Real Estate Credit Inves... Share Discussion Threads

[gary1966] 20/3/2013 21:44

NAV or share price chester? If it is NAV then drop explained by RECI going XD during the period and so in effect NAV hasn't grown over the last two weeks.

[chester] 20/3/2013 17:52

Certainly largest % drop this year and well into last year.

[gary1966] 20/3/2013 17:47

NAV 149p and so drop in line with divi.

[pillion] 20/3/2013 14:37

Dave's link

[davebowler] 20/3/2013 14:04

Similar Investment Company HDIV;

https://www.brighttalk.com/webcast/2001/68275
About 3rd minute onwards John Pattullo talks about how secured loans are better risk/reward.

[pyemckay] 18/3/2013 13:52

fantastic run of late and delighted tha one of my largest holdings is on a march. I can see RECI being bought at a premium to NAV soon although NAV may have increased since last update. friday should bring another fotnightly fact sheet.

pye

[mangal] 18/3/2013 13:17

This has now become one of my largest holdings -
Should I Stay Or Should I Go?
or let some go?

[davebowler] 18/3/2013 12:24

Thanks Pillion!

[pillion] 18/3/2013 12:08

Just topped up with 2107 shares at 151; the share price increased immediately by .5p

[gary1966] 15/3/2013 16:52

Kenny,

I think it is just a case that there is no stock around. I have been well bid for 50K shares all week and the MM even phoned my broker after the first dummy trade that I did. You are the reason many are here and you more than anyone know that these are undervalued and a re-rating was inevitable and that is what we are in the process of.

[skinny] 15/3/2013 16:35

Hmmmm - interesting, thanks Kenny.

[kenny] 15/3/2013 16:29

Something BIG may be cooking here!! Strong buying (after the shares went ex-div!) and also the market makers are marking the shares higher on very little buying - and on days there is net selling. I would speculate that it may be another bond or two redeeming early at par.

Those buyers and the MM's seems to know something but this is pure speculation on my part; so should not be a basis upon which to buy, sell or hold shares in RECI - unfortunately, I cannot claim any inside knowledge. I am private investor who has no inside knowledge so it is annoying to see - time after time - people in the know buying before news is announced to the market.

[kenny] 14/3/2013 12:39

Thanks Dave.

Investing in Spanish residential property bonds is going to prove extremely brave or extremely foolish! Even at 46% I don't think I would like to touch them albeit they could, eventually, be very profitable. People may be able to pay their monthly payments on an underwater mortgage but what happens when interest rates rise - albeit we may be many years away from interest rates rising in any material way.

[kenny] 12/3/2013 16:31

TFIF has a mid share price of 103.75p against a NAV of 98.13p. On the same premium, RECI should be at 159.6p mid.

The above takes no account of the fact RECI has a bond portfolio that has a 25% discount to par value, whereas I doubt TFIF will be able to deploy the £150m it has raised to accumulate a portfolio of bonds at that high an average discount.

[pyemckay] 12/3/2013 09:31

discount to nav being closed at quite a rate and its ex div too. v nice.

[davebowler] 12/3/2013 08:32

Yes I agree. TwentyFour Income raised £150m last week and is in the same market sector.Its now at a premium and our RECI is fully invested but at a discount to NAV.

[kenny] 11/3/2013 17:09

zantas, plenty of scope for the potential late 2017 liquidation value to rise. Also, agree that a liquidation in 2017 is by no means baked in - we will have to see what transpires. If the prefs were being redeemed today, there would be plenty of demand for a new issue - at a much lower coupon than the current 8%, therefore, increasing profits for ordinary shareholders even further.

[zastas] 11/3/2013 17:01

Kenny, I agree...., I just took the factsheet par value as the discounted one I believe. Teaches me not to write too quickly! Never mind, your figures are good enough for me.

[kenny] 11/3/2013 13:59

It is an ever moving target and it is measurable from the two weekly factsheets.

[davebowler] 11/3/2013 13:35

Surely its an ever moving target , hopefully, if Cheyne keep selling at close to par and buying well under par?

[kenny] 08/3/2013 15:24

Zastas,

I do not think the figure of 240p is correct. If you look at the top of page 2 you will find the amount that is the difference between par and current value for the entire bond portfolio.

The potential appreciation to par is the difference between the two figures of £108.9m and £80.9m, so £28m. That £28m is equal to 70p per share. Add the 70p to current NAV of 151p gives a potential wind-up figure of 221p at present.

Trust you agree?

[zastas] 08/3/2013 15:07

Kenny,

I make the potential payout, future divis excluded , as about 240 pence.

Not all of the 101.1 million is invested in bonds standing at 25% below par on average; some are loans bought at par, of which some have gone up considerably.Churning isn't a problem provided bonds below par can be found which will appreciate towards par. Not everything will reach par by 2017, the potential and only potential winding-up date.

About 33% of 101 plus cash is about 140. Minus 45 for prefs leaves 95 for 40 million shares. That's ofcourse if and but..

[skinny] 08/3/2013 10:58

Thanks for the updates chaps.

[davebowler] 08/3/2013 10:56

Investec;
¢ RECI benefitted particularly from bonds secured by German retail properties, which accounted for 25% of bond gains in the month.

¢ The bond portfolio continues to trade at a greater than 25% discount to par, with scope for further price appreciation in the coming months.

¢ The investment portfolio is now valued at £100.8m, with a further £5.1m in cash.

¢ Bond purchases exceeded sales during the month. £3.2m of bonds have been purchased at an average discount to par of 16%. The average effective yield on bonds purchased was 8.7%. RECI sold £2.2m of bonds during the month and the average sale price achieved was 3% under par.

Investec Insight:

¢ The NAV continues to move up, with an impressive YTD return of 10.2%.

¢ In this month's commentary, management highlight the continued value in the bond portfolio, which is marked to market and is currently held at a 25.7% discount to par.

¢ The manager invests in property backed bonds with the expectation that RECI will get par back as and when the bonds mature. A key member of RECI's investment management team at Cheyne Capital is a RICS qualified valuer and emphasis is put on doing their own valuation work to ensure real LTVs within the portfolio are not stretched and par may be achieved.

¢ We like the real estate backed debt space and continue to consider RECI shares as highly attractive. RECI provides a differentiated investment approach to recently launched pure real estate loan funds as the managers can opportunistically buy and sell property backed bonds in the secondary markets and apply portfolio protection through hedges, as well as providing direct real estate backed loans.

¢ The shares currently offer a double discount opportunity as not only is the underlying bond portfolio held at a discount to par but the shares trade on a 7.7% discount to NAV (including the 2p quarterly dividend which went ex-div on the 6th March).