| Tuesday 11 January 2022 Good morning Voornaam,
There was more good news from Steinhoff yesterday, with the narrative getting better with each passing week. As I've mentioned many times before, I'm long Steinhoff as part of my speculative basket. I'm up more than 135% and counting, which is a nice outcome!
The latest development is that Steinhoff subsidiary Mattress Firm Group has filed with the SEC in the United States for a proposed IPO i.e. listing of the company.
The market generally likes this type of thing for a couple of reasons. Firstly, it enables "price discovery" as there will now be a traded market for Mattress Firm, so people no longer need to guess what the market might believe the company is worth. Secondly, it shows that the subsidiaries can stand on their own feet and are capable of having retail shareholders involved. This is especially true for a US listing, where the regulations are extensive and thus the company needs to stack up.v>
Anheuser-Busch InBev is busy rejigging the balance sheet. The company has announced a redemption of USD3.1 billion in notes, which are debt instruments issued by the company. There are two tranches paying 3.650% and 4.915% respectively. This has the effect of reducing debt on the balance sheet.
Hulamin has renewed its cautionary announcement which was first issued in October. It can become frustrating for investors when companies trade under cautionary for months, so there will hopefully be some details available soon on what the company is busy negotiating.
We now move on to property, where there were several updates.
Schroder European Real Estate Investment Trust has given an update on the property valuation and rent collection. By 31 December, the property portfolio had increased in value by 2.2% for the quarter on a like for like basis (i.e. excluding new acquisi tions). This was achieved by "yield compression" which means that the risks in property are decreasing and so values are going up. Approximately 96% of rent due for the latest quarter has been collected.
NEPI Rockcastle is considering a EUR4 billion guaranteed Euro medium term note programme. This debt would be used to refinance a portfolio of green projects, so the senior bonds issued under this programme would naturally be targeting investors with ESG mandates. For qualifying portfolios, this can be an attractive source of funding. The company has mandated several investment banks to bring potential investors to the table. If this issuance goes ahead, then NEPI will also try repurchase its May 2023 notes (2.625%). The deadline for holders of the notes to offer them to NEPI for repurchase is 17 January. Long story short: the company is trying to bring down its cost of funding (as it should).
This brings us neatly to today's f eature articles. The first is on a new listing called aReit, which I have some major reservations about. I discuss these concerns (and some core concepts about REITs) in this article.
The second feature is on Texton, a REIT that is allocating capital into a US fund. This seems like a strange decision for me and I doubt that most JSE investors are in favour of this approach, based on how investment holding companies have been punished in recent years. Read this article to learn more.
Finally, there's an article from Jaltech with a few tips for cryptocurrency investment.
That's it for today. Have a lovely Tuesday!
The Finance Ghost
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