Technical Analysis | NB Global Monthly Income Fund - Partial Redemption Is This An Opportunity?

2nd Sep '23 by Tommy H

6 comments 467 reads

I will start simply I hold NB Global Monthly Income Fund (LON:NBMI) within my Mum's ISA (aka) pension fund (long story about divorce, inheritance and some financial advisors taking an opportunity anyway...

NB Global Monthly Income Fund (LON:NBMI) is now a special situation as it no longer pays monthly income, there have been quarterly dividends this year, and it is in close down mode. So what was a 2% holding due to redemptions is now less than 1%.

The last message to come through last night is as follows:

NB Global Monthly Income Fund Limited has announced a capital distribution by a way of a compulsory partial redemption of your shares.

The company intends to redeem approximately 26.12% of the shares held on the record date, 11 September 2023. This means that these shares will be redeemed, and you will receive cash in exchange for your shares.

Under the proposed terms, your account will be credited with approximately GBP0.7931 for each share redeemed.

Stocko is showing it is a buy 72p at close last night, so a discount of ~10% which is what is stated on AIC.

Is this a simple case of top up back up to a 2% holding and take a circa 10% return each time there is a redemption? With the potential of quarterly dividends along the way (3.78p paid out this tax year so far)?

Or am I missing something obvious here?

There is the downside risk of a shrinking fund, now just over £100m and whether the NAV drops and removes the discount?

Thanks

Tommy

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ken mitchell

3rd Sep '23

I’m doing the same as you; I.e buying back at 72p the 26% stake the Trust is buying from me at 79p. I’ve done that with previous similar offer, and as you say while this is the case we can’t go wrong doing this as long as that profitable difference between the partial redemption price and the current share price remains. If that changes and the discount narrows or goes then I’ll probably sell the entire stake.

It’s been fun so far. And there are those dividends on top too.

Tommy H

Thank you Ken

snavira

5th Sep '23

I’ve also been doing the same and using the redemption funds to buy back to my original holding

nickwild

10th Sep '23

It is in the name, No Brainer Monthly Income. When the wind up was announced it was suggested it would be complete by around the end of the year. The buy backs occur every 2 months at the moment. So one in November another January and the remainder sold off to a fund at a slight discount at that point?

M48

I hold this from before the wind up announcement but think likely the better quality stuff is being sold first because it’s easier to sell, so as more redemptions occur I might expect the discount to widen. I guess you have to take a view as how reasonable the valuations are for the less liquid stuff within the NAV.

UK_Investor_8888

27th Sep '23

Has anybody received their cash yet, from September's compulsory redemption?

Nothing for myself yet via hl.co.uk other than the marker on my portfolio.

I am quite comfortable with this, with the trade price @ 71.5 to 74.5p and NAV at +80p.

NB Global Monthly Income Fund - Partial Redemption is this an opportunity?

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Tommy H

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