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Burford bonds

Posted: August 7th, 2019, 1:42 pm
by gbjbaanb
Noticed that, with the current Burford hoohah going on, the bonds have also dropped 40%, so now a 5% BUR3 is 68p. Assuming Burford doesn't collapse entirely, and carries on running with "reduced expectations", then these should be reasonably attractive right now.

Re: Burford bonds

Posted: August 7th, 2019, 1:47 pm
by GSVsowhat
Agree this may be an opportunity - will watch what tomorrow brings with Burford riposte - currently 79-82

Re: Burford bonds

Posted: August 7th, 2019, 1:59 pm
by gbjbaanb
GSVsowhat wrote:Agree this may be an opportunity - will watch what tomorrow brings with Burford riposte - currently 79-82


Graham Neary on Cubeinvestments has an article about Burford today, he thinks all that's happened is the massive amount of frioth has been blown off BUR, and that its a profitable company at reasonable valuation - but that valuation is around £5 - which is roughly what it is today. Do I think the shares will rise? No. Do I think the bond price will rise back to normality once investors stop panicing and think that the company will not go bust? Yep.

Net assets at 30 June 2019 were $1,567 billion ($7.17 per share). If 40% of the investment portfolio are unrealised gains, and we don’t want to pay anything for them, that knocks the value down to $860 million ($3.93 per share). The latest share price is 568p, representing $6.90 at the latest exchange rates.

In other words, normality has been restored to the Burford valuation

Re: Burford bonds

Posted: August 7th, 2019, 3:05 pm
by Clitheroekid
I think the selling's been overdone, but I'd be a bit wary of buying the shares yet.

However, as well as the 5% bond there are also two others available, the 2022 bond (BUR 1) with a coupon of 6.5%, and the 2024 bond (BUR 2) with a coupon of 6.125%. These have also dropped dramatically, and if, as I believe, the company is basically sound they would both appear to offer excellent value. So much so that I've decided to buy some of the BUR1 at approximately £0.79.

Thanks for bringing it to my attention.

Re: Burford bonds

Posted: August 7th, 2019, 3:41 pm
by scrumpyjack
Looking at their 2018 accounts, it has the longest audit report I've ever seen! It takes Ernst and Young 9 pages to give a clean audit opinion.

They were obviously worried about how things were valued. Their report lists all the things they did to try and form an opinion.

Maybe Muddy Waters looked more closely.

Too soon to say if this another Quindell but I wouldn't rule it out.

Re: Burford bonds

Posted: August 7th, 2019, 5:08 pm
by Gan020
I bought BUR3 in the reatil bond raise in May 2017. I sold a quarter in Jan 2019 and then got nervous after the first shareprofits write up. I didn't particluarly agree with much of it but there was just about enough to make me feel uneasy. I sold another quarter in June 2019 and I got lucky last week and sold my remaining holding at 101.77. It was gut feel mostly. I liked the price I could sell for felt I could do better elsewhere with the cash.

I have read the Muddy Waters report today and I shan't be repurchasing any of these bonds. I would recommend reading the full MW report. There are a large number of red flags the largest of which for me is that they've had around 4 accountants in 4 years and the latest one is the wife of the founder (who I have read elsewhere but not verified is not a qualified acccountant). What was a £3b company doing without a qualified accountant as the accountant? It's no wonder they are still on AIM (which makes you wonder why they are on AIM). There's a lot of stuff in the report about questionable valuation of income streams.

What is not discussed at any length in the report is how BUR re-finance the debt when it becomes due, because if the market loses faith, the only choice will be to roll the debt at a very high interest rate.

I invest in bonds as I want a steady income stream with (no/minimal) risk. That no longer applies here so I won't be buying any of these.

I think BUR are going to find it very difficult to raise any new finance (even if they successfully refute MW claims) which means bond interest is going to have to be paid out of profits not new bond issues and may constrain BUR's ability to bring some of the cases currently in place to completion due to lack of funds.

There may be money to be made here but it's not for me. Doesn't fit my risk profile. GLA

Re: Burford bonds

Posted: August 8th, 2019, 1:20 pm
by gbjbaanb
Clitheroekid wrote:So much so that I've decided to buy some of the BUR1 at approximately £0.79.

