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

RM Infrastructure Income

18/07/2022 07:00

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RNS Number : 7274S  RM Infrastructure Income PLC  18 July 2022

 RM Infrastructure Income Plc

 ("RMII" or the "Company")

 LEI: 213800RBRIYICC2QC958

 Net Asset Value

 NAV

The Company's NAV % Total Return for the month of June was -0.02%, which
 brings the NAV % Total Return for the quarter to +0.80%.

 The NAV % Total Return over the last twelve months was +5.26%, since January
 2020 pre-COVID-19 pandemic the NAV % Total Return has been +13.39% and
 inception to date has been 34.22%.

 The Ordinary Share NAV as at 30(th) June 2022 was 93.68 pence per share. This
 monthly NAV return of -1.644 pence per share arose primarily from the
 ex-dividend effect of the 1.625 pence per share ordinary dividend for the
 period Q1 2022, declared in May 2022 and paid in June 2022. Otherwise, there
 was positive interest income, net of expenses, of 0.616 pence per share and a
 decrease in portfolio valuations of 0.635 pence per share.

Summary for June 2022 (pence per share)
 Net interest income             +0.616p
 Change in portfolio valuations  -0.635p
 Payment of Dividend (Q1 2022)   -1.625p
 Net NAV Movement                -1.644p

 

 The closing mid-market share price at the quarter-end was 90.75 pence which is
 4.25 pence per share lower than the opening mid-market share price at the
 start of the year and represents a total shareholder return of 8.16% over the
 twelve months to 30(th) June 2022.

Market Update

The quarter saw continued weakness in credit spreads and an increase in
 government bond yields. The Markit ITRX European Crossover Index rose from 338
 to close the quarter at 579 and since the beginning of the year this index has
 doubled from 240 and is now trading at the widest level since the brief
 "peak-fear" moment in March 2020 and then not since the European sovereign
 crisis of 2012. Benchmark 10-year UK government bond yields rose 62bps over
 the period from 1.6% to 2.2%.

 Overall, with higher government rates and wider credit spreads the all-in
 yields are starting to look very attractive across a variety of names.
 Furthermore, the general yield compression we saw during the QE years has
 reversed and now we are seeing healthy dispersion with risks starting to be
 priced more favourably amongst issuers.

 RMII has significantly outperformed benchmark loan and bond indices over the
 first half of 2022 with a share price total return of -1.06% versus -7.62% for
 the S&P European Leverage Loan Index Total Return and -13.40% for the
 Markit iBoxx EUR High Yield Index.

                    Total Return
                     YTD      ITD
 RM Infrastructure Income NAV           +2.68%   +34.22%
 RM Infrastructure Income Share Price   -1.06%   +28.23%
 S&P European Leveraged Loan Index      -7.62%   +8.73%
 Makit iBoxx EUR Liquid High Yield TRI  -13.40%  +0.21%

 

Portfolio Activity

As described above, publicly observable credit spreads have been very weak and
 during the month of June the Level 2 assets were marked to the bid side of the
 market, using Markit pricing, and after discussions with the Company's
 independent valuation agent the Level 3 assets had a generic widening of 20bp
 applied. This generic widening of 20bp reflects the shorter duration of the
 portfolio combined with the covenanted higher yielding and bespoke nature of
 the loans held. The overall portfolio yield has thus increased from 8.60% to
 8.73% over the month.

 With persistently high inflation levels and likely further interest rate hikes
 by global central banks, the Investment Manager remains confident with regards
 to the low interest rate sensitivity of the portfolio. This is largely due to
 the short duration nature of the portfolio which is currently 1.91 years.
 This means that loans can be repaid relatively quickly and reinvested at
 higher yields.

 The second quarter of 2022 was active in terms of new investments and
 scheduled drawdowns totalling circa £13.5m under existing committed
 facilities. The new investments increase the portfolio's weighting towards its
 refreshed target sectors. Repayments and divestments received throughout the
 quarter totalled circa £1.3m. The transactions for the quarter are shown
 below.

 Increased investments

 ·      Social Infrastructure - Aged Care, Ref 88: £1,287,805 drawdown
 under a senior secured committed construction facility.

 ·      Social Infrastructure - Health & Well-being, Ref 76:
 £150,000 drawdown under a senior secured committed facility.

 ·      Environmental Infrastructure - Renewable Heat Incentive, Ref 52:
 £400,000 drawdown secured against Renewable Heat Incentive (RHI) cash flows.

 New Investments

 ·      Social Infrastructure - Health & Wellbeing, Ref 94.a:
 £350,000 senior secured Recovery Loan Scheme (RLS) term loan facility.

 ·      Social Infrastructure - Aged Care, Ref 97: £6,000,000 senior
 secured committed term loan construction facility, partly funded via the RLS
 regime.

 ·      Social Infrastructure - Childcare, Ref 95: £3,000,000 Senior
 secured committed term loan facility, partly funded via the RLS regime.

