SLF Realisation Share Discussion Threads

[ctrader3] 30/6/2022 13:13

Ordinary Shares:

As at 31 March 2022, the unaudited estimated NAV was £63.09m or 17.72 pence per Ordinary Share. This compares to £68.15m or 19.15 pence per Ordinary Share from the December 2021 unaudited NAV.

The total return per Ordinary Share during the period from 31 December 2021 to 31 March 2022 was therefore (2.2) per cent (after taking into account capital returns during the period). A total of £3.56m has been returned to Ordinary Shareholders during the period, reflecting 1 pence per Ordinary Share.

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if they return capital of 1p a share the share price will fall
to 5p against a NAV of around 16p.

[ctrader3] 30/6/2022 12:59

I guess for the ordinaires the outcome will be decided on
Borrower 6 the French glass manufacturer, the record
energy prices haven't helped.
The only way I know is to watch and wait.

[ctrader3] 30/6/2022 11:55

SLF Realisation Fund Limited



Asset Realisations



The Board of the Company is pleased to announce that Borrower 11* within the Ordinary Share Class Portfolio, an anaerobic digestion plant located in Eire, has refinanced repaying £3.0 million. The loan had a carrying value of £2.65 million as at 31 March 2022.





*by reference to the half-yearly financial report to 31 December 2021.


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first AD sale, more to follow I expect.

[chucko1] 20/6/2022 14:36

Probably worth reflecting that 6.8mn Cs traded on Friday and 30mn Ords (being 20x and 60x average daily volume respectively).

I thought this might be Schroders, but the scale of the Ords might indicate Investec, the largest holder of Ords at some 30mn, have had enough. They also possess 8.1mn Cs, so it looks like a workable theory.

In my opinion, the news on the largest loan repaying was worth 2p on the price. The seller would have used this strength to generate liquidity be selling significantly below this level.

[ctrader3] 13/6/2022 14:52

Asset Realisations



The Board of the Company is pleased to announce that Borrower 43* within the C Share Class Portfolio, a wholesale portfolio of Mexican leases, has refinanced and bought back the participation in the loan for $6.4 million (£[5.1] million). The loan had a carrying value of £4.6 million as at 31 March 2022, since which time the Company has also received amortisation and interest payments amounting to $409,000 (£325,740).



In addition, a loan within the Ordinary Share Class portfolio, Borrower 37*, an operating lease of earth moving vehicles, has agreed a final repayment schedule, whereby the borrower has paid to the Company an amount of £174,625 on each of 6 May 2022 and 31 May 2022 and has agreed a payment of £174,625 due on 30 June 2022, and a final payment of £176,175 due on 29 July 2022 for full and final settlement. The position had a carrying value of £680,305 as at 31 March 2022.

[imnotspartacus] 24/5/2022 09:57

Still waiting IWeb

[spectoacc] 24/5/2022 07:18

Finally got the money in from Hargreaves Lansdown.

[spectoacc] 21/5/2022 13:02

IG are cheap, but I don't like their price quotes (don't seem to use many RSPs) & in general as a co, they're words I can't legally safely write. They seem to lose a lot of FOS cases.

[camo1997] 21/5/2022 07:05

Still nothing from hl fyi, will check Monday morning ay

[camo1997] 21/5/2022 07:04

Yeah I’m moving slowly over to IG. Really like the platform and if you do 3 or more trades a month uk deals are £3 and us trades are free commission, just 0.5% exchange fee. Not great for funds and automatic reinvestments, but got all the etfs and stocks you need.

[spectoacc] 20/5/2022 15:44

What particularly irks me with both HL & iii is that when you message them to ask where your money is, they take days and days to respond - by which time, it's appeared, and they can send a snarky "I see the money is in your account".

To be fair, wouldn't much like to work at one of these understaffed brokers.

[gregatimb] 20/5/2022 15:36

Still nothing from HL. Two market days lost for reinvesting.

[bandit99] 20/5/2022 11:32

I had to chase HL for 2 weeks over a capital repayment from another stock they had 'misplaced' - actually they denied it had been paid to them! I checked with the trust that monies had been paid on time, they had, so I had the evidence to go back to HL and start getting annoyed. If it happens again I will lodge a formal complaint.

The ord repayment here still hasn't been credited..

[2wild] 20/5/2022 09:56

Best thing I ever did was move to interactive investor. Pay £20 a month and you get 2 free trades a month, to use in your ISA and/or trading account. Subsequent trades are just 399p, dividend reinvestment 99p and free regular monthly investments. Can also add a SIPP, £10 a month extra, first six months free. The tax man will top up by 25%. Even non taxpayers can put in £2,880 and interactive will take about 7 weeks to claim £720 from the government.

[spectoacc] 20/5/2022 08:03

Jarvis credited my C's payment yesterday; agree nothing from HL yet.

[gregatimb] 20/5/2022 07:58

HL yet to credit mine also. There processing times for dividends and corporate actions have got more extended recently.

