RM Secured Direct Lending delivering for yield seeking investors – Some of the highlights from the direct lending sector company, RM Secured Direct Lending’s (RMDL), first-half period to 30 June 2019 include:
- Loan investments totalled £122m with an increased average yield of 8.61%;
- Diversified portfolio with 35 debt investments (H1 2018: 30 investments) across 13 sectors (H1 2018: 15 sectors);
- 54% of portfolio is senior secured supported by high quality junior secured investment in defensive sectors
- Weighted average life: 3.46 years (H1 2018: 3.86 years);
- Focus on secured investments operating in non-cyclical sectors with tangible asset backing or visible cash-flows;
- Successful capital raise of 13.5m new Ordinary Shares at a price of 100p per share in March 2019.
Norman Crighton, chairman of the company, had this to say: “We have been able to deliver attractive returns to our investors with a NAV total return in the period of 4.9%. Over the longer term, RMDL is well placed to take advantage of the strong pipeline of opportunities and continued investor appetite for yield.”
We note that based on its current share price, RDL is yielding 6.4%.
RMDL aims to generate attractive and regular dividends through investment in secured debt instruments of UK SMEs and mid-market corporates and/or individuals including any loan, promissory notes, lease, bond, or preference share sourced or originated by the manager with a degree of inflation protection through-linked returns where appropriate.
Loans will generally be, but not limited to, senior, subordinated, unitranche and mezzanine debt instruments, documented as loans, notes, leases,or convertible bonds. Such loans shall typically have a life of 2-10 years. In certain limited cases Loans in which the company invests may have equity instruments attached, ordinarily any such equity interests would come in the form of warrants or options attached to a Loan. Typically, the loans will have coupons which may be fixed, index-linked or linked. For the purposes of this investment policy, UK SMEs include entities incorporated outside of the UK provided their assets and/or principal operations are within the UK.
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. The company will make loans to borrowers in a range of sectors within certain exposure limits which will vary from time to time, according to market conditions.
RMDL: RM Secured Direct Lending delivering for yield seeking investors
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