QuotedData’s morning briefing 6 March 2023

a cup of tea, a croissant and some magazines

In QuotedData’s morning briefing for 6 March 2023:

  • Life Settlement Assets (LSAA) has announced that it has received federal approval for the sale of the portfolio of life policies to Acheron Portfolio Trust. The portfolio was sold for a gross consideration of $24m, with transaction costs estimated to be $5m.
  • Castelnau Group Limited (CGL) has announced that Ocula Technologies Holdings (“Ocula”), the data science business in which it is a founding shareholder, has today confirmed that it has received new investment from Lloyds Banking Group and its Fintech Investment Team. The transaction values Ocula on a post new money basis at £10 million.
  • Along with announcing its annual results (which can be read here), Bellevue Healthcare Trust (BBH) has also offered shareholders the opportunity to partake in a script dividend scheme, if they have not done so already.  Those who wish to partake can do so here, with a deadline of 5:00pm on 31 March 2023.
  • Home REIT (HOME) has announced that two of its tenants – Gen Liv UK CIC (5.7% of annual rent) and Lotus Sanctuary CIC (12.5%) – have gone bust. Gen Liv UK CIC has entered into a creditors’ voluntary liquidation and has appointed FRP Advisory Trading Limited as liquidators. Lotus Sanctuary CIC has also entered into a creditors’ voluntary liquidation. The company says it is in discussions with prospective tenants to take on new leases of Gen Liv UK CIC’s and Lotus Sanctuary CIC’s portfolios. Arrangements have been made for existing care and support services to continue, to ensure that there is no impact on underlying residents. No resident will lose their accommodation as a result of the above creditors’ voluntary liquidations.
  • The merger of Shaftesbury and Capital & Counties has completed. The new company – Shaftesbury Capital – has pro-forma net tangible assets of £3.5bn or 192p per share and a combined portfolio in London’s West End (primarily focused on Covent Garden including Seven Dials, the Opera Quarter and Coliseum; Carnaby including Soho; and Chinatown) worth £4.9bn. The portfolio has annualised gross income of £178m and an ERV of £227m. Net debt is £1.5bn, equating to an LTV of 31%.
  • LondonMetric Property (LMP) has sold seven long income assets for £33.9m (LMP share: £29.6m), reflecting a blended net initial yield of 4.5%, and an average discount of 4.7% to 30 September 2022 book value. The assets, which generate £1.4m of rent a year, are fully let with a WAULT of 14 years and comprise:
    • a 19,000 sq ft Aldi store in Weymouth, sold for £6.8m;
    • a 53,000 sq ft urban warehouse let to Restore Scan in Salford, sold for £6.6m;
    • a 42,000 sq ft self storage unit in Oldbury, sold for £5.7m;
    • a 16,000 sq ft Premier Inn in Ringwood, sold for £8.65m (LMP share: £4.3m);
    • a 22,000 sq ft trade unit let to Jewson in Littlehampton, sold for £4.0m; and
    • a portfolio of two IMO car washes sold for £2.2m.
  • LXI REIT (LXI) has completed the first stage of its ongoing refinancing with a new £150m 16-year, interest-only term loan signed with a leading insurance company and an extension to its existing HSBC Facility. The new facility carries a margin of 1.75% per annum plus the prevailing UK Treasury 2039 Gilt rate on the date of drawdown. The new facility will be secured against a ring-fenced pool of assets, without recourse to the wider group. The LTV default covenant has been set at 60%, requiring a 33% fall in the value of the secured assets to trigger a breach from the day one valuation. The interest cover ratio default covenant has been set at 170%, requiring a 32% fall in the net rental income of the secured assets to trigger a breach. The company has also agreed a short-term extension of the term of its existing £60m loan with HSBC, which now matures in December 2024, with a further six-month extension option subject to lender consent. The group says the shorter-term nature of the HSBC facility provides it with additional optionality on potential asset management and debt capital markets initiatives. Following the extension, the HSBC facility now carries a margin of 2.05% per annum above SONIA and benefits from an existing interest rate cap until July 2023 at 1.84%. The company expects to acquire an additional cap to hedge the cost of the HSBC facility to expiry. The company has also agreed an increase in the LTV default covenant to 55% (from 50%), now requiring a 40% fall to breach. The interest cover ratio default covenant remains at 150% and the company expects to continue to cap the interest rate risk at a level continuing to provide significant headroom. These two facilities represent the first step of the company’s wider refinancing strategy to replace all of its near-term debt maturities. The second step is at an advanced stage of negotiations with agreed heads of terms, with a club comprising a number of the company’s existing lenders.
  • Alternative Income REIT (AIRE) posted a 12.5% fall in NAV to 84.34p in the six months to 31 December 2022. The value of its portfolio dropped 8.9% in the period to £107.4m impacted by the upward yield movement across the wider real estate sector, driven primarily from rises in interest rates during 2022. EPRA earnings per share was up 5.2% to 3.45p, which comfortably covered its dividend for the period of 2.75p. The group’s financing comprises a £41m loan (LTV of 36.8%) which matures in October 2025 and is fixed at a weighted average interest cost of 3.19%.

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