Real Estate Credit Inves... Share Discussion Threads

[williamcooper104] 05/8/2021 17:25

Shame prefs never really caught on with U.K. REITs Non-recourse asset level debt with just pref shares at the holdco level is a great debt structure

[loglorry1] 05/8/2021 17:19

Back at NAV but every chance it trades above given the good dividend stream.

[skinny] 05/8/2021 16:55

Yes, I bought some RECP at the same time - long gone of course.

[williamcooper104] 05/8/2021 16:53

Yep; same 2011-12 started with RECI - huge discount to NAV and double digit yields - and those European RMBS that then got spun out Owned some of the listed prefs too

[skinny] 05/8/2021 16:43

Another long term for me (2012) +60%.

[williamcooper104] 05/8/2021 16:40

Yep it feels fairly valued now; it's been a great run I'm liking the non-recourse, term marched loan on loan financing RECI is starting to doHappy to continue holding; given Cheyne's undoubted expertise

[skyship] 05/8/2021 16:16

Personally I now think RECI fully valued. Yield @ 155p = 7.74p; discount now turned to a premium. Sure been a great and predictable run...

[cwa1] 05/8/2021 07:21

Real Estate Credit Investments Limited announces today that it has declared a first interim dividend of 3.0 pence per Ordinary Share (a total amount of GBP 6,879,974.34) for the year ending 31 March 2022. The dividend is to be paid on 10 September 2021 to Ordinary Shareholders on the register at the close of business on 20 August 2021. The ex-dividend date is 19 August 2021.

[my retirement fund] 04/8/2021 15:45

Every day is an up day here

[skinny] 27/7/2021 07:07

.

Real Estate Credit Investments Limited ("RECI" or "the Company") is pleased to announce that the Investment Manager's Q1 Investor Presentation is now available on the Company's website at:



An extract from the Summary section of the presentation is set out for investors in the Appendix to this announcement.




Appendix: Q1 Investor Presentation Extract

Summary: The Investment Opportunity

-- Attractive returns from low LTV credit exposure to UK and European commercial real estate assets

-- Weighted Average LTV of 65.0% as at 30 June 2021
-- Predominantly large, well-capitalised, and experienced institutional borrowers
-- Quarterly dividends delivered consistently since October 2013
-- The Company has consistently sought to pay a stable quarterly dividend
-- This has led to a stable annualised dividend of around 7% of NAV
-- Maintained dividend policy for March 2021 year end as announced in May 2020
-- Highly granular book
-- 61 positions
-- Top position: 13.8% of NAV (by commitment) as at 30 June 2021
-- Transparent and conservative leverage
-- Net leverage 16.0% (with GBP45.4m cash) as at 30 June 2021
-- Access to established real estate investment team at Cheyne, which manages over $4bn AUM
-- Access to pipeline of enhanced return investment opportunities identified by Cheyne
-- Robust mitigation against a rising rates environment
-- A high yielding portfolio, combined with a short weighted average life of under 2 years, ensures minimal exposure to yield widening and the ability to redeploy quickly at higher rates

Key Quarter Updates

-- Portfolio
-- No defaults in the portfolio
-- Successful and favourable completion on the last remaining hotel loan restructuring
-- Migration of portfolio to senior lending in keeping with the compelling opportunity set therein

-- 9 new deals completed (GBP117m of commitments) since 31 March 2020, showing strength of opportunity post the initial impact of Covid

-- A further 4 deals have repaid (or partially repaid) since 31 March 2021, with cash received since then of GBP62m

-- Cash
-- Cash reserves remain robust at between 5% to 10% of NAV
-- Dividend
-- Dividends maintained at 3p per quarter, 8.2% yield, based on share price, as at 30 June 2021
-- Dividend cover from net profits 1.09x
-- Term matched financing
-- Successful conclusion of 1st term matched financing on a senior loan deal
-- Share Price Discount to NAV
-- Reduction in the discount - which as at 26 July 2021 was 2.3%
-- Opportunities
-- Bank lending remains constrained across Europe and high barriers to entry secures a continued compelling investment landscape, especially in senior lending

Summary: Structural Strength - Positioned to Capitalise on Opportunities

-- Having successfully navigated through the challenges posed by the COVID-19 pandemic, RECI is well positioned to address future market uncertainty, with a strong portfolio profile and modest leverage comprising:

-- Senior loans and bonds equal to 82% of NAV
-- Weighted average LTV of 65.0%
-- The portfolio is concentrated on credits to large, well-capitalised and experienced institutional borrowers

-- Leverage of 1.29x gross (1.16x net of cash held) as at 30 June 2021
-- Started to introduce term financing on senior loan investments
-- Cash on balance sheet of GBP45.4m
-- The Company has good visibility on its liquidity and income profile for the next financial year ending March 2022, and beyond

-- The Company is positioned to take advantage of a new pipeline of opportunities from a position of strength:

