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RECI Real Estate Credit Investments Limited

127.50
0.00 (0.00%)
10 Oct 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Real Estate Credit Investments Limited LSE:RECI London Ordinary Share GB00B0HW5366 ORD NPV
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 127.50 233,010 14:56:07
Bid Price Offer Price High Price Low Price Open Price
127.00 128.00 130.00 127.00 127.50
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 31.36M 21.86M 0.0970 13.14 287.18M
Last Trade Time Trade Type Trade Size Trade Price Currency
16:35:22 UT 622 127.50 GBX

Real Estate Credit Inves... (RECI) Latest News (1)

Real Estate Credit Inves... (RECI) Discussions and Chat

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Date Time Title Posts
09/10/202409:00Real Estate Credit Investments2,731

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Real Estate Credit Inves... (RECI) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2024-10-10 15:35:22127.50622793.05UT
2024-10-10 15:20:08128.007089.60O
2024-10-10 14:58:24127.502,3482,993.68O
2024-10-10 14:34:20127.0110,00012,701.00O
2024-10-10 14:06:15127.501,3751,753.13O

Real Estate Credit Inves... (RECI) Top Chat Posts

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Posted at 10/10/2024 09:20 by Real Estate Credit Inves... Daily Update
Real Estate Credit Investments Limited is listed in the Unit Inv Tr, Closed-end Mgmt sector of the London Stock Exchange with ticker RECI. The last closing price for Real Estate Credit Inves... was 127.50p.
Real Estate Credit Inves... currently has 225,237,478 shares in issue. The market capitalisation of Real Estate Credit Inves... is £287,177,784.
Real Estate Credit Inves... has a price to earnings ratio (PE ratio) of 13.14.
This morning RECI shares opened at 127.50p
Posted at 27/9/2024 11:31 by davebowler
Liberum
Event

Real Estate Credit Investments Limited's Board of Directors has announced a new share buyback programme running until March 31, 2025, with a maximum expenditure of £10 million. This follows a previous program set to expire on September 30, 2024, which had an allocation of £5 million and a successor buyback programme of c.£4.1m. The average discount to NAV on shares acquired during the initial programme was 14.1% and at a discount of 15.5% to NAV for the successor programme.

The company's net asset value (NAV) and share price have increased during this period, prompting a reduction in the share price discount from 21.9% at the outset to 11.9%.
Posted at 11/9/2024 10:25 by davebowler
Real Estate Credit Investments

Continued momentum with a +0.7% m/m NAV total return
Analyst: Bjorn Zietsman


Mkt Cap £285m | Share price 128.5p | Prem/(disc) -12.9% | Div yield 9.3%

Event

RECI’s NAV per share as of 31st August 2024 was 147.5p representing a +0.7% NAV total return MoM. The change in the NAV for the month largely relates to +1.2p of interest income, +0.1p from share buybacks and +0.1p in fx movements, offset by -0.3p of expenses.

The portfolio comprises 26 positions with an aggregate value of £301.8m. The weighted average LTV is reported at 59.7%. RECI had available cash of £24.2m at the month end. Cash held as collateral totalled £1.3m. Net effective leverage has increased 1.2ppts to 17.9% as RECI continued to use cash to invest in loans and performed share buybacks. We note that RECI recently re-invested £18.5m, refinancing an existing portfolio of four-star hotels anticipating a levered yield of 15%+.

The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.

Liberum view

We expect news of reinvestment at a projected mid-double digit yield to be taken positively by the market. We expect the market has been waiting for evidence of capital recycling to evidence future growth prospects. The opportunity set for new investments is very strong in this environment and the current c.9% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. We see scope for dividend and earnings growth as capital is recycled. RECI’s portfolio LTVs (59.7%) provide a comfortable cushion against asset write-downs and has underpinned asset recoverability. We expect the company to continue rotating its bond portfolio (GAV of £8m remaining) into senior loans as it views senior loans as offering better risk-adjusted returns. The gross fair value of the bond portfolio is now £7.8m (2.6% of NAV).
Posted at 09/7/2024 12:29 by davebowler
Panmure Liberum-
NAV +0.5% MoM, £12.4m gross development loan repaid

Mkt Cap £268.1.9m | Share price 120.0p | Prem/(disc) -18.8% | Div yield 10.0%

Event

RECI’s NAV per share as of 30th June 2024 was 147.9p, representing a +0.5% NAV total return MoM. The change in the NAV for the month largely relates to +0.8p of interest income, +0.2p in owing to the buy-back and +0.1p in FX movements, offset by -0.2p of expenses and -0.1p of asset valuation movements.

