International Public Par... Share Discussion Threads

[pyufak] 28/4/2022 11:47

This is a repost of my comments / thinking on another site. I decided to buy this week just above 160 as I didn’t want to take allocation risk. Hoping for a strong result announced tomorrow.

Previous post:

INPP is raising funds at 159.5p - closes EoD 27th April; results 29th April. After watching HICL and this name for a while I decided to take the plunge today and bought as part of my income holdings. Here’s a few points why; I would be interested if others have any views on this name they wished to share.

hxxps://www.internationalpublicpartners ... aft_vf.pdf

1. Slide 5 & 7: Dividend is x1.1 covered; expected to grow at ~2.5% for both ‘22 and ‘23. This is better than HICL which is uncovered and static projection at the moment.

2. Slide 30 - discount trends - while discount rates have dropped by ~1% over the past decade, 30y interest rates (which I think is the appropriate metric given the asset base and matched fixed rate financing) have dropped substantially more. As such the relative constitution of the discount rate is a higher credit proportion vs. interest rate throughout the past decade. Therefore arguably as interest rates rise the existing discount rate has room to rebalance to a more historical mix of interest rate + credit proportions rather than head materially higher outright.

3. Slide 31, 32 & 33 - the key slides which got me across the line to buy the dip caused by this fund raising. This looks at the impact of inflation on their portfolio. Frankly their assumptions are way off what we look set to experience in ‘22 and ‘23. They assume central banks hit their long run inflation targets (2.5% in U.K. - their most important geography. That’s a fair enough assumption but what interests me is the portfolio impact of higher inflation when inflation overshoots - +1.8p if 200bp above (so 4.5%). Given it looks like the U.K. may have ‘22 inflation closer to 8 or 9% this could add almost 5.4p to the NAV; and more the longer inflation persists.

Putting this together I like the balance the investment brings - in that the portfolio appears to have a degree of inflation protection should higher inflation become entrenched or persistent. Conversely, if central banks react significantly on short term interest rates to bring inflation back to target I would argue 30y discount rates will be unchanged as if anything this would strengthen their inflation taming credibility.

[bountyhunter] 27/4/2022 16:41

500,000 buy at the close at 160.7208p with buys above the offer price comfortably excluding sells for the day bodes well.

[bountyhunter] 27/4/2022 15:53

True enough, I leave it until fairly close to the bell as well as you can't get your money back if you apply too soon and the price subsequently drops below the offer price. I expect to get all of these as likely to be less popular than SUPR.

[ec2] 27/4/2022 15:00

Indeed... I eventually submitted my application in PB at 13:40. It's something that has been ingrained into me over many years. I don't instruct on any corporate action until the deadline day.In case these go to a slight discount to the offer price in the days ahead I didn't go as full on here as I had originally planned.

[bountyhunter] 27/4/2022 13:20

Surely we're just about at the wire with only 40m left!

[ec2] 27/4/2022 12:39

I will leave this right down to the wire before I make my final decision. Following the HICL price very closely as IMO this gives a cleaner indication of how INPP would be performing if there was no offer taking place.

[williamcooper104] 27/4/2022 11:59

Same - PB but also bought in open market on basis that wouldn't get what wanted

[income investor] 27/4/2022 11:58

Took up Open Offer and applied significantly for Excess Allocation (through Interactive Investor). Interesting to see if get full Excess Allocation application!

[bountyhunter] 27/4/2022 10:24

Changed my mind in view of the significantly oversubscribed PB Supr offer and buying today in the market above the offer price, got my application in to PB with only hours left!
Anyone else?

[bountyhunter] 25/4/2022 19:14

I've decided against this in view of the deteriorating economic outlook and rising inflation - I was undecided but the unimpressive long term chart swung me to not participate in the offer now at just a tad below the current market price.

[apparition1] 25/4/2022 10:27

Certainly not worth doing a tail swallowing exercise to take up the rights like I was considering. I guess it's squeaky bum time alround with the markets as they are - just sit tight and do nothing on any share at the moment.

[bountyhunter] 25/4/2022 08:30

Getting close to the offer price now with markets falling due to a hawkish Fed and China lockdowns.

[income investor] 13/4/2022 17:21

Good to see Prospectus states "the Directors generally intend to give priority to existing shareholders over prospective new shareholders", even if it qualifies this by saying the Directors will balance the benefits to the Company of allowing existing shareholders to maintain or increase the size of their relative shareholdings with expanding the shareholder base of the Company.I hope this means we will do better applying for shares in excess of the Open Offer through the Excess Application Facility, rather than in the Intermediaries Offer!!

[apparition1] 10/4/2022 07:45

Ex Rights issue 8am 11.4.22
Entitlement to Rights credited to Crest Account 12.4.22
Latest date for acceptance of Rights offer 11am 27.4.22
Commencement of dealings in New Shares 4.5.22
I've got these in a fully invested SIPP so will wait until nearer the deadline to decide whether to do a bit of tail swallowing to take up or just let lapse

[emptyglass] 08/4/2022 17:20

Yes this appears open to all investors so includes retail :
".... existing Shareholders are entitled to subscribe for New Shares pro rata to their holdings of Existing Ordinary Shares on the basis of 1 New Share for every 12 Existing Ordinary Shares held ...."

[williamcooper104] 08/4/2022 09:19

So do we little retail people get the right to subscribe - RNS says open to all shareholders so presumably will be able to do though main broker platforms Very happy to pick up more shares at getting closer to a 5 yield

[williamcooper104] 08/4/2022 09:11

Good stuff - like that when I see a big drop and then it's a fund raise

[rik shaw] 08/4/2022 07:35

Fund raising

[rik shaw] 24/3/2022 07:44

Annual results and dividend declaration;





2023 target dividend of 7.93p

[williamcooper104] 30/6/2021 16:26

Just what I was thinking Phoning Numis to have a winge There's no excuse not to include retail via primary bid

[ec2] 30/6/2021 07:34

Would have been nice to have seen the offer available to private investors via Primary Bid.

[rik shaw] 09/4/2020 08:13

Solid results today. Dividend last year 7.16p. Target 2020 and 2021 full-year dividends of 7.36 and 7.55.

[george stobbart] 05/2/2020 21:09

why this big dip today? any news?

[gopher] 16/9/2019 16:59

Disappointing that existing shareholders don't qualify for issue of new equity. Cheaper to fund raise to investment professionals but how big is their register anyway

[apollocreed1] 21/7/2019 15:54

The share price is on the way up again. There's no official news but the likelihood of Corbyn gaining a majority in any future election has decreased so I've noticed that a few fund managers have built up stakes in INPP - e.g. It's the largest position in FP Foresight UK Infrastructure Income fund.
So I decided to come out at 157.20p. At a 7.33% premium, I think the downside risks have increased.