RM Secured Direct Lending PLC Net Asset Value(s) (1155N)

TIDMRMDL TIDMRMDZ TIDMTTM

RNS Number : 1155N

RM Secured Direct Lending PLC

18 May 2020

 
                   RM Secured Direct Lending Plc and RM ZDP PLC 
 
                             ("RMDL" or the "Company") 
 
                             LEI: 213800RBRIYICC2QC958 
 
                                  Net Asset Value 
 
 RMDL announces that its unaudited net asset value per ordinary 
  share as at 30 April 2020, on a cum income basis, was 89.10 pence 
  (31 March 2020: 86.64 pence). 
 
            RM ZDP PLC announces that the unaudited accrued capital entitlement 
             per ZDP share as at 30 April 2020 was 107.36 pence (31 March 
             2020: 107.05 pence). 
 
             Market Update 
             The market saw a recovery in sentiment during April as governments 
             globally sought to introduce and or increase policy measures 
             to help businesses though this lockdown period. This improved 
             risk appetite across markets meant credit spreads retraced from 
             the wider levels seen during March and resulted in modest valuation 
             gains for the portfolio during the month. 
             NAV 
             The NAV total return for the month was 2.83%. This takes the 
             one-year NAV total return to (3.1%) and the cumulative NAV total 
             return since IPO to 9.4%. 
             The Ordinary Share NAV as at 30(th) April 2020 was 89.10 pence 
             per share, which is 2.46 pence higher than at 31(st) March 2020, 
             comprising interest income net of expenses of 0.53 pence per 
             share and an increase in portfolio valuations of 1.93 pence per 
             share which includes all credit and currency movements. 
             During the month the Company purchased 500,000 shares at 72.50 
             pence. After the month end the Company purchased a further 35,000 
             shares at 79 pence. These will all be held in treasury. 
             Portfolio Activity 
             As at the 30(th) April, the Company's portfolio consisted of 
             34 debt investments with a running yield of 9.48%, diversified 
             across 13 sectors, with the percentage split between fixed and 
             floating rate of 56% to 44%. The portfolio structure is 59% in 
             bilateral private loans; 36% in club or syndicated private loans; 
             and 5% in more liquid corporate debt. Consequently, private debt 
             investments represent 95% of the portfolio. 
             The Company declared a dividend of 1.625p per ordinary share 
             with respect to the period Q1 2020.The ex-dividend date is 5(th) 
             June. 
             No new investments were made during the period as the focus for 
             the Investment Manager remains on managing the existing portfolio. 
             Within the top 10 investments which represents circa 50% of the 
             portfolio, eight paid interest in cash as expected during the 
             period. The two remaining holdings utilised the structural features 
             of their loan terms to pay interest via Payment-in-Kind (PIK). 
             The Investment Manager continues to closely monitor the entire 
             portfolio and support borrowers where necessary. A number of 
             other portfolio companies who provide lender reporting monthly 
             had positive updates. These updates started to cover the period 
             of the lockdown in March 
 
             The key highlights of the portfolio's activities during April 
             include: 
              *    Asset Finance - post period end RM Funds received the 
                   quarterly (to 31(st) March) collateral review from 
                   the third-party provider engaged to provide such 
                   services to the Company. For Quarter One 96% of the 
                   portfolio is performing, broadly in line with 
                   previous reporting periods and operating as per the 
                   financial model base case. 
 
 
              *    The two largest hotel investments : RMDL received 
                   their scheduled quarterly interest payment during the 
                   month. The sites currently remain closed. 
 
 
              *    The Automotive Parts investment in Germany : the 
                   company is seeking to restart production (in line 
                   with the management forecasts given at the start of 
                   this crisis), which supports cautious optimism that 
                   the supply chain is restarting - this note is using 
                   the PIK feature within the documentation allowing the 
                   borrower to conserve cash which will be required for 
                   working capital as operations restart. 
 
 
              *    The Gym Operator : the sponsor and the lender are in 
                   negotiations regarding the need for additional 
                   working capital - whilst discussions take place the 
                   lender is allowing the borrower to conserve cash and 
                   has PIK documentation in place. 
 
 
              *    The two student accommodation investments : RMDL 
                   continues to receive interest as both have interest 
                   reserves which can be utilised. 
 
 
              *    Two other hotel transactions : RMDL continues to 
                   receive interest as both have interest reserves which 
                   can be utilised. 
 
 
 
             The Investment Manager's key priority remains on the protection 
             of capital, and collection of its economic interests. 
             Post month end the Board and the Investment Manager reached agreement 
             with regards to the extension of the Investment Management Agreement 
             "IMA". The Board would like to take this opportunity to explain 
             more fully the rationale behind the agreement reached. Norman 
             Crighton, Chairman, commented; 
 
             "The Board is pleased to have secured the services of RM Funds 
             for another three years at the same fee rate which has been in 
             place since the launch of the Company in 2016. At 0.875% per 
             annum the agreement secures RMDL Shareholders one of the best, 
             and lowest cost, deals in the debt sector. In addition, the Board 
             is delighted that RM Funds has agreed to continue to align its 
             interests with Shareholders by purchasing shares in the market 
             using a portion of their management fees. 
 
             The portfolio has been constructed by RM with the majority of 
             investments being bespoke loan agreements which are highly complex, 
             with numerous covenants. The portfolio has a weighted average 
             life of 3.25 years so the Board aligned the Investment Management 
             Agreement with the life of the portfolio, and believes there 
             is no group better positioned to manage your investments. 
 
             By extending the IMA at the same fee rate and ensuring RM Funds 
             continue to buy shares in the market, Shareholders have the ongoing 
             alignment of the Investment Manager, and security of their continued 
             services through what could be a volatile period. " 
 
             If you have any questions for the Board please do not hesitate 
             to contact Singers and we will respond as soon as possible. 
 
 The Company also announces that the Monthly Report for the period 
  to 30 April 2020 is now available to be viewed on the Company 
  website: 
 https://rmdl.co.uk/investor-centre/monthly-factsheets/ 
 
                                        END 
 
  For further information, please contact: 
 RM Capital Markets Limited - Investment Manager 
 James Robson 
 Pietro Nicholls 
 Tel: [phone] 
 
 International Fund Management - AIFM 
 Chris Hickling 
 Shaun Robert 
 Tel: [phone] 
 
 Tulchan Group - Financial PR 
 James Macey White 
 Elizabeth Snow 
 Tel: [phone] 
 
 PraxisIFM Fund Services (UK) Limited - Administrator and Company 
  Secretary 
 Brian Smith 
 Ciara McKillop 
 Tel: [phone] 
 
 Nplus1 Singer Advisory LLP - Financial Adviser and Broker 
 James Maxwell 
 Lauren Kettle 
 Tel: [phone] 
 
 About RM Secured Direct Lending 
 
 RM Secured Direct Lending Plc ("RMDL" or the "Company") is a 
  closed-ended investment trust established to invest in a portfolio 
  of secured debt instruments. 
 
 The Company aims to generate attractive and regular dividends 
  through loans sourced or originated by the Investment Manager 
  with a degree of inflation protection through index-linked returns 
  where appropriate. Loans in which the Company invests are predominantly 
  secured against assets such as real estate or plant and machinery 
  and/or income streams such as account receivables. 
 
 For more information, please see 
 https://rmdl.co.uk/investor-centre/monthly-factsheets/ 
 

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May 18, 2020 02:00 ET (06:00 GMT)