Share Name Share Symbol Market Type Share ISIN Share Description
Vpc Specialty Lending Investments Plc LSE:VSL London Ordinary Share GB00BVG6X439 ORD GBP0.01
  Price Change % Change Share Price Shares Traded Last Trade
  -0.20 -0.31% 63.80 64,962 16:35:08
Bid Price Offer Price High Price Low Price Open Price
63.80 64.00 64.00 63.80 64.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 46.66 27.05 8.11 7.9 198
Last Trade Time Trade Type Trade Size Trade Price Currency
17:18:04 O 5,868 63.952 GBX

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Date Time Title Posts
01/10/202009:56VPC Specialty Lending Victory Park 583

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Vpc Specialty Lending In... (VSL) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2020-10-01 16:25:1963.955,8683,752.70O
2020-10-01 16:18:3164.001,040665.57O
2020-10-01 16:12:3663.962918.55O
2020-10-01 15:35:0963.8010,3386,595.64UT
2020-10-01 15:29:5864.002918.56AT
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Vpc Specialty Lending In... (VSL) Top Chat Posts

Vpc Specialty Lending In... Daily Update: Vpc Specialty Lending Investments Plc is listed in the General Financial sector of the London Stock Exchange with ticker VSL. The last closing price for Vpc Specialty Lending In... was 64p.
Vpc Specialty Lending Investments Plc has a 4 week average price of 61.40p and a 12 week average price of 61.40p.
The 1 year high share price is 83p while the 1 year low share price is currently 42p.
There are currently 309,778,118 shares in issue and the average daily traded volume is 423,417 shares. The market capitalisation of Vpc Specialty Lending Investments Plc is £197,638,439.28.
davebowler: Liberum; Event VPC Specialty Lending Investments' NAV per share at 30 June 2020 was 89.8p (previously reported), representing a 0.5% NAV return in H1 2020. The July monthly report has since been published and the NAV total return for the seven months to July is 1.8%. During H1 2020, the overall performance comprised 6.3% of revenue returns and a capital loss of -5.9%. The capital loss was primarily a result of writedowns on equity investments (-3.1%) and an increase in Expected Credit Loss provisions (-2.7%). The ECL provisions which now represent 4.6% of portfolio acquisition cost. The portfolio comprises 19 balance sheet investments (83% of NAV) with a weighted average coupon of 11.3%. The remainder of the company's assets comprise equity investments in 26 companies (11% of NAV) and cash (6% of NAV). The manager continues to report robust credit performance from the balance sheet investments. Collection performance has exceeded the downside expectations on almost all of the balance sheet loans. Cash levels are also high within the SPV structures due to reduced origination and the short duration profile of the loan portfolios. The portfolio companies are taking a cautious approach to new origination given the underwriting challenges in the current market. In the US consumer portfolio, payment performance is ahead of expectations and the proportion of deferred loans is declining. After completing a deferment, 65-75% of borrowers are agreeing regular repayment schedules, with less than 10% defaulting on loans. Liberum view During a turbulent period, portfolio performance has remained relatively robust with all contracted balance sheet loan payments received to date. The portfolio companies have made a number of prepayments, enabling a reduction in gearing from 0.59x at 31 March to 0.43x at 31 July. Cash levels have also built up within the SPV structures. Government support schemes have resulted in significantly better credit performance than would have been expected at the onset of the crisis. We expect the underlying loan pools will experience further stresses as support schemes are withdrawn but VSL does have a layer of protection through first loss equity positions. 93% of the loans also benefit from a guarantee from the portfolio company in addition to the loan collateral. The current 29% discount is one of the widest of the performing direct lending funds and appears relatively attractive given the structural protection within the loans. The board has attributed the recent share price weakness to selling pressure from some shareholders who voted against continuation. We note the consistent level of buyback activity by the company in recent months to attempt to address the situation. In total, VSL has acquired 9.1% of the shares in issue at 31 December 2019.
