Vpc Specialty Lending In... Dividends - VSL

Vpc Specialty Lending In... Dividends - VSL

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Stock Name Stock Symbol Market Stock Type
Vpc Specialty Lending Investments Plc VSL London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 86.40 08:27:38
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Industry Sector

Vpc Specialty Lending In... VSL Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

rogerramjett: Added 50% to my holding today. Re read the annual report and can't see any real negatives. I'm interested in the dividend which appears to be strong. Was tempted to double holding but have restricted myself and drip feeding capital in safer havens with relatively large dividend yields.
chucko1: "Poor months" only offsetting the extreme increase in the valuation of BKKT. Stripping that out (and the share price has basically done that), then the underlying business seems to be returning a tad over 1% a month. Easily enough to cover the dividend and allow for a useful increase in NAV. Anything additional on BKKT and the other 3 (smaller) SPACs is little more than a smallish special dividend. Considering the 16p in dividends over the past 2 years and roughly 5p increase in NAV on top, everything else is basically noise. I expect much of the same for the NAV over the next 2 years as well.
chucko1: This is not correct, I think. They have insufficient cash as it stands - thank God, or they could not afford the dividends. It is a question, firstly, of where the cash would come from. They could borrow it via a bond issue. Were that the case, they add leverage and pay a bond coupon instead of dividends. This is a saving, of course, although at the expense of higher risk (to the remaining shareholders) but higher per share dividends, or, they could sell assets to finance the share purchase. Far more likely as all they have to do is to allow short dated investments (there are many) to roll off. There would still be a liquidity issue in this respect, but could be satisfied via a short term credit facility. Again, this would represent a significant saving to remaining shareholders. More importantly, in respect of the fact they they are paying "above market" (104p versus 88p), this is irrelevant as they cancel the shares. They do not exist any more. The equity so far issued is a liability and the purchase of it cancels the liability. And this is the reason why there is no accounting loss - as the share price falls (previously), they do not ever take a gain. And this was the big debate back in 2008/9 for banks - they were allowed (via a sudden change) to mark to market their own issued debt (which was the vast majority of their issued capital) as credit spreads rose from perhaps 70bps to 700bps (for Tier 1 or even 2 debt) and similar multiples for their senior debt. This had the effect of offsetting their vast mark to market credit losses. In my previous day job, I had a mark to market loss of some EUR35bn!! Cash wise, very profitable, I hasten to add for fear of losing any credibility I am trying to project! But this accounting change was only for debt and not equity. It was not necessary as there were no significant equity assets they typically held. In our case (VSL), imagine if they were to buy back 100% of the equity. Then, by extension of the "loss" argument, there would be an infinite loss per share (not that any would exist any more). This cannot be the case as all you would be left with was a bunch of assets financed by a bunch of debt, or a dissolution of the company via selling of all assets. In which case every share at 88p would have been retired at 104p (assuming the assets were realised at that price [the NAV], in fact). Of course, this is not the point of the company and would annoy SpectoAcc beyond the point of mere irritation.
chucko1: If you hold the additional 33% of shares (so a 25% buyback takes you back go where you were originally) for a year (until buyback completed), you can expect a 26% total return on that portion. Around 9% from the dividend (4 x 2p) plus appreciation from 88p to, say, 104p NAV. This NAV assumes an almost zero valuation on BKKT. If share price rises to 99p, so on the border of the 5% trigger level, then you enjoy a 20% return on everything. Other permutations in between! 20% on something which has already shown its quality in testing circumstances is compelling. But VSL has been compelling ever since they started writing back their conservative loan impairments starting March 2020 (and at an share price of 63p or so, and even as low as 44p).
cwa1: 24 February 2022 VPC Specialty Lending Investments PLC ( the " Company") DIVIDEND DECLARATION The Board of Directors of the Company has declared an interim dividend of 2.00 pence per share for the three-month period to 31 December 2021. The dividend will be paid on 31 March 2022 to shareholders on the register as at 4 March 2022. The ex-dividend date is 3 March 2022.
davebowler: Liberum; VPC Specialty Lending Investments Resilient income and accretive SPAC investments lead to 28% FY 2021 NAV return Mkt Cap £264m | Share price 94.8p | Prem/(disc) -16.9% | Div yield 8.4% Event VPC Specialty Lending Investments' NAV per share at 31 December 2021 was 114.1p, representing a -4.0% NAV total return in the month. December's performance was driven by a gross capital return of -5.4%. Gross revenue returns remained strong at 1.1%. The overall NAV return in 2021 was 27.6%. The primary cause of the NAV reduction in the month was a significant decline in the share price of Bakkt Holdings (-5.6% NAV impact), a digital asset marketplace. We note the share price has continued to fall post year end (-51% in 2022). There was considerable activity across the other equity investments: VPC Impact Acquisition Holdings III (VPCC) has completed its business combination with Dave Inc, a banking app that launched in 2017. VSL holds common shares and warrants in VPCC. 60% of the common shares are valued at the year-end price of $10.25 less a 20% discount. The share price has risen by 36% in 2022 to date. Beforepay, one of VSL's private investments, closed its IPO in Australia in January. VSL's holding is subject to two lock-up periods. An illiquidity discount will be applied to the valuation. VSL realised gains on a number of equity investments in December, including Sunbit ($1.8m gain) and Kueski ($4.4m gain). Liberum view 2021 was VSL's strongest year for NAV performance. The increase from SPAC and other equity investments has been a key contributor to this, with a gross uplift of 23% (pre-fees). Crucially, the company's balance sheet investments have generated consistent monthly returns of c.1%. We believe the fund remains very attractively valued, despite the volatility in the equity investments. We do, however, believe the company needs to more clearly articulate its long-term strategy for the equity investments in terms of allocation and potential distributions.
