Real Estate Credit Inves... Share Discussion Threads

[cwa1] 27/9/2022 16:12

Filling their boots...well, a little at least...

[mwj1959] 27/9/2022 10:10

Share price reflecting the general battering property related stocks have taken in recent days courtesy of Kwasi. Now trading on a c.13% discount and 9%+ yield. About 50% of assets are Euro denominated, so NAV will benefit from £ weakness. However, marking to market of c.20% of NAV in Market Bonds will detract. Weighted average life of bonds is 1.6 years, so a short duration portfolio, which is both good and bad. May end up with a lot of cash if re-investment opportunities dry up on back of much higher rates and clearly default risk has increased too. However, in the last factsheet the company said that it expected to deploy its currently available cash resources in near term commitments and continued to see a growing pipeline of new attractive opportunities, so they were optimistic about the backdrop then. But clearly a lot has changed since then, particularly relating to the 50% of assets in the UK. It will be interesting to see whether the tone changes a month further on. So, all in all a widening discount is probably appropriate and it will be interesting to see what the Sep NAV looks like when its published in a couple of weeks time. The discount could get a lot wider, of course, and looking back through the NAV history I note that during the Pandemic it got to around 30%, but that was solely due to share price weakness (got to near £1) as the lowest the NAV got during this period was £1.46p.

[my retirement fund] 27/9/2022 10:02

Good to see directors dipping a bit of bread in the bowl

[ammons] 26/9/2022 17:10

A couple of small director purchases RNS after hours.

[badtime] 26/9/2022 16:31

Aye ..I have a small holding ..happy too add ..but maybe not just yet

[skyship] 26/9/2022 16:05

They had held up pretty well until today... 9.2% yield now looking interesting again.

[mwj1959] 23/9/2022 14:23

Kwasi ensuring that the cost of borrowing is going to rise even further. That's a positive for RECI, albeit also increases the default risk.

[holts] 23/9/2022 09:34

Still holding from Queens walk days it has been a real income play , however the payout has not really changed since 2010 although it was in Euro initially back then.

[chucko1] 22/9/2022 21:29

Ditto to all the above. Short duration is key for now.

In a different area, VSL achieving much the same, and with a larger discount.

[williamcooper104] 22/9/2022 21:08

Totally; will go higher with rates going up

[mwj1959] 22/9/2022 19:19

And you're clipping a decent coupon

[williamcooper104] 22/9/2022 19:08

I'm only holding on basis of Cheyne and their proven ability Otherwise would run That and the leverage is pretty low

[mwj1959] 22/9/2022 17:26

Credit spreads widening are as you say not a particular big deal for the fund...in fact it benefits any new lending that they do. The bigger issue is for the potential for defaults down the line. Recessions are never good for RE and its still unclear as to how bad and for how long the current / impending one will be. Yes RECI's loans are all secured, but rising defaults would inevitably hurt sentiment towards the share price, even if ultimately there is no loss of principal from defaults. We saw that at the time of the pandemic when the share price collapsed far more than the NAV did.

[panshanger1] 22/9/2022 11:51

Joined you here for a few today GLA

[williamcooper104] 21/9/2022 16:28

Absent credit events it shouldn't have Credit spreads have moved out; which is a NAV movement I'm not too bothered about; but given the shortish tenor of RECIs loans that should not hit NAV too badly

[mwj1959] 21/9/2022 15:51

Discount widening, now around 8%, albeit we won't see the Sep NAV until early October. Difficult to see any reason why it would have declined materially. Share price increasingly looks to be factoring in a much weaker RE environment and heightened default risk. Dividend yield now just under 9%. Tempted to add here, although got plenty of exposure already.

[badtime] 14/9/2022 20:54

I'll probably add but don't see the rush ..way things are down seems more likely than up

[cwa1] 14/9/2022 15:23

Just taken a few at 139p, doesn't SEEM ridiculously expensive-but it does SEEM like there's plenty available :-/ Hmmmm.

[skinny] 10/9/2022 09:52

Yes - LGEN from 99.89p in 2011. :-)

[wllmherk] 10/9/2022 09:31

you have made some cracking purchases over the years Skinny, the yield on your 96p purchase must be north of 13%. If memory serves me correctly you hold LGEN at a really low price, which shows the benefit of buying and holding if you get in at a good price on companies such as these.

wllm :)

[skinny] 10/9/2022 08:59

Just doing some housekeeping and noticed that next month, I will have held these for 10 years @96.48p - I wish they were all like this!

[wllmherk] 09/9/2022 22:49

My average here is 137p if this falls below my average I'll be looking to top up, the dividend looks safe and too good to ignore.

wllm :)

[davebowler] 09/9/2022 14:21

Liberum;
Real Estate Credit Investments

0.6% return in August

Mkt Cap £325m | Share price 141.5p | Prem/(disc) -4.3% | Div yield 8.5%

Event

RECI's NAV per share at 31 August 2022 was 147.8p, representing a 0.6% NAV total return for the month (6.2% over the last 12 months).

The portfolio comprises 62 positions with an aggregate value of £434m. The weighted average LTV remains relatively low at 61.1%. Portfolio activity was relatively light in August with one Italian logistics bond repaying in the month.

RECI had cash of £37m at the month end and the manager expects to deploy the capital in near term commitments. The gross and net leverage ratios were 35.8% and 24.7% (including asset level structured funding) respectively at the end of August.

Liberum view

August's performance was largely in line with expectations. The short duration portfolio generates a high level of cash repayments, providing scope to reinvest capital at higher rates (current unlevered yields for the portfolio are 9.5% for loans and 6.8% for bonds). The opportunity set for new investments is very strong in this environment and the current 8.5% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs