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To generate attractive risk-adjusted returns, principally through income distributions by investing in a diversified portfolio of credit securities.
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I've been watching this company for some time and have finally got some funds available but I can't buy them! Barclays says "there are no results matching your search". Not looking for advice just wondering how others are buying and selling SMIF
The TBD = 72.88p then!
I think these were in the 75 - 77p range when it was first announced. So I'm glad I didn't thank part in this one. It seems strange to me selling in the future at an unknown price. I take it its normally done with a slight premium or why bother. I haven't checked back but I suppose the quoted price might have been a premium at the time as it dropped to around 70p.
I might have to watch a couple more to suss out how it all works. It was scaled back so there was support for it. Did anyone take part?
There is an article in the FT today. In this they state that $37b of AT1's issued globally have call dates for April. The information I had about $13b this year came from Blackrock but this was in reference to European banks (which is more relevant to SMIF). Given that the entire AT1 market is supposedly $260b, I do struggle with the $37b mentioned by the FT as it would imply that you would, on average, call the entire market in less than a year!
The most recent update on Twentyfour is worth a read, in they point out that even if the AT1's are never called then the return on a composite index is 9% , with calls it is around 11.5%.
Further update yesterday on-
https://www.twentyfouram.com/insights
You can follow the AT1's (AT1 ticker) - this had about 7% CS at the end of Feb which needs to be taken into account. The etf obviously hides quite large company differences since the weekend with a better recovery of the strongest banks.
The amount of AT1's that banks hold as a percentage of their cet ratio also range from 28% UBS & Barclays to 13% Lloyd's & ING.
The next interesting development will be whether those that are up for being called are called on time(even though perpetual they are expected to be called periodically). I believe that there is around $13b worth this year but nothing for at least a couple of months which will give things time to settle.
Hats off to Twentyfour for keeping holders well informed, I also hold BIPS and Invesco have, in contrast, been far less forthcoming.
Helpful info Monks and it looks like some had the chance to buy the dip. Unfortunately I wasn't one of them. There is a lot of chatter about AT1s and coco's and there seems to be some confusion over the process for Credit Swiss.
This might mean there is more risk now and there might be a need to increase the premium.
Mr Market seems to be getting over things..... for now anyway.
''rns not showing here''
I believe it was a PRN (Press Release Newswire)
good post info for this board.
rns not showing here-
'Re: Company update following Credit Suisse takeover
Markets were digesting the ramifications of the actions of the Swiss authorities on Sunday evening, as FINMA, the Swiss regulator, has overseen the takeover of Credit Suisse by UBS, which included a payment to equity holders, while AT1 debtholders are wiped out, which is unprecedented.
However, other regulators have been quick to highlight the differences in their regimes, with the ECB and BOE releasing statements already highlighting the seniority waterfall - and reaffirming that AT1s clearly rank ahead of equity holders. These statements have, in turn, helped to support the markets for European banks. The market for AT1s on Monday morning had been lower by 15-20pts, but recovered to be down by 3-7pts by close yesterday, depending on Issuer. With prices for AT1s another 3-5 points higher today, valuations seem to be stabilising.
The TwentyFour Select Monthly Income Fund Limited (LSE: SMIF) does have a small amount of exposure to Credit Suisse Senior Unsecured bonds, which have not been impacted by the changes, and did not hold any Credit Suisse AT1 bonds. Furthermore, the Fund does not hold debt from any other Swiss banks. The Fund does have exposure to other AT1s, and currently holds 25.3% in this asset class, with 8.2% exposure to other, non-AT1 bank debt (which includes the Credit Suisse Senior Unsecured bonds).
TwentyFour Asset Management LLP (the Portfolio Manager) believe the rationale for holding European and UK subordinated debt is sound and was re-endorsed by the Eurozone regulators yesterday, confirming that the seniority waterfall put equity holders behind debt holders. The comment from ECB President, Christine Lagarde, last night saying “Switzerland does not set standards in Europe”, was another strong statement about the difference in regulation in Europe.'
