Rdlz Real Discussion Threads

[spectoacc] 01/5/2019 14:22

RDLZ should be safe regardless; I'd be more worried if I was an RDL s/holder tho, still a ways to go..

[eltox] 01/5/2019 08:57

I see these are suspended currently. Genuine accounting delay or playing games?

[davebowler] 26/4/2019 09:03

I'd go for 122p!

[davebowler] 12/2/2019 10:06

Liberum;
Event

Based on information provided by the chapter 11 Trustee in the bankruptcy proceeding of Princeton Alternative Income Fund, Ranger has decided to write down the carrying value of its investment in Princeton by $13.5m to $15m.

Ranger has been actively engaged with the Trustee since its appointment in early November. The potential recovery value of $15m is based on a number of variables, including the final structure of the creditor and investor waterfall and distribution scheme. This will not be finalised for a number of months. Other factors that may impact the final amount include recoveries from the performing and payday loans in the portfolio as the current estimates are based on assumptions using historic sector benchmarks.

As previously announced, the investment management agreement with with the current investment manager terminates with effect from today. Joe Kenary has recently been appointed to the executive board in addition to Dominik Dolenec and Brett Miller. A third party valuer will be used to value the portfolio on a half-yearly basis. The board believes half-yearly valuations are more appropriate than monthly valuations given the ongoing realisation process. Net asset value will be reported for 30 June and 31 December in future.

Liberum view

Ranger had flagged the writedown in Princeton as far back as October. The company has stressed the uncertainty regarding the latest recovery estimate for Princeton and we believe there is potential for a further impairment in this investment. The remaining value of $15m is equivalent to 11% of pro-forma NAV. 73% of the original $56m investment in Princeton has now been written off.

Following the writedown, we estimate the cover ratio on the ZDP shares is 2.65x. This is below the minimum cover covenant of 2.75x which is tested on an incurrence basis (e.g. at the time of dividend distribution etc). As a result, the company cannot make any further distributions to ordinary shareholders (outside of what is required to maintain investment trust status) without being in breach of the ZDP covenants.

[spectoacc] 20/12/2018 15:06

No use to me, I took (I think) 113p when they said they were buying them all for "112-114". More fool me.

Still - another RDL impairment just hit the tape.

[davebowler] 20/12/2018 14:26

I hear Staude & CG Asset Mgmt are leading a charge to get a better deal on Ranger Zeros..

[yieldsearch] 29/11/2018 20:18

it is not clear to me why they need to reach 61%. I agree with Liberum, as the 13.7% is not counting , i guess the 61% should be viewed as 61/(100-13.7)= 70.68%

is there a trigger in the documentation at 70.7%?

[spectoacc] 29/11/2018 15:33

I sold based on what they previously said they'd pay for the zeros, so mildly peeved, but also glad to be completely out of both RDL & RDLZ - didn't trust previous management, certainly don't trust current ones.

[davebowler] 29/11/2018 09:20

Liberum;
ZDP offer proposal

Mkt Cap £112m | Prem/(disc) -22.9% | Div yield n/a%

Event

Ranger Direct Lending has made a buyback proposal to a group of large holders of the company's ZDPs. Subject to agreement from the group of ZDP holders, Ranger will offer 116p in cash to all holders of ZDP shares. The settlement of the offer is expected to take place prior to 31 December 2018.

The offer is conditional on receiving acceptances of at least 61% of the ZDP shares in issue (32m shares). The 13.7% of ZDP shares owned by Ranger will not be counted for the purpose of satisfaction of the threshold.

Ranger will also not vote any ZDP shares acquired in the offer in a continuation resolution of the ZDP company. It will meet with the ZDP group to discuss appropriate safeguards for the interests of any ZDP holders who wish to remain until the final capital entitlement is due in July 2021.