[camo1997] 20/5/2022 07:39

Not had the ord payment yet? HL account

[2wild] 19/5/2022 14:37

Got the 4 and 1ps in both my interactive Investor ISA and trading accounts.

[a0002577] 19/5/2022 12:33

Well, the c's capital has been repaid - expect the ords shortly?

[2wild] 11/5/2022 13:39

Started to reinvest next week's 4ps, with a small purchase at 9.5p. Probably 50 to 100% upside at this price.

[ctrader3] 10/5/2022 16:04

plenty to learn there, tks for taking the time to post.

[chucko1] 10/5/2022 15:32

The Ords were at 14.5p to buy in huge size in October 2010. At that time, it was virtually impossible for them not to get at least that amount back. The risk/reward was absurdly good.

At the same time, the Cs were at about 35p but more difficult to trade. However, there was a lot of debate about the relative merits and it was more than worthwhile taking the time to switch from any Xs into Cs. There was quite some discussion about this.

However, it became pretty clear that the quality of the Cs portfolio was far, far higher than that of the Ords. This became clear once SQN published a line by line on each of the assets - the most useful report by far that we had seen from them. In fact, it was invaluable as it painted a picture of a hopelessly undervalued C portfolio whereas the Ords portfolio was so AD-centric that it was little more than a one-trick pony. On seeing this, the relative risk/reward was so stacked towards the Cs there was little point holding on to many of the Ords having been bought at prices ranging from 22p down to 14p and back to about 16p. It was also clear that the average life of the C portfolio was around a half of that of the Ords, which some people thought useful.

With the 4p return of capital, the Cs will have paid back 60p. Having bought them at 35p up to 45p or so, one might think it time to say thank you and move on. In cash terms, I now have about one third of what I had before the 4p ex cap announcement (half the reduction as a result purely of the 4p itself).

So what now. As I suggested in a post a few days ago, we are now down to 6 credits of roughly equal size. In fact, I thought it useful to model all 8 credits including the two small ones as I wanted to examine the remaining possibility here in great detail. Now, when I say model 8 credits, let me be clear what I mean. I have little idea what sort of obligor each credit represents, but we have discount rates and remaining maturities for each of them. We also have the history of amortisations and interest payments made by each of them.

What I want to do is explore how risky the remaining portfolio is from a purely mathematical point of view. It is a little bit like a CDO where any shareowner has a senior part. To price a CDO, we need to know the concentration of credits in any particular sector, as the higher the concentration is (the higher the correlation, therefore), the riskier is the exposure to the shareholders. We do not know this, although we have all the other information, so long as one gives credibility to the discount rates stipulated by their invocation of IFRS9. In any event, that is how they arrive at the NAV, so it flows through my own analysis pretty well.

I did 3 different things. I assumed no correlation between credits, or some correlation, or finally, complete correlation. In the latter case, this essentially means that if one credit defaults, they all do. That would be a s0dding bad outcome!

Case 1. There is a 16% chance the portfolio is worth less than around 15.5p and a 2% chance it is worth less than 13p. Roughly, but not that rough.

Case 2. 16% worth less than 13.25p and 2% less than 8.5p

Case 3. 16% worth less than 12p and 2% less than 6p.

Ingredients for the method:

Binomial distribution for each of the credits indicated by discount rate and average life. Two outcomes - full repayment or default. This is OK as I calibrate with value assigned to each credit.

20% recovery upon default

Central limit theorem for distribution of sum of means of the above.

I used a covariance matrix with equal correlations for calculation of all off-diagonal cells.

I assumed an average life equal to 75% of the final maturity. This is generally consistent with the flows seen from the periodic reports.

For all of the above, it is perfectly reasonable to critique what I have attempted to do, and a more conservative method is not unreasonable. However, my gut feel tells me case 2 is not far from a representation of increasing correlation as we are down to 8 credits which do indeed share something in common - they have not yet been refinanced! And despite the quick 4p after the previous 10p, one has to take on board their comments regarding the long tail of the portfolio. Against this, though, is the fact that each credit has a known payment history and none have been further impaired over the past year or so even though some in the Ords portfolio have. This indicates a healthy process in this respect - one of the few healthy processes!!!!!

Again, for all of the above, I have assumed no misrepresentations in the reports. So far, there have not been any that are material, so long as you excuse the background low level of competence from some involved over the years.

I would also add - it is extraordinary how they could put together a portfolio as dire as that of the Ords, and yet the Cs might still return a total of 80p in the pound before dividends (actually, that is quite bad, but that’s another story).

DYOR, I am bound to say. Let me know if you feel I have messed anything up. No point doing this for the Ords as we know the correlation is basically 1. And AD performance is merely an article of faith and/or specific knowledge.

[ctrader3] 10/5/2022 08:59

IF u had bought the ord's instead at 23p
u will have received 18.5p