Vpc Specialty Lending In... Share Discussion Threads

[chucko1] 19/6/2020 17:11

Redhill, losses can take a while to show up. Especially in the US where, supposedly, there is an ocean of liquidity. This is certainly the experience in the high yield market in the US in previous recessions, although VSL have modelled for this. But only as best they can as no one has experienced a pandemic before in the lifetime of traded credit markets, and one where ratings agencies existed.

However, the key thing here is the managers are specialists in credit structuring as opposed to credit (that's for mere mortals - credit officers!). It is the understanding of market dynamics rather than individual creditworthiness that will be of most value here.

As I previously stated, the key dynamic is the average life of the portfolio and that is clearly playing out every month as we see the collections. So long as we do not see a rapid pick-up in defaults which might indicate an unexpected deterioration of payments they only though were delayed. I would keep this reserve for perhaps a year and in my experience, this is typically what a bank would do.

But yes, so far so excellent.

[redhill9] 19/6/2020 16:48

chuko1, I agree that it's best if they don't keep changing the reserves but I think the important point from the May report is that they don't seem to have needed any of the reserves set-up last month (though still early days of course) as they suggest everyone is paying what they should and on time, with no mention of any realised credit losses in May.

No doubt they will continue with the current aggressive share buy back programme with the dual intentions of increasing NAV and reducing the discount but for me the key thing is that they ensure the dividend doesn't have to be reduced. By demonstrating they can maintain the current dividend during difficult times will have more effect on reducing the discount than any number of buy backs (imo).

[chuckol] 19/6/2020 16:39

Whoops..... dropped a bit there at the end !!!! It can't always be a Staircase to Paradise, can it mate?

[chuckol] 19/6/2020 16:35

I'm soo glad it's agreed, Speccy. It means so much to us all, as you know. 1% per month will be worth at least £17. luvvly jubbly

How's the Corona-spreading going? I bet you've copped quite a few, you rascal. Keep up the good work. That'll keep those bloody supermarkets closed because there will be nobody left to marshal the queues! You might think of volunteering, eh? Add a few more to your tally. LOL

[spectoacc] 19/6/2020 15:42

Agreed - with the activist to keep the management on their toes.

[chucko1] 19/6/2020 15:25

That write back will be a long time coming. Nothing worse than flip-flopping on reserves. A credibility killer.

I don't care - the 11.5% yield - or 1% a month roughly, will keep me in fine shape in the meantime.

[spectoacc] 19/6/2020 13:37

Thanks @redhill9. And a further bull point - wonder if they'll eventually write back some of that provision they made.

[redhill9] 19/6/2020 12:55

A solid month.

Looking at the movement in monthly NAV, April was reported as 89.70p so removing May dividend paid of 2p gives a base figure on 1 May of 87.70p. Published figure for 31 May of 88.82p gives movement for May of 1.12p. Of that, I calculate the effect on NAV of buybacks during May (costing £2.6m) of 0.41p so an underlying increase in NAV of 0.71p.

In conjunction with comments about all income due being received, no requirement to increase reserves, and strong inflow of capital payments (which is reported to be continuing in June) it looks to be a satisfying picture. The key questions are whether there is some deferral of credit related losses yet to appear, and whether the current acceptable experience can be continued. However with every month that passes the risks can be better controlled due to the general short-tail of the exposures.

Incidentally, I calculate June buybacks to date, costing £6.3m, have contributed around a further 0.63p to NAV as of yesterday's buyback announcement.

[rambutan2] 18/6/2020 22:18

Still receiving all payments! If that continues for the next few months then the discount will turn into a premium and Victory will be victorious!

[nil of] 15/6/2020 09:58

Back on vsl. They have been forced to improve their proposed terms. They haven’t done that because they got a warm feedback from shareholders and despite managements 20% it must be a close call. Are their revised Terms enough? No idea but I see Jeffries changed their view from, it will and should pass when initially announced to , it shouldn’t pass. Without the managements stake it would clearly fail and go into wind down. All the buy backs which have been good to enhance nav and push the price up will stop as soon as this vote has passed. Their aren’t doing it to look after shareholders they are only doing it to try and protect their fees and they have needed to buy 20% themselves. It needs some independent directors and even if they wriggle through this vote, which I guess they will but not by much and only because of managements stake, this will rumble on and there is serious decent coming from the large shareholders.

