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RM SecDirect Lending - Net Asset Value(s)

RNS Number : 1155N
RM Secured Direct Lending PLC
18 May 2020
 

RM Secured Direct Lending Plc and RM ZDP PLC


("RMDL" or the "Company")


LEI: 213800RBRIYICC2QC958


Net Asset Value


RMDL announces that its unaudited net asset value per ordinary share as at 30 April 2020, on a cum income basis, was 89.10 pence (31 March 2020: 86.64 pence).


RM ZDP PLC announces that the unaudited accrued capital entitlement per ZDP share as at 30 April 2020 was 107.36 pence (31 March 2020: 107.05 pence).

 

Market Update

The market saw a recovery in sentiment during April as governments globally sought to introduce and or increase policy measures to help businesses though this lockdown period. This improved risk appetite across markets meant credit spreads retraced from the wider levels seen during March and resulted in modest valuation gains for the portfolio during the month.

NAV 

The NAV total return for the month was 2.83%. This takes the one-year NAV total return to (3.1%) and the cumulative NAV total return since IPO to 9.4%.

 The Ordinary Share NAV as at 30th April 2020 was 89.10 pence per share, which is 2.46 pence higher than at 31st March 2020, comprising interest income net of expenses of 0.53 pence per share and an increase in portfolio valuations of 1.93 pence per share which includes all credit and currency movements.

During the month the Company purchased 500,000 shares at 72.50 pence. After the month end the Company purchased a further 35,000 shares at 79 pence. These will all be held in treasury.

Portfolio Activity

As at the 30th April, the Company's portfolio consisted of 34 debt investments with a running yield of 9.48%, diversified across 13 sectors, with the percentage split between fixed and floating rate of 56% to 44%. The portfolio structure is 59% in bilateral private loans; 36% in club or syndicated private loans; and 5% in more liquid corporate debt. Consequently, private debt investments represent 95% of the portfolio. 

The Company declared a dividend of 1.625p per ordinary share with respect to the period Q1 2020.The ex-dividend date is 5th June. 

No new investments were made during the period as the focus for the Investment Manager remains on managing the existing portfolio. Within the top 10 investments which represents circa 50% of the portfolio, eight paid interest in cash as expected during the period. The two remaining holdings utilised the structural features of their loan terms to pay interest via Payment-in-Kind (PIK). The Investment Manager continues to closely monitor the entire portfolio and support borrowers where necessary. A number of other portfolio companies who provide lender reporting monthly had positive updates. These updates started to cover the period of the lockdown in March

 

The key highlights of the portfolio's activities during April include:

·      Asset Finance - post period end RM Funds received the quarterly (to 31st March) collateral review from the third-party provider engaged to provide such services to the Company. For Quarter One 96% of the portfolio is performing, broadly in line with previous reporting periods and operating as per the financial model base case.

·      The two largest hotel investments: RMDL received their scheduled quarterly interest payment during the month. The sites currently remain closed.

·      The Automotive Parts investment in Germany: the company is seeking to restart production (in line with the management forecasts given at the start of this crisis), which supports cautious optimism that the supply chain is restarting  - this note is using the PIK feature within the documentation allowing the borrower to conserve cash which will be required for working capital as operations restart.

·      The Gym Operator: the sponsor and the lender are in negotiations regarding the need for additional working capital - whilst discussions take place the lender is allowing the borrower to conserve cash and has PIK documentation in place.

·      The two student accommodation investments:  RMDL continues to receive interest as both have interest reserves which can be utilised.

·      Two other hotel transactions: RMDL continues to receive interest as both have interest reserves which can be utilised.

 

The Investment Manager's key priority remains on the protection of capital, and collection of its economic interests.

Post month end the Board and the Investment Manager reached agreement with regards to the extension of the Investment Management Agreement "IMA".  The Board would like to take this opportunity to explain more fully the rationale behind the agreement reached. Norman Crighton, Chairman, commented;

 

"The Board is pleased to have secured the services of RM Funds for another three years at the same fee rate which has been in place since the launch of the Company in 2016. At 0.875% per annum the agreement secures RMDL Shareholders one of the best, and lowest cost, deals in the debt sector. In addition, the Board is delighted that RM Funds has agreed to continue to align its interests with Shareholders by purchasing shares in the market using a portion of their management fees.

 

The portfolio has been constructed by RM with the majority of investments being bespoke loan agreements which are highly complex, with numerous covenants. The portfolio has a weighted average life of 3.25 years so the Board aligned the Investment Management Agreement with the life of the portfolio, and believes there is no group better positioned to manage your investments.

 

By extending the IMA at the same fee rate and ensuring RM Funds continue to buy shares in the market, Shareholders have the ongoing alignment of the Investment Manager, and security of their continued services through what could be a volatile period. "

 

If you have any questions for the Board please do not hesitate to contact Singers and we will respond as soon as possible.

 


The Company also announces that the Monthly Report for the period to 30 April 2020 is now available to be viewed on the Company website:

https://rmdl.co.uk/investor-centre/monthly-factsheets/


END


 For further information, please contact:

RM Capital Markets Limited - Investment Manager

James Robson

Pietro Nicholls

Tel: 0131 603 7060


International Fund Management - AIFM

Chris Hickling

Shaun Robert

Tel: 01481 737600


Tulchan Group - Financial PR

James Macey White

Elizabeth Snow

Tel: 0207 353 4200


PraxisIFM Fund Services (UK) Limited - Administrator and Company Secretary

Brian Smith

Ciara McKillop

Tel: 020 7653 9690


Nplus1 Singer Advisory LLP - Financial Adviser and Broker

James Maxwell

Lauren Kettle

Tel: 020 7496 3000


About RM Secured Direct Lending


RM Secured Direct Lending Plc ("RMDL" or the "Company") is a closed-ended investment trust established to invest in a portfolio of secured debt instruments.


The Company aims to generate attractive and regular dividends through loans sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate. Loans in which the Company invests are predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables.


For more information, please see

https://rmdl.co.uk/investor-centre/monthly-factsheets/

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: RM Secured Direct Lending

Price: 77.5

Market: LSE
Market Cap: £93.98 m
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