Last week they sold all of their Treasury stock in their absolute return fund and had (still are?) planned to reinvest in bank debt.
EBA have now come out with a statement about AT1's
'In particular, common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier One be required to be written down. This approach has been consistently applied in past cases and will continue to guide the actions of the SRB and ECB banking supervision in crisis interventions.'
Twenty Four are. THE. specialists in Fixed Income and I have total confluence in their management of th e. situation. Even though bond prices. have fallen. dramatically - the income will still come in - and the. bond prices. will recover - as always. They have stated in their. latest report. that they. are. concentrating on. bonds. from. very defensive. companies,
CS AT1's, although not completely unique, are unusual that they can be written down to zero. It is more common that there is equity conversion although it is down to the details in the bond prospectus.
AT1 prices are likely to remain depressed for a while but it may not quite as bad as it first looks.
at about 69p
45Bob, I too got out on Friday (76.8p). I confess I did this more to take advantage of low prices elsewhere than in anticipation of the collapse in SMIF this morning. However, the exposure to banks, to which you allude, was a concern. I believe the hysteria surrounding the banks will prove to be a transitory phenomenon and fully intend to get back into SMIF very soon, at prices much lower than before.
I sold out today at 75p and broke even, but I had really high hopes for this as a long term hold. Looking at the top ten it is very exposed to the banks so I can understand the fall. I’m sitting at 80% cash now and carefully watching this, LGEN and AV for a decent entry. Anything below 70p will tempt me back in. Good luck
So I take it there are an aggregate of 552,459 Ordinary Shares to be bought on 31st March at a price of TBD then???
This is a bit strange
That's the way they do it.
I'm like you and have always avoided tendering.
You can usually sell in the market at a better price - alhough then you have dealing costs to contend with.
Im looking at a corporate action to purchase some of my shares at a price to be determined on 31st Mar. Is this unusual for this share? I can understand why they may wish to buy back 20% of their shares but I would like to know the price before hand not write a blank cheque.
Im unlikely to sell
I'll apologise now to you all, I've bought in today so if it falls off a cliff it will be my fault.
Probably need to catch up on past events but I'm mainly after some income and being monthly it might add something different to my PF
Only first purchased in the second half of this year - strategy of drip feeding purchases down to 70p on increasing long term gilt rates has so far worked out well. Share price now trading comfortably above my average price giving an excellent yearly yield.
"Anyone know what's their full reasoning behind this offer ?"
It's a regular thing. I guess it makes sense for them to buy back shares at below NAV.
Not sure how it makes much sense to holders to sell at substantially lower price than they can sell for in the market although dealing costs might be an issue if only selling small amounts.
My immediate inclination is to do nothing.
Anyone know what's their full reasoning behind this offer ?
"TwentyFour Select Monthly Income Fund Ltd is offering to repurchase 20% (basic entitlement) of its own shares by way
of a Tender Offer, at a price in cash to be determined on 30th December 2022. Your options are:"
The problem is that you don't know what the tender price will be before having to make a decision. The tender price is the NAV at December 31st less 2%.
The NAV on November 9th was 70.90P so you could sell today for more than that.
Can anyone explain what they mean by tendering? And is it worthwhile? I suppose it depends on your average price
The price dropped to determinate the tender price. Not many shares though 85,051 at 70.25 on 6th,
It has not recovered to the last issue price. 500,000 at 72.52 on the 3rd October.
https://www.londonstockexchange.com/news-article/SMIF/tender-results/15661811
https://www.londonstockexchange.com/news-article/SMIF/issue-of-equity/15656020
DH
Price will decline on underlying net asset value declining, and underlying asset values are sensitive to increasing interest rates. I anticipated lower share prices when I first invested in July if there were to be continuing base rate increases along with higher bond yields. It is for that reason that I have drip fed my purchases since my first. I may well drip feed with further purchases if there are further declines.
just checked - a limit order I placed yesterday got executed at 70p