Real Estate Credit Inves... Share Discussion Threads

[badtime] 10/5/2021 18:38

Nice positive movement

[cwa1] 06/5/2021 08:17

Hardman research, usual caveats about being paid for/maybe having to register for the full report:-

[playful] 05/5/2021 09:07

Hardman Talks - Real Estate Credit Investments

[playful] 02/5/2021 14:31

Hardman haven’t uploaded the presentation but Ravi gave another interview you can access below:

[skyship] 28/4/2021 16:08

Quite a lucid presentation of yesterday's update.

# Particularly encouraged by the Q&A answers on the dividend aspect - he is not at all concerned by any short-term period of an uncovered dividend. The long-term target of a dividend c7% of NAV will reassert itself as M2M markdowns unwind.- very clear about that.

# Also interesting to hear his views on Office valuations:

=== City centre tower-block valuations have fallen; and he sees no way back for those less attractive working and commuting offices

=== Very confident for low rise, less dense offices

[skyship] 28/4/2021 13:30

Presentation by the Manager Ravi Stickney on Hardman Talks at 3:00pm today - see Playful's post 1793 above

[evaluate] 27/4/2021 08:31

Reads like the dividend is secure for the foreseeable future.

Can't be many less risky opportunities to make 8.5% on your money.

[holts] 27/4/2021 07:55

Reads well I think and quite re assuring in the circumstances

[loglorry1] 10/4/2021 21:29

I emailed the company and got this reply....



See link to our May 2020 update: [...]



Slide 27 shows the breakdown of the impact on Covid on the bond and loan portfolios.



Since the pre-pandemic NAV, RECI has continued to pay 3p per quarter in dividends, and this needs to also be included in your reconciliation below.



In our Mar 21 fact sheet (released today), we showed a 1.0p write back on the UK housebuilder (which had taken a 5.5p write down in Mar 20).

------

So there's been some small reduction in NAV due to the uncovered dividend but not very much so more write backs hopefully to come.

[skyship] 10/4/2021 13:47

It will be interesting to hear what Ravi Stickney has to say about the dividend on the 28th (see playful's P. No 1793 above).

He will surely have to address the subject in the webinar; and if not directly then for sure he'll get a question on the matter.

[rik shaw] 10/4/2021 12:50

Reading again the monthly factsheets covering the last 13 months the significant mark down to the NAV was in March 20 as:

.’NAV as at 31 March 2020 was £1.470 pence per share; a reduction of 10% (16.8p) from the post dividend NAV of £1.638p per share
• In the March month end NAV, RECI has reported marked to market losses on its bond portfolio which, while being unrealised, equate to 10.1p per share. This is primarily based on the independent pricing information received, the likely read across to other asset’s values, and reflects the recent poor market sentiment in financial markets driven by COVID-19 concerns.
• RECI also reviewed its loan portfolio, recognising fair value write-downs: notably on a loan to a UK housebuilder (equating to 5.4p per share) and the loan to a UK retail park (equating to 0.8p per share). Whilst these are not realised losses, the fair value write-downs reflect anticipated lower recovery values on loan investments in a prolonged recessionary environment.’

Since that time the NAV has been adjusted each month by small values representing income and net MTM improvement plus quarterly dividend payment.

The November interims noted wrt writedowns.
‘The output of this analysis was to write down the value of just 2 of its mezzanine assets, out of a granular book of 53 positions. These impairments are not realised losses, but provisions for potential losses recognised today under conservative scenarios on the long term trajectory of the crisis’

None of the factsheets or reports appear to indicate that losses have been realised. However the NAV still looks to be down relative to pre-covid by a combination of over 10p net MTM and writedowns, and because dividends have exceeded income for the year by c 2-3p (though noting income run rate now looks to be steady at c1.0-1.1p per month.)

[badtime] 09/4/2021 17:46

I hadn't heard of any recent concerns...have I missed something

[skinny] 09/4/2021 12:57

Thanks for the update and links.

[loglorry1] 09/4/2021 12:45

Surprised to see only 3.5p of write backs available on the bond portfolio. NAV was around 168 pre-pandemic now 151 so adding back in the 3.5p from bonds suggests the rest of the portfolio NAV dropped by 13.5p !

I seem to recall a write-down on some mezzanine loans but not a write off. Can anyone tell me if there were realized loan losses during the pandemic?