The portfolio comprises 26 positions with an aggregate value of £303.9m. The weighted average LTV is reported at 60.6%. RECI had available cash of £23.5m at the month end. Cash held as collateral totalled £1.2m. Net effective leverage has reduced to 0.7% as RECI was repaid £12.4m in gross proceeds having delivered a gross unlevered 7.4% IRR.

Cash reserves are targeted at between 5 and 10% of the NAV (June’s total cash levels are c.8.1% of the NAV). The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.

Liberum view

June’s performance is in line with expectations. The opportunity set for new investments is very strong in this environment and the current 10.0% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. RECI’s portfolio LTVs (60.6%) provide a comfortable cushion against asset write downs and has underpinned asset recoverability. We expect the company to continue rotating its bond portfolio (GAV of £8m remaining) into senior loans as it views senior loans as offering better risk adjusted returns. The gross fair value of the bond portfolio is now £8.0m (2.6% of NAV).
Posted at 20/6/2024 10:17 by davebowler
Liberum-RECI reported its FY24 results this morning. RECI's NAV per share as of 31st March 2024 was 144.5p representing a +7% NAV total return y/y. Key figures contained in the annual results have already been reported with the March fact sheet. The outlook highlights global election risk, but not notes that lower inflation should lead to lower long-term interest rates which should still benefit RECI as it offers higher sustainable yields. Guidance is for RECI to benefit from returns of over 10% on loans to enhance portfolio returns and dividend cover.RECI's investor presentation showed:  (i) Cash reserves are targeted at between 5 and 10% of the NAV; (ii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.Liberum viewPerformance is in line with expectations. The opportunity set for new investments is very strong in this environment and the current 10.3% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. RECI's portfolio LTVs (64.9%) provide a comfortable cushion against asset write downs and has underpinned asset recoverability. We view the recent write-downs of asset as conservative and note that RECI's impairment testing policy is asset specific. We expect the company to continue rotating its bond portfolio into senior loans as it views senior loans as offering better risk adjusted returns.
Posted at 11/3/2024 09:12 by davebowler
Liberum-
NAV +0.8% MoM
Analyst: Bjorn Zietsman

Mkt Cap £276m | Share price 121.0p | Prem/(disc) -16.8% | Div yield 9.9%

Event
RECI’s NAV per share as at 29th February 2023 was 146.6p representing a +0.8% NAV total return MoM. The change in the NAV for the month largely relates to 0.8p of interest income, 0.4p in asset valuation increases and 0.1p in FX, offset by expenses of -0.2p.

The portfolio comprises 32 positions with an aggregate value of £306.2m. The weighted average LTV is reported at 60.6%. RECI had available cash of £23.7m at the month end. Cash held as collateral totalled £4.2m

RECI’s investor presentation showed: (i) Cash reserves are targeted at between 5 and 10% of the NAV (February’s total cash levels are c.7.7% of the NAV); (ii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.

Liberum view

February’s performance is in line with expectations. The opportunity set for new investments is very strong in this environment and the current 9.9% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. RECI’s portfolio LTVs (60.6%) provide a comfortable cushion against asset write downs and has underpinned asset recoverability. We view the recent write-downs of assets as conservative and note that RECI’s impairment testing policy is asset specific. We expect the company to continue rotating its bond portfolio (GAV of 7.8m remaining) into senior loans as it views senior loans as offering better risk adjusted returns. The gross fair value of the bond portfolio is now £7.8m (2.5% of GAV).
Posted at 12/1/2024 12:26 by davebowler
Liberum-
NAV -0.6% MoM, conservative mark down of French office development loan
Analyst: Bjorn Zietsman

Mkt Cap £288m | Share price 126.0p | Prem/(disc) -12.6% | Div yield 9.5%

Event
RECI’s NAV per share as at 31st December 2023 was 144.2p representing a -0.6% NAV total return MoM (+5.7% YTD). The change in the NAV for the month largely relates to 0.9p of interest income, 0.1p in FX, offset by an unrealised write down of -1.6p (see below), expenses of -0.3p and the impact of the dividend paid of -3p.

RECI has taken the decision to mark down a position which has had a slight negative impact on asset valuations. The French real estate market experienced a difficult year in 2023, with investment volume at its lowest since the Global Financial Crisis. Changes in working patterns since Covid has also reduced office demand. RECI has therefore conservatively taken an unrealised mark down of one of its positions, reporting (but not realising) a small loss equivalent to 1.6p per share against the NAV. The asset is a senior loan to a development of a prime Grade A Paris office.

The portfolio comprises 34 positions with an aggregate value of £318.7m. The weighted average LTV is reported at 60.7%. RECI had available cash of £12.1m at the month end. Cash held as collateral totalled £4.9m

RECI’s latest investor presentation showed: (i) Cash reserves are targeted at between 5 and 10% of the NAV (December’s total cash levels are c.5.1% of the NAV); (ii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans. RECI announced a share re-purchase on the 25th October 2023, and has subsequently repurchased 500,000 shares at an average price of 129.5p.

