Net Asset Value(s)

RM Infrastructure Income PLC

16 October 2023

 

RM Infrastructure Income Plc

("RMII" or the "Company")

LEI: 213800RBRIYICC2QC958

Net Asset Value

NAV & Share Price Performance The Company's NAV % Total Return for the month of September was 0.39%, which brings the NAV % Total Return for the quarter to 0.52%. The NAV % Total Return over the last twelve months was 4.74% and inception to date 41.59%. The Ordinary Share NAV as at 30th September 2023 was 90.53 pence per share. This monthly NAV return of -1.268 pence per share arose primarily from the ex-dividend effect of the 1.625 pence per share ordinary dividend for the period Q3 2023, declared and paid in September 2023. Otherwise, there was positive interest income, net of expenses, of 0.426 pence per share and a decrease in portfolio valuations of 0.07 pence per share. Summary for September 2023 (pence per share) Net interest income +0.426p Change in portfolio valuations -0.069p Payment of Dividend (Q3 2023) -1.625p Net NAV Movement -1.268p Shareholder Consultation Update On 6 September 2023, the Company announced that following an extensive consultation with its advisers and shareholders regarding the future strategy of the Company, and although shareholders have been overwhelmingly supportive of the Company's management and performance, the Board has decided to put forward proposals for a managed wind down of the Company. The Board intends to publish a shareholder circular by the end of October 2023 to convene a general meeting at which it will seek approval from shareholders for the managed wind down and any other related matters required to facilitate an orderly realisation. Market Update Fixed income products, especially sovereign bonds, have dominated the news flow during this third quarter of 2023. The higher for longer rhetoric from Central Banks from both sides of the Atlantic, has translated into a steepening of the UK yield curve at the tail end as well as a tightening of the yield curve inversion at the front of the curve. Although on track to continue its downward trajectory, UK inflation remains high with the labour market showing signs of resiliency. We remain cautious regarding duration risk and have positioned the portfolio accordingly.    Credit spreads, as measured by the Markit ITRX European Crossover Index, saw a widening of circa 25bps during September, commencing at circa 400bps and ending the month at circa 427bps. Since the month end, it reached a peak of circa 461bps after gradually reverting back to circa 430bps. This is in line with our previous comments whereby RM believes that spreads are / were probably at their tightest levels and decompression would soon materialise. As the monetary tightening effects continue to feed through the financial system and as credit conditions continue to deteriorate, it is RM's view that credit spreads will continue their decompression journey, in line with what we have seen in the sovereign yield space. Total Return (%) 1yr 3yr 5yr RM Infrastructure Income NAV 4.74% 21.58% 31.78% RM Infrastructure Income Share Price -8.73% 10.61% 1.36% S&P European Leveraged Loan Index 6.08% 1.75% -2.69% Ishares Core Corp Bond UCITS ETF GBP 7.98% -18.46% -5.34% Portfolio Update The Investment Manager remains confident with regards to the low interest rate sensitivity of the portfolio. This is largely driven by its short average duration, which is currently 1.53 years. The weighted average yield of the portfolio has increased to 10.38% at the end of the reporting period, a widening in yield of 26bps versus June 2023 or 151bps versus same period last year. We outline below the key investment activities for Q3 2023: New investments ·      Childcare & Education, Ref 98: c.£0.8m Material Repayments: ·      Asset Finance, Ref 60: £2m ·      Hotel & Leisure, Ref 86: £5m Post period end, the Company successfully completed the prepayment at par of investment loan #82 and #83, receiving c.£7.8m. Given the outcome of the Board's strategic review and the resulting proposed managed wind down recommendation, which will be put to a Shareholders' vote in November 2023, there will be no new investments (save for drawdowns against committed facilities) unless the Board considers that doing so will maximise returns to shareholders in the timeframe in which the Company will otherwise be dealing with the managed wind down. As such, available free cash is currently being utilised in repayment of the outstanding leverage facilities. During the reporting period, the RCF was fully repaid with a £2.2m repayment and the Term Loan saw a £1m repayment. Post period end, a further £5.8m was repaid on the Term Loan with a current outstanding balance of c.£5.2m. We anticipate that by end of Q4 2023, the TLB will have been repaid in full.

The Company also announces that the Monthly Report for the period to 30 September 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/

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For further information, please contact:

RM Capital Markets Limited - Investment Manager

James Robson

Thomas Le Grix De La Salle

Tel: [phone]

FundRock Management Company (Guernsey) Limited - AIFM

Chris Hickling

Dave Taylor

Tel: [phone]

Apex Listed Companies Services (UK) Ltd - Administrator and Company Secretary

Ciara McKillop

Tel: [phone]

Singer Capital Markers Advisory LLP - Financial Adviser and Broker

James Maxwell

Asha Chotai

Tel: [phone]

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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