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Blue Capital Alternative Income evaluating options on discount

Blue Capital Alternative Income evaluating options on discount – the company made a brief announcement on the morning of 1 September 2017 that just says: “The Company’s Ordinary Shares have traded at an average discount of more than 5 per cent. to the net asset value per Ordinary Share over the three month period ending on 31 August 2017. As a result, in accordance with the discount management policy of the Company implemented at launch, the Directors are considering various options and will put a proposed course of action to shareholders in due course.”

Extract from our note published 31 May 2017

As part of its efforts to control its discount, BCAI operates a discount triggered tender each year. The last of these was triggered by the discount trading, on average, wider than 5% over the three months ended 31 August 2016. Up to 10% of the shares were available for tender, 19,855,391 shares, and the tender was taken up in full. Each share validly tendered was converted into an unlisted redemption share. The company set out a timetable for the redemption shares such that:

  • 58% was anticipated to be redeemed on 31 March 2017 for settlement 30 April 2017;
  • 30% is anticipated to be redeemed on 31 August 2017 for settlement on 30 September 2017; and
  • 12% is anticipated to be redeemed on 31 December 2017 for settlement on 31 January 2018.

On 21 March 2017, the company announced that on or before 30 April 2017, an amount equal to US$13.1m will distributed to redemption shareholders.

Awaiting news on impact of Harvey

We are waiting to find out what impact, if any, Hurricane Harvey will have on the company. Here is what they have had to say on the subject so far: “On 25 August 2017, Hurricane Harvey made landfall near Corpus Christi, Texas as a Category 4 hurricane with winds of 130 miles per hour followed by substantial rainfall and flooding.   The Investment Manager has now commenced its normal post-event procedures to estimate any loss to the Company from Hurricane Harvey, and continues to monitor this event for potential material impact to the Company.”

BCAI : Blue Capital Alternative Income evaluating options on discount

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