RM Secured Direct Lending PLC Net Asset Value(s) (7635L)

TIDMRMDL TIDMRMDZ TIDMTTM

RNS Number : 7635L

RM Secured Direct Lending PLC

15 January 2021

 
                     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 31 December 2020, on a cum income basis, was 93.88 
  pence (30 November 2020: 93.66 pence). 
 
 RM ZDP PLC announces that the unaudited accrued capital entitlement 
  per ZDP share as at 31 December 2020 was 109.87 pence (30 November 
  2020: 109.55 pence). 
 
  NAV 
  The Company's NAV % Total Return for the month was +1.97%, which 
  brings the NAV % Total Return for the quarter to 4.29% and for 
  the full year 2020 to 3.15%. 
  The Ordinary Share NAV as at 31(st) December 2020 was 93.88 pence 
  per share, which is 0.22p greater than at 30(th) November 2020. 
  This monthly return of 0.22 pence per share arose primarily from 
  the ex-dividend effect of the 1.625 pence per share total ordinary 
  dividend for the period Q3 2020, declared in October and paid 
  in December 2020. Otherwise, there was positive net interest 
  income net of expenses of 1.06 pence per share and an increase 
  in portfolio valuations and currency hedging costs of 0.79 pence 
  per share.   Summary for month (pence 
             per share) 
   Net interest income    +1.058 
   Change in portfolio 
    valuations            +0.788 
   Payment of Dividend    -1.625 
   Net NAV Movement       +0.221 
  ---------------------  ------- 
 
              Company Activity 
              During the quarter, the Company continued to purchase shares 
              in the market with an additional 1,371,299 shares acquired, bringing 
              the total number held in treasury to 3,860,299. The share price 
              discount to NAV has narrowed over the last three quarters from 
              -16% at the end of Q2, then -12% at the end of Q3, to -7.3% at 
              year end. Both the Board and the Investment Manager remain focused 
              on reducing the discount to -6% or lower which is the targeted 
              maximum discount level noted within the Company prospectus. 
              The portfolio size increased over the quarter by GBP5m as new 
              CBILS transactions were closed. Cash management has been a key 
              focus over this period and the Investment Manager has successfully 
              rotated out of the majority of the syndicated loan investments 
              with below target yields into higher yielding bilateral loans 
              originated by RM Funds. The has led to a material increase in 
              the average portfolio yield from 8.89% to 9.37% during the period. 
              Using the mid-market current share price against the stated dividend 
              target gives an implied income yield for investors of 7.55% down 
              from 8.125% at the end of Q3, as the share price has appreciated 
              over the period. 
              Portfolio Update 
              It has been a strong quarter for the portfolio both in terms 
              of performance and activities within the portfolio. Key highlights 
              include: 
               *    GBP15m of HM Government guaranteed CBILS business 
                    written, representing c11% of NAV. 
 
 
               *    GBP1.8m partial repayment of 2 hotel loans and an 
                    increase in the lender reserve attached to this 
                    facility of GBP1m. 
 
 
               *    Resolution of Covid-related work-out assets 
                    contributing to additional NAV gains during the 
                    month. 
 
 
              CBILS Loans 
              RM Funds was initially granted GBP15m of HM Government Guarantee 
              capacity, with the potential to upsize this by a further GBP10m. 
              The Investment Manager is currently seeking approval for the 
              additional capacity. All CBILS loans benefit from a UK Government 
              Guarantee, protecting 80% of the principle and 100% of the first 
              year's interest. 
 
              New Investments 
              Social Infrastructure > Aged Care Sector: Two tranche Senior 
              Secured Loan (GBP5m CBILS, GBP2.8m Non-CBILS). The loan will 
              be utilised to support the development of a high quality 72 bed 
              purpose-built care home. The borrower has an extensive track 
              record in developing and operating quality care homes in the 
              UK. 
              Hospitality & Leisure > Senior Secured Loan (c.GBP4.5m CBILS). 
              The loan will be utilised to support the development of hospitality 
              and leisure assets. The loan benefits from an all-asset debenture 
              and guarantee over key development assets. 
              Existing Investments 
              Social Infrastructure > Student Accommodation (GBP6.1m nominal; 
              Loan ref 68). RM Funds executed a work-out strategy as the developer 
              failed to action their Covid recovery plan. This loan is senior 
              secured on a new, purpose-built student accommodation ("PBSA") 
              in a prime location in Coventry city centre. The asset has 80 
              bedrooms and the loan equates to c.GBP76k/bed. The Investment 
              Manager appointed FRP Advisory LLP "FRP" as part of the work-out 
              process, which will involve the marketing, operational management 
              and a variation of planning permissions to maximise the utility 
              of the asset in the near to medium-term. The loan has been marked 
              down to 81.86% of par valuing the loan at just over GBP5m. This 
              values the asset at c.GBP62.8k per bed which is conservative 
              versus some of the listed peer group and other private comparables. 
              Hospitality & Leisure > Hotel (Development) ( GBP3.35m, Loan 
              ref 58): This loan was partially refinanced by GBP2m during December 
              2020 generating a gain of approximately GBP700,000 as the loan 
              was previously marked at 64.58% of face value. The remaining 
              loan balance also saw a valuation increase to 73% of par value 
              as the hotel development scheme was fully funded during the period 
              by the senior and junior Lenders, in addition to further equity 
              cash injection. The additional capital funded by RMDL was via 
              the CBILS scheme. This loan trajectory is back to 100% of par 
              value as the scheme is finalised over this coming year. Finally, 
              the existing loan coupon was increased from 12% to 15% as part 
              of the refinancing to reflect the general increase in debt costs 
              since the Covid period started - this interest will roll up as 
              is typical of a construction financing. In summary the property 
              has a signed Hotel Management Agreement ("HMA") with a 5* counterparty 
              and a fully funded scheme. An updated valuation was undertaken 
              with the new HMA counterparty in-situ, and, on an "as is" basis, 
              the LTV is 71.5% and the Gross Development Value "GDV" once stabilised, 
              is expected to be 65%. 
              Social Infrastructure > Student Accommodation (GBP4.4m nominal; 
              Loan ref 12): A senior secured loan to a PBSA asset with 77 bedrooms. 
              This loan equates to c.GBP78k/bed. The borrower has had ongoing 
              issues with the operator which have been resolved. RMDL had previously 
              noted overdue interest for this asset in the July Interim accounts, 
              RM Funds are pleased to report that GBP500k was received in December 
              2020 and is key contributor to the excess income over the month. 
              Hospitality & Leisure > Hotels (Operational) Despite the temporary 
              closure of the hotels, our counterparties have continued to perform 
              through the Covid pandemic via cash interest payments. December 
              saw significant progress with the reduction of risk within this 
              portfolio exposure as our largest borrower completed a ground 
              rent transaction on an asset held within the two loan portfolios 
              (ref 66&67). This ultimately reduced the loan balance by c.GBP1.8m, 
              lowered the LTV back to 80% and has enabled the borrower to deposit 
              c.GBP1m in a RMDL lender control account. 
 The Company also announces that the Monthly Report for the period 
  to 31 December 2020 is now available to be viewed on the Company 
  website: 
 https://rmdl.co.uk/investor-centre/monthly-factsheets/ 
 
 For further information, please contact: 
 RM Capital Markets Limited - Investment Manager 
 James Robson 
 Thomas Le Grix De La Salle 
 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 
 Carlo Spingardi 
 Tel: [phone] 
 
 Peel Hunt LLP - Financial Adviser and Broker 
 Luke Simpson 
 Liz Yong 
 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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January 15, 2021 02:00 ET (07:00 GMT)