chucko1: So, now a 31 month average life and better than expected collections. Crucial stuff, because they have a meaningful degree of first loss protection and in March/April, any sensible-minded investor would have been concerned as to whether or not this degree of protection was sufficient. But the folk running this company are well schooled in credit structuring. They knew straight away that the risk was sudden and considerable and moved to a position of maximum defence. Nothing was reinvested - in normal times, unacceptable as generating a covered 8p dividend requires constant redeployment, especially in (what was) a 2% yield environment. In the meantime, there was the confounding issue of the continuation - I have to say that I cannot for the life of me understand why 13.4% of the votes were against the motion, but it is what it is. And the Chairman made it really clear in his statement that some of the votes against were now constantly selling their shares, and VSL are constantly buying them. And that this contributes to the weak share price. But this is brilliant. Because, as time goes by (and a kiss is just a kiss), the ratio of cash (or reduction in leverage - take your pick) that forms part of the discount increases, and so the discount, which should compensate for additional risk, does no such thing. It far exceeds the level of risk and so were the company to never invest another penny, I calculate that there is an IRR of 18% to be earned by continuing shareholders. So I have added recently, and may do so a fair bit more. This is an irony, as the continuation means that such an IRR cannot be a certainty. Perhaps this is what the 13.4% wanted - a runoff and a certainty for their own portfolio reasons (one can only speculate). However, although continuation indicates a lower IRR, it will be for longer and that is the point of a good investment in most peoples' minds. Do you want a low-risk 18% 31 month bond or a 12-13% 10 year bond. Well, if you thought you could reinvest at the end of 31 months at a further high rate, good luck to you. But as I have written here before, I expect that a narrowing of the discount to 10% over a couple of years will result in an annual return of circa 15% and then around 10-11% thereafter. Good enough for me, especially with the people and structure they appear to have in place. There were some other interesting bits in there, such as the undue markdown of the equity investments as a result of using proxy pricing. Also, the constant reference to the share price and discount by the Chairman. Anyone would think it mattered to him! No mention of a release of credit reserve - this is normal. Once you have taken it, you leave it for a lot longer than it might be needed as flip-flopping on credit reserves looks awful. You release it when you most do not need it, as otherwise it raises questions. Sometimes, you have to release it as the specific underlying credit gets repaid. But in this case, it is of a general nature across multiple assets.
chucko1: Strangely, there are many AT trades which hammer away at the share price during the day - VSL sit on the bid and take up the whole lot. Today, they bought a few at 64p which makes one wonder who programs these computers as I am sure VSL would equally have paid 64.6p. Of course they would - the average today was 64.7p or so. Just as in the case of the REITs, I am glad to say there are some buffoons trading this.
redhill9: Dividend maintained as expected indicating a yield of around 12.4% at the current share price with the dividend seemingly more than covered by revenue income in the quarter. Together with the discount to latest NAV of c.28%, there does seem a fair margin of comfort in the current share price.
davebowler: 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.
rthak: Thanks - I get the impression that VSL are hoping that by doing aggressive share buybacks they can narrow the discount to sub-10% before the AGM which would make a number of these issues go away...That needs a share price of 80p - not completely unachievable with aggressive buybacks I would have thought.
davebowler: Stifel- Continuation Vote. The board says it is focused on continuing the positive momentum from the last two years through the continuation vote and beyond. It is acutely aware of the continued discount of the Ordinary Share price to NAV and is determined to continue to use the variety of tools at our disposal to mitigate this. Accordingly, following discussions with a wide range of shareholders, if the continuation vote is passed, it has been resolved to offer shareholders additional exit opportunities. These exit opportunities will be triggered if targets based on: (i) the performance of both the share price relative to the NAV per share; and (ii) the NAV (Cum Income) Return (calculated as set out in the Company’s annual report and accounts) are not achieved. Finals to 31/12/20. During the year ended 31 December 2019, the Company:  generated a revenue return of 9.83% and a total NAV (Cum Income) return of 11.34% for the Ordinary Shares;  declared quarterly dividends of 2.00 pence per Ordinary Share for each quarter of 2019;  invested 87% of the of the Company's NAV in balance sheet investments as at 31 December 2019 compared to 85% as at 31 December 2018; and  continued the share buyback programme, purchasing 47,808,578 shares during the year at an average price of 73.31 pence per Ordinary Share, representing 12.5% of the Ordinary Shares issued by the Company.
