Regional Reit Share Discussion Threads

[nickrl] 13/2/2024 18:10

@hindsight rolling the bond will just worsen their cash needs. The dividend is toast and should have been 12mths ago. They need to redeem the bond and then hope that IRs have fallen before the first refi is due in Aug26.

[grahamg8] 13/2/2024 17:26

RGL1 debt for RGL equity? I don't think so. The attraction of a bond is to have a reasonably secure income without growth, shares on the other hand have a tendency to return less in the form of dividends but hopefully make up for it with capital growth. And in RGL's case the main downside is risk of a wipe out. The bonds are still more secure, but a tad shaky. If the risk takers don't want to buy the shares then the risk averse bond holders certainly won't want to be lumbered with them.

[hindsight] 13/2/2024 14:04

WC104 Paying the retail bond with cash removes cash that could be used to cure secured covenants

Yep why think they will be keen to roll bond with high yield or some debt for equity offerings

[louis brandeis] 13/2/2024 13:15

God help us.

[chatchat] 13/2/2024 13:09

annualising is a bit of an ego trip

actual cash in the bank is the reality

[ursus] 13/2/2024 12:38

So if I back a horse that wins at 10/1 at lingfield this afternoon, my gambling return is 365000% pa? Or 366000% pa for this lucky leap year?

[louis brandeis] 13/2/2024 11:47

Got touched by the Woodford black spot. ;)

[louis brandeis] 13/2/2024 11:46

Annualising is fine. Event arbitragers annualise their returns on events that are one offs!

[williamcooper104] 13/2/2024 11:15

The retail bond isn't counted in secured debt covenants but those are 60 LTV with form memory one at 55 Paying the retail bond with cash removes cash that could be used to cure secured covenants

[williamcooper104] 13/2/2024 10:49

You can pay a scrip divi and keep your reit status - HMSO did this for years Also it's 90% of taxable profits after capital allowances

[andycapp1] 13/2/2024 09:28

Helpful thanks. Not sure it’s changed my view!

[spectoacc] 13/2/2024 08:49

All about LTV and voids for me - if they could somehow sell the c.20% that's empty and costing money (rather than having to sell the better stuff), could transform them.

Difficulty is finding buyers, the price received, and the effect on NAV/LTV. What's the empty stuff valued at, what's it geared at?

But from a trading perspective, could make a big difference to cashflow to not be paying out on empty rates/insurance/maintenance.

Even better, get some of it let, but that's been going backwards.

Something will no doubt be pulled out the bag for the retail bond - not crowing yet - but Inglis has been the last to see RGL's problems coming (think of his share buying), & he'll be the most surprised when his office empire comes unstuck.

[arbus5000] 13/2/2024 08:33

paying off the retail bond should reduce the group LTV by around 8 percentage points, which should give better headroom towards other covenants, if needed.

I dont see why it would have to accelerate the repayment of other debt - if the average cost is 3.5% and rental income is 9-10%, it makes sense to earn the difference.

The bond is up slightly, and is on offer for 91p, hardly a doomsday scenario!

the next dividend announcemnet is on feb-22, will be interesting to see what happens.

[andycapp1] 13/2/2024 07:59

Gotcha thanks. I spent bit of time looking through this train wreck at the weekend. Was recommended by friend!! I can’t see a way out. The retail bond redemption might be survivable but a progressive bank refi (even if possible) will swallow all the cashflow. If you could magically sell all the assets in a sh1t mkt, and they are all itty, bitty assets, would they fetch enough to repay debt and leave much for equity? ie are the assets really worth close to NAV? I’m not convinced at all. So worth a punt? Non, not from me.

[arbus5000] 13/2/2024 07:29

they can 'junk' the dividend:


* its perfectly acceptable to offer a scrip dividend, and offer a more generous amount of shares than a cash dividend - with the shareholder free to chose. Hammerson did this earlier.

* Dividends can be suspended for up to 1 year (from the end of the accounting period), so in effect, longer than a year. Many reits suspended dividends during covid.

* it can pay less than 90% of income yet remain a REIT, but will have to pay corporation tax on the amounts it did not pay out.

[rcturner2] 13/2/2024 07:01

They can stop paying the dividend, they would lose their REIT status or at best suspend it for a while.

[andycapp1] 12/2/2024 22:51

Am I not right in saying they can’t junk the divi as the REIT status requires them to pay out income?

[cruelladeville] 09/2/2024 13:22

I think so. Witnessing a slow motion insolvency here.

[cc2014] 09/2/2024 11:12

Share price and bond price indicating the end of the road?

[return_of_the_apeman] 08/2/2024 09:41

The risks to the unsecured bonds are laid out in the prospectus from pg24

hxxps://www.regionalreit.com/investors/retail-eligible-bonds

[nickrl] 08/2/2024 09:26

RGL1 has held up pretty well through the incipient decline in RGL but all of suddenly people getting twitchy over these although its a thin market.

[grahamg8] 08/2/2024 07:53

RCT, nonsense. Annualised returns are normally used to rebase longer investment or debt onto a comparable time frame of 1 year. Although unusual it is perfectly correct to annualise from a shorter timeframe. In theory what it means is that you could invest in RGL1 now and collect in 6 months, then invest the proceeds in another RGL1 (assuming an identical investment existed) for a further six month.

Put another way would you like to make a cash return of 10% in 6 months or 12? The amount you make is the same, how fast it grows, ie the annualised rate of return, is very different.

The point I was making a few posts back is that the Directors "plans" are pretty near impossible to achieve, you simply can't keep paying the dividend and reduce the LTV to 40% and repay/refinance the bonds all at the same time. The only way out is hefty asset sales which would begin a downward spiral. Better to kill this dog now.

[bondey] 08/2/2024 03:25

1. They have a £701m property portfolio
2. You can buy them at 89
3. The return is higher than 10%. Approx 12.5% cap gain(11/89) plus 2.25% income - in 6 months