Alpha Plus Launches 5.00% Secured Sterling Retail Bond Due 2024
Alpha Plus Holdings plc – a provider of private education which owns and operates 18 high quality independent schools, nurseries and sixth form colleges, predominately in London – has today launched an eight year 5.00% retail bond.
• This is the second secured issuance by the Company; the first has traded consistently at a premium to its issue price on the London Stock Exchange’s ORB since its issuance in December 2012
• The bonds are secured against real estate and other assets
• Minimum subscription amount is £2,000 with further purchases in increments of £100
• The first interest payment shall be made on 30 September 2016 in the amount of £2.50. Thereafter, interest shall be paid semi-annually, on 31 March and 30 September, in arrears in equal instalments of £2.50 per £100 of investment
• The offer period is expected to close on 23 March 2016
• Authorised Distributors are Interactive Investor, Redmayne Bentley LLP, Barclays Stockbrokers
The Alpha Plus Retail Bond prospectus and information booklet can be found at http://www.alphaplusgroup-retailbond.co.uk/
• This is the second secured issuance by the Company; the first has traded consistently at a premium to its issue price on the London Stock Exchange’s ORB since its issuance in December 2012
• The bonds are secured against real estate and other assets
• Minimum subscription amount is £2,000 with further purchases in increments of £100
• The first interest payment shall be made on 30 September 2016 in the amount of £2.50. Thereafter, interest shall be paid semi-annually, on 31 March and 30 September, in arrears in equal instalments of £2.50 per £100 of investment
• The offer period is expected to close on 23 March 2016
• Authorised Distributors are Interactive Investor, Redmayne Bentley LLP, Barclays Stockbrokers
The Alpha Plus Retail Bond prospectus and information booklet can be found at http://www.alphaplusgroup-retailbond.co.uk/
Comments
Had already ordered as I think these may well go quickly seeing as how this is first ORB issue for yonks and the low interest rate environment forecasts are still getting extended.
Quite happy to hold for 8 years even if rates creep up as incremental interest gain in short term will help balance out any increase in longer term, plus it's nice to get away from financial related Fixed Interest investments.
I'm not going overbaord but these will help maintain my "ladder"
007
iDealing tell me they are not handling this issue (which is a shame - perhaps there is too little demand) and Barclays are much too expensive for a small holding. My alternative is to buy a parcel in the market .
Can anyone help me by posting when they commence trading in case it passes me by
Whitey
I omitted to mention of course that our bonds portfolio is held in our ISA therefore I receive the interest gross (hurrah) and my ISA is with iDealing because of the low costs. So I will be buying some in the market. I will be looking at LSE/ORB website each day to see when it starts trading
Barclays new issues part of their website say the offer is now closed
Whitey
Mid Price 101.72
Time/Date Price Volume Trade Value Type
13:01:25 22-Mar-2016 101.50 4,800 487,200.00 Ordinary Trade - delayed publication
12:28:00 22-Mar-2016 101.26 10,000 1,012,571.70 Ordinary trade
12:11:35 22-Mar-2016 101.60 6,000 609,600.00 Ordinary Trade - delayed publication
11:56:39 22-Mar-2016 101.50 30,000 3,044,895.00 Ordinary Trade - delayed publication
11:56:28 22-Mar-2016 101.50 46,000 4,669,000.00 Ordinary Trade - delayed publication
11:55:07 22-Mar-2016 101.50 46,000 4,669,000.00 Ordinary Trade - delayed publication
08:48:40 22-Mar-2016 103.00 3,000 309,000.00 Ordinary Trade - delayed publication
08:06:24 22-Mar-2016 102.00 37,000 3,774,000.00 Ordinary Trade - delayed publication
Am i missing something here. ? Specific news from Alpha i am finding difficult to find.
Thanks in advance for any comments.
Are investors interested in being repaid using 2024 issue?
Alp1 could be liquidity driven, someone didn't want to hold on and mess up with their Christmas.
The market for a new bond maybe unsettled by the losses from the current school business? Just a guess
The Group held £5.0m of cash as at 28 February 2019 (2018: £5.1m).
