QuotedData’s morning briefing 17 July 2023

In QuotedData’s morning briefing 17 July 2023:

  • Cordiant Digital Infrastructure (CORD) has announced that its portfolio company, Emitel S.A, has refinanced its senior loans, securing €353m in financing which matures in 2030. The new facility was 1.6 times oversubscribed, with a blended rate lower than the 2.9% of its current senior facilitates. The new loans will be used to retire previous facilitates. CORD will have net gearing of 36% following its refinancing, with no debt maturing before June 2025.
  • RTW Biotech Opportunities (RTW) has announced that one of its invested companies, Apogee Theraputics, has raised an upsized $300m in its recent IPO listing on the NASDAQ exchange, with its shares increasing $17.00 per share to $21.23 on its first day of trading.
  • Gresham House, the asset manager responsible for the investment management of multiple trusts, has announced that it will be purchased by Seed Bidco Limited, a newly incorporated entity formed by funds advised by Searchlight Capital Partners L.P. and its affiliates for the purpose of purchasing Gresham House. The cash offer values Gresham House at £469.8m, and represents a 63% premium to Gresham’s previous close price. Part of the rationale for this purchase includes the board’s view that its share price did not reflect the true value of Gresham House, with Searchlight being committed to supporting Gresham’s management in growing the company, while also having experience to realise the value of their other financial investments. [QD comment: M&A activity is not uncommon in the asset management industry, and the purchase of Gresham should not immediately lead to major changes in the operations of its associated trusts. Time will tell as to whether their boards will wish to pursue new management. Though it seems that Gresham’s investment approach will remain unchanged, so we would speculate that the associated trusts will continue as they always have. We do observe that these events have triggered a rethink by boards in the past, with Majedie’s purchase by Liontrust being a recent example, which saw its namesake trust drop its management team in favour of a different asset manager.]
  • Schroder European REIT (SERE) saw a 0.8% like-for-like decrease in the value of its portfolio to €218.4m over the quarter to 30 June 2023. The company said the change partially reflected the valuers increasing sustainability-led provisions across select assets. Office assets (34% of the portfolio) witnessed a 2.4% decline, reflecting additional sustainability-led provisions, as well as valuers adjusting their yield assumptions by 5-15 basis points (0.05% to 0.15%). Industrial assets (30% of portfolio) witnessed a 1.2% increase, driven by ERV growth. Yields have remained static. The German retail portfolio valuation was flat, whilst the alternative investment portfolio declined 3.0%, as a result of shortening unexpired lease terms and 20-25 basis points of outward yield movement. Based on 30 June 2023 values, the LTV is 31% based on gross asset value and 24% net of cash. The company is reviewing select sustainability-led capex initiatives in the portfolio, which it said will best optimise earnings growth and asset liquidity.
  • Lok’n Store (LOK) made the first deployment from the proceeds of its £20.5m equity raise into a new freehold land acquisition. Contracts have been exchanged on a freehold site in Eastbourne, Sussex where the company intends to submit planning for a 60,000 sq ft store shortly.  Completion is due by the end of the year upon vacation of the current occupier. This Landmark location, adjacent to supermarkets and retail, is close to its existing leasehold store. The initial land cost will be £5.53m and total net project costs are expected to be £12.0m.

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