12th Apr 2016 09:59
LONDON (Alliance News) - Ranger Direct Lending Fund PLC on Tuesday said it will seek to pay higher dividends to shareholders, having committed to deploy all its capital in assets.
Ranger invests in loans provided by primarily US direct lending platforms, which offer an alternative source of finance to banks.
Ranger paid its first dividend in December 2015 and now that its capital is effectively fully invested, the company will seek to achieve an increase in its quarterly dividends through 2016.
Payment of the 10% targeted annual dividend will be "contingent" on securing "appropriate" borrowings, Chairman Christopher Waldron said, with talks continuing on the structure of a facility. Ranger Direct Lending hopes to utilise a borrowings facility by the end of the second quarter.
Waldron said the fund's IPO in May 2015 was capped at GBP135 million to ensure "prudent and timely" deployment of the proceeds from investors. He said that approach was justified by the pace of investment in the remainder of that year.
The chairman said the board is "committed" to growing Ranger, and that it is "clear" the direct lending sector still offers "compelling" value and yield.
"The continuing reluctance of mainstream lenders to offer attractive finance to SMEs means that there will be further opportunities in 2016 and Ranger hopes to be able to raise new capital to take advantage of them," Waldron said.
Ranger Direct Lending said its performance to the end of December was in line with its aim of meeting targeted net annualised returns on investments of 12% to 13% to the company. Its net asset value rose to GBP10.46 per share in December from GBP9.92 in May. The stock was down 0.2% at 967.85 pence Tuesday.
Growth in net asset value was in line with expectation, Ranger Direct Lending said, with the company looking to provide shareholders with "progressively higher" dividends as it deploys its capital. As of December 31, the fund had deployed, or committed to deploy, all its assets in debt instruments issued by direct lending platforms, according Christopher Waldron.
"This has resulted in a steadily improving rate of monthly NAV growth and dividend yield over the period. This pace of deployment was anticipated at the time of the initial public offering in April, but it is nevertheless reassuring that it has been achieved and endorses Ranger's original investment case," Waldron said.
"More than 80% of Ranger's portfolio consists of secured loans across a diverse selection of industries and whilst most of the assets are in the US, three of the recent investments have been in platforms based outside the US. There has also been progress towards making tactical equity investments in Direct Lending Platforms and we expect several to be completed by the end of the second quarter of 2016," the chairman said.
By Samuel Agini; [email protected]; @samuelagini
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