12th May 2014 16:06
Duet Real Estate Finance Limited
("DREF" or the "Company")
Interim Management Statement for the period from 1 January 2014 to 15 May 2014 and NAV and Dividend Announcement
Dividend and NAV
The board of the Company is pleased to announce a dividend of 1.65 pence per Ordinary Share in respect of the quarter to 31 March 2014, payable on 13 June 2014 to those Shareholders on the register as at 23 May 2014. Dividends to date (including this distribution) on shares issued at the time of the Company's Initial Public Offering total 20.90 pence per share.
As at 31 December 2013, the audited net asset value ('NAV') of the Company was 93.5 pence per share. During the quarter to 31 March 2014, the Company returned an equivalent of 13.35 pence per share in the form of an issue and redemption of B shares, in addition to paying a dividend of 2.25 pence per share, thereby adjusting NAV to 77.9 pence per share. As at 31 March 2014, the Company is able to report an unaudited NAV per share of 78.4 pence per Ordinary Share.
Portfolio Update
The portfolio of the Master Fund as at 31 March 2014 consisted of 11 investments totalling £216.3 million of principal and accrued interest, after impairments, together with the value of foreign exchange hedging derivatives. The portfolio had a current blended loan-to-value ratio of 71.3%, (including payment-in-kind interest accrued where applicable), along with a blended cash pay coupon and payment-in-kind coupon of 10.71% and 1.53% respectively. The portfolio provides the income and total return as targeted in the Company's prospectus, whilst maintaining a resilient risk profile, and is detailed in the tables below:
Asset Types: | Region: |
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Offices | 52% | UK | 48% |
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Hotels | 34% | Germany | 24% |
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Retail | 9% | France | 18% |
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Healthcare | 2% | Netherlands | 7% |
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Mixed | 3% | Belgium | 3% |
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Portfolio Investment | Asset Type | Country | Balance (including accrued interest) | Description | ||||
Loan 2 | Offices | United Kingdom | £19.3m | mezzanine loan secured by an office | ||||
Loan 4 | Offices | France | €47.5m | mezzanine loan secured across a diversified portfolio of assets | ||||
Loan 5 | Healthcare | United Kingdom | £0.0m(1) | mezzanine and senior loan secured by a portfolio of care homes | ||||
Loan 6 | Hotels | United Kingdom, Netherlands | £40.5m | mezzanine loan secured by 8 hotels | ||||
Loan 7 | Retail | Germany | €23.5m | mezzanine loan secured by a portfolio of 45 retail properties | ||||
Loan 9 | Mixed | United Kingdom | £7.4m | senior loan secured by a business park | ||||
Loan 10 | Offices | Netherlands | €7.9m | senior loan backed by an office and warehouse portfolio of 23 assets | ||||
Loan 11 | Offices | Belgium | €7.5m | mezzanine loan secured by an office | ||||
Loan 12 | Hotels | Germany | €39.4m | mezzanine loan backed by a portfolio of 20 hotels | ||||
Loan 13 | Offices | United Kingdom | £40.2m | mezzanine loan secured by an office | ||||
CMBS 1 | Healthcare | United Kingdom | £4.2m | securitisation backed by a portfolio of private hospitals | ||||
(1) including impairment.
Some specific updates are as follows:
The Master Fund continues the process of enforcing its rights under the loan security package to recover outstanding amounts owed under Loan 4, and the Investment Adviser expects that these actions will result in full recovery of principal, accrued interest and expenses.
In respect of Loan 5, during Q1 2014 a consortium of hedge funds assumed control of a majority of the senior debt of the underlying borrower company. Post quarter end the senior lenders executed a pre-packaged administration of the underlying borrower company, purchasing all the assets of the underlying borrower company at liquidation value. As a result, the Master Fund's debt claims are now subject to the administration, and recovery is expected to be minimal. The remaining balance of Loan 5 has been fully written off by the Master Fund which is reflected in the Company's NAV as at end of Q1 2014.
In respect of Loan 13, the borrower has informed the investment adviser that they anticipate repaying the loan at the end of Q2 following a sale of the asset.
Investment Performance
The Company raised £76.0m and has, including the dividend payable on 13 June 2014, paid dividends totalling £15.5m and returned capital of £11.1m. The total value to paid-in ratio of the Company at 31 March 2014 is 1.11x.
For further information, please contact:
DRC Capital LLP +44 (0)20 7042 0600
Dale Lattanzio
Cyrus Korat
Oriel Securities Limited +44 (0)20 7710 7600
Neil Winward
Mark Bloomfield
Tunga Chigovanyika
Related Shares:
DREF.L