redhill9: As we are now into 2022 it may be worth reminding ourselves of the conditions around the continuation vote in June 2020. As a means of encouraging shareholders to vote in favour of continuation, VSL made three key commitments: (i) One year NAV (Cum Income) Return The Board will now propose an ordinary resolution to approve the continuation of the Company as an investment company at the Company's AGM in 2021 if the Company's NAV (Cum Income) Return (calculated as set out in the Company's annual report and accounts) for the period from 1 April 2020 to 31 March 2021 is less than 4%, as compared to less than zero in the initial proposal. If the resolution is not passed the Directors will, within 3 months of the date of the resolution, put forward proposals to shareholders to the effect that the Company be wound up, liquidated or unitised; (ii) Three year NAV (Cum Income) Return The Board will now offer shareholders an exit opportunity for up to 100% of the shares in issue immediately following the Company's AGM in 2023 if the Company's NAV (Cum Income) Return (calculated as set out in the Company's annual report and accounts) for the period from 1 April 2020 to 31 March 2023 is less than 24%, as compared to 18% in the initial proposal; and (iii) Discount to NAV If the average discount to NAV at which the shares trade over the 3 month period ending on 31 March 2023 is greater than 5%, as compared to a 4-week period and a 15% discount in the initial proposal, the Board will now offer shareholders an exit opportunity for up to 25% of the shares in issue immediately following the Company's AGM in 2023. For the avoidance of doubt, this exit opportunity will not be offered in the event the 100% exit opportunity in condition (ii) has been triggered. Point (i) is history as the 4% NAV increase was achieved, and point (ii) of a three year NAV increase of 24% is still in play but looks likely to be achieved. However it is point (iii) that is of particular interest as, despite strong share price growth since the commitment, reducing the average discount to no more than 5% in the three month period to 31 March 2023 looks to me like quite a stretch. I’ve been very content to hold VSL as long as the 8p dividend (current yield c.8.6%) looks sustainable but additionally we appear to be in a position of either the share price has to increase significantly over the next 11 to 14 months to reduce the discount or we get the prospect of a capital return of 25% of shares at full NAV as compensation. I also see this point (iii) as to some extent underpinning the dividend in the immediate term as any reduction would certainly impact the sp, which would make reducing the discount to 5% in that timescale unachievable. Does anyone see it differently?
ctrader3: BMD,BVT is a programme error, they recently announced they are going to pay a 7% dividend for the next year. this will be paid from portfolio sales or from new cash raised from new investors. they have announced a 3.5p dividend final and they paid a 3p interim last year. BVT Dividend policy · The Board will, where possible, seek to pay two dividends to shareholders in each calendar year, typically an interim dividend in September and a final dividend following the Annual General Meeting in February/March. · The Board will use, as a guide, when setting the dividends for a financial year, a sum representing 7 per cent of the opening net asset value of that financial year. so around 77p = 5.4p so they could pay more. RLE They pay an increased final dividend, which may or may not be paid in full.
