Uil Share Discussion Threads

[vacendak] 18/3/2021 16:45

Also, the 2022 will go into 2028, so still a six years duration. There were talks, aborted for the ZDPs 2020 full redemption, to extend from six to eight years.
So maybe they will create some ZDP 2030s next year to spread the repayment then have the 2024s turn into 2032s.


This could work out well for them and avoid having to cough up £48.5M in cash to redeem in October 2022. Of course, if the rollover is a disaster and people do not even rollover those £25M... they will need to find those £48.5+M pronto via asset sale or create those hypothetical 2030s at a very expensive coupon.

@CC2014
I would not worry much about Somers, it is the same team that runs it. The only issue is its NAV estimate, since Somers is not traded enough in Bermuda for proper price discovery to occur. So far the market has not reacted to badly at ICM's decision to say "Somers is worth as much as we believe it is".

Of course, a more radical solution would be to list it in London and offload a lot of share to create some free float; but this is unlikely to happen. Somers' holdings are decent quality though.

[vacendak] 18/3/2021 16:23

My 2022s are in two roughly equal lots.

One on paper, which I have not been able to dematerialise with my current ISA provider and the other within the ISA. I will most likely elect to let the paper version mature and get the cheque next year and ask to rollover 100% of the rest. They guarantee only a certain amount, but let people bid for more. So far, I have always managed to rollover 100% of the amount I held (2014, 2016, 2018 and 2020). I cashed in the 2012s at maturity to buy a car back then.

However this time, since they are in effect cutting the borrowing, I might not be allowed to rollover the whole lot. We shall see.

It is a nice ballast in the portfolio, liquid enough to sell if I needed the money and like the Lannisters, UIL Ltd always pays its debts; so I shall take the offer, with the added bonus.

[cc2014] 18/3/2021 15:55

Yes you read it right that only about a third of the 22's will be turned into 28's.

It's my interpretation that they are trying to spread the debt out so that the two yearly lumps are a similar amount.

Pitching this now, just as gilt and treasury yields are rising fast makes me think that by doing it now they think the rate will be lower than if they leave it another 6 months or whatever.

The 5.75% seems pitched about right to me, meaning I'm sitting here considering it but not over-excited. Rolling over 36% of holding into the new issue seems about right at 5.75%. If they wanted me to roll 100% of my holding I'd be wanting more.
We have some time to make a decision. For me it will be either roll 36% or just let it mature in 2022. I won't be applying for extra at 5.75%


I am farily uncomfortable about the fund holding a larger and larger lump of Somers.

[vacendak] 18/3/2021 15:34

A bit early to rollover in April 2021 for a share class due to mature in October 2022.
A nice little premium to NAV on the day of the rollover (2.60%) and a 5.75% yield to maturity.

Now the million dollar question is whether or not we shall see runaway inflation, therefore higher interest rates, till 2028 and how much worse would 5.75% look like by then.

Am I reading it right when I see that the current 2022s clock at £73.5 mils and they say there will be only £25M max in ZDP 2028s at time of conversion?
Would this mean UIL Ltd is considering weaning itself off its debt? In the past when they were doing rollovers, they always topped up the debt.

[vacendak] 17/3/2021 10:49

The technicality vote that will allow them to invest up to 50% in one platform, I assume Somers. Potentially a risky vote as the ICM crowd does not hold the ZDPs.

[spectoacc] 01/3/2021 11:38

"150-180p" was the spread :) MMs killed it for ages, managed to average down but it really was an average down, having bought pre-Covid.

[vacendak] 01/3/2021 11:35

Put the graph on "3 Years" and it is only back to where it was in late 2019 when I exited a few weeks before the move away from the main listing.

Still, nice surprise for those who carried on accumulating during the recent 150-180p seesawing period.

[spectoacc] 01/3/2021 11:27

They talked about getting it to 25% discount - NAV a moveable feast of course, but still a little to go.

[morton2011] 01/3/2021 11:21

agree buybacks support it all and the non exec who bought a lot of shares recently has a good CV. Difficulty is how do you know when they might stop.

[spectoacc] 01/3/2021 10:48

Agreed, makes no sense - "Because things are exactly the same, we're now going to change to Daily".

But did like the "...The strong performance has continued in the first two months of 2021"

Still all about the director buying & the buybacks for me. I'll book the profit when the buybacks are done I think.

[morton2011] 01/3/2021 10:44

Long live the independents - still on the sidelines myself and clearly poorer for it at the moment.