[skyship] 09/4/2021 11:45

I suspect that has put paid to the dividend cut concerns...

[playful] 09/4/2021 11:06

Event: Hardman Talks | Real Estate Credit Investments live webinar

Description: Real Estate Credit Investments presentation and Q&A

Date: 28/4/2021

Event Type: Investor Show

Location : Webinar

Speakers : Ravi Stickney, Real Estate Credit Investments

[cwa1] 09/4/2021 10:36

As ever, thanks for posting that db

[davebowler] 09/4/2021 10:21

Liberum;
Mkt Cap £322m | Prem/(disc) -7.1% | Div yield 8.5%

Event

Real Estate Credit Investments' NAV per share at 31 March 2021 was 151.2p, representing a NAV total return of 1.6% in the month.

NAV performance in March benefited from 1.5p of mark-to-market gains across the loan and bond portfolios. 1.0p related to a partial recovery of a previous writedown taken in March 2020 on a loan to a UK housebuilder. The remaining 0.5p relates to mark-to-market movements on the bond portfolio.

The company has funded £3.3m to fund existing commitments, bringing the total portfolio value to £391m (diversified across 61 positions). Gross leverage has remained broadly unchanged at 22.6% of NAV (net leverage of 16.0%).

Liberum view

The company's NAV total return over the last 12 months is 11.4% as the portfolio has benefited from strong income generation and mark-to-market gains predominantly in the bond portfolio. 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 approximately 40% 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.

We believe the bond portfolio still offers re-rating potential as European real estate debt has lagged the wider credit rally. The bond portfolio experienced 8.9p of mark-to-market losses in March and April and we estimate the mark-to-market gains since then have totalled 5.4p. The bond portfolio is secured on core and core+ assets (weighted average LTV of 51.5%) owned by institutional borrowers. We regard the 7% discount to NAV and 8.5% dividend yield as highly compelling given the fund’s long-term track record, defensive positioning and potential NAV upside from re-rating opportunities across the portfolio

[skyship] 09/4/2021 08:46

Thnx Skinny:

MONTHLY UPDATE:

• NAV as at 31 March 2021 was £1.512 per share, representing a decrease of 0.6p per share from the 28 February 2021 NAV of £1.518 per share .

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

• The payment to investors of an interim dividend of 3.0p per share;

• 1.1p of interest income;

• 1.0p of positive mark-to-market (‘MTM’) adjustments reported on the loan to the UK housebuilder, recovering some of the previous MTM write down taken in March 2020; and

• 0.5p of positive mark-to-market (‘MTM’) adjustments reported across several positions in the bond and loan portfolio.

• RECI funded £3.3m of its existing commitments in the March.

• The Company had cash at month end of £22m and gross leverage of £78m (representing 23% of NAV and 1.16x net/effective look through leverage).

• RECI remains w ell placed to participate in the healthy new pipeline of deals comprising predominantly loans that are senior risk, at lower LTVs, but w ith attractive returns.

[skinny] 09/4/2021 08:18

www.recreditinvest.com/media/1803/reci-fact-sheet_31-march-21.pdf

[skyship] 09/4/2021 08:01

Real Estate Credit Investments Limited (the "Company"), a non-cellular company incorporated in Guernsey, is pleased to announce that its Investment Manager's monthly Fact Sheet as at 31 March 2021 is now available on the Company's website at:



However at 08:00 it isn't on the website!

[madmix] 09/4/2021 07:36

"NAV as at 31 March 2021 was £1.512 per share, representing a decrease of 0.6p per share from the 28 February 2021 NAV of £1.518 per share."

"•The decrease in NAV per share was primarily due to: •The payment to investors of an interim dividend of 3.0p per share;•1.1p of interest income; •1.0p of positive mark-to-market (‘MTM’) adjustments reported on the loan to the UK housebuilder, recovering some of the previous MTM write down taken in March 2020; and•0.5p of positive mark-to-market (‘MTM’) adjustments reported across several positions in the bond and loan portfolio."

So a net 2.4p increase in NAV, accounting for the dividend.

[madmix] 09/4/2021 07:35

Here you are guys :

[cwa1] 09/4/2021 07:31

Uninspiring Skinny

[skinny] 09/4/2021 07:27

That's pretty poor - I emailed both available addresses :-

[e-mail]

[e-mail]

and got this from the first "Unknown user"

and from the second "Thank you for getting in touch. We’ll get back to you within five working days".