-- Cheyne's real estate business' current pipeline comprises GBP0.9 billion across 17 deals
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END
Ends

[playful] 09/7/2021 07:03

MONTHLY UPDATE
• NAV as at 30 June 2021 was £1.546 per share, representing an
increase of 1.0p per share from the 31 May 2021 NAV of £1.536 per
share.
• The increase in NAV per share was driven by robust interest
income.
• RECI invested a further £2.1m in June in existing loan
commitments.
• The Company had cash at the month end of £43.7m and gross
leverage of £101.3m (representing 28.6% of NAV and 1.16x
net/effective look through leverage).
• RECI remains well placed to participate in the continued healthy
pipeline of Cheyne’s deals comprising predominantly of loans that
are senior risk, at lower LTVs, but which have attractive returns.
• RECI released its Annual Report on 24 June 2021, and the
Investment Manager is scheduled to release another Company
Update on 27 July 2021.

[cwa1] 08/7/2021 10:29

Another 3p "bagged" today. Lovely. Pay day 30/7

[loglorry1] 07/7/2021 08:54

Thanks Skyship. It's ex on Thurs I think so that will knock it back a little. Still good to see it grinding up a bit.

[skyship] 07/7/2021 08:28

Finally yesterday we saw trades at the 150p level. At that level the yield is still 8%.

...and still 7.5% when we get to 160p:


free stock charts from uk.advfn.com

[skyship] 24/6/2021 09:47

Thnx DB. With just less than a third of the M2M impact recovered, certainly should be further NAV upside to flow through from that aspect alone...

Happy to hold for the 8.2% yield; and still see the 150p level approaching.

[davebowler] 24/6/2021 09:31

Liberum;
Strong results; further upside from mark-to-market recovery

Mkt Cap £331m | Share price 144.5p | Prem/(disc) -5.9% | Div yield 8.3%

Event

RECI's NAV per share at 31 March was 151p (previously reported), reflecting a NAV total return of 11.4% for the year. This strong performance has been a result of both robust interest collection and mark-to-market gains on the portfolio. NAV per share has risen by a further 1.6% in the two months to 31 May 2021.

The portfolio is diversified across 61 positions in loans and bonds. Senior loans and bonds account for 82% of NAV and the weighted average LTV across the portfolio is 64.9%. 80% of the portfolio is self-originated bilateral loans and bonds, providing greater control and security. The underlying borrowers are typically well-capitalised institutions with significant operational and financial resources. The weighted average levered yield is 9.7% and the portfolio remains focused on liquid real estate markets (UK and France).


RECI's long-term debt strategy is for a mix of term funding on its senior loan book and repo financing on the bonds. The company has recently put in place new term funding facilities that will enhance the maturity profile of the debt and also diversify its source of funding. At 31 May, Gross and net leverage were 26.8% and 15.5% of NAV.

Liberum view

Today's results and recent portfolio updates highlight the quality of the manager's underwriting process. This has resulted in strong interest collection and enabled the company to maintain an unchanged dividend. All of the bilateral loans and bonds are self-originated, providing greater control and security. We note that some of the borrowers have injected further equity into transactions this year, de-risking RECI’s exposure.

The manager took a prudent approach to loan valuations at the beginning of the crisis and this was reflected in the housebuilder loan which was written down to 42% of par in March 2020. The pace of house sales and prices achieved by the borrower have been ahead of expectations since the beginning of the crisis. Following the partial recovery, we estimate the loan is now held at just over 50% of par and we expect further improvements in this position over time. The mark-to-market recovery in European real estate debt has lagged other credit markets and we believe there is considerable potential for further NAV growth. The mark-to-market impact in March 2020 was c.16p and the recovery since then is c.5p.

[playful] 24/6/2021 07:58

All sounds promising..

The April Company Update and the Investment Manager's Report describe Cheyne's view of the attractive opportunities for RECI, which should benefit from the current disruption in real estate and credit markets. This is confirmed by the attractive terms of recent investments and the pipeline identified by them, providing enhanced returns and improving dividend cover. Your Board and Cheyne are encouraged by the opportunities available to strengthen further the portfolio and continue to deliver an attractive dividend to investors seeking a reliable long term income stream.

[my retirement fund] 24/6/2021 07:53

another juicy 3p in the bag, reci the gift that keeps on giving

[badtime] 17/6/2021 11:15

Div announcement due?

[holts] 10/6/2021 09:31

Thanks for that as usual .

[davebowler] 10/6/2021 09:26

Liberum-
New term funding facilities

Mkt Cap £331m | Share price 144.5p | Prem/(disc) -5.9% | Div yield 8.3%

Event

Real Estate Credit Investments' NAV per share at 31 May 2021 was 153.6p, representing a NAV total return of 0.8% in the month. The NAV increase in April was primarily from interest income with a small uplift (+0.2p) from mark-to-market movements on the bond portfolio.

