Ing Uk Real Estate Income Trust Share Discussion Threads

[lord gnome] 15/5/2009 19:14

Good news indeed - better late in the day than not at all. Like Flying Pig, I have some concerns about the divi in the short term, but longer term, this now looks like a good investment and I hope for a rerating by the market. Having said that, there are plenty of other property investments trading at similar discounts to NAV, so i won't hold my breath.

[flying pig] 15/5/2009 19:10

Dividend may suffer if they need cash for repayment of bonds. Remains a good holding

[nickcduk] 15/5/2009 18:24

Excellent news today that the bond holders have approved the changes. An announcement on the dividend is due next week. Hopefully they will maintain the dividend. If they do so the yield works out around 15%. The headroom under the new LTV should be more than sufficient to protect itself against further falls in the market. I would expect a re-rating as IRET is considerably cheaper than its peer group.

[sleepy] 12/5/2009 15:35

ING UK Real Estate Income Trust Limited
(the "Company")

12 May 2009

Adjournment of Noteholder Meeting

At the direction of the noteholders, the noteholder meeting of the Company's
securitised loan facility convened for 2:00 pm today was adjourned to 4:00 pm on
15 May 2009 at the offices of Mayer Brown International LLP, 201 Bishopsgate,
London EC2M 3AF.

The Company will provide an update to shareholders following the noteholder
meeting.

For further information:

ING Real Estate Investment Management (UK) Limited
Michael Morris, 020 7767 5648, [e-mail]
Helen Stott, 020 7767 5648, [e-mail]

[flying pig] 18/4/2009 09:41

This has the air of a very done deal. No bond holder wants to have "in default" bonds and the continued AAA rating is key!

If you exclude the swap "value" the underlying property asset value is c57p per share.

[lord gnome] 17/4/2009 19:45

Trading update today. Gives NAV of 52p and this news on divis:

Dividends
The Board will consider the next quarterly dividend after the conclusion of the noteholder meeting. However, shareholders should be aware that whilst the Group remains in breach of the Facility's LTV Covenant or utilises cash resources held outside the Facility structure to remedy the LTV Covenant breach, the Board does not expect to pay dividends to shareholders.

Looks like the deal with noteholders is a done deal, so no need to panic there.

[qwazi] 07/4/2009 08:08

I doubt there's a screen price, you'd need to get a quote from a friendly bond dealer.

[kavnish] 06/4/2009 22:37

Anybody have an idea where we get pricing for these notes from, perhaps the trade is to buy these if they are sufficiently below par.

[skyship] 06/4/2009 14:39

ALAN - We've now got a thread on IGRE - they seem to have woken up slightly at last. Being an investment trust, what is needed there is a major share buyback programme - or better still, a wind-up date - anything to reduce that absurd 41% NAV discount! In the meantime the 8.4% yield is certainly attractive. Like you, that is now my largest holding

[nickcduk] 06/4/2009 14:25

Apologies for jumping the gun a little regarding covenants. I think they may need to bung them a further 1% on margin which wouldn't be the end of the world. Would be an extra 2m or so a year. I think they might want to even try and tough it through. They should be ok on covenant for the 1st quarter and I would second quarter IPD to be a lot better than Q1. A couple of disposals should keep them in check. Sector has had a strong rally today and IRET seems to be considerably behind it. Usually IFD and IRET trade around par but IFD has motored to 26p. Would expect the gap to narrow soon enough.

[qwazi] 06/4/2009 14:16

The announcement is issued by the securitisation vehicle (which is listed in Ireland) rather than by IRET itself. Since it would appear to be a non-material meeting (i.e. the covenants are not being amended), I assume that is the reason why IRET did not announce it.

[alanji] 06/4/2009 13:50

How did you find the announcement Nick?

Something very strange here. Searching on IRET does not produce the announcement. At the end it states:

"This announcement has been issued through the Companies Announcement Service of
the Irish Stock Exchange.
This information is provided by RNS
The company news service from the London Stock Exchange"

I would be selling now had I not already done so - albeit at a lower price

[qwazi] 05/4/2009 14:59

Thinking about it - what on earth is going on here? The company specifically stated:

---
Further to the announcement dated 24 February 2009 regarding a meeting of Noteholders of the Company's Securitised Loan Facility, the Company has received notice from the Note Trustee of an error on the voting instructions for the proxy votes.
---

But it would now appear (assuming I read the new notice of meeting correctly) that that excuse was complete BS -- as they are no longer proposing the change to the covenants previously disclosed.

Two questions arise from this:
(1) WTF are they doing proposing amendments to the securitisation without getting the majority of note holders to consent to it in advance, and
(2) Why are they talking about errors on the proxy instructions when it would appear that the much more critical reason is that the noteholders were going to vote it down???

Maybe there was an error on the voting form, but to quote that as the reason is simply disingenuous to the extreme.

Well, the truth will out anyway - they will obviously have to come up with new proposals if the noteholders aren't going to consent.

