02 January 2024

BIOPHARMA CREDIT PLC

UPDATE ON INVESTMENT

BioPharma Credit PLC (LSE: BPCR) notes the filing of a Form 6-K made on 29 December 2023 by LumiraDx Limited (“LumiraDx”), which is copied below in part for convenience and can be found in its entirety at: LumiraDx Form 6-K Report.  Pharmakon Advisors, LP (the “Investment Manager”) notes the information as set forth below helped form the basis for the main assumptions reflected in the current valuation of the LumiraDx loan (as set forth in the October and November 2023 monthly updates). The Investment Manager will continue to provide updates in due course, including with respect to the status of the acquisition and any further updates as needed to the valuation of the LumiraDx loan.   

“EXPLANATORY NOTE

Appointment of Administrators; Sale of Point of Care Diagnostics Business to Roche

On December 29, 2023, LumiraDx Limited (the “Company” or “LumiraDx”) announced that Andrew Johnson, Lisa Rickelton and Lindsay Hallam of FTI Consulting LLP have today been appointed as joint administrators (the “Administrators”) of two of its subsidiaries, LumiraDx Group Limited and LumiraDx International Limited, which together hold substantially all of the assets of the LumiraDx group. The Administrators have not been appointed to any other subsidiaries of the Company.

Following their appointment earlier today, the Administrators have entered into a sale and purchase agreement with Roche Diagnostics Limited (“Roche”) providing for Roche’s acquisition of certain of the LumiraDx group companies (the “Point of Care Diagnostics Companies”) engaged in the operation of LumiraDx group’s point-of-care diagnostics platform business and certain related assets (the “Transaction”). The Administrators have not been appointed to any of the Point of Care Diagnostics Companies.

Pursuant to the Transaction, Roche is to acquire all of the Point of Care Diagnostics Companies for the sum of $295 million, subject to customary closing adjustments. The completion of the Transaction is subject to certain conditions, including antitrust and foreign direct investment approvals, and is expected to close once the antitrust and other regulatory approvals have been obtained and the conditions have otherwise been met. It is anticipated that all of the sale proceeds will be used to repay certain amounts outstanding under the Loan Agreement (as defined below), and that there will be no distribution to the Company or its shareholders from the sale proceeds of the Transaction.

BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership (the “Senior Secured Lenders”), as senior secured lenders of the LumiraDx group, have agreed to provide up to $59.2 million in funding for the LumiraDx group until the completion of the Transaction to, among other things, support the ongoing operations of the Point of Care Diagnostics Companies. Under the terms of the Transaction, Roche has agreed to reimburse the Senior Secured Lenders for up to $55 million of funding provided by the Senior Secured Lenders to the Point of Care Diagnostics Companies in the period to completion of the Transaction to support the ongoing ordinary course operations of the Point of Care Diagnostics Companies.

The appointment of the Administrators and sale to Roche represent the culmination of LumiraDx’s previously announced strategic review process led by Goldman Sachs & Co. LLC and follows extensive efforts to find a buyer for the business. The completion of the sale to Roche will allow the continued operation of the point-of-care diagnostics business under new strategic ownership.

My top ten Trusts if/when the next market crash occurs.

I made decent profits in several of the Trusts but

the biggest mistake was to buy 3i and sell for enough profit only for

several Starbucks, other coffees available.

10k compounded at 7% for

10 years £19,700

20 years £38,700

30 years £86,600

In the unlikely event that u could compound at 10%

for 30 years £174,450, which should mean a bit

leftover for those wee cats and dogs, even allowing for inflation.

Current fcast income for the blog portfolio for 2024 is £8,000.

Sleep tight.

CAPTAIN HINDSIGHT

Looking at the chart which is entered under the ‘if only’ category,

congrats if u bought.

Of no interest for the portfolio as the yield is too low.

Whilst not an exact science, if u hold above the cloud the odds of making

a profit are better than owning under the cloud.

Above the cloud the sun is shining below its raining.

In days of yore RECI traded around its NAV and therefore may, one day, do

so again.

Will the NAV fall to the share price or will the share price rise

to the NAV ?

Most probably both but until the question is answered

keep banking and re-investing the dividends.

I have bought for the portfolio 771 shares in RECI for 1k.

Real Estate Credit

Yielding 9.4% Trading at a discount to NAV of 12%

Investment Banking and Brokerage Services

Real Estate Credit Investments Ltd is a closed-ended company registered in Guernsey. Its investment objective is to provide a levered exposure to a portfolio and stable returns in the form of quarterly dividends. The company seeks to ensure that its investment portfolio is geographically diverse and backed by a broad range of financial assets. It mainly invests in secured residential and commercial debt by exploiting opportunities in publicly traded securities and real estate loans. In order to achieve its objective, the company will invest in real estate debt investments such as securitized tranches of secured real estate-related debt securities. The company holds two reportable segments the Market Bond Portfolio and Bilateral Loan and Bond Portfolio.

Three Trusts that pay a secure dividend.

No dividend is one hundred percent secure.

Portfolio Rule 2

If any Trust drastically alters its dividend payment the Trust must

be sold, even at a loss.

The current portfolio yield target is plus 7% so u

would need to pair trade any of the Trusts with a higher yielding Trust

to obtain a blended yield of 7% plus.

The Motley Fool

2 cheap UK passive income shares I’m hoping to buy in 2024!

Story by Royston Wild  

The London stock market underperformed in 2023 as worries over the political and economic landscape sapped market confidence. But these troubles haven’t deterred me from investing. I’ve continued to buy UK shares of late, and plan to keep adding to my portfolio during the new year.

One reason is I buy shares for the long haul. I invest according to the returns I can expect to make over several years, meaning that an uncertain outlook in 2024 isn’t enough to put me off.

It’s also because many top British stocks now offer exceptional all-round value. Recent share price weakness leaves stacks of quality companies trading on low earnings multiples and carrying mighty dividend yields.

Here are two UK stocks I’m hoping to add to my Stocks and Shares ISA at the next opportunity.

The PRS REIT

While the British economy faces an uncertain outlook in the new year, the highly defensive operations of residential landlord The PRS REIT (LSE:PRSR) means it should continue paying above-average dividend income.

City analysts agree, and for this financial year (to June 2024) the business carries a healthy 4.6% dividend yield. This solid yield is also underpinned by REIT rules that specify at least 90% of rental profits must be distributed in the form of dividends.

PRS REIT’s share price could fall again if interest rates remain well above post-2008 norms. In this landscape, net asset values (NAVs) — which edged 3% higher in fiscal 2023 — may remain under pressure. Borrowing costs would also stay at more uncomfortable levels.

Yet with inflation falling sharply, and Britain’