Please find some complementary research on the Regional REIT 4.5% 06/08/2024 bond.

Regional REIT Limited (“RGL”) is an investment trust listed on the LSE with a NAV of £393m that invests and manages high quality commercial properties predominantly in principal UK regions, outside of London.

We believe this bond offers a safe and simple investment. The interest is covered 3.8 times by the company’s earnings, pretty safe-looking from a bond holder’s perspective.

This makes a timely replacement for holders of the CLS 5.5% 31/12/19, which is being redeemed early on 31st July at a price of around 105%. Holders could therefore buy this new bond at a 105/100 ratio (a holding of 30,000 CLS 5.5% could be replaced with a subscription of 31,500 Regional REIT 4.5%).

The offer period closes on the 1st of August so please submit any order before then. With a coupon of 4.5%, we believe the bond represents good value and may well trade at a modest premium in the secondary market.

Please find some complementary research on the Burford Capital Plc 6.125% 26/10/24 bond, which is currently in the ‘Offer Period’ before being listed on the London Stock Exchange.
Burford Capital Limited (“Burford”) is the world’s largest provider of litigation finance with approximately 60 staff located in the US and the UK. The company trades on the London Stock Exchange with a market capitalisation of £629m.
The bond does not carry a credit rating but is being issued by a good business with a proven track record of making money. Burford’s 2015 operating profit provides interest cover of 3.1 times, a very comfortable margin
The bonds have a minimum investment of just £2,000 with multiples of £100 thereafter.
The Offer Period ends on 19th April but is likely to close early due to demand. The previous Burford bond rose immediately above par and are now yielding just 5.6%. That bodes well for investors and we rate the issue a strong buy.

Please find research on the Paragon 6% 28/08/24 bond, which is currently in the ‘Offer Period’ before being listed on the London Stock Exchange.
Paragon Group of Companies Plc (“Paragon”) is a FTSE 250-listed company with market capitalisation of approximately £1.3bn. Founded in 1985, it is predominantly a Buy-to-Let specialist with smaller operations in consumer debt and banking.
The bond is senior, unsecured debt of Paragon and contains certain covenants including a gearing covenant and negative pledge in respect of the provision of security and subsidiary guarantees. The issue is rated BBB- by Fitch, making the issue investment grade and indicating that the issue is of good credit quality.
The bonds have a minimum investment of just £2,000 with multiples of £100 thereafter.
The Offer Period ends on 24th August but is likely to close early due to demand. Previous Paragon bonds have risen above par and are now yielding below the 6% coupon offered by this issue. That bodes well for investors and we rate the issue a strong buy.

National Transport Distribution company Stobart Group Ltd is issuing a six year sterling bond with a 5.5% coupon.

Though the issue does not carry a credit rating, we feel this bond looks good value against the 3% and 4.5% GRYs offered by Go Ahead and FirstGroup around the same maturity. With the general consensus forecasting a long period of low interest rates, the issue looks attractive. The senior ranking of the bond combined with covenants suggest that the bond offers a good risk/return ratio.

We are taking orders for settlement until the 27th of November, however we expect the issue to close early due to strong demand. If you would like to purchase some bonds at par (the minimum size is £2,000 and they trade in multiples of £100 thereafter), please register your interest with your stockbroker or by contacting us on 200 75181 or email to dealers@gam.gi.

As a company that ‘actually does something’, the bond offers a good opportunity to diversify from recently issued bonds that have mostly come from the finance and property sectors. Similar issues have traded above par after admission to trading in the secondary market and with a target raising of just £25m, we expect this bond to do the same.

Provident Financial Plc is issuing a new 5 1/2 year sterling bond with a 7% coupon, which will commence trading on the 4th of April, complimentary research attached.
Rated BBB by Fitch, we feel this bond looks good value against the 1.1% offered by the benchmark Treasury gilt and the ~3% offered by the average corporate bonds with the same maturity.
With the general consensus forecasting a long period of low interest rates, the issue provides added attraction. The relatively short maturity of the bond will also mean less volatility in secondary market prices. And the senior ranking of the bond combined with the steady course steered by Provident Financial’s management through the credit crunch suggests that the new bond offers a good risk/return ratio.
The Provident Financial 7% April 2020 is priced at 105.7 – a 6.1% yield to maturity. Considering the 7% 4th October 2017 bond is shorter, we believe the bond should trade at a premium to par upon admittance to trading in the secondary market.