REG - RM Infrastructure RM SecDirect - RMDC - Net Asset Value(s)

RM Infrastructure IncomeAnnouncement

17/01/2023 07:00

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RNS Number : 9034M  RM Infrastructure Income PLC  17 January 2023

 RM Infrastructure Income Plc

 ("RMII" or the "Company")

 LEI: 213800RBRIYICC2QC958

 Net Asset Value

 NAV & Share price performance

The Company's NAV % Total Return for the month of December was 0.66%, which
 brings the NAV % Total Return for the quarter to 1.50%.

 The NAV % Total Return over the last twelve months was 4.98% and inception to
 date 37.22%.

 The Ordinary Share NAV as at 31(st) December 2022 was 92.50 pence per share.
 This monthly NAV return of -1.009 pence per share arose primarily from the
 ex-dividend effect of the 1.625 pence per share ordinary dividend for the
 period Q3 2022, declared in November 2022 and paid in December 2022.
 Otherwise, there was positive interest income, net of expenses, of 0.568 pence
 per share and an increase in portfolio valuations of 0.048 pence per share.

Summary for December 2022 (pence per share)
 Net interest income             +0.568p
 Change in portfolio valuations  +0.048p
 Payment of Dividend (Q3 2022)   -1.625p
 Net NAV Movement                -1.009p

 

 During the month of December 2022 and post period-end, the Company purchased
 c.250k shares as part of its buyback program. The Board and the Investment
 Manager remain focused on reducing the discount to Net Asset Value.

 Market Update

 Peak inflation fear and the instability created by Liz Truss had started to
 pass as the quarter began, as evidenced by government bond yields starting to
 fall again. Overall, it was a strong quarter for both risk assets and
 government bonds as equities rallied and the 2 -year UK government bond yield
 fell from a high of circa 4.4% to finish the period at circa 3.5%. There was a
 similar shift in yields for the long end of the government bond market, which
 had been particularly affected by LDI unwinds, with cash prices for the UKT
 0.5% 61 touching 28 cents on the £ in early October and finishing the quarter
 at 35 cents on the £.

 Credit spreads saw a material reduction in the risk premium with the Markit
 ITRX European Crossover Index peaking at 650 in early October and then
 steadily reducing over the period to finish at 475. Post period end this trend
 has continued with spreads touching nearly 400 today. It is likely that these
 are the tightest levels we will see in this index for the remainder of the
 year and thus the widening applied to the Level 3 assets, of 70bps in June and
 September 2022, have not been reversed by the Investment Manager nor the
 Valuation Agent until we see economic indicators giving indications that can
 justify this spread compression within these more liquid indices. In the view
 of RM Funds, this is pragmatic and what investors would expect; to reduce
 volatility within the fund as we expect further spread widening from these
 more liquid indices during 2023.

 RMII has significantly outperformed benchmark loan and bond indices in FY2022
 as outlined in the below table;

                    Total Return
                     1yr      3yr      5yr
 RM Infrastructure Income NAV           4.98%    16.54%   33.00%
 RM Infrastructure Income Share Price   -3.75%   7.16%    19.11%
 S&P European Leveraged Loan Index      -7.05%   -7.06%   -8.13%
 Ishares Core Corp Bond UCITS ETF GBP   -15.40%  -14.52%  -7.50%

 

Portfolio Update

The Investment Manager remains confident with regards to the low interest rate
 sensitivity of the portfolio. This is largely driven by the short duration
 nature of the portfolio, which is currently 1.50 years, which in turn means
 that loans can be repaid relatively quickly and reinvested at higher yields.
 This has been evidenced during the quarter as a number of loans written over
 previous years were repaid and the capital redeployed into higher yielding
 loans. In conjunction with this, the portfolio manager has been seeking to
 increase security with a move up the capital structure by recycling this
 capital into senior secured loans and reducing mezzanine or junior lending
 exposure. The portfolio yield has thus increased over the quarter by 28bps
 from 8.87% to 9.15%.

 Increased investments

 ·      Social Infrastructure - Aged Care, Ref 88: c.£5,000

 ·      Environmental Infrastructure - Energy Efficiency, Ref 96:
 £70,000

 ·      Non-Core - Hotel & Leisure, Ref 69: £7,500

 New Investments

 ·      Social Infrastructure - Care Home, Ref 97a&b: £6,200,000
 committed (c.£1.1m drawn in period)

 Repayments:

 ·      Environmental Infrastructure - Energy Efficiency, Ref 96:
 £70,000

 ·      Environmental Infrastructure - Energy Efficiency, Ref 62:
 £1,000,000

 ·      Environmental Infrastructure - Renewable Heat Incentive, Ref
 9&52: £150,000

 ·      Social Infrastructure - Childcare, Ref 95a&b: £120,000

 ·      Social Infrastructure - Health and Well-being, Ref 94: c.£7,700

 ·      Social Infrastructure - Childcare & Education, Ref 91:
 £1,550,000

 ·      Non-Core - Asset Backed Lending, Ref 64: £2,750,000

 ·      Non-Core - Asset Backed Lending, Ref 60: £2,000,000

 ·      Non-Core - Hotel & Leisure, Ref 67: £950,000

 A quarterly update webinar from the Investment Manager is scheduled for
 Tuesday 19(th) January 2-3pm and registration can be made here:
 https://us06web.zoom.us/webinar/register/WN_oBbZJhtFRiWqkGlu_7t6DQ
 (https://us06web.zoom.us/webinar/register/WN_oBbZJhtFRiWqkGlu_7t6DQ) .