Liberum view

December’s performance is in line with expectations. The opportunity set for new investments is very strong in this environment and the current 9.4% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. Despite wider market challenges in December, RECI successfully realised £9.2m being fully repaid at par its position in a dully let, grade A office block. RECI continues to use its cash to invest in its existing commitments in accretive, wider opportunities in senior mortgage lending
Posted at 11/12/2023 09:02 by davebowler
Liberum-: Bjorn ZietsmanMkt Cap £297m | Share price 127.0p | Prem/(disc) -14.2% | Div yield 9.4%EventRECI's NAV per share as at 30 November 2023 was 148.1p, representing a -0.2% NAV total return MoM (+5.7% YTD). The change in the NAV for the month largely relates to 1.0p of interest income, -1.1p decrease in asset valuations (see below), 0.1p in FX offset by expenses of -0.3p.RECI has taken the decision to mark down a position which has had a slight negative impact on asset valuations (-1.1p). Due to severe disruption in the German real estate and banking market from the collapse of Signa, RECI has reassessed the recovery valuation on a legacy mezzanine position exposed to a Berlin asset. RECI has therefore conservatively marked this asset down, reporting (but not realising) a small loss equivalent to 1.1p per share against the NAV.The portfolio comprises 35 positions with an aggregate value of £322.6m. The weighted average LTV is reported at 60.6%. RECI had cash of £16.9m at the month end.RECI's latest investor presentation showed: (i) Cash reserves are targeted at between 5 and 10% of the NAV (November's cash levels are c.5.7% of the NAV); (ii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans. RECI announced a share re-purchase on the 25th October 2023, and has subsequently repurchased 500,000 shares at an average price of 129.5p.Liberum viewThe opportunity set for new investments is very strong in this environment and the current 9.4% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. RECI's portfolio LTVs (60.1%) provide a comfortable cushion against asset write downs and has underpinned asset recoverability. We view the write-down of the mezzanine position exposed to the Berlin asset as conservative and note that RECI's impairment testing policy is asset specific. We expect the company to continue rotating its bond portfolio into senior loans as it views senior loans as offering better risk adjusted returns. The gross fair value of the bond portfolio is now £7.5m (1.9% of GAV).
Posted at 29/11/2023 09:39 by davebowler
Liberum-
H1 24 results – Capital recycling creates the opportunity for more attractive future yields
Analyst: Bjorn Zietsman

Mkt Cap £297m | Share price 130.5p | Prem/(disc) -12.3% | Div yield 9.3%

Event
RECI reported its interim results this morning. NAV per share as at 30 September 2023 was 147.7p and RECI generated an annualised NAV total return of +9.4% (dividend yield of 9.1%). EPS increased c.51% y/y to 6.8p mainly as prior period losses from the bond portfolio and currency instruments reversed with RECI generating gains in the current period. Expenses have been well contained, with other operating expenses (excl. management and administration fees) declining c.32% y/y. Finance costs increased +63% y/y due to the impact of higher interest rates.

The portfolio comprises 45 positions with an aggregate value of £334.1m. RECI had cash of £14.9m at the month end.

The outlook statement cites caution around current macro-economic conditions, but confidence in Cheyne’s management expertise which positions RECI well, stating that scheduled portfolio repayments will boost available cash resources for investment into attractive higher yielding opportunities identified by Cheyne. RECI’s latest investor presentation showed: (i) The portfolio experienced no defaults; (ii) Cash reserves are targeted at between 5% and 10% of the NAV (September’s cash levels were c.4.8% of the NAV); (iii) The outlook is positive, guiding for a growing opportunity set as bank lending becomes more constrained. RECI stated they have a strong pipeline of floating rate senior loans.

Liberum view

RECI’s portfolio of real estate debt offers higher yielding returns than direct real estate investments whilst still being underpinned by tangible property in the event of default, thereby offering investors a higher risk adjusted return profile than direct real estate. Moreover, RECI also pays a higher dividend yield than UK REITs. When compared to banks, RECI is more capital efficient as its permanent capital structure allows for lower regulatory capital requirements enabling a higher return on equity than some traditional bank lenders.