davebowler: Liberum; VPC Impact Acquisition Holdings II (VPCB), a SPAC sponsored by an affiliate of VSL's investment manager, has entered into a definitive agreement to combine with FinAccel, the parent company of Kredivo, a buy now pay later platform in Indonesia. Following the transaction, FinAccel will become a publicly traded company with an expected equity value of $2.5bn. VSL currently owns 1.0m Class B Shares and 0.8m private placement warrants in VPCB, held at cost of $1.25m. The transaction implies a value of $10 per Class A share. 70% of VSL's Class B shares will convert into Class A shares with an undiscounted implied transaction value of $7.2m. The remaining 30% of the Class B shares have an implied value of $3.1m. These shares have a 5 year vesting period but are fully vested if the VWAP reaches defined levels for 10 out of 20 trading days at any time (defined levels range from $12.50 to $15.00 per share). VSL will hold the Class A shares at a 40% discount to reflect illiquidity and closing risks. The discounted value of $6.2m implies a 1.5% NAV increase. The private placement warrants have a strike price of $11.50 per share and expire five years after the closing of the transaction. The options will be valued using a Black Scholes model and the initial value is $1.7m. The Class A shares will be subject to a two-year lockup and the transaction is expected to close in Q4 2021/Q1 2022. Liberum view In the recent June monthly report, the company announced that the valuation policy for warrants issued by SPACs has been amended. This follows a statement from the SEC's Division of Corporate Finance. VSL had previously held its private placement warrants at zero. The valuation policy is now as follows: Post-IPO - all shares will be held at cost. Deal announcement and post-close lock-up periods - Founders and sponsor shares will be valued at the closing price as of the valuation date, with a discount applied and amortised throughout the duration of the process to account for deal closing risk and liquidity. Private placement warrants - valued utilising an option pricing model/Black Scholes model. The transaction value implies a high multiple on capital invested for VSL (6.3x at the discounted value), demonstrating the favourable economics for SPAC sponsors in the US. VSL's equity investments have been highly accretive to NAV in Q4 2020 and 2021. In total, we calculate a 7.1x gross unrealised multiple on the $5.4m invested across the four SPACs. We calculate a total 7.6% NAV increase from the SPAC transactions in 2021 after fees. Several other equity investments have also been realised over this period (including positions in Bread and Elevate Credit) and we note other investments such as wefox are demonstrating strong operating performance. Approximately 25% of VSL's NAV is invested in equity positions. We believe the company should consider committing to return a percentage of realised profits from the equity investments to shareholders in order to help address the discount.
davebowler: Stifel; Summary Credit should be given where it is due. We believe the manager has done a good job navigating the economic impact of the virus and is now also reaping the rewards of its equity portfolio. In 2020 the manager commented on the resilience of their portfolio and so far this has proven to be true. They also believed in the hidden value of their equity holdings and this has been corroborated by two transactions which we believe will add c.12% to NAV. We think the prospective discount to NAV of c.18% and the dividend yield of 10% are attractive for a fund that has delivered on its objectives. Key Points SPACs will lead to c.12% NAV Uplift Over the past few months we have seen VPC announce two important transactions involving its equity holdings. The first was the investment in stock and warrants of Katapault Holdings which has announced a definitive merger agreement with a Specialty Purpose Acquisition Company (ticker FSRV). On closing of the deal (expected in Q2 2021) VPC Specialty will receive $3.33 per Katapault share and 604,821 shares of FSRV. The second, is the announcement that the VPC SPAC (ticker VIH) has announced an agreement to acquire Bakkt Holdings. As part of the pre-IPO sponsor economics VPC Specialty will receive 2.2m shares in VIH and 2.7m warrants (with an exercise price of $11.50). The current share price of FSRV is $16.85 and VIH $14.57. We understand VPC Specialty (VSL) may apply up to a 20% discount to post-uplift valuation of VIH to account for the risk that the deal may not close. Impact: Overall, the net impact from Katapault Holdings gain over the 30/11/20 NAV of 93.76p will be c. +3% (+2.8p) and the gain from VIH c.+9% (c.+8p, i.e.+1.6p from warrants and +6.4p from common shares), after accounting for a merger arbitrage discount. In total, these two transactions will add c.+10.8p to the NAV. As a result, we are expecting the prospective NAV at 31/01/21 to be c.104p after deducting the 2p dividend (ex-dividend date of 26/11/20). Levered equity: It is important to note that the warrants will behave like levered equity, given they will have no intrinsic value below their strike price of $11.50. VSL’s holding in VIH will also be subject to a one-year holding period and therefore crystallisation of any gains will have to wait. Given these factors, we think it is unlikely that the full NAV uplift which we expect to be reported to 31/01/21 will be reflected in the share price and a discount will persist. However, we think it is important to recognise that the manager has had their positive comments regarding their equity holdings validated through actual transactions. This comes on the back of the portfolio also proving to be resilient from the economic shock of the virus in 2020 as reserves have been slowly released in Q4. All in all it has been a very good period for the fund, in our view. Cash Dividend Cover The dividend policy of VSL is to pay 2p a quarter. We believe the cash dividend cover has been under some pressure over the past year due to a combination of 1) the share buyback policy, 2) look through leverage falling from 43% to 37% of NAV over the past 12 months, 3) high gross cash balance of 9% of assets and 4) the weighted average coupon of balance sheet loans falling from 14% to 11% over two years. These factors would have led to the income producing proportion of VSL to fall. However, the manager is expecting to deploy the bulk of its cash shortly, and so we think the current snapshot should represent the trough of revenue earnings. Key Positives. 1) Expected fully cash covered dividend, 2) The demise of Pollen St Secured Lending may lead to a technical tailwind as there are limited options to gain exposure to the sector, 3) The Board have highlighted the need to close the discount to NAV and have put a number of objectives in place. Key Negatives. 1) Gains from equity holdings will be subject to lock-up periods and share price volatility until released, 2) Negative sentiment amongst shareholders for the sector. 3) Ownership structure of VSL is overshadowed by a holding of 20% of share capital which is effectively controlled by the manager.
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