Classic ICM in the RNS - "The half yearly report also noted that volatility is expected to remain high as differentiated recoveries become clearer. Consequently, the Board believes that it is now an appropriate time to move to a daily basis of NAV reporting" Mr Google struggling with 'differentiated recoveries'.

If there is a lot of volatility why go to daily. Financial advice I have always been given is tune out such noise in pricing look at weekly, monthly or quarterly. Its also odd to move to daily when there is so little liquidity in the investments and platforms.

Todays challenge for that first valuation is that Resimac in Australia down 10% this morning and 20% from the last valuation on 24 Feb. It represents around 20% of the underlying portfolio.

[vacendak] 01/3/2021 09:13

Daily updates for the NAV. The last three independent small investors on the register will be pleased to get more information. :)

[vacendak] 24/2/2021 19:19

I tend to always criticise them now that I am only in for the ZDPs but I must admit that the whole clique has a lot of skin in the game. So much that they literally own the company itself.

Back in late 2015 early 2016 there were a lot of director buys... then the share price shot up a lot indeed. It went from languishing at 90-100p for ages to a peak of 190p within six months.

[spectoacc] 24/2/2021 18:54

More fool me being in both :)

But agreed, am surprised at the decent director buying so high up on UTL. Starting to look like it'll break out on the chart.

[ceaserxzy] 24/2/2021 18:50

With buyback by the company and insider buy on the market, there is some strong credibility in the NAV and the large discount. Unlike the situation with tfg, where the large NAV is only used for benefiting the directors in their NAV based fee calculation,while cutting the dividend for share holders and no director buys or company buyback on the market of the apparently deeply discounted cheap shares.

[spectoacc] 24/2/2021 11:45

Bridges bought 50k shares at £2.46. Not unimpressive, tho still not sure about directors front-running the buyback.

Edit - and another 46k at £2.55.

[vacendak] 19/2/2021 13:22

The best unsaid thing is the reason for the platform structure. Peter Burrows all but admits this was a means to an end to circumvent the maximum holding limit of the orginal 2003 prospectus at UIL Ltd's birth. That max holding has been increased to 30% in 2008 and will now be done away via allowing the platforms (Somers, Zeta, etc.) to reach 50% of UIL Ltd.
Shareholders and ZDP holders will be given a say but... well... the numbers are in favour of ICM Ltd.

They do explain in details their new way of evaluating the price of Somers on pages 41-42. It is not as dodgy as it first sounded.

[vacendak] 19/2/2021 13:16

The Chairman statement is heavily self-congratulatory, especially on the debt reduction. No mention is made of the shady borrowing against shares and other wizardry in the accounts. The, somewhat forced by the markets, cash redemption of the 2020s is sold as a debt reduction exercise, which it is indeed in technical terms.

[vacendak] 19/2/2021 13:14

Currently reading the HY report:
"UIL is taking steps to create a 2028 ZDP share class
with the view to offering the opportunity to 2022
ZDP shareholders to roll into the 2028 ZDP shares
and enabling investors who were cashed out in
full under the 2020 ZDP redemption last year the
opportunity to reinvest."

So this is a halfway house result:
* They are not phasing out the ZDPs.
* They are not extending their lives to 8 years as was the plan a few years ago when they created the 2026s at the same time of the rollover from 2018s to 2024s.

[spectoacc] 16/2/2021 10:22

Fair points. Structural anomaly def right, but guess it suits them.

Not sure I'll call it, but want to be out when the buyback nears its end, and keep riding it until then.

[vacendak] 16/2/2021 10:19

Switching from "What the market says" for the NAV to "What we think it is" may have helped too.
True, the market did not say much, but it was UTL's own making: Hardly any free float to trade, not many trades, no efficient valuation.

In an ideal world, buy-back would be used to correct pricing anomalies. UTL has a structural anomaly: They should hoover your shares indeed, de-list and go private.

[spectoacc] 16/2/2021 09:17

Buyback isn't daily, but difficult to argue it's not the reason for the rise. NAV doing fine, but the buyback is a good chunk of the volume on the days they do it.

They'll get mine too eventually.

[spectoacc] 09/2/2021 08:59

Must be a glutten for punishment as am in both :)

UTL's recent rise seems all buy-back related, particularly looking at L2 & the gap on the bid.

[ceaserxzy] 04/2/2021 19:07

Despite being opaque and trading on big discount like tetragon (tfg), this trust has performed much better than tfg. Multiple reason are behind the performance difference, such as it paying a maintained or even increasing dividend, buy back for cancellation shares at market price. Compared to this trust tfg is a disgrace as the its share holders are severely punished (deeply cut dividend and decreasing share price) while its managers are benefiting from increased fee through the nominal NAV increase.