 ·      Social Infrastructure - Accommodation, Ref 93:  £2,000,000
 Junior secured RLS term loan facility.

 ·      Environmental Infrastructure - Energy Efficiency, Ref 96:
 £300,000 drawdown under a senior secured committed facility to a company
 manufacturing and distributing energy efficiency products in the UK.

 The Company also announces that the Monthly Report for the period to 30 June
 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
 Pietro Nicholls

 Thomas Le Grix De La Salle
 Tel: 0131 603 7060

 International Fund Management - AIFM
 Chris Hickling
 Shaun Robert
 Tel: 01481 737600

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

 Sanne Fund 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/

 

The closing mid-market share price at the quarter-end was 90.75 pence which is
4.25 pence per share lower than the opening mid-market share price at the
start of the year and represents a total shareholder return of 8.16% over the
twelve months to 30(th) June 2022.

Market Update

The quarter saw continued weakness in credit spreads and an increase in
government bond yields. The Markit ITRX European Crossover Index rose from 338
to close the quarter at 579 and since the beginning of the year this index has
doubled from 240 and is now trading at the widest level since the brief
"peak-fear" moment in March 2020 and then not since the European sovereign
crisis of 2012. Benchmark 10-year UK government bond yields rose 62bps over
the period from 1.6% to 2.2%.

Overall, with higher government rates and wider credit spreads the all-in
yields are starting to look very attractive across a variety of names.
Furthermore, the general yield compression we saw during the QE years has
reversed and now we are seeing healthy dispersion with risks starting to be
priced more favourably amongst issuers.

RMII has significantly outperformed benchmark loan and bond indices over the
first half of 2022 with a share price total return of -1.06% versus -7.62% for
the S&P European Leverage Loan Index Total Return and -13.40% for the
Markit iBoxx EUR High Yield Index.

 

 

                                        Total Return
                                        YTD      ITD
 RM Infrastructure Income NAV           +2.68%   +34.22%
 RM Infrastructure Income Share Price   -1.06%   +28.23%
 S&P European Leveraged Loan Index      -7.62%   +8.73%
 Makit iBoxx EUR Liquid High Yield TRI  -13.40%  +0.21%

 

Portfolio Activity

As described above, publicly observable credit spreads have been very weak and
during the month of June the Level 2 assets were marked to the bid side of the
market, using Markit pricing, and after discussions with the Company's
independent valuation agent the Level 3 assets had a generic widening of 20bp
applied. This generic widening of 20bp reflects the shorter duration of the
portfolio combined with the covenanted higher yielding and bespoke nature of
the loans held. The overall portfolio yield has thus increased from 8.60% to
8.73% over the month.

With persistently high inflation levels and likely further interest rate hikes
by global central banks, the Investment Manager remains confident with regards
to the low interest rate sensitivity of the portfolio. This is largely due to
the short duration nature of the portfolio which is currently 1.91 years.
This means that loans can be repaid relatively quickly and reinvested at
higher yields.

The second quarter of 2022 was active in terms of new investments and
scheduled drawdowns totalling circa £13.5m under existing committed
facilities. The new investments increase the portfolio's weighting towards its
refreshed target sectors. Repayments and divestments received throughout the
quarter totalled circa £1.3m. The transactions for the quarter are shown
below.

Increased investments

·      Social Infrastructure - Aged Care, Ref 88: £1,287,805 drawdown
under a senior secured committed construction facility.

·      Social Infrastructure - Health & Well-being, Ref 76:
£150,000 drawdown under a senior secured committed facility.

·      Environmental Infrastructure - Renewable Heat Incentive, Ref 52:
£400,000 drawdown secured against Renewable Heat Incentive (RHI) cash flows.

New Investments

·      Social Infrastructure - Health & Wellbeing, Ref 94.a:
£350,000 senior secured Recovery Loan Scheme (RLS) term loan facility.

·      Social Infrastructure - Aged Care, Ref 97: £6,000,000 senior
secured committed term loan construction facility, partly funded via the RLS
regime.

·      Social Infrastructure - Childcare, Ref 95: £3,000,000 Senior
secured committed term loan facility, partly funded via the RLS regime.

·      Social Infrastructure - Accommodation, Ref 93:  £2,000,000
Junior secured RLS term loan facility.

·      Environmental Infrastructure - Energy Efficiency, Ref 96:
£300,000 drawdown under a senior secured committed facility to a company
manufacturing and distributing energy efficiency products in the UK.

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

Pietro Nicholls

Thomas Le Grix De La Salle

Tel: 0131 603 7060

International Fund Management - AIFM

Chris Hickling

Shaun Robert

Tel: 01481 737600

Tulchan Group - Financial PR

Elizabeth Snow

Oliver Norgate

Tel: 0207 353 4200

Sanne Fund 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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