Secured Income Share Discussion Threads

[makinbuks] 15/7/2020 12:06

Yes I agree, although I was still half expecting a rabbit to be pulled out of the hat because I'm confused now regarding Dawn Kendall's new business as manager. Surely she saw this coming, but it does her no good at all?? I think they snuck in a warning today about the Covid related issues. The platform P2P stuff is still c. 6% or something so there may well be further write downs. Still not happy but no problem to hold for 3 years while something close to NAV is returned

[spectoacc] 14/7/2020 14:16

The only sensible choice IMO, tho suspect the recent SQN shenanigans put the nail in the coffin of rollover.

We'll be waiting a good while to get full value back, but if they're still earning/paying divis in the meantime, happy with that. Plenty (SQN!) have much longer average duration:


"The longest dated loan in the portfolio matures in March 2026, whereas the weighted average life of the portfolio is 2.9 years which includes some extensions for CoVid. Subject to shareholders approving the managed wind-down, the Board will, in seeking to maximise value from the Company's portfolio, consider asset sales if appropriate terms can be agreed, but expects that the majority of the portfolio will be run off in accordance with the maturity profile of the loans with the possibility of some borrowers refinancing their loans with the Company prior to such maturity dates."

[spectoacc] 19/6/2020 14:54

They requested the vote go this way, they expected it. So why do we have to wait until September, presumably at the limit of the 90 day limit, to know what's going to happen next?



"Accordingly, the directors are required under the Articles of Association to convene a further general meeting of the Company to be held within 90 days of the date of the General Meeting to consider a special resolution to approve the voluntary winding up or other reconstruction of the Company. Therefore, the Board will now undertake a strategic review into the future of the Company, in particular examining the likely returns to shareholders and the timing of any managed wind down of the investment portfolio compared to other options to return capital to shareholders or the creation of a more liquid investment in a larger vehicle listed on the London Stock Exchange. The Board will consult with shareholders as part of the strategic review process and intends to inform shareholders of the outcome of the strategic review at the end of August 2020 with a view to holding the required general meeting in September 2020."

[makinbuks] 26/5/2020 17:03

I assume he represents the shareholder who wants out. I suspect they are agitating for a wind up for cash rather than rolling their stake into another vehicle. At least we will be saving some fees! David Stephenson strikes me as a sensible bloke with PI's interests to the fore.

I did think the announcement was somewhat downbeat.

[spectoacc] 26/5/2020 10:04

Couldn't tell from that whether they really want to wind it up, or want to go down the route mooted above - and what's with the director resignation/conflict?

[makinbuks] 26/5/2020 09:54

Sounds like get the wind up startted with a deal in a few months/ a year once the position with COVID is clearer to shorten the process. Whats the difference between that and the ongoing payment of an uncovered dividend? Obviously the main concern is that we get as close to NAV as possible. Personally I have no problem waiting

[spectoacc] 02/5/2020 08:12

Hold SQNX & SSIF (in size) but no SQN, & wouldn't much fancy a merger with that long duration, dodgy AD co too. Thinking they might realise as much cash as they can across all 3, then announce an option of getting money back (at a discount) or continuing with a larger, fully merged entity. Certainly won't be imminent but perhaps a year down the line if/when Covid over, AD issues resolved etc. With the cash exit not too generous in the knowledge the SSIF s/holders wants out.

[makinbuks] 01/5/2020 11:30

Yes creating size through that sort of merger would help make the management side more efficient

[spectoacc] 30/4/2020 15:32

Thanks @Makinbuks. Wonder if there'll now be an attempt to merge with say SQNX? Otherwise, IMO SSIF just too small to survive. They're never going to grow it.

[spectoacc] 30/4/2020 11:41

"It is the SSIF Board's expectation that at the same time as the appointment of KKV to manage AFIF is formalised, which is expected to occur on or around 1 June, 2020, the management of SSIF will transfer to KKV on the same contractual terms as are currently in place. This transfer is expected to take place with the agreement of both the SSIF Board and SQN CM which will continue to provide support and consulting services to KKV for a period of at least an additional twelve months at no additional cost to SSIF. The SSIF Board remains aware, however, that the appointment of KKV to manage AFIF remains subject to the finalisation of various agreements between AFIF, KKV and SQN CM.

Shareholders should note that this expected change in management arrangements will not affect the previously announced Continuation Vote that is due to be held on 19th June 2020 and that Dawn Kendall and her team will be extensively involved in that process.
"

[spectoacc] 30/4/2020 09:02

@Makinbuks - any views on previous RNS?

Also interesting to see SQN.L "change" their manager - basically the same people, in a different corporate body.

[spectoacc] 27/4/2020 08:03

This line is a pleasant surprise!

"In addition, the Board wishes to obtain a clearer view on the impact of Covid-19 on SSIF's portfolio before making any recommendation to shareholders. This applies to both the legacy portfolio and the more recent loans which SQN has originated and which, to date, are all performing in line with expectations with no missed payments."

[spectoacc] 31/3/2020 14:48

Saw it come out this morning, meaning to go back to it, completely forgot.