 The Company also announces that the Monthly Report for the period to 30
 September 2022 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
 Shaun Robert
 Tel: 01481 737600

 Tulchan Group - Financial PR
 Elizabeth Snow
 Oliver Norgate
 Tel: 0207 353 4200

 Apex Listed Companies Services (UK) Limited- Administrator and Company
 Secretary
 Brian Smith
 Ciara McKillop
 Tel: 020 3327 9720

 Singer Capital Markers Advisory LLP - Financial Adviser and Broker
 James Maxwell
 Asha Chotai
 Tel: 020 7496 3000

 Peel Hunt LLP - Financial Adviser and Broker
 Luke Simpson
 Liz Yong
 Tel: 020 7418 8900

 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/

 

During the month of December 2022 and post period-end, the Company purchased
c.250k shares as part of its buyback program. The Board and the Investment
Manager remain focused on reducing the discount to Net Asset Value.

 

Market Update

Peak inflation fear and the instability created by Liz Truss had started to
pass as the quarter began, as evidenced by government bond yields starting to
fall again. Overall, it was a strong quarter for both risk assets and
government bonds as equities rallied and the 2 -year UK government bond yield
fell from a high of circa 4.4% to finish the period at circa 3.5%. There was a
similar shift in yields for the long end of the government bond market, which
had been particularly affected by LDI unwinds, with cash prices for the UKT
0.5% 61 touching 28 cents on the £ in early October and finishing the quarter
at 35 cents on the £.

Credit spreads saw a material reduction in the risk premium with the Markit
ITRX European Crossover Index peaking at 650 in early October and then
steadily reducing over the period to finish at 475. Post period end this trend
has continued with spreads touching nearly 400 today. It is likely that these
are the tightest levels we will see in this index for the remainder of the
year and thus the widening applied to the Level 3 assets, of 70bps in June and
September 2022, have not been reversed by the Investment Manager nor the
Valuation Agent until we see economic indicators giving indications that can
justify this spread compression within these more liquid indices. In the view
of RM Funds, this is pragmatic and what investors would expect; to reduce
volatility within the fund as we expect further spread widening from these
more liquid indices during 2023.

RMII has significantly outperformed benchmark loan and bond indices in FY2022
as outlined in the below table;

 

                                        Total Return
                                        1yr      3yr      5yr
 RM Infrastructure Income NAV           4.98%    16.54%   33.00%
 RM Infrastructure Income Share Price   -3.75%   7.16%    19.11%
 S&P European Leveraged Loan Index      -7.05%   -7.06%   -8.13%
 Ishares Core Corp Bond UCITS ETF GBP   -15.40%  -14.52%  -7.50%

 

Portfolio Update

The Investment Manager remains confident with regards to the low interest rate
sensitivity of the portfolio. This is largely driven by the short duration
nature of the portfolio, which is currently 1.50 years, which in turn means
that loans can be repaid relatively quickly and reinvested at higher yields.
This has been evidenced during the quarter as a number of loans written over
previous years were repaid and the capital redeployed into higher yielding
loans. In conjunction with this, the portfolio manager has been seeking to
increase security with a move up the capital structure by recycling this
capital into senior secured loans and reducing mezzanine or junior lending
exposure. The portfolio yield has thus increased over the quarter by 28bps
from 8.87% to 9.15%.

Increased investments

·      Social Infrastructure - Aged Care, Ref 88: c.£5,000

·      Environmental Infrastructure - Energy Efficiency, Ref 96:
£70,000

·      Non-Core - Hotel & Leisure, Ref 69: £7,500

New Investments

·      Social Infrastructure - Care Home, Ref 97a&b: £6,200,000
committed (c.£1.1m drawn in period)

Repayments:

·      Environmental Infrastructure - Energy Efficiency, Ref 96:
£70,000

·      Environmental Infrastructure - Energy Efficiency, Ref 62:
£1,000,000

·      Environmental Infrastructure - Renewable Heat Incentive, Ref
9&52: £150,000

·      Social Infrastructure - Childcare, Ref 95a&b: £120,000

·      Social Infrastructure - Health and Well-being, Ref 94: c.£7,700

·      Social Infrastructure - Childcare & Education, Ref 91:
£1,550,000

·      Non-Core - Asset Backed Lending, Ref 64: £2,750,000

·      Non-Core - Asset Backed Lending, Ref 60: £2,000,000

·      Non-Core - Hotel & Leisure, Ref 67: £950,000

 

A quarterly update webinar from the Investment Manager is scheduled for
Tuesday 19(th) January 2-3pm and registration can be made here:
https://us06web.zoom.us/webinar/register/WN_oBbZJhtFRiWqkGlu_7t6DQ
(https://us06web.zoom.us/webinar/register/WN_oBbZJhtFRiWqkGlu_7t6DQ) .

The Company also announces that the Monthly Report for the period to 30
September 2022 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

Shaun Robert

Tel: 01481 737600

Tulchan Group - Financial PR

Elizabeth Snow

Oliver Norgate

Tel: 0207 353 4200

Apex Listed Companies Services (UK) Limited- Administrator and Company
Secretary

Brian Smith

Ciara McKillop

Tel: 020 3327 9720

Singer Capital Markers Advisory LLP - Financial Adviser and Broker

James Maxwell

Asha Chotai

Tel: 020 7496 3000

Peel Hunt LLP - Financial Adviser and Broker

Luke Simpson

Liz Yong

Tel: 020 7418 8900

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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