Vpc Specialty Lending In... Share Discussion Threads

[chucko1] 20/3/2021 15:52

I’m still owed (by Barclays) the tax taken on the PID portion of REIT dividends going back 3 years. I sent them an Excel spreadsheet explaining exactly what they owed me as two separate official complaints have, so far, only led to some compensation being paid to me. Of course, I am assuming they have Excel but I took the precaution of printing out on A4 the relevant hundreds of line items as a second chance either. Extraordinarily bad. It all comes down to their choice of third party provider of administration services - this changed after they changed their platform. There are so many ITs you cannot buy as they are regarded as funds and require KIIDs which their 3rd party provider seem not to be able to get their hands on. Everyone else is able to. Jeremy Corbyn was less incompetent than this lot.

[redhill9] 20/3/2021 12:16

Barclays "Smart" (LOL) Investors only want to deal in funds which are minimal work for them and generate easy fees. They are geared-up for the type of retail investor who is happy for their broker to make all their investment decisions for them.

I moved my family's ISAs away from Barclays when they changed the platform and added Smart to the name, but it took them an incredible two years for all stocks to actually be transferred.

[wilwak] 19/3/2021 21:42

I’ve just discovered that I can’t buy these with Barclays Smart Investor.

What is going on at Barclays? So many shares blocked from trading. Annoying.

Even cheapy iWeb is trading them fine.

[redhill9] 19/3/2021 15:19

Annual Letter just issued today. Gently reassuring as usual and contains some interesting background and information on SPACs.

[oniabsta] 09/3/2021 15:13

Thanks guys. Topped up earlier anyway. overweight in these now

[spectoacc] 09/3/2021 14:52

The SPAC come off a little, but have seen little else, & needs viewing in terms of recent share price - only down a handful of p from high.

[chucko1] 09/3/2021 14:51

VIH, most likely. Rose a lot on the news that this SPAC stuff has added a load to NAV. Announced a new and much higher NAV a few days back and that was the high for VIH which has subsequently fallen 35%.

Overdone both ways, but core business seems to be doing fine.

[oniabsta] 09/3/2021 14:41

Anyone know whats going on? Lot of selling last few days and taking a dive. Any news?

[chucko1] 03/3/2021 10:49

The return to c1.0% gross returns is a healthy sign for the core of this business. Whatever happens to the SPAC lottery ticket is anyone's guess.

[wskill] 03/3/2021 10:48

Cheers Dave well run as we have come to expect VSL is a star of the quoted debt investment scene looks like it’s only the few of us that have noticed this I am extremely happy with management 10% yield and capital growth that will do me.

[skinny] 03/3/2021 09:58

Thanks for the update Dave.

[davebowler] 03/3/2021 09:45

Liberum
Mkt Cap £252m | Prem/(disc) -12.8% | Div yield 8.9%

Event

VPC Specialty Lending Investments' NAV per share rose by 7.1% in January to 102.6p. The NAV increase in December was due to gross revenue returns of 1.0% and a capital return of 7.7%. The gross capital return was driven primarily by unrealised gains in the investments in VPC Impact Acquisition Holdings.

VPC Impact Acquisition Holdings (VIH), a SPAC sponsored by an affiliate of VSL's investment manager, entered into a definitive agreement on 11 January to combine with Bakkt Holdings, a digital asset marketplace launched in 2018 by Intercontinental Exchange. VSL's investment in VIH was held at cost ($2.7m) at 31 December. The transaction price implies a total value of $22.2m for VSL's investment and the share price of VIH has risen a further 50% above the transaction price. At 31 January 2021, VIH's share price of $14.93 implied a total value of $42.5m for VSL's investment. VSL has applied a 30% discount to this to reflect illiquidity and deal closing risks and the position is held at a value of $29.7m. VSL's shares and warrants are subject to one-year lockup and the transaction is expected to close in Q2 2021. Despite the significant sell-off in the US tech sector over the past week, the current share price of VIH is 0.6% above the level at 31 January.

