RM Infrastructure’s NAV drops amid weaker credit environment

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RM Infrastructure Income PLC posted a lower interim net asset value on Monday due to a weaker credit backdrop.

The London-based lender’s net asset value fell 1.6% to 93.68 pence per share as of June 30 from 95.25 a year a year ago.

“Credit spreads as measured by the Markit iTraxx Europe Crossover Index widened significantly, doubling from 240 to 580 at the end of the period. These levels were last seen in the fear month of March 2020 due to Covid-19 and before that 10 years ago during the European sovereign debt crisis,” the company explained.

The half-yearly dividend of 3,250p per share is the same as a year ago.

RM reported a bullish outlook: “For the first time since pre-quantitative easing, we are now seeing dispersion within the broader corporate bond market, where risk is currently more accurately reflected in individual credit spreads.”

He added: “Our key theme is that now is the time to be a credit investor and probably the best environment to deploy and invest capital.” Risk is appropriately priced and, in our view, offers attractive returns to investors with the ability to structure enhanced security and enhanced covenants on transactions at this point in the economic cycle as credit conditions tighten.

Shares of RM Infrastructure were down 0.3% at 88.75p apiece in London on Monday morning.

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