Real Estate Credit Inves... Share Discussion Threads

[jp69] 05/6/2023 09:15

Looking at dividend pay dates over last two years , 6p (2 dividends) maybe in next 3 months by mid September should attract a bit of buying

[cc2014] 05/6/2023 09:09

Either someone has some information and wants out before the bad news breaks or it's just some institutional doing what institutions sometimes do.

What is apparent is that whoever is selling is trying to get the best price they can but they also have plenty of stock. Indeed so much stock has gone through over the last few weeks it seems likely there is more than one seller.

It feels like buying this could be playing with fire.

[cwa1] 05/6/2023 08:58

This seems to be on its knees, with no end to the selling in sight...

[skyship] 01/6/2023 11:24

Averaged down at 123.2p. Will add further at 122p - if they get down that far.

[badtime] 31/5/2023 16:32

Topped up yesterday..should have waited

[williamcooper104] 30/5/2023 20:23

Yep remember the prefs - I'd buy them again happily

[mwj1959] 30/5/2023 19:24

A reduction in yield, even if the sensible thing to do if we were to see defaults, would not be taken kindly by the market, regardless of the current discount. A frustrating stock for LT holders, but at least we've been clipping a decent coupon for years. But the Prefs (for those that remember) were much easier to hold and certainly didn't have the the current level of volatility. I'm not at the buying level yet, largely because I've got plenty of exposure already, but if the discount widens dramatically further I'll be tempted. But that is likely below the 120p level. I rather hope that will never occur!

[skyship] 30/5/2023 08:39

Back in here again this morning at 125.5p. The 15.2% discount obviously provides protection against a default somewhere; though only the hotel in France with an 80% LTV might look a little exposed.

Meanwhile the 9.56% yield speaks for itself.

Even if they decided to reduce, say to 10p, the yield would still be 8%.

[chucko1] 24/5/2023 17:10

In my opinion, fair value is a few percent premium. But who cares about a few percent when you are earning roughly 10% against a base rate of 4.5% and you feel you are able to carry this for a few years at least.

[mwj1959] 24/5/2023 14:15

The RECI risk is around loan defaults leading to dividend cuts. I agree that the risk of these has, at the margin, increased, but a 16% discount should more than compensate for that risk, particularly given the senior status of the vast majority of these loans and the (relatively) conservative LTVs on most of them. Fair value for me in this sort of asset class with the quality of management and "low" risk approach (well diversified senior loan focused portfolio and "conservative" LTVs) is around a 5-7% discount.

[chucko1] 24/5/2023 12:05

Fair summary even given the small sample of examples! The low loan average life is key. They can reinvest at higher rates and improve covenants and seniority at the same time (even if forgoing some further yield). And they are proudly and loudly doing this.

I expect to add more even though it currently accounts for 5% of my portfolio, which, in itself, is 60% in MM funds. I.e. it is one eighth of everything else! (apart from my home and car and hi-fi, though the car's not worth as much since my daughter borrowed it).

[rimau1] 24/5/2023 12:00

The reason RECI is falling is simply sticky base rate and inflation expectations and a potential european/uk downwards real estate market. The risk free rate rises and our nav potentially falls making RECI less appealing. Its quite simple. The bull case here in my view counters the above and for me makes the risk skewed to the upside but you never know. Even with a conservative LTV we are at the end of the day financing developments in French hotels and Spanish property!! Clearly i have picked 2 of the 12 investments we have made but you get my point…

[mwj1959] 24/5/2023 11:21

And the discount...at that price around 16%. Struggling to understand the recent weakness, other than its symptomatic of market wide concerns around CRE. This is against a portfolio whose risk is being reduced through the PMs strategy of transitioning over time to a close to 100% senior loan portfolio. Most of the loan LTVs remain reasonable as well according to the latest presentation. I last bought some of this when it fell below 120p and was at a 20% discount. Current levels definitely look attractive, particularly for someone who doesn't own it already or has limited exposure.

[catch007] 24/5/2023 10:30

Added a few more today at 124.5p enticed by the yield and price point.

[cwa1] 22/5/2023 19:07

Decent volume gone through today. Would be nice to see this one finding a bottom :-(

[my retirement fund] 19/5/2023 15:55

Mccunliffe is a right one, kid gloves! Best ignored, some people are just that way from birth.

[brian3777] 19/5/2023 12:11

Hi Tournesol.

Thanks for that information.
I never knew that the colours were significant.

Brian3777.

[cwa1] 18/5/2023 19:49

There's nearly always one down voter on boards these days. They rarely 'fess up, nor does it ever make sense. Best to just ignore them imho

[mcunliffe1] 18/5/2023 19:00

Therefore, tournesol, we have a cowardly bluey.
To be fair, could be a bluey with arthritic fingers.

[tournesol] 18/5/2023 18:21

MCunliffe

Ordinary posters with free accounts have their names displayed in black. Paying account holders are displayed in blue.

Only the latter are able to do a thumbs down. I have no idea which of them is doing the ubiquitous down vote. But I can easily see who it isn't and that's anyone with a name in black.

[mcunliffe1] 18/5/2023 17:54

I see this BB has a 'down voter'. Anybody care to own up and explain your logic? Hiding in the ether si rather cowardly.

Thanks langland for that info. as it's given me a bit of confidence now I'm in as well.

[langland] 18/5/2023 16:17

Director purchase today.....comforting.

[mcunliffe1] 18/5/2023 14:33

I'm in as well - at 1.26122.

Like rimau1 said, great BB. Thankyou.

[rimau1] 18/5/2023 14:14

I’ve taken a position a smidge under £1.26. For all the reasons explained by the knowledgable posters here, great BB this!! I particularly like the very conservative LTV and the continued pivot towards senior debt. Tucked away in a SIPP as a buy and forget and sits neatly with my AA4, GACA, BOI and STAB.

[mcunliffe1] 17/5/2023 09:09

Thankyou guys.
I now know a little more than I did yesterday.

Mike