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27 Apr 2021 07:00
27 April 2021
Real Estate Credit Investments Limited
Company Update Presentation
Real Estate Credit Investments Limited ("RECI" or "the Company") is pleased to advise investors of the release of its latest Company Update Presentation.
Given the ongoing uncertainty evolving from the COVID-19 pandemic, RECI's Investment Manager has prepared the Company Update Presentation to provide investors with:
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• | an update of the position of the Company as at 31 March 2021; |
• | a detailed review of the portfolio investments held by the Company; and |
• | detail of the Company's strategy with regards to dividends, leverage, liquidity and opportunities in the UK and European real estate credit markets. |
The Company is pleased to announce that the Company Update Presentation is now available on the Company's website at:
https://www.recreditinvest.com/investors/results-reports-and-presentations/#currentPage=1
An extract from the Summary section of the Company Update Presentation is set out for investors in the Appendix to this announcement.
For further information, please contact:
Broker: Richard Crawley / Richard Bootle (Liberum Capital) +44 (0)20 3100 2222
Investment Manager: Richard Lang (Cheyne) +44 (0)20 7968 7328
Appendix: Company Update Presentation Extract
Summary: The Investment Opportunity
· Attractive returns from low LTV credit exposure to UK and European commercial real estate assets
o Weighted Average LTV of 64.9% as at 31 March 2021
o Predominantly large, well capitalised, and experienced institutional borrowers
· Quarterly dividends delivered consistently since October 2013
o The Company has consistently sought to pay a stable quarterly dividend
o This has led to a stable annualised dividend of around 7% of NAV
o Maintaining dividend policy for March 2021 year end as announced in May 2020
· Highly granular book
o 61 positions
o Top position: 14.1% of NAV (by commitment) as at 31 March 2021
· Transparent and conservative leverage
· Access to established real estate investment team at Cheyne, which manages over $4bn AUM
· Access to pipeline of enhanced return investment opportunities identified by Cheyne
· Robust mitigation against a rising rates environment
o A high yielding portfolio, combined with a short weighted average life of 1.9 years, ensures minimal exposure to yield widening and the ability to redeploy quickly at higher rates
Summary: Responding to COVID
· Market
o Due to banks still not lending, Cheyne has become a "go to" lender
· Portfolio
o No defaults due to robust positions. Move to more senior positions
o Mark to Market recovery of 4.1p to NAV since initial COVID-19 impact in March 2020
· Cash
o Cash reserves maintained at between 5% to 10% of NAV
· Dividend
o Dividends maintained at 3.0p per quarter, 8.8% yield, based on share price, as at 31 March 2021
· Discount
o Average discount during 2021 calendar year to date of 6.4%, from >40% at peak
· Opportunities
o Increased returns at more defensive LTVs
Summary: Structural Strength - Positioned to Capitalise on Opportunities
· Having successfully navigated through the challenges posed by the COVID-19 pandemic, RECI is well positioned to address future market uncertainty, with a strong portfolio profile and modest leverage comprising:
o Senior loans and bonds equal to 82% of NAV
o Weighted average LTV of 64.9%
o The portfolio is concentrated on credits to large, well capitalised and experienced institutional borrowers
o Leverage of 1.23x gross (1.16x net of cash held) as at 31 March 2021
o Cash on balance sheet of £22.8m
· The Company has good visibility on its liquidity and income profile for the next financial year ending March 2022, and beyond
· The Company is positioned to take advantage of a new pipeline of opportunities from a position of strength
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