Bakkt was launched three years ago enabling institutions and consumers to buy, sell, store and spend digital assets. Bakkt’s existing equity holders and management will roll 100% of their equity into the combined company. Bakkt will have $574m of cash to fund the growth of the business following the transaction.

VSL has agreed a new $130m gearing facility with MassMutual. $80m has been drawn from the facility to repay the previous debt facility with Pacific Western Bank and the first-out participation facility on Avant. The new debt facility has a lower interest cost than the prior facility and and there is also an option to increase the facility to $200m. The look-through gearing ratio has increased marginally to 33% of NAV as a result (32% of NAV at 31 January 2021).

Liberum view

The investment in VIH has been highly profitable in part due to the attractive economics for sponsors in SPAC transactions. The implied valued at 31 January (pre-discount) represents a 15.7x multiple on VSL's initial $2.7m investment. Liquidity events across a number of the equity positions have contributed to the strong NAV growth since mid-2020. Many of the equity investments are warrants and common stock that are often received in conjunction with funding the a platform's balance sheet loan investments. Based on the current share price of VIH, we estimate the potential NAV upside is 2.8% after stripping out the 30% discount. These potential gains are subject to the deal completing (expected in Q2 2021) and the holding is also subject to a lock-up period.

In addition to the positive performance from equity investments, the company's balance sheet debt portfolio continues to perform well and is generating a return of c.1% per month. Cash collection has been robust across the debt portfolio and this has enabled the release of some of the ECL provisions taken in H1 2020. A high level of prepayments has enabled debt reduction from 59% of NAV at 31 March 2020 to 32% currently.

[chucko1] 18/2/2021 15:18

21.50 VIH now.

[chucko1] 16/2/2021 17:29

Far from it, but we need this madness to prevail. We're still OK if it doesn't, so it's more like sport than investment.

Buy a share of VSL, get a decent dividend and a free ticket to the steeplechase.

[spectoacc] 16/2/2021 17:18

And judging by VIH's price, they're right. No sign of the crypto bubble bursting yet.

[redhill9] 16/2/2021 17:17

VPC back to buying their own shares again over the past two days. Clearly they must believe the current share price is still a bargain.......

[chucko1] 11/2/2021 12:57

Usually early March ex-date.

[spectoacc] 11/2/2021 09:16

Divi this month? Guessing a week or two until we find out ex date.

[chucko1] 10/2/2021 13:55

I agree - back to boring! I am not sure how well income accrual is served by call spreads/knock-outs with rebates on SPACs. You couldn't really make it up. I did make a little bit of money on them, but let's see if that's still the case at 9.30EDT.

[mach100] 10/2/2021 13:34

Thanks Chucko. Sure is complex and yes I probably took the Private Warrants from the prospectus. With the cap it looks like it is better to stick with Vpc shares than go stateside. Appreciate the explanation above which chimes in with my understanding.

[chucko1] 10/2/2021 13:13

I have described the "Public" warrants, whereas Mach100 is referring to the "Private" cousins.

[chucko1] 10/2/2021 13:11

Oh dear!! On reading the terms of the warrants in full, there are anti-dilution measures that effectively cap the payout at $6.50 (being $18.00 minus the strike). There is both complex logic and legalese to wade through.

This warrant is either, at best, a call spread ($11.50 vs. $18.00), or at worst, a knock-out call, knocking out at $18.00 with a $0.10 rebate. Now we can say that the vastly increased trading activity on the warrants the past few days has been by professional market traders who have had sight of the full terms. Even the Bloomberg description is not aware of the full terms, merely describing this as a 1:1 warrant on VIH and not pricing it in the more complex manner described above.

The rationale appears to be that if the Class A shares increase beyond $18.00, they want to kill the warrants but allow warrant holders to exercise - and there is some convoluted language that appears to state that the Class A shares "may fall below $18.00". I take this to mean that they cannot effectively be exercised at any price above $18.00.

I can say that I have never seen an option quite like this (from the legal/corporate perspective), but this is an option on something SPAC-like where, I suppose, anything goes.