davebowler: Liberum- Increased loss provision but cash payments holding up well Mkt Cap £147m | Prem/(disc) -46.0% | Div yield 16.7% vent VPC Specialty Lending Investments' NAV per share at 31 March 2020 was 88.9p, reflecting a total return of -3.6% in the month (-2.6% for Q1 2020). The NAV decline is a result of increased expected credit loss (ECL) provisions (-2.6%) and mark-to-market losses on equity positions (-2.7%). Total ECL reserves now represent 4.3% of the balance sheet investments. The increase reflects a 100% probability of default assumption in a stress scenario. All of the portfolio companies are up to date on interest payments. The platforms saw an increase in requests for payment relief (2-12% range across the portfolio vs 0-6% pre-Covid-19). The manager believes the level of requests has declined steadily during April. Delinquencies (excluding payment relief requests) have remained stable. The level of payment requests and delinquencies is manageable across most of the balance sheet investments. All of the portfolio companies have significantly reduced or stopped new originations (75-95% reduction). The manager is assessing new investment opportunities in secondary ABS deals (backed by pools of consumer and SME loans) and loan portfolio acquisitions at significant discounts. Other opportunities include increased exposure to its legal lending strategy. The movement in the equity investments is a combination of Elevate's share price reduction (-0.6%) and valuation adjustments to the venture equity positions (-2.1%). Cash generation from the portfolio has remained robust with $60m of prepayments since early March. The total revenue return in Q1 was 2.6p per share. All contractual interest payments due in April were paid. $25m has been used to pay down the PacWest revolving credit facility. Liberum view Despite the negative return in the quarter, we believe today's update will be well-received by investors. The level of equity exposure remains high (9% of NAV) and the look-through gearing ratio is at the higher end of the range (c.52% debt to equity following $25m repayment), but the company has been proactive in dealing with portfolio companies. The portfolio companies are likely to experienced further stresses over the remainder of the year but VPC does have a layer of protection through first loss equity positions. 93% of the loans also benefit from a guarantee from the portfolio company in addition to the loan collateral.
davebowler: Stifel The fund has not yet seen any material cashflow impact from the pandemic but the managers are preparing for what will clearly be a challenging time. We have highlighted our lack of love for the underlying collateral (consumer unsecured) and primarily for that reason we downgrade from Positive to Neutral, while we wait to understand the scale of the problems before them. Consumer loans are not typically the highest priority payments when borrowers are having cashflow difficulties, a mortgage is, and so are potentially more exposed. The key protections are as follows: Senior financing, and so there is some subordination below them. The portfolio companies may have excess cash outside of the collateral pool. The share price is down 37% over the past three months while the NAV is little changed, so some pain is already priced in. We are also concerned about the exposure to Texas (<10% of the portfolio) as in effect there is a double impact from the pandemic and the fall in oil prices which the state is particularly exposed to. Valuations on the equity portfolio (11% as at 29/02/20) will also likely fall. Finally, we are also worried whether the lenders will have the capacity to deal with a high number of borrowers attempting to contact them simultaneously. At this juncture, the uncertainty remains high. (Analyst: Sachin Saggar).
soundsplausible: Still do not like share buy backs. VPC announced in 22/12/16 that the buy back would start to narrow the %diff between NAV and share price. That was then when the NAV was ~94p and a share price of ~77p. Here we are now and having bought 72,000,000, a quick calculation would indicate that the total spent ~£55M. The latest NAV was 92.65p and the share price was 78.6p @ 31/12/19. So hurrah the discount has narrowed by ~2%. Does this cost really justify the outcome? The money spent works out ~14p/share. Knowing all of the above would you prefer the money as a dividend or the cost to deliver a small narrowing NAV? Even better put it to productive use and lend it out and get more income in. They are pretty good at doing this.
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