Thanks for bringing it to my attention.


Today they're £0.89... you're welcome! BUR3 did better - 68p to 87p today.

Re: Burford bonds

Posted: October 13th, 2020, 1:57 pm
by langley59
With the US listing the BUR share price is climbing back up nicely as confidence rebuilds after the Muddy Waters affair. I hold the BUR2 bonds (as well as the shares) bought on launch and see that I can still add to these below par (just) for a 6%+ yield. Tempting...

Re: Burford bonds

Posted: October 14th, 2020, 6:57 pm
by 88V8
langley59 wrote:....see that I can still add to these below par (just) for a 6%+ yield. Tempting...

Well, so long as you're not a widow nor an orphan....

V8

Re: Burford bonds

Posted: May 10th, 2022, 9:24 am
by Wozzitworthit

Re: Burford bonds

Posted: May 10th, 2022, 11:39 am
by Alaric
I suppose redeeming the bonds suggests they are making real money out of financing litigation, rather than as was suggested by the US analyst's report earlier in the thread, that it was smoke and mirrors,

Re: Burford bonds

Posted: May 10th, 2022, 2:58 pm
by Gan020
It's a bit odd. The bonds were due to be redeemed in 3 months time anyway.

It's a complete guess but maybe they are about to do another dollar denominated bond and wanted this one paid off first to improve the coupon they have to pay on new financing.

Re: Burford bonds

Posted: May 13th, 2022, 10:37 am
by geoffp
Thanks for the heads-up Wozzit. I hadn't spotted the RNS.
Do I read the price to be paid paragraph correctly and does the comma before "plus 1.00 per cent" in the last line indicate an addition of 1% to the price after the higher of the two options has been calculated or does it just affect the value of the second option? I suspect the comma is relevant and it is an addition to the price to be paid.
Bringing repayment forward three months just provides another headache earlier about where to replace the investment but, presumably, Burford feel they are better off re-financing before interest rates rise even further.

Re: Burford bonds

Posted: April 28th, 2023, 10:26 am
by Laughton
Share price recovering nicely following New York judgement re YPF/Peterson case. Yes, I know, judgement not the same as collection.

Picked up some more BUR2 today @ 97.6p for what I make a YTM of 7.87%.

Doesn't cover current inflation but quite happy with that for something that (hopefully) matures in 18 months.

Re: Burford bonds

Posted: April 28th, 2023, 5:18 pm
by formoverfunction
I have a note in my calendar reminding me that one of their bonds falls into default if the accounts are not published by this weekend.

I haven't had time to read my notes, as it's been a busy day, but the reminder flashed up as notifier before the event, so that actual day must be during this weekend.

Re: Burford bonds

Posted: April 28th, 2023, 6:03 pm
by Laughton
I could well be wrong but have a feeling that Chris Bogart addressed this at a recent presentation. He was relaxed and I'm sure stated that there was a 30 or 60 day grace period and indicated that accounts would be published before grace period expired.

I'm old so memory not what it was - so DYOR.

Re: Burford bonds

Posted: April 29th, 2023, 6:42 am
by formoverfunction
You could well be right Laughton. Either way I don't feel worried at this point, but I may just see if there's an archive of the presentation.

Have a great weekend.

Re: Burford bonds

Posted: April 29th, 2023, 9:46 am
by Laughton
I think this may be it - but I haven't listened back to it to be certain:- https://www.sharesmagazine.co.uk/video/ ... apital-bur

Re: Burford bonds

Posted: May 1st, 2023, 6:51 am
by formoverfunction
Thanks, I'll give that a listen today. I have an excuse for a period on research. Post beer festival this morning. Why oh why did I just drink stout and dark beers all night. :shock:

Re: Burford bonds

Posted: June 26th, 2023, 5:51 pm
by Laughton
https://www.londonstockexchange.com/new ... 4/16014829

Damn! I was quite happy seeing these through to redemption next year. Now I'll have to look for an alternative home for the proceeds somewhat sooner.