Urban Exposure Share Discussion Threads

[stemis] 19/7/2019 14:06

I'd be surprised if this is a scam. It's not some mickey mouse operation preying on PIs.

[horndean eagle] 19/7/2019 14:02

This looks like a scam of some sorts. The company can barely generate a positive return and yet are contemplating issuing debt at these levels. How are they going to generate excess return over the cost of this funding. Has a horrible stink about it.

[stemis] 19/7/2019 13:45

AJ Bell offering subscription to bonds.

At the moment, ahead of 31 October, I'm keeping my powder dry in putting new money into the market.

I'm guessing weakness here is sectoral

[jonwig] 17/7/2019 08:03

Could be interesting. At the placing price, the expected yield was 5%, which didn't look attractive enough, but at 8% and an asset discount it might.

The kinds of security and covenants they will employ look pretty tight, and they say they've never suffered a loss. So that might make them look attractive.

When I reached p38, though, I was rather put off by the figures comparing 2016 and 2017. Presumably the much lower activity in 2017 was caused by the referendum result? But their costs seem to have a high fixed element so there's a lot of operational gearing, maybe?

Also on p38 they have a "gain on loan redemption" which looks exceptionally large. I'd like to know how this arose, what it consists of, etc. but we aren't told.

A last thing, they need to get co-investors to build up their loan portfolio, since their own resources with gearing will amount to only about £200m. Will that be easy in a recession? (I'm guessing the UK could well go into recession soon.)

As they say on Dragon's Den, "I'm out."

EDIT: "gain on loan redemption" is probably an early redemption penalty on one or more loans, in which case it's an income substitute, except that they can redeploy the capital. If so, it would have been to their advantage to tell us!

[hindsight] 16/7/2019 11:18

Depends on ones view of uk property outlook. At least prospectus has sensible LTV, presuming its followed and values real

LTV (loan to value)
The Issuer will not make any loans on the basis of
an LTV ratio of more than 75% (including for the
purposes of calculating the value of the loan, inte
rest and fees due, as well as the principal amount
lent).
The Guarantor believes that this is a prudent basis
on which to lend, given historical movements in re
al
estate values, and provides adequate protection aga
inst any defaults by Borrowers under Eligible Loans
.

[stemis] 16/7/2019 10:55

Anybody got any views on the ords?

[wmb194] 16/7/2019 09:31

I've double checked a few of the old and recent prospectuses - including IPF, Tesco PF, Helical, EnQuest, A2Dominion, CLS, Burford, Alpha Plus - and no, £2k looks normal. Of course, this doesn't recommend this bond but at least on this score it looks usual.

The 'charity' ones e.g., CAF, Hightown, Belong, Dolphin, Golden Lane were just £500 so it seems like it could have set the subscription at at lower level if it had wanted to.

[jonwig] 16/7/2019 08:41

wmb - really? 3 to 5 I thought.

[wmb194] 16/7/2019 07:58

For ORB bonds a minimum subscription of £2,000 is normal.

[jonwig] 16/7/2019 06:30

Minimum size is small, which suggests to me they are trying for the 'low' end of the market. But then their list of brokers is a bit limited. (Neither of mine is included.)

Haven't touched the ords, and unlikely to buy the bonds.

[yieldsearch] 16/7/2019 01:04

6.5% 7 years announced today. I guess closest comparable would be lendinvest retail bonds?

[stemis] 08/7/2019 11:13

NAV 31.12.19 = 95p

Forecasts are loss of 1.7p in 2019 and 0.7p in 2020. Forecast dividends of 5p in 2019 and 5.13p in 2020, leaving forecast 2020 NAV = 82.47p

[jonwig] 08/7/2019 10:55

If you replace your header links with these, they should be clickable:

[jonwig] 08/7/2019 10:53

Thanks for setting it up, SteMiS. Will come back with queries, comments.

[stemis] 08/7/2019 10:48

This is the announcement which seems to have done the damage



As a result, the Company expects significantly reduced income in the short term. However, the potential for the Company to build a larger asset management business is expected to result in strong growth in the medium term and earnings are protected through minimum earnings clauses as described below.