As previously reported, RECI has obtained its first term funding against a senior loan secured on a 310 unit co-living scheme in London. A further term financing facility is expected to be agreed in June on a loan secured on a mixed use development in London. The development is substantially complete and partially pre-let. Gross and net leverage have remained relatively stable at 26.8% and 15.5% of NAV.

Liberum view

RECI's long-term debt strategy is for a mix of term funding on its senior loan book and repo financing on the bonds. The new term funding will enhance the maturity profile of the debt and also diversify its source of funding.

Mark-to-market gains have helped to boost RECI's YTD NAV return to 4.8%. The mark-to-market recovery in European real estate debt has lagged other credit markets and we believe there is considerable potential for further NAV growth. The mark-to-market impact in March 2020 was c.16p and the recovery since then is 4.5p. In addition, we expect robust income generation across the portfolio. All of the bilateral loans and bonds are self-originated, providing greater control and security. The underlying borrowers are typically well-capitalised institutions with significant operational and financial resources. We note that some of the borrowers have injected further equity into transactions this year, de-risking RECI’s exposure.

[playful] 10/6/2021 07:04

MONTHLY UPDATE
• NAV as at 31 May 2021 w as £1.536 per share, representing an increase of 1.3p
per share from the 30 April 2021 NAV of £1.523 per share.
• The increase in NAV per share w as primarily due to:
• 1.1p of interest income; and
• 0.2p of positive mark-to-market (‘MTM’) adjustments reported
across several positions in the bond portfolio.
• RECI invested a further £2.4m in May in ex isting loan commitments
• In May, the Company has successfully put in place its first term funding against
a senior loan backed by a 310 unit co-living scheme in London
• Another position (number 5 on the top ten) is ex pected to be term financed in
June
• This non-recourse matched financing w ill provide a greater balance of
funding for RECI, w hile keeping to its overall conservative leverage limit of
40%.
• The Company had cash at month end of £39.8m and gross leverage of
£94.3m (representing 26.8% of NAV and 1.15x net/effective look through
leverage).
• RECI remains w ell placed to participate in the continued healthy new pipeline
of Cheyne’s deals comprising predominantly loans that are senior risk, at low er
LTVs, but w ith attractive returns.

[davebowler] 11/5/2021 11:17

Liberum-
Diversification of funding source

Mkt Cap £338m | Share price 147.5p | Prem/(disc) -3.1% | Div yield 8.1%

Event

Real Estate Credit Investments' NAV per share at 30 April 2021 was 152.3p, representing a NAV total return of 0.7% in the month. The NAV increase in April was primarily from interest income with a small uplift (+0.2p) from mark-to-market movements on the bond portfolio.

In terms of portfolio activity, £4m was invested in a CMBS issued by a large UK leisure parks operator (65% LTV) and RECI refinanced one of its larger senior loan positions (secured on a Grade A London office property). Gross leverage has increased to 27.5% of NAV following the agreement of term funding against a senior loan backed by a 310-unit co-living scheme in London. Net leverage has increased marginally to 17.4% of NAV.

Liberum view

RECI indicated it was close to agreeing non-recourse, term funding in its recent investor update. The long-term debt strategy is for a mix of term funding on its senior loan book and repo financing on the bonds. This is RECI's first term financing and it will help to diversify the source of funding and extend the tenure of the debt.

The recent investor update update highlighted the quality of the manager's underwriting process. All of the bilateral loans and bonds are self-originated, providing greater control and security. The underlying borrowers are typically well-capitalised institutions with significant operational and financial resources. We note that some of the borrowers have injected further equity into transactions this year, de-risking RECI’s exposure. NAV total return to date in 2021 is 3.9% and we expect continued robust performance from income generation and revaluation gains across the loan and bond portfolios.

[skyship] 11/5/2021 08:09

MONTHLY UPDATE:

• NAV as at 30 April 2021 was £1.523 per share, representing an increase of 1.1p per share from the 31 March 2021 NAV of £1.512 per share.

• The increase in NAV per share was primarily due to:

--- 1.1p of interest income; and

--- 0.2p of positive mark-to-market (‘MTM’) adjustments reported across several positions in the bond and loan portfolio.

• RECI invested £4.0m in April, purchasing a newly issued CMBS, with a LTV of 65.0%, secured by a large UK leisure park operator

• RECI refinanced once of its senior loan positions in the month, (position 7 on the top ten) which increased cash to £35.5m as at 30 April.

• Since the April month end, the Company has also successfully put in place its
first term funding against a senior loan backed by a 310 unit co-living scheme in London. This non-recourse matched financing will start to form a good balance of funding for RECI, while keeping to its overall conservative leverage limit of 40%.

• The Company had cash at month end of £35.5m and gross leverage of £96.2m (representing 27.5% of NAV and 1.17x net/effective look through leverage).

• RECI therefore remains well placed to participate in the continued healthy new pipeline of Cheyne’s deals comprising predominantly loans that are senior risk, at lower LTVs, but with attractive returns.