion of this loan has taken slightly longer than expected with management guidance previously indicating the fund would be 95% invested by the middle of January 2014. We estimate recurring earnings of 1.5p for the year to January 2014 compared to an original target of 4-5p in year 1 at the time of the IPO.

LBOW has the highest rating amongst the real estate debt funds (4.8% premium vs. weighted average 2.0% premium for peers) which we regard as unwarranted given the fund's track record to date.