Liberum view

The offer price represents a 3.1% premium to the accrued capital entitlement at 31 December 2018. We estimate the offer price implies the company is acquiring the ZDP shares back at a gross redemption yield of 3.8%. On the basis of a 116p offer price and a settlement date of 31 December 2018, ZDP holders who came in at initial issue would have earned a gross redemption yield of 6.3%. As the 61% acceptance level does not include ZDP shares held by Ranger, the implied acceptance rate required from the remaining ZDP shareholder base to reach 32m shares is 70.7%.

[spectoacc] 04/10/2018 20:34

Good spot - could get very messy surely, if some sell out, some hold RDL to ransom? Not read up on it tho.

Also - "112.5p-113.5p" is clearly 113.5p:

"The Company announces that, following the update announcement earlier today, it purchased 5,738,000 of the zero dividend preference shares ("ZDP Shares") issued by its subsidiary Ranger Direct Lending ZDP plc (representing approximately 10.83% of the total outstanding ZDP Shares) at a price of 113.5 pence per ZDP Share."

[yieldsearch] 04/10/2018 16:36

"At this stage, the Company has indicated to holders of ZDP Shares a willingness to pay amounts of between 112.5p and 113.5p per ZDP Share."

[spectoacc] 25/9/2018 07:40

" We have also commenced discussions with ZDP holders about an early redemption of their instruments. "

Really? Haven't spoken to me.

RDL update this morning is a smorgesbord of mess.

[davebowler] 02/8/2018 10:53

INLZ new issue is at 5.25% GRY

[spectoacc] 02/8/2018 10:27

Been quiet for a while, wonder when we'll next get news.

[rob the slob] 11/6/2018 11:24

The figure offered, when multiplied by the rate (net of higher rate income tax of course) I could get on a 3 yr fixed rate savings account or other suitably covered zdp to my satisfaction needs to yield an expected figure of 127.6 plus a bit for covering any uncertainties/risks on the calculation plus an added figure to incentivise me not to challenge it in court.

[spectoacc] 11/6/2018 11:13

As a fellow holder I agree :)

But if I was a big Ords holder I'd say "why should the ZDP's get paid out first - they can wait till the end".

I guess the minimum is c.111p, being c.2 years at 5% plus a bit of compounding, and the max is 127.6p, with the actual figure likely falling between the two.

And nothing certain until after the AGM vote - Oaktree's response may be interesting.

[rob the slob] 11/6/2018 10:57

True. All I'm saying is It is in the interests of ord shareholders (think big institutional) to keep lawyers and courts out of it in balancing the needs of more risk averse zdp shareholders (think pensioners in retirement). I need to be fully compensated for any loss of that final figure in 3 yrs time in terms of what it will cost me to replace it.

[spectoacc] 11/6/2018 09:31

I think all that "balance the needs.." guff rules out the full wind-up price - more likely we'll be paid out first from the easier-to-realise positions? Also wonder how many ZDP holders are also holders of the Ords.

[spectoacc] 11/6/2018 08:14

Looks like our money will be coming back sooner than expected.

Edit - basically, the RDL board has (rightly) partially folded. "If you don't vote us out/vote in Oaktree/LIM's nominees, we'll wind the co up ourselves". Ares no longer going to take on the mandate, so in that Oaktree have won.

"Assuming the current independent directors continue to make up a majority of the Board following the AGM, the Board will commence a dialogue with ordinary shareholders and ZDP shareholders about a portfolio realisation process and timetable for winding-up the Company. Any such process will also have full regard for the rights of the ZDP shareholders. In the meantime, the Board has instructed Ranger to consider how best to realise the portfolio in a manner that maximises value for all shareholders. The Board would emphasise that any process of orderly realisation of the portfolio needs to take into consideration the status of the legal proceedings currently in process in respect of the investment in Princeton, and they intend for the Company to continue to actively engage in those proceedings with Ranger until their conclusion."


"... Full regard fro the rights of the ZDP shareholders" says to me that we're getting money back sooner rather than later (ie not left to the end), and probably at an apportioned premium.