At the most recent valuation date, 1 March 2019, the security portfolio was valued at 2.18 times (1 March 2018: 2.14 times) the principal amount of the bonds in issue.
They'll have to get some funding to pay-off ALP1, have they not announced any plans for this, looks like they are going to use the 50mm 2024 issue held by dbk to transfer investors over, folks are not going to be happy being forced into maturity extension, so yeah, they'll have to sweeten the deal like ipf2, and good luck doing that in parallel to brexit.
on the other hand these alp folks here are gambling their shirts off, thankfully somebody has spotted this opportunity and decided to hit some bids, alp should announce something soon before it becomes all out panic and the bonds slips into distressed territory, the recovery from which would be pretty much impossible as then everyone would naturally assume that company is 'hiding' something, Reflexivity asserts that prices do in fact influence the fundamentals and that these newly influenced set of fundamentals then proceed to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern - https://en.wikipedia.org/wiki/Reflexivity_(social_theory)#In_economics
one thing alp folks should not do is to start pressuring the short sellers and distract themselves from the inertia they need to break -
For a private school group, you are talking nonsense, what short sellers?
Alpha Plus Schools is not a public listed company
As per their web-site
"Alpha Plus is the largest private education company in London and the
second largest private education company in the UK. However, although
we own many Schools, each of which has their own distinctive approach
and ethos, there is a single common purpose for all our Schools and that
is to ensure the best possible start in life for every child in our care."
Annual Revenue £104m pa
Equity 31/8/18 £16m
Losses 31/8/18 £13m pa
The main concern is that if they don't stem their P/L losses, then they will be in negative equity; it this which must be alarming potential investors
Short sellers who borrow bonds from long-only folks like you and hit bids
Alpha Plus Schools Credit is publicly listed, the market for which according to you maybe unsettled by the losses from the current school business? Just a guess
Which is the largest private education company in the UK, i think that should be good hedge against alp1 short, if it has any public securities
they should update their purpose, ensuring best possible start is not tangible enough, also the kids are not in your care, they are not cattle, they are people, much more importantly do you actually care for the kids, there's a difference between journey and destination - https://www.phrases.org.uk/meanings/387450.html
Going back to https://www.alphaplusgroup.co.uk/wp-content/uploads/2019/06/Interim-Results-to-28-February-2019-FINAL.pdf
As in previous periods, reported EBITDA has again been impacted by additional operating costs incurred as the Group expands and creates additional capacity.
The Group’s policy is to carry property, plant and equipment at cost less accumulated depreciation. Many of the Group’s freehold and leasehold properties form part of the security portfolios in respect of the Group’s retail bonds. As such, they are subject to an annual professional valuation, the most recent of which was carried out in March 2019. Had the valuations included therein been reflected in the Group’s financial statements, the net asset value would have increased by £120m less any attributable deferred tax liability.
The situation seems lot more benign than the worst case scenario i feared, still they should not leave it to last minute specially with brexit overhang.
Extract from it's half yearly report
"Whilst the Group’s primary focus is on improving the trading performance of its existing schools and
colleges, the Group does continue to look for opportunities to further expand its school and college
portfolio both in the UK and overseas."
Improved trading performance of it's existing operations is key to ensure future profitability and sustainability.
Note 15 of half year accounts (see below) re Bond Security
"The secured sterling bonds are secured by way of a first legal mortgage over a portfolio of assets held by certain of
the Company’s subsidiaries and other related companies. This security portfolio is subject to annual external
professional valuation and the Company is obligated to ensure that the value of the security portfolio is not less than
1.5 times the principal amount of the bonds in issue. Additional properties can be added to the security portfolio in
the event of a shortfall. The properties currently constituting this security portfolio are detailed on the Group’s
website at www.alphaplusgroup.co.uk/investors. At the most recent valuation date, 1 March 2019, the security
portfolio was valued at 2.18 times (1 March 2018: 2.14 times) the principal amount of the bonds in issue."
The Alpha Plus two bond holdings represent just 1.57% of my overall well diversified fixed income (mostly) portfolio. The yield is worth the risk!
arjungaur, as you say "brexit" is a concern, in particular if we an exit with no deal, thus possibly resulting in an economic major downturn for the UK.