Real Estate Credit Inves... Share Discussion Threads

[badtime] 07/11/2017 10:01

Thanks Sky

[skyship] 07/11/2017 07:36

Another good performance last month:

Manager Commentary

# NAV per share at 31 October of 164.3p, up 1.1p per share in October

# During the month, the Company invested
- £3.3 million in 3 different new mortgage secured bonds
- £2.0 million towards funding its ongoing loan book commitments

# The Company has a further £66 million of unfunded loan commitments as at 31 October 2017. Of this, it expects to fund £8 million before the year end

# Following receipt of proceeds from the third placing under the Company’s placing programme, RECI has a strong cash balance of £37.6 million, representing 18% of NAV

# RECI has several deals expected to close before the end of 2017. The current pipeline includes four loan deals with combined commitments for RECI of around £58 million (consisting of a number of senior loans with low LTVs  in the UK), and a number of listed bonds secured by core / core+ income across Europe

[badtime] 26/10/2017 14:45

Good to see the share price firming after the fund raising

[skyship] 26/10/2017 11:53

An interesting para lifted from that DTel article:

"The fund manager gave the example of one £20m loan in April. It was for just 40pc of the property value, with the owner and other lenders ranking behind RECI in the event of default – but the return is expected to be 8pc a year. This kind of figure is normally associated with highly risky assets, not secured lending on London property when other parties have to lose 60pc of the asset’s value before any impact is felt."

[skyship] 26/10/2017 11:47

....and why not as the yield still 7% @ 171.5p (assuming 12p/annum dividend)

@ 175p the yield = 6.86%

@ 180p the yield = 6.67%

Obviously one has to keep an eye on the premium; but I suspect we are headed to 180p.

[asmodeus] 26/10/2017 10:00

RECI tipped in today's Telegraph.

[davebowler] 06/10/2017 09:33

Liberum;
Significant improvement in capital structure

Event
NAV per share rose 0.7% in September to 163.2p per share (August: 162.2p). NAV total return in the six-month period since March 2017 is 3.7%.

During the month, RECI redeemed all of its £41.9m of preference shares (8% coupon) which has been replaced with significantly lower cost debt. Debt has reduced to £34m and the weighted average cost is now 1.3%. As previously announced, the company raised £40.7m under its placing programme. Gearing as a percentage of NAV has reduced from 26% to 16%.

The company agreed a new £8.4m senior loan commitment secured against an office development asset in London's Tech City district. The LTV on the loan is 63%. £5.5m of bonds were acquired in the month including £3.7m secured by the assets of an established UK mid-market housebuilder and £1.8m secured against the UK's largest operator of holiday villages.

Cash as a percentage of NAV at 30 September was 20% and the manager reports a strong pipeline with a number of deals due to close in the coming months.

Liberum view
The capital raise and preference share repayment leaves the company well-placed to deliver an uplift on NAV returns achieved in recent years. The preference share repayment will result in significant interest cost savings and a reduced TER due to lower management fees. In addition, risk/reward dynamics have improved considerably in certain segments of the UK real estate lending markets and the company has been very active in 2017 in order to take advantage of these opportunities. RECI currently trades on a 3.6% premium to NAV (5.6% average for peer group) and the latest quarterly dividend implies a 7.1% dividend yield compared to an average 6.3% dividend yield for the peer group.

[skyship] 06/10/2017 08:50

Another good month:
===================



Manager Commentary

NAV per share at 30 September of 163.2p, up 1.0p per share in September. This brings the total NAV return since 31 March 2017 to 6.0p per share

# On 18 September RECI announced it had redeemed all of its £41.9 million Preference Shares, which had been accruing at a cost of 8%

# RECI has replaced some of this leverage at a significantly lower cost of borrowing. At 30 September the outstanding debt has reduced to £34 million, and has a weighted average cost of just 1.3%. This, combined with the lower management fee, will immediately improve the risk adjusted returns from the more liquid assets in the investment portfolio and the overall yield of the Company

# On 27 September RECI announced the successful closing of a third placing under its placing programme raising gross proceeds of a further £40.7m for the  Company

# In September RECI signed a new £8.4 million senior loan commitment secured against a new office development asset in London’s ‘Tech City’ district. The LTV of the loan is 63% and it carries a coupon that is in line with the Company’s target gross return

# RECI purchased £3.7 million of a listed bond collateralised by the assets and business of an established UK mid-market housebuilder. RECI also purchased £1.8 million of bonds secured against the UK’s largest operator of holiday villages

# Following receipt of the third placing proceeds, RECI has a healthy cash balance of £41.7 million (representing 20% of the increased NAV)

# The continued pipeline of opportunities developed by Cheyne across both the loan and structured credit markets remains strong with a number of deals due to close in the coming months

[badtime] 27/9/2017 12:24

Way the share price is going you will be able to buy more at 166

[langland] 27/9/2017 09:28

I got what I asked for.

[skyship] 27/9/2017 08:56

YouInvest got me a small top-up in the placing @ 166p

[my retirement fund] 26/9/2017 08:49

RECI are equally culpable tho. They could have easily made it an open offer.

[holts] 20/9/2017 21:22

What a load of rubbish , you can buy in the market at a higher price but you cant buy them cheaper because its a placing , the fools who dream up these rules never consider the variety of scenarios that may arise .

I suspect selftrade will come up with the same drivel .

[skinny] 20/9/2017 14:59

Hl have now replied in writing :-

"As this is a placing we are unable to participate in a retail capacity. However, if you are a Qualifying Professional Investor we will be able to submit an instruction on your behalf.

If you believe you are a Qualifying Professional Investor, please respond to this message and I will arrange to send a questionnaire to you which will need to be completed and returned before we accept an instruction form you.

Please note that a £100 placing commission will apply to the transaction."

[skyship] 20/9/2017 12:23

I have applied to Youinvest for a top-up in my SIPP....unlikely, but worth a try...

[holts] 20/9/2017 11:16

thanks for replies , I have tried selftrade but awaiting an answer .

[skinny] 20/9/2017 10:48

I've approached HL., but it seems beyond their 'scope' to deal with!

[langland] 20/9/2017 10:22

I have applied for some. That was early yesterday. Not heard anything yet.

[holts] 20/9/2017 09:52

has anyone approached their own broker asking them to apply to liberium for stock in placing ? If so what sort of response did you get ?

[badtime] 19/9/2017 22:32

Managed 171 just b4 it went exdiv of 3p

[alter ego] 19/9/2017 22:20

Also managed to buy some more under 170p with a limit order.

[skyship] 19/9/2017 20:53

nerja - excellent trade - well done you...

[nerja] 19/9/2017 18:49

Thanks sky, that 7% you mentioned made me go, lucky to get a cheeky 10k at 169.74p last thing
cheers