The opportunity set for more attractive non-bank real estate debt investments can only expand (in our view) as banks lenders continue to tighten their lending on liquidity concerns in a rising rate environment and increasing need to maintain capital adequacy and increase deposit rates. The H1’24 performance is in line with our expectations. The opportunity set for new investments is very strong in this environment and the current 9.3% dividend yield represents attractive relative value, particularly given the focus on senior loans at low LTVs. We expect the company to continue rotating its bond portfolio into senior loans as it views senior loans as offering better risk adjusted returns
Posted at 31/8/2023 09:37 by davebowler
Liberum-
Initiation of share buyback programme
Analyst: Joachim Klement and Shonil Chande

Mkt Cap £291m | Share price 127.0p | Prem/(disc) -14.4% | Div yield 9.4%

Event

RECI has announced its intention to initiate a share buyback programme, beginning today and extending to 31 March 2024. The maximum purchase amount will be £5m (1.5% of last reported NAV of £339.9m), within RECI’s general authority to purchase a maximum of 34.4m shares (15% of outstanding shares).

Under the terms of the programme, the maximum price payable per share must not exceed the higher of:

105% of the average middle market quotations for the previous five business days
the higher of the last independent trade and the highest current independent bid on the LSE
Liberum view

This morning’s announcement will come as good news to investors and is in response to RECI’s current 14% discount to NAV. The short duration of RECI’s loan and bond portfolio (less than 2 years) means that capital can be recycled into both buying back shares and/or new loans with very attractive IRRs. The buyback programme only makes RECI more attractive, in our view, with the shares yielding 9.4% and the return outlook further improved by the new higher interest rate environment. The addition of the buyback, assuming full utilisation, implies a total yield (buyback yield + dividend yield) of c.11%.

The weighted average LTV of 60% provides significant downside protection and all of the loans continue to perform in line with expectations. We expect the share price to respond positively to this morning’s announcement.

Addition of a marginal buyer should complement volumes that have held well

Not all share price discounts are created equal and in this environment, the addition of a significant buyer can have a material impact. Compared to many alternative funds, where volumes have declined significantly this year, volumes and liquidity have held up well in RECI’s case, without repurchasing shares. RECI is one of the top 10 highest-yielding funds within the AIC universe, on a NAV basis, and one that remains attractively positioned given the floating rate short-duration focus.



There are several ways to evaluate the impact of share repurchases. These include the impact on the share price, the impact on the discount, the impact on discount volatility, NAV accretion, and impact on the bid/ask spread. Based on our tracking across these metrics for alternative funds, given RECI’s portfolio characteristics and liquidity profile, there is a good chance that the buyback programme will have a material impact on the discount. Useful case studies YTD include Fair Oaks Income and Sequoia Economic Infrastructure, which share some of the relatively higher-yielding and floating rate exposure characteristics. The impact on NAV accretion will be relatively more modest given the initial size and the fact that RECI’s discount is not especially high, compared to many alternative funds.
Posted at 30/8/2023 14:46 by mwj1959
Front page of Hardman's report (paid for research)...

RECI’s current discount to NAV (15%) suggests to us that some investors could be concerned that potential issues with commercial real estate (CRE) will dramatically affect the trust’s assets. In our view, the key reasons why they should not lie in RECI’s management of its position as a debt provider and in its asset selection. We note i) CRE equity holders take first losses (with a 60% LTV, RECI has a big cushion), ii) when accounts have got into difficulties, RECI has typically seen more funds injected by the equity backers, iii) CRE equity holders suffer from rising rates, as value transfers from equity holders to debt providers, and iv) RECI has limited office exposure (none in the US) – the sector most exposed to working from home.
► CRE equity holders vs. debt: CRE equity holders are affected directly by falling CRE prices, rents and rising borrowing costs. The risks to a debt provider to CRE (like RECI) arise from the probability of a borrower defaulting and loss in the event of default, not CRE prices alone. We detail below how RECI materially reduces both of these factors.
► July 2023 factsheet: The underlying NAV rose 1.5p,due to recurring interest income(1.0p).
Cash was £17m, and gross leverage £90m. The book has 45 positions (30 loans, gross
drawn value £371m, and 15 bonds, fair value £35m – down from 26 and £90m,
respectively, at end-March). The weighted average LTV is 60%, and the yield is 10.8%.
► Valuation: In the five-year, pre-pandemic era, on average, RECI traded at a premium to NAV. In periods of market uncertainty, it has traded at a discount. It now trades at a 15% discount, a level not seen since late 2020. RECI paid its annualised 12p dividend in 2022, which generated a yield of 9.5% ‒ expected to be covered by interest alone.
► Risks: Credit cycle and individual loan risk are intrinsic. All security values are currently under pressure. We believe RECI has appropriate policies to reduce
the probability of default and has a good track record in choosing borrowers.
Some assets are illiquid. Much of the book is development loans.
► Investment summary: RECI generates an above-average dividend yield from
well-managed credit assets. Income from its positions covers the dividends.
Sentiment to marketwide credit risk is currently difficult, but RECI’s strong
liquidity and debt restructuring expertise provide extra reassurance. Where
needed, to date, borrowers have injected further equity into deals.
Real Estate Credit Inves... share price data is direct from the London Stock Exchange

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