RM Infrastructure Income PLC Net Asset Value(s) (0421X)
18 December 2023 - 6:00PM
UK Regulatory
TIDMRMII TIDMTTM
RNS Number : 0421X
RM Infrastructure Income PLC
18 December 2023
RM Infrastructure Income Plc
("RMII" or the "Company")
LEI: 213800RBRIYICC2QC958
Net Asset Value
NAV Performance
The NAV % Total Return for November 2023 was -0.91%, which takes
the NAV % Total Return to +1.06% over the past six months, and
+3.65% over the past 12 months.
The NAV as at 30(th) November 2023 was 90.35 pence per Ordinary
Share, which was 0.83 pence lower than at 31(st) October 2023.
This overall loss comprised positive interest income of 0.41
pence per Ordinary Share, net of expenses, and a decrease in
portfolio valuations of 1.23 pence per Ordinary Share.
The interest income net of expenses has been negatively impacted
during the period due to the prepayment of all outstanding Company
leverage which in turn has resulted in the amortisation of associated
costs to be recognised in full during the reporting period as
opposed to a monthly amortisation until the expected maturity
of said facilities.
The primary driver behind the shifts in portfolio valuations
is the performance of investment loans 66 and 67. These loans
are junior secured and are backed by two portfolios jointly owning
five operational hotels in the UK. It is important to note that
both loans have been performing consistently, meeting their interest
obligations in cash since their inception. They are scheduled
for repayment on 4 April 2024.
However, there is uncertainty regarding the borrower's ability
to secure refinancing upon maturity. Consequently, the valuation
agent has marked down the position by approximately 10% of its
nominal value, or when assessed using a discounted cash flow
approach, reflecting an increase in default risk from a discount
rate of approximately 9% to around 30%.
Currently, the loan-to-value ratio stands at 71%. Nevertheless,
the valuer has factored in the possibility that, during a potentially
limited marketing period, the hotels could experience a decline
in market value of around 30% compared to the latest valuation
report. After repaying senior debt, this would result in an indicative
average asset coverage of approximately 90%, aligning with the
current revised assessment.
Since inception, the portfolio's valuation approach has been
based around fair value where the independent third-party valuation
agent looks at observable pricing for similar sectors and values
the assets based upon where comparables are valued. This incorporates
the broader market returns as well as any idiosyncratic risks.
Through review of the latest iteration of the extant IPEV guidelines
and discussions with the Company's valuation agent and a review
of industry practice in light of the change in guidelines, the
Company will move to a valuation process that is driven by a
yield-based methodology i.e. discounted cash flow approach. The
discount rate is driven by observable risk pricing and thus the
method is similar in its approach to obtaining fair market value,
however this change could lead to valuation differences. After
an initial appraisal by the valuation agent, these potential
differences are not expected to be material. This valuation methodology
is expected to be used from December onwards.
Portfolio Activity
As at 30(th) November 2023, the Company's invested portfolio
had an aggregate valuation of GBP101 million across 31 investments.
The average yield was 10.84%, with a weighted average loan life
remaining of circa 1.69 years(10) . Overall, the portfolio is
95% invested in private market assets and 5% in public bonds.
During the reporting period, investment loan ref 84 was fully
repaid at par, or GBP4m.
At period end, the Company's RCF remains fully undrawn with the
term loan B having been repaid in full. The balance sheet has
cash of circa GBP10m of which circa GBP6m is committed for existing
loans that have not been drawn down.
The Company also announces that the Monthly Report for the period
to 30 November 2023 is now available to be viewed on the Company
website:
https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/
END
For further information, please contact:
RM Capital Markets Limited - Investment Manager
James Robson
Thomas Le Grix De La Salle
Tel: 0131 603 7060
FundRock Management Company (Guernsey) Limited - AIFM
Chris Hickling
Dave Taylor
Tel: 01481 737600
Apex Listed Companies Services (UK) Ltd - Administrator and
Company Secretary
Jenny Thompson
Tel: 07767102572
Singer Capital Markers Advisory LLP - Financial Adviser and
Broker
James Maxwell
Asha Chotai
Tel: 020 7496 3000
About RM Infrastructure Income
RM Infrastructure Income Plc ("RMII" 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://rm-funds.co.uk/rm-infrastructure-income/
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END
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