It's excellent, IMO. Recognises the Covid-19 issue, recognises it may drag on (unlike so many, who think it'll be over inside a quarter). Saying an extra 12 months or so for wind-up, and delaying the EGM, perfectly sensible. And:

" During these turbulent times our priority is to focus
on preserving cash and maintenance of dividend cover for our Shareholders.
Equally, we are pleased that the Manager is conducting sensible and
cooperative conversation with our borrowers to set their minds at
rest with a priority given to protecting their financial health and
that of their people. This emergency period will pass and it is incumbent
on all stakeholders to behave in a responsible and fair manner. We
do expect the maturity profile of the loans to be extended but are
encouraged that updates from underlying businesses have been broadly
encouraging at this early stage. "


So likelihood is loan extensions until Covid-19 passes.

Often get nervous holding SSIF, but it's the pick of the bunch IMO. Compare it to SQN's latest massive NAV write-down of the AD plants today.

[makinbuks] 31/3/2020 14:42

Seems a pretty decent update today. Don't have much time, need to re read it carefully

[spectoacc] 25/3/2020 15:00

Lol - someone sold 20.6k when bid was 79p - and got all of 72p for them.

Divi seems to still be getting paid - one of the very few!

But realistically, who knows atm.

[spectoacc] 09/3/2020 16:10

Gorra laff - 84/84.5, really?

No - 82p to sell 16.5k, then 81p to sell 12.4k. Tiny in the scheme of things, yet MMs given the sellers way under bid.

SSIF should be moderately OK thanks to the NAV discount and monthly yield, and can see some sort of govnt relief for businesses unable to pay their bills. Can't say I'm adding tho!

[makinbuks] 02/3/2020 12:11

Quiet month in January, another 5 platform loans repaid yet cash slightly reduced. Monthly payout uncovered again

[makinbuks] 19/2/2020 16:08

Disappointed with the December update issued three weeks ago. Cash increased again to 8% and NAV fell by £458k after a dividend of £307k. This was sfter two months in whihch the dividend was fully covered and NAV rose. The implication is that something was written off, possibly in the region of £400k - £500k. Could that be a year end review knowing that the auditors are due in? The number of platform loans is now down to just 40 with an average value of £97k, 6.3% of the fund

[dodgyknees] 17/2/2020 12:54

The three trades so far today are all shown as sales but they are in fact purchases!

[makinbuks] 28/1/2020 12:55

I agree that is a pretty bold statement given their position and the uncertainty overt he future. Good to see, open and honest

[spectoacc] 24/1/2020 08:14

Has taken them a few days, but the communication at SSIF is much improved:

"We would like to share with you a recently published research note from Kepler on the SQN Secured Income Fund.



In light of Monday's announcement from SSIF's sister fund, the Asset Finance Income Fund, we would like to take this opportunity to highlight the following points:

-- The SQN Secured Income Fund is managed by Dawn Kendall who joined to set up a separate subsidiary for SQN in April 2017 in order to take over stewardship of the trust. Dawn has over 30 years experience of fixed income investing, previously holding senior positions at Twenty Four, Investec, Architas, Newton and SG Warburg.

-- The Fund is very well diversified across sectors with the diversity of borrowers reducing thematic or sector risk. The Fund does not hold any exposure to Anaerobic Digestion projects and therefore will be unaffected by the write downs associated with these assets in the sister fund SQN Asset Finance Income Fund managed by Neil Roberts.

-- As you will read in the attached independent note from Kepler, since taking over the Fund Dawn has built a portfolio of senior secured direct loans and reduced the Fund's (inherited) exposure to peer to peer platforms. Dividend cover has been achieved with the new asset mix, the underlying portfolio now generates a yield of 10% which is in excess of the target return of net 8% total return per annum.

-- As highlighted in the note, the Fund AUM at the end of December was GBP50m which is below GBP250m targeted when management was assumed. As a result, investors will be given the opportunity to decide on the Fund's future by way of a continuation vote and as mentioned in a press release in December 2019, SQN and the Board are in discussions regarding the timing for this and we will be in touch on that point shortly.

We hope that the work carried out by Dawn and the team provides comfort that the mandate is in good shape and will continue to provide the returns that make it an attractive proposition to investors seeking a regular income. We thank you for your continued trust and support. If you would appreciate a follow up call to discuss the Secured Income Fund in further detail we would be very happy to organise.
"

[spectoacc] 17/1/2020 20:39

Re-reading this again:

(Also need to read the subsequent 16th Oct RNS where they rapidly increased a provision).

Wondering at what point they announce what this proposal put to the Board by the asset manager is - surely a merger with eg SQN or SQNX, tho both trade at wider discounts atm I think.

Also reminded me that end of this year, 2020, is when a continuation vote would happen.

Very happy to sit on SSIF for its decently-managed portfolio, increasing switch away from the legacy stuff, and monthly divi, but clearly at this size, something's going to give, and it's going to give this year, 2020.

"Expectations are that a solution that benefits all parties is likely to come together before the continuation vote"

[spectoacc] 03/1/2020 12:48

All fair points. My worry is that SSIF is still trading too highly, compared to eg SQN/SQNX, that ought to be very similar. Where once they traded at a big premium/SSIF at a discount, now we have SQN/X at a big discount and SSIF at a relatively smaller one.

Yes, minor in the scheme of things, the divi is what matters. But as you say, there's a large holder wanting out of SSIF, with absolutely no liquidity in the shares and no prospect of bulking up. Do we just roll on until the next recession/depression?