Sqn Asset Finance Income Share Discussion Threads

[spectoacc] 20/1/2020 14:28

The ords now trade on about the same discount as yesterday but accounting for pretty much the worst-case NAV write-down given in the RNS, so looks about right to me (at 70p anyway). The surprise is quite how long they gave everyone to sell out - easily an hour.

C shares not been perfect but again - they have absolutely no AD exposure, which is what has also done for HWSL. Can't say no write-downs coming from elsewhere but they've (figuratively & literally) been a different class to SQN. More like HONY, less like HWSL.

Wouldn't buy any of them at par, but everything has its price.

[horndean eagle] 20/1/2020 14:23

The C shares took ages to invest so odds are much better dd but would still expect write downs. We haven't seen any so far but its same management. If they are a bit useless then unlikely we will have totally been spared. Surprised ords not down more. Seems to be a buyer about.

[spectoacc] 20/1/2020 13:58

Citywire have made the valid point that SQN unlikely to survive November's continuation vote now. Which will make for some interest with Suniva ongoing, and these delayed AD plants have a c.20 year life.

Not seeing much value here yet, am assuming c.80p NAV if full AD provision per RNS. X looks far better, c.97p NAV (update due this week) & no AD investments. Think I'm going to wait for the NAV just in case tho.

[spectoacc] 20/1/2020 13:26

Disagree per above, but have to say it's amazing to think these all once traded at big premia. And that many have suffered capital losses on lending without us even having a recession, let alone depression.

Edit - @riverman77 - SQN has 39% of NAV in AD loans. SQNX has zero. SQN been paying an uncovered divi, & still battling with Suniva (& others). SQNX fully covered.

[riverman77] 20/1/2020 13:24

All these direct lending funds seem to be equally useless. You need specialist expertise in one area, whereas SQN cover such a random range of sectors (ships, helicopters, factory equipment, etc). I suspect the C shares are only performing well because there have yet to be any blowups, bur that's probably only a matter of time.

[spectoacc] 20/1/2020 13:23

SSIF? They're more SQNX IMO. They do, however, have their own legacy stuff - is a massive RNS about it from a while ago. So some further small write-downs wouldn't be a big surprise. Not aware they've any AD but could be wrong.

HWSL, on the other hand, have also been undone by similar.

[apollocreed1] 20/1/2020 13:18

Can anyone explain what the difference is between this fund and SQN Secured Income please? Is "Secured Income" any safer or equally liable to announce a large impairment?

[tournesol] 20/1/2020 10:52

Having sold within a few minutes of today's RNS, I've just looked back at my history with this holding.

I'd held them for 20 months, and the regular monthly dividends more or less matched the capital loss (give or take a few %) so disappointing but not painful or damaging.

C'est la vie.

[lord gnome] 20/1/2020 10:03

And given the caution in the statement, could you trust the stated nav when it does finally appear?

[spectoacc] 20/1/2020 10:01

Suniva was quantifiable, accounted for, and (still) likely to turn out not too bad.

That expected range of possible NAV drop is enormous, and NAV delayed, and is a bolt from the blue.

[lord gnome] 20/1/2020 09:54

Looks like we are all heading for the exit. Until this is sorted out SQN is uninvestible.

[rogerrail] 20/1/2020 09:42

I'm out too, this sort of situation more often deteriorates rather than improves.

[tournesol] 20/1/2020 09:22

Specto

Thanks for posting that. Pretty shabby that they released the RNS at 8.26 when everbody has finished reading the day's RNS's.

I see no point waiting for the rest of the sorry tale to unfold in its every grisly detail and sold as soon as I read the news.

Good luck to those who remain.

T

[spectoacc] 20/1/2020 08:58

Only thing I'm not sure about is whether that's an additional "4.6p to 13.2p" of potential loss, over and above the £3.2m already provided for (I think it is).

SQN doing an HWSL.

[spectoacc] 20/1/2020 08:30

Looks bad for the Ords - how much is in the price?