[1tcm1] 15/6/2020 09:33

Spectoacc really makes me laugh. He sits on this thread and innumerable others pompously giving his worthless opinions when he is arguably the biggest loser on ADVFN.

Take this share, for instance. He's already lost a huge pile of his paltry money stash here and is likely to lose more imminently. That is because he simply does not have a clue about investing: he just loves the sound of his own voice.

[irkin] 10/6/2020 19:56

Amazing turnaround here - I almost sold prior to the US stimulus announcements. The $1200 cheques sealed the deal for me. The statistics suggest that the global economy will be in the toilet for the foreseeable future which still concerns me.

I am I right to be worried - any views?

[spectoacc] 10/6/2020 19:25

Perhaps overpaid a smidge for them too.

[rthak] 10/6/2020 17:38

Another 805,000 shares bought back today. I wonder where all these shares are coming from and who is selling!

[redhill9] 10/6/2020 09:51

I thought this sentence from the announcement focuses the mind:

In formulating these proposals, the Directors also note that if all the conditions are met by 31 March 2023, shareholders will have received a minimum total return of 52.0% by reference to the closing traded price per share of 69.70p on 9 June 2020.

If we believe that the conditions are not excessively challenging then 52% over just less than 3 years is quite acceptable, although some of that 52% seems to have been achieved already by this mornings share price movement......

I'm happy with this situation - I wonder how Staude will react?

[davebowler] 10/6/2020 08:38

Liberum;
Amendment to proposed thresholds for exit opportunities

Mkt Cap £208m | Prem/(disc) -20.5% | Div yield 11.5%

Event

VPC Specialty Lending Investments has amended the thresholds for the conditional exit opportunities that it proposes to offer investors if the company's continuation vote is passed at the AGM on 24 June 2020.

The conditional exit opportunities will now be:

Continuation vote at 2021 AGM if the NAV total return for the 12-month period to 31 March 2021 is less than 4% (0% in the original proposal);
Exit opportunity for up to 100% of shares in issue following the 2023 AGM if the NAV total return for the three-year period to 31 March 2023 is less than 24% (18% in the original proposal); and
Exit opportunity for up to 25% of shares in issue following the 2023 AGM if the average discount over the three-month period to 31 March 2023 is greater than 5% (15% discount over a four-week period in the original proposal).
The board states that these changes have been made following consultation with a range of shareholders after the publication of the circular. The company has also published the April monthly report since the circular was released and the manager is cautiously optimistic about the performance of the portfolio. The directors have also noted the significant movement in the share price following a reduction in the discount from 51.6% on 24 April to 20.5% currently.


Liberum view

The change to the thresholds comes only three weeks after the initial AGM proposal and follows the publication of a second letter from Staude Capital to the board. Staude was critical of the board's arguments for unanimously recommending continuation and for the 'unambitious' thresholds. It remains to be seen if shareholders will support these proposals but we believe the three-year NAV total return target (7.4% annualised) is fair given given the current economic environment. The discount target of 5% also represents a meaningful reduction from the current level. Staude's call for the offer of an orderly run-off to shareholders appears to have been ignored for now.

[waterloo01] 10/6/2020 07:47

Happier with that. They seem to have listened and made some changes.

[spectoacc] 10/6/2020 07:31

Seem reasonable to me, but will wait to see the activist's response. Like the "greater than 5%" discount to NAV 25% exit one in 2023.

[eeza] 10/6/2020 07:25

RNS
Amendments to AGM questions.

[spectoacc] 10/6/2020 06:59

Not small numbers in the context of VSL daily volume.

[redhill9] 09/6/2020 17:29

Another 1,700,000 shares repurchased today which makes 2,071,000 shares in two days.

[chucko1] 08/6/2020 16:43

They thought VSL was a REIT. They also thought Neil Woodford was a reliable fund manager.

Well, that's what happens when you haven't been able to go to school for 3 months.

[pete_bane] 08/6/2020 14:22

Typical lying Speccy behaviour. He claims he filters everybody that does not agree with his repetitive posts then answers (dishonestly) every one of them

[redhill9] 08/6/2020 14:12

Very tight spread at the moment - I've just been quoted 69.51p/69.58p

[spectoacc] 08/6/2020 14:12

It was posted on McColls, discussing supermarkets vs convenience. So yes - relevant.

What's this obsession with Leeds?

Anything to say on VSL? No?