Someone else will know better than me, but if c.5p pa accruing to ZDPs plus compounding, you'd think 112p-118p back on them. Timescale isn't certain but I now think that's now happening irrespective of the AGM vote - either current management wind it up, or Oaktree's lot do. They may share repayment of realisations btwn ZDP & ords but that only increases the amount the ZDPs eventually get.

Anyone been in this situation before, ie a solvent winding-up ahead of ZDP date?

[spectoacc] 01/6/2018 08:52

Fairly comprehensive:

"RNS Number : 9797P

Ranger Direct Lending ZDP PLC

01 June 2018

1 June 2018

Ranger Direct Lending ZDP plc

(the "Company")

Clarification on voting rights of holders of Zero Dividend Preference Shares ("ZDPs" and "ZDP Shareholders")

The Company is a wholly owned subsidiary of Ranger Direct Lending Fund plc ("Ranger" or the "Parent") and has 53 million ZDPs in issue.

As announced by Ranger on 16 May 2018, it is intended that a Circular will be distributed to ordinary shareholders of the Parent containing full details of proposed amendments to Ranger's management arrangements and investment policy and convening a general meeting of the Parent for its ordinary shareholders to vote on those matters.

Ranger's intention is that this vote will publicly clarify the views of all of its shareholders.

In anticipation of the publication of Ranger's circular, and having regard to recent engagement from the Company's ZDP Shareholders, the Board wishes to clarify the voting rights of ZDP Shareholders in connection with a change of the Parent's investment policy.

The rights of the Company's ZDP Shareholders to vote in these circumstances are set out in the Company's articles of association and the undertaking granted by Ranger at the time it entered into the loan agreement with the Company and the Company first issued ZDPs. Pursuant to these, and as summarised in the Company's ZDP prospectuses:

1. Ranger is only required to seek the approval of the Company's ZDP Shareholders to amend its investment policy if, in the reasonable opinion of the Directors of the Company, the proposed amendments to Ranger's investment policy would be materially prejudicial to the interests of the Company's ZDP Shareholders; and

2. Ranger is required to ensure that the Board of directors of the Company from time to time comprises only individuals who are directors of the Parent.

In light of:

1. the experience, qualifications and scale of the Parent's proposed new investment manager, Ares Capital Management III LLC;

2. the Parent's proposed investment strategy going forward (including the transitional arrangements to be put in place with the existing investment manager); and

3. the consideration that was given to the position of the Company's ZDP Shareholders during the Parent's management engagement committee's management review process,

the Board of the Company, having taken advice, has unanimously concluded that in the reasonable opinion of each member of the Board, the proposed amendments to Ranger's investment policy would not be materially prejudicial to the interests of the Company's ZDP Shareholders. No vote on the proposals is therefore required or planned for the ZDP Shareholders.

As previously announced by Ranger, the Independent Directors of the Parent (who are all also members of the Company's Board) have carried out a structured review of the Parent's management arrangements. As part of this, two rounds of written submissions were received from parties interested in the Parent's management contract and the Independent Directors actively engaged with potential new managers with the aim of balancing all stakeholders' interests, including the legitimate interests of ZDP Shareholders.

As will be set out in full in the Parent's circular, under Ares' management, Ranger would continue to focus on loans to Specialty Finance Companies, principally in the USA and servicing the borrowing requirements of consumers and SMEs. There would be no change in that overall investment focus going forward. A key change to be introduced under Ares' management, however, would be in credit structuring. Under Ares' proposals, the Parent would invest predominantly through SPV vehicles which would have an equity cushion or "first loss piece" in the SPV contributed by a third party in the range of 15 to 25 per cent. of the gross maximum value of the relevant pool of loans.

The Independent Directors of Ranger (and therefore the Board of the Company) consider this credit structuring to be attractive for a number of reasons, but primarily because, from the point of view of the capital base of the Parent (and by definition the capital cover attributable to ZDPs), such a credit structure is beneficial, rather than prejudicial, to capital preservation and the rights of ZDP Shareholders.

[davebowler] 21/2/2018 13:37

EJFZ are also on a GRY of 5%+