[qwazi] 05/4/2009 14:52

Nick - I'm not sure the vote is back on. I have extracted what I think are the relevant parts of the announcement below. I assume that the second extraordinary resolution was the one amending the covenants, and that is "subject to further consultation". I find it extremely remiss of the company not to keep shareholders informed of what is going on here. We should not have to be digging through securitisation documents to try and understand what is going on.


EXPLANATORY SCHEDULE

Part 1

Summary and explanation of the Amendment effected by the Amendment Document

The Borrower is seeking to amend the Borrower Bank Agreement to provide that the Minimum Short-Term Rating reflects S&P's current published criteria for counterparties in CMBS transactions. This allows the Borrower Account Bank to be A-1 rated rather than A-1+ rated, enabling the Borrower to maintain its account with National Westminster Bank PLC, the current Borrower Account Bank, and avoid the unnecessary cost and expense of moving the Borrower Account Bank as a result of the downgrade of the existing Borrower Account Bank.

Further clarification in relation to the proposed amendment as described above may be sought by contacting the Note Trustee at [e-mail].

......

Update Following Cancellation of Noteholder Meeting Dated 18 March 2009

On 24 February 2009 the Issuer proposed two extraordinary resolutions by a notice of Noteholder Meeting dated 18 March 2009, which meeting was subsequently cancelled pursuant to a notice dated 17 March 2009. The first extraordinary resolution is effectively re-issued by this notice. The second extraordinary resolution is subject to further consultation. As a Noteholder, you may participate in the further consultation of the second extraordinary resolution by providing evidence of your holding the Note Trustee at [e-mail], and the Note Trustee will forward the same to the Investment Manager who will then contact you.

...........

[nickcduk] 05/4/2009 11:48

Just doing a few quick calculations regarding current LTV.

18m of disposals in the quarter so far which have probably resulted in a loss of circa 1m since December NAV. Last reported property valuation was 436m so that leaves you with 418m of properties. Assume a 10% markdown for the quarter (I would guess that IRET will beat IPD returns so this is probably a bit conservative) and you get a figure of 376m.

Net assets (excluding swap liability) amounted to 224m at year end. Take off a million for the properties disposed of and it equates to 223m. Then take off 42m for the reduction in value of the rest of the properties and you end up with NAV of circa 181m.

181/376 gives you an LTV ratio of 52%, which is just above the 50% covenant level. As I expect I am being overly conservative on the portfolio return I think we could possibly be under that figure. Ive excluded the swap liability as it isn't used when calculating the LTV ratio for IRET.

If they get the new proposals voted through then IRET will have a fair amount of headroom to protect them from further market falls. Even on the above figures they would be able to withstand a further 14% fall in valuations. A few more small disposals would probably give them the flexibility for a further 20% falls. That should be more than enough to tide them through the trough. Should be enough to ensure dividends stay at 4p in the mean time.

[nickcduk] 05/4/2009 11:20

You have to be eagle eyed to pick out the announcement:-



Looking to seriously increase my already quite large position if its approved.

[skyship] 04/4/2009 11:41

NICK - "The vote is back on again" - wasn't aware of that, have I missed an RNS somewhere?

[nickcduk] 03/4/2009 17:44

The vote is back on again which suggests they didn't pull it because they didn't think it would pass. Todays disposals as well as the ones earlier in the first quarter should make the LTV borderline with covenants. Obviously not an ideal situation to be in but if they can get it relaxed then we should be ok. Not sure what the process is once a covenant is broken but hopefully common sense will prevail. We do have circa 15m in net profits per annum which could in the worst case scenario be used to reduce the outstanding debt and buy time with lenders. The property market does seem to be perking up a little as well which should allow a few more disposals to proceed.

Would expect the shares to move markedly if the lenders agree with new proposals. Fairly confident it will happen because they wouldn't be going through with it again if they weren't fairly sure it was going to go in their favour.

[chopshs] 23/3/2009 17:14

Been busy last few days and not keeping up. My reading of RNS from 18/03 is that the proposals would have been voted down, so they cancelled the vote.
They expect to issue another notice in due course... Can't be that difficult, surely? Do they mean ...after they have negotiated on the terms?

[skyship] 18/3/2009 15:33

A bit bloody inefficient of somebody!!!

[sleepy] 18/3/2009 13:38

What is going on???


ING UK Real Estate Income Trust Limited
("IRET" / "the Company")


18 March 2009


Announcement regarding Noteholder meeting


Further to the announcement dated 24 February 2009 regarding a meeting of
Noteholders of the Company's Securitised Loan Facility, the Company has received
notice from the Note Trustee of an error on the voting instructions for the
proxy votes.


As a result, the meeting, due to take place on 18 March 2009, has been
cancelled. The Company expects a further notice will be issued in due course.

[kavnish] 26/2/2009 09:35

This is a well timed move by the trust, i like to hope that the terms have been agreed already but not sure.

The pain may well be in a higher interest charge as well as a nonsense fee for agreeing to the covenant change.

if we get away with 100 bip increase in funding plus a 100 bip loan arangement fee . This stock should move nicely higher.

Only concern is would have liked to see ltv at 70% , but i guess this would have impacted the AAA covenants.

Lets see , fingers crossed for a good deal