QuotedData’s morning briefing 31 March 2020

In QuotedData’s morning briefing for 31 March 2020:

Banks turn off dividend tap? – The Financial Times has a story that the Prudential Regulation Authority will soon force UK banks to suspend their dividend payments. This would knock a big hole in the income of some UK equity income funds. This follows a similar move by the ECB with respect to European banks on Friday.

  • SQN Secured Income says that it will be lenient with borrowers that are struggling to service their loans. “During these turbulent times our priority is to focus on preserving cash and maintenance of dividend cover for our shareholders. Equally, we are pleased that the manager is conducting sensible and cooperative conversation with our borrowers to set their minds at rest with a priority given to protecting their financial health and that of their people. This emergency period will pass and it is incumbent on all stakeholders to behave in a responsible and fair manner. We do expect the maturity profile of the loans to be extended but are encouraged that updates from underlying businesses have been broadly encouraging at this early stage.” It may end up moving to another management house: “The board is in discussions with the manager and other stakeholders to consider a practicable way forward for a fund that has performed well while facing challenges but associated with a management group which is experiencing difficulties with another client.
  • PRS REIT has suspended work on its construction sites. It has 1,947 complete homes (1,675 of which are let) and around 3,000 under construction. Gearing is about 21% and £75m of additional debt is not being used while the board decide whether it makes more sense to build additional homes or buy complete homes cheaply.
  • NewRiver REIT says that 36% of stores in its retail portfolio are still trading (providing essential services to the community). 60% of March’s quarterly retail rents were received on the due date and it is working constructively with tenants who are yet to pay.
  • Aberdeen Emerging Markets has renewed its £25m multicurrency revolving loan facility with RBS for a further year to 26 March 2021. The facility is currently fully drawn down.
  • BMO Real Estate has a new £20m 5-year revolving credit facility from Barclays, borrowings will be charged at 1.7% over LIBOR and unused facilities attract a commitment fee of 0.68% per year.

We also have stories on Empiric Student Property, which is suspending its dividend, and Regional REIT, which is paying its.


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