25th Nov 2016 08:44
25 November 2016
Duet Real Estate Finance Limited
("DREF" or the "Company")
NAV, Portfolio Update, Investment Performance and Outlook
NAV
As announced previously, at 30 June 2016, the unaudited net asset value ('NAV') of the Company was 14.60 pence per Ordinary Share. During the quarter to 30 September 2016, the Company returned an equivalent of 7.67 pence per Ordinary Share in the form of an issue and redemption of B shares. We are now pleased to advise that at 30 September 2016, the unaudited NAV was 6.92 pence per Ordinary Share.
Portfolio Update
The portfolio of the Master Fund as at 30 September 2016 consisted of 4 assets totalling £14.1m of principal and accrued interest, after impairments, together with the value of foreign exchange hedging derivatives. The portfolio had a blended loan to value ratio of 59.0% (including payment-in-kind interest accrued where applicable), along with blended cash pay and payment-in-kind coupons of 6.16% and 2.47% 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 | 68% | UK | 32% |
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Healthcare | 32% | Netherlands | 18% |
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Belgium | 50% |
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Portfolio Investment | Asset Type | Country | Balance (including accrued interest) | Description | ||||
Loan 5 | Healthcare | United Kingdom | £0.0m(1) | mezzanine and senior loan secured by a portfolio of care homes | ||||
Loan 10 | Offices | Netherlands | €3.3m | senior loan backed by an office and warehouse portfolio of 13 assets | ||||
Loan 11 | Offices | Belgium | €8.5m | mezzanine loan secured by an office | ||||
CMBS 1 | Healthcare | United Kingdom | £4.5m | securitisation backed by a portfolio of private hospitals | ||||
(1) after impairment.
Investment Performance and Outlook
Whilst no longer required to release Interim Management Statements, the board intends to continue to update Shareholders on the Company's investment performance and outlook alongside each NAV update.
The Company raised £76.0m and has paid dividends totalling £19.3m and returned capital totalling approximately £66.5m. The total value to paid-in ratio (based on capital raised) of the Company at 30 September 2016 was 1.193.
The Investment Adviser anticipates the current trend of earlier repayments to continue as increased liquidity in the financing markets, the ongoing deleveraging through amortisation of most transactions and the generally rising trend in asset values encourage borrowers to refinance or sell the assets that back the remaining loans in the Master Fund.
As the underlying portfolio of the Master Fund continues to be realised, and with 87.4% of the original capital raised already returned, your Board anticipates that the Company will continue to make distributions of capital via B Share issues and redemptions, together with payments of income, if any after the Company's expenses, by way of dividend.
The underlying asset quality and conservative debt metrics leave the Master Fund in a robust position, with no current significant concern over the credit-worthiness and recoverability of the portfolios' investments. We remain hopeful that the Master Fund will be fully realised within the coming months, and therefore that the Company will have distributed the majority of its remaining assets and income shortly thereafter.
For further information, please contact:
DRC Capital LLP +44 (0)20 7042 0600
Dale Lattanzio
Cyrus Korat
Stifel Nicolaus Europe Limited +44 (0)20 7710 7600
Neil Winward
Mark Bloomfield
Tunga Chigovanyika
Related Shares:
DREF.L