Regional Reit Share Discussion Threads

[redhorse2020] 19/2/2024 11:31

Does anyone know how much he and his family actually hold? I wasn't aware that his stake is especially big...

[spectoacc] 19/2/2024 11:08

He's a big shareholder tho - does he then sell out?

I think they'll come up with something re the bond - eg sell some more family silver, redeem most, and keep say £20m outstanding via a new retail roll. Retail were up for 4.5% on an unsecured bond originally, some will be up for eg 8% now.

[spectoacc] 19/2/2024 08:48

I've said throughout the divi would be the last thing to go, and Inglis the last to see what's happening - so my money would be on the same divi, and possibly a bounce into XD.

For my sins I held HMV once, and the what I got for the shares 12 months after getting the divi, was less than the divi was :)

[nickrl] 19/2/2024 08:40

Lets see what the Q4 divi declaration brings on Thursday.

[spectoacc] 19/2/2024 06:51

NRR's done great :)

It's INTU, HMSO, CAL IMO. Heavily over-geared in a structurally affected market.

[m_kerr] 18/2/2024 23:20

They can't pay dividends whilst not paying a debt due in 6 months.

The directors must be certain there will be enough cash to pay it. As WC104 stated, the refinance cost will be prohibitive, ahead of the yield of the portfolio, so they'll have to pay it off. I think they will find the money, making the bond return very attractive.

Still wouldnt touch the equity here. SAid a year or so it reminded me of newriver in a few ways, and I haven't seen anything to change my mind since.

[bondey] 18/2/2024 17:51

I can't see ANY risk on the bonds. They probably have close to 50m cash already and any shortfall can be made in the next 6 months via a sale or two. Sub 90 the bonds are a give away

[lord gnome] 17/2/2024 17:32

Too late to worry about that. The share price has already crashed.

[grahamg8] 17/2/2024 12:07

Canning the dividend would crash the share price. And kill the REIT. There doesn't seem to be a reasonable option but sell property through 2024 at a higher rate than 2023 and rely on the Manager's expertise to get close to NAV. I'n not confident. Certainly the bonds are a better bet than the shares, but still high risk.

[nickrl] 16/2/2024 18:21

@m_kerr by canning the current divi level they would generate 6m/qtr!! So if they were to make that move bond would be a good bet.

[m_kerr] 16/2/2024 13:01

They had £26m unrestricted cash at half year, and sold £26m worth so far this year (assuming half of that is available). If they generate £6m quarterly in cash, the bond looks safe IMV. They will no doubt be selling some smaller assets for alternative use before August 2024. This will be aided by a low average lot size of around £5m.

They also still have a small amount of industrial and retail for which there may be a bit more interest.

The bond looks a pretty decent risk adjusted bet IMV.

[nickrl] 14/2/2024 21:22

RGL aren't very transparent with covenants but in a capital raising document issued in 2019 they reported that

the Santander (65m) facility was

historic interest cover > 300 per cent. at all times;
projected interest cover > 300 per cent. at all times;
LTV <60% until fifth anniversary then <50%

Its secured against Toscafund Glasgow Limited whatever properties are in that portfolio as that has multiple subsidiaries and its Jersey domiciled.

The anniversary is 19 June 24 so doomsday clock looks earlier than the bond potentially.

Scottish Widows Ltd. & Aviva Investors Real Estate Finance (165m)

historic interest cover > 300 per cent.
projected interest cover > 300 per cent.
LTV <60%

secured against RR Range Limited (28 properties)

Scottish Widows (36m)

historic interest cover > 275 per cent.
projected interest cover > 225 per cent.
LTV <60%

secured against RR Star Limited (19 properties)

Royal Bank of Scotland, Bank of Scotland & Barclays (126m) must be post 2019 as not mentioned.

[bondey] 14/2/2024 18:35

They said in the 2nd Feb update they intend to keep cost of debt at 3.5%. At least 80% of bond holders would sell any shares given in lieu, and the shares would collapse further.

[hindsight] 14/2/2024 17:56

They simply wont pay the bonds cash, too close to 60% covenants. They will offer a 20% new bond roll and/or a debt for equity offering at the same time.
If the bondholders like me accepted shares at say 14p, the share price probably wouldnt fall much as LTV would be <50%

[grahamg8] 14/2/2024 17:20

arbus, I agree with your maths. Bonds are now in seriously distressed territory, the shares have been there for some time and sinking steadily.

Was your question about converting £750m assets into £450m addressed to me? As the comments above about BCPT indicate the book value is not necessarily going to be the sale price, then there are selling costs, interest on the debt, admin expenses, and dividends assuming the REIT status holds they will still be paid even as the whole pack of cards crumbles. These costs are going to be paid from a shrinking rent roll.

The end result all depends on what assumptions are made. Perhaps I am being too pessimistic. But I would rather be surprised on the upside than discover the shares falling off a cliff after buying a load of worthless paper.

Perhaps the most puzzling aspect is that Stephen Inglis and his buddies seem to think that it's all a minor hiccough that can readily be overcome. One more worry not mentioned recently is that the loans are going to have covenants on them and we have no idea what those say or how close we are to breaching them.

[arbus5000] 14/2/2024 15:55

bond is trading at 85 today, thats >30% annualised yld

[arbus5000] 14/2/2024 13:20

Which bcpt are you referring to?

I got the following:

"Since the beginning of the year, BCPT has announced the disposal of four office holdings, raising capital proceeds totaling £68.865m delivered at an aggregate discount of 2.6% to the preceding independent valuation[2]. Three of these sales are regional out of town offices, which is a structurally challenged sector of the market. '

[spectoacc] 14/2/2024 08:53

Also note BCPT's commentary:

"Three of these sales are regional out of town offices, which is a structurally challenged sector of the market. "


They're looking to offload more, as I'm sure are others.

Again, if I were RGL, I'd be dumping the c.20% unoccupied for whatever I could get, RLE-style, just to be shot of them and to bring in a little cash.

Then again, if I were RGL I'd not be in this position.


"SpectoAcc - 06 Dec 2022 - 10:08:31 - 3034 of 3963 
Also very bearish on RGL - IMO they should pass the divi, spend cashflow on meeting EPCs & cutting the high LTV. Don't think they will cut, but at cost/risk of the IT itself in future. High gearing in a shrinking sector is what did for the likes of INTU, HMSO, CAL etc."

[nickrl] 14/2/2024 08:48

Read across from BCPT sale isn't great - business park asset in Crawley with 8yrs still left on tenancy been shifted at 6.3% below the Dec 23 valuation! This isn't a distressed sale either so given RGLs situation doesn't bode well.

[bondey] 14/2/2024 08:25

Spoken like a true equity holder! If they don't repay the bond they are in default = bust. The bond(s) is their priority, not the shares.

[arbus5000] 14/2/2024 08:22

how did you manage to convert £750 mln of assets down to £450mln?

[grahamg8] 14/2/2024 07:32

I ran my slide rule over a 'what if' scenario. Keep selling property over the next four years, could they pay off the debt and balance the books? On my numbers just about, but as a gambling investment (and I have a few) then share price needs to drop quite a lot further before I would want to add to my woes.