Raven Prop P Discussion Threads

[horndean eagle] 01/3/2022 18:19

Does depend on whether the company did anything to hedge in the last couple of weeks. They might actually get lucky with tenants vacating. Especially if international ones. They will likely just pay up leases to get out of additional costs and RAV might be able to lease them locally. Their russian interest rate hedges must be worth a few quid at the moment. Depends on where those hedges are held in the corporate structure. Too many unknowns for now though

[mwj1959] 01/3/2022 17:58

BEE valuing all Russian listed stocks at zero in their latest NAV.

[hindsight] 01/3/2022 15:55

Personally think the valkyrie binary bet is approaching. But this isnt the one

[montyhedge] 01/3/2022 15:54

It's like having a bet on red or black, lose your money or double.

[montyhedge] 01/3/2022 15:41

No, nearly did yesterday, but playing golf saved the day. I don't take my phone on the course.

[chinese investor] 01/3/2022 15:27

Did you top-up monty ?

[montyhedge] 01/3/2022 15:24

Keep taking your medication.

[spectoacc] 01/3/2022 15:19

20.2/30, good old MMs.

JRS's RNS earlier is worth a read for Russia-watchers.

[spectoacc] 01/3/2022 14:50

Don't think it was an issue before the day before yesterday :)

Was on BBC news yesterday.

From a quick Google for eg:
"It had earlier touched a record low of 120 to the dollar on electronic currency trading platform EBS, and was still trading considerably higher there than in Moscow."

[spectoacc] 01/3/2022 14:32

@gfrae - yesterday the Rubble was down 30% officially, but 70% locally. No idea what it's done today.

[gfrae] 01/3/2022 14:29

mkerr, 30% or less of their debt is in Euros, which will have increased by 30% odd due to the fall in the Rouble....do you think that is enough for them to be breaching their coventants ? Surely not If the LTV was at 56% previously ? I agree the refinancing may be tricky.

[spectoacc] 01/3/2022 14:10

One thing I hadn't thought of - what's the set-up for the global brand/company tenants in Moscow? ie could Raven be paid outside of Russia, for its Moscow rent? My guess is they're Russian subsidiaries, with Russian bank a/cs, where eg Raven paying Euro interest on its debt would be impossible due to sanctions. But be interesting to know.

The Raven lot were big with Neil Woodford - astonishing how Woodford touched has turned to dust. Allied Minds (s/p peak over £7) another.

[m_kerr] 01/3/2022 13:47

'Our secured finance facilities are amortising and therefore reduce each quarter. DSCR covenants are set at around 1.2 times and LTV ratios between 60% and 80% dependent on the facility. Covenant cover on both is comfortable, the average secured LTV ratio at the year end reaching 56% on weak exchange rates. Covenants are sensitive to exchange rates as we have an element of Euro denominated debt supported by Rouble denominated income. We continue to reduce our exposure to Euro debt as this is amortised at an accelerated rate compared to the Rouble element'
'The availability of finance. Given the amortising profile of our secured debt facilities we are continuously refinancing our portfolio. '

so they have contracted to cough up with euro repayments at 'an accelerated rate'. they're already at 60% LTV, and i think they'll be breaching covenants left right and centre.

£97m of debt refinancing next year (2023), £310m the year after (2024) and £131m after that (2025). there's no breathing space really.

[spectoacc] 01/3/2022 13:08

@SteMiS - I think @CC2014's post above is more accurate. There's no value in RAV or RAVP IMO.

EVR, JRS, POLY, POG? Quite possibly the same, tho in some cases with more diversification.

The "Publicly available information" is the 60km long line of Russian heavy armour approaching Kiev.

[stemis] 01/3/2022 12:36

There seems to be some sort of disconnect between the price of the ords (down 60%) and the prefs (down 80%).

The Russian properties are held by Russian companies so even if they can't get the money out it will be accumulating there. The question is whether, with the collapse of the Rouble, it will be worth enough to cover any Euro/dollar loan interest. I do note however from the finals that

"Other than our St Petersburg office portfolio, each of the secured
facilities sits in a special purpose vehicle (“SPV”) structure to minimise
recourse to the overall portfolio."

Undoubtedly Raven is going to be damaged by this but I don't think there is enough publicly available information to say if this will be terminal. Some SPVs may fail, some may survive. Will that be enough to fully protect the prefs? Honestly couldn't say. I don't think it's certain either way...

I suspect we may see pref dividends paid 'in specie' for a while

[waterfall city] 01/3/2022 11:40

You need to look at how the debt is held as its normally in silos, would covenants be relaxed in the circumstances,also are there debt free properties held plus theres the cash, and non Russian property.

[montyhedge] 01/3/2022 11:20

Yes looks like bust, someone just taken a punt 100,000 at 22.90.Directors own I think around 20% be interesting see what happens.

[m_kerr] 01/3/2022 11:16

i'd imagine there will be very serious pressure from the ESG brigade (and various governments - see the swiftly announced divestitures of shell and BP's russia interests) for all multinationals to pull out of russia.

[spectoacc] 01/3/2022 11:13

And that's before you get to the tenants.

Russia is uninvestable.

[m_kerr] 01/3/2022 11:09

CC2014 is correct IMV, and on my calculations this company is insolvent so worth 0p. they may have stood a chance of riding it out if they had a much lower LTV, very supportive banks who would waive covenants, with say 8-10 year maturities on the debt (and no hard currency debt), but the euro debt needs refinancing in 3-4 years, and even on the rouble debt, interest rates are double what their portfolio yield is when they need to refinance shortly. doesnt take a genius to see the very serious hole they find themselves in.

[hpcg] 01/3/2022 10:30

Odds are very strong all western owned assets in Russia are worth nothing to their current owners. That doesn't even matter to Raven as economic conditions will wipe it out and this is probably just a problem for the banks. It isn't punt money, it is a charity donation to those selling.