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Hardman & Co Research: Real Estate Credit Investments (RECI): Why rising rates should not hurt RECI

·2-min read

Hardman & Co Research
08-Nov-2021 / 14:30 GMT/BST

Hardman & Co Research: Why rising rates should not hurt RECI

In this note, we explore RECI's low sensitivity to a rising rate environment by analysing i) borrower revenue sensitivity, ii) borrower debt sensitivity, iii) RECI's portfolio risk mitigation techniques, iv) the MTM on the bond portfolio, v) the impact of RECI's own funding mix, vi) international diversification), vii) previous share price experience, viii) sentiment to the stock, and ix) potential opportunities that may arise. This reinforces the message in our last two notes that RECI's business has shown limited downside during the COVID-19 crisis. We use a case study of a hotel exposure to illustrate how Cheyne's management of challenging relationships materially reduces the final loss.

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About Hardman & Co: For the past 25 years Hardman has been producing specialist research designed to improve investors' understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge.  Our focus is to raise companies' profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.

Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd and is authorised and regulated by the Financial Conduct Authority; our FCA registration number is 600843. Hardman Research Ltd is registered at Companies House with number 8256259.

Our research is provided for the use of the professional investment community, market counterparties and sophisticated and high net worth investors as defined in the rules of the regulatory bodies.  It is not intended to be made available to unsophisticated retail investors. Anyone who is unsure of their categorisation should consult their professional advisors. This research is neither an offer, nor a solicitation, to buy or sell any security. Please read the note for the full disclaimer.

 


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End of Announcement - EQS News Service

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