RMII Rm Infrastructure Income Plc

TIDMRMII TIDMTTM

RNS Number : 0421X

RM Infrastructure Income PLC

18 December 2023

 
                               RM Infrastructure Income Plc 
 
                                ("RMII" or the "Company") 
 
                                LEI: 213800RBRIYICC2QC958 
 
                                     Net Asset Value 
  NAV Performance 
   The NAV % Total Return for November 2023 was -0.91%, which takes 
   the NAV % Total Return to +1.06% over the past six months, and 
   +3.65% over the past 12 months. 
   The NAV as at 30(th) November 2023 was 90.35 pence per Ordinary 
   Share, which was 0.83 pence lower than at 31(st) October 2023. 
   This overall loss comprised positive interest income of 0.41 
   pence per Ordinary Share, net of expenses, and a decrease in 
   portfolio valuations of 1.23 pence per Ordinary Share. 
   The interest income net of expenses has been negatively impacted 
   during the period due to the prepayment of all outstanding Company 
   leverage which in turn has resulted in the amortisation of associated 
   costs to be recognised in full during the reporting period as 
   opposed to a monthly amortisation until the expected maturity 
   of said facilities. 
   The primary driver behind the shifts in portfolio valuations 
   is the performance of investment loans 66 and 67. These loans 
   are junior secured and are backed by two portfolios jointly owning 
   five operational hotels in the UK. It is important to note that 
   both loans have been performing consistently, meeting their interest 
   obligations in cash since their inception. They are scheduled 
   for repayment on 4 April 2024. 
   However, there is uncertainty regarding the borrower's ability 
   to secure refinancing upon maturity. Consequently, the valuation 
   agent has marked down the position by approximately 10% of its 
   nominal value, or when assessed using a discounted cash flow 
   approach, reflecting an increase in default risk from a discount 
   rate of approximately 9% to around 30%. 
   Currently, the loan-to-value ratio stands at 71%. Nevertheless, 
   the valuer has factored in the possibility that, during a potentially 
   limited marketing period, the hotels could experience a decline 
   in market value of around 30% compared to the latest valuation 
   report. After repaying senior debt, this would result in an indicative 
   average asset coverage of approximately 90%, aligning with the 
   current revised assessment. 
   Since inception, the portfolio's valuation approach has been 
   based around fair value where the independent third-party valuation 
   agent looks at observable pricing for similar sectors and values 
   the assets based upon where comparables are valued. This incorporates 
   the broader market returns as well as any idiosyncratic risks. 
   Through review of the latest iteration of the extant IPEV guidelines 
   and discussions with the Company's valuation agent and a review 
   of industry practice in light of the change in guidelines, the 
   Company will move to a valuation process that is driven by a 
   yield-based methodology i.e. discounted cash flow approach. The 
   discount rate is driven by observable risk pricing and thus the 
   method is similar in its approach to obtaining fair market value, 
   however this change could lead to valuation differences. After 
   an initial appraisal by the valuation agent, these potential 
   differences are not expected to be material. This valuation methodology 
   is expected to be used from December onwards. 
   Portfolio Activity 
   As at 30(th) November 2023, the Company's invested portfolio 
   had an aggregate valuation of GBP101 million across 31 investments. 
   The average yield was 10.84%, with a weighted average loan life 
   remaining of circa 1.69 years(10) . Overall, the portfolio is 
   95% invested in private market assets and 5% in public bonds. 
   During the reporting period, investment loan ref 84 was fully 
   repaid at par, or GBP4m. 
   At period end, the Company's RCF remains fully undrawn with the 
   term loan B having been repaid in full. The balance sheet has 
   cash of circa GBP10m of which circa GBP6m is committed for existing 
   loans that have not been drawn down. 
 
 The Company also announces that the Monthly Report for the period 
  to 30 November 2023 is now available to be viewed on the Company 
  website: 
 https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/ 
 
 
 
                                            END 
 
 
 
   For further information, please contact: 
 RM Capital Markets Limited - Investment Manager 
 James Robson 
 Thomas Le Grix De La Salle 
 Tel: 0131 603 7060 
 
 FundRock Management Company (Guernsey) Limited - AIFM 
 Chris Hickling 
 Dave Taylor 
 Tel: 01481 737600 
 
 Apex Listed Companies Services (UK) Ltd - Administrator and 
  Company Secretary 
 Jenny Thompson 
 
 Tel: 07767102572 
 
 Singer Capital Markers Advisory LLP - Financial Adviser and 
  Broker 
 James Maxwell 
 Asha Chotai 
 Tel: 020 7496 3000 
 
 
 About RM Infrastructure Income 
 
 RM Infrastructure Income Plc ("RMII" or the "Company") is a closed-ended 
  investment trust established to invest in a portfolio of secured 
  debt instruments. 
 
 The Company aims to generate attractive and regular dividends 
  through loans sourced or originated by the Investment Manager 
  with a degree of inflation protection through index-linked returns 
  where appropriate. Loans in which the Company invests are predominantly 
  secured against assets such as real estate or plant and machinery 
  and/or income streams such as account receivables. 
 
 For more information, please see 
 https://rm-funds.co.uk/rm-infrastructure-income/ 
 

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December 18, 2023 02:00 ET (07:00 GMT)

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