"In preparation for the review of the interim accounts for the six months ended 31 December 2019, the Company is undertaking a review of the models and projections supporting the carrying values of the AD plants. Three of the AD plants have not yet reached targeted operational capacity. A further three AD plants are performing at or above the targeted operational capacity but feedstock costs have been higher than originally anticipated.

As a result, the Investment Manager has undertaken an assessment of the valuation of these assets. Given the large number of variables and the high degree of sensitivity of each of those variables when modelled over the more than 20 year lives of the assets, the range of potential values is large. If the range of values were to be accepted and deemed appropriate for purposes of the interim accounts, a potential impairment of between 4.6 pence to 13.2 pence per ordinary share would have to be recorded. Given the wide range of potential values, and in the interests of prudent risk management, the Board intends to appoint a third-party valuer to provide an independent assessment of the valuation of these assets, which will then be reflected in the 31 December 2019 net asset value ("NAV"). The six assets, in aggregate, had a valuation of GBP127.7 million, as at 30 November 2019.

The C share portfolio has no exposure to AD assets. "


Edit - def an "I would say that", but amazed how poorly the SQN's been run, compared to how good SQNX is - same bloody management. Looking for an op to buy more X's, been some selling since that RNS, but they've no exposure.

"4.6p to 13.2p" eh........

[petewy] 12/1/2020 11:32

Thanks EEZA. I hold FIPP.

[eeza] 12/1/2020 00:56

VSL = VPC Specialty Lending Victory Park

[petewy] 11/1/2020 23:46

Specto What is VPC?

[spectoacc] 11/1/2020 21:03

SQN pays divi out of capital atm, until Suniva eventually resolves.

I hold SQNX & also been in VPC a long while, it's really turned around and doesn't deserve the size of discount IMO.

[2wild] 11/1/2020 17:26

Sold out of SQN due to continuing falls in NAV and added to VSL.
Over 12 months SQN nav fell 3.81p from 97.49 to 93.68p.
7.25 Div-3.81 = 3.44.
3.44/83 = 4.1% net adjusted annual yield.
Over last 6 months nav fell 2.76p from 96.44p.
6xDivs 3.6252-2.76p gives 2.1% net adjusted annualised yield.

Although NAV declines could reverse, given the falls have excellerated over last 6 months this seems unlikely.

[a0002577] 02/1/2020 14:36

A lot of room to move up SpecToAcc, particularly if they solve the Suniva problem.

[spectoacc] 02/1/2020 11:03

XD today, guess the 86p's on Tue were getting in ahead of it.

[spectoacc] 31/12/2019 08:55

A couple of decent ATs at full offer on the X's this morning. Room to move up I reckon (but I would say that).

[a0002577] 23/12/2019 19:04

How about June this year as an example, Chucko? These are prices downloaded from ADVFN

"C" Shares (SQNX) ORD Shares (SQN)
Date Close Date Close
31/05/2019 91.00 29/05/2019 90.80
03/06/2019 91.00 30/05/2019 92.20
04/06/2019 90.50 31/05/2019 92.20
05/06/2019 90.50 03/06/2019 92.00
06/06/2019 90.50 04/06/2019 92.00
07/06/2019 89.00 05/06/2019 92.00
10/06/2019 91.25 06/06/2019 91.00
11/06/2019 89.00 07/06/2019 91.00
12/06/2019 89.50 10/06/2019 91.60
13/06/2019 88.00 11/06/2019 90.00
14/06/2019 88.50 12/06/2019 91.60
17/06/2019 87.00 13/06/2019 91.40
18/06/2019 88.50 14/06/2019 90.20
19/06/2019 88.00 17/06/2019 90.00
20/06/2019 87.50 18/06/2019 89.40
21/06/2019 87.50 19/06/2019 88.60
24/06/2019 89.00 20/06/2019 88.60
25/06/2019 90.00 21/06/2019 90.00
26/06/2019 90.00 24/06/2019 88.60
27/06/2019 89.00 25/06/2019 90.00
28/06/2019 91.00 26/06/2019 89.30

Some of this is due to the way the closing price is calculated but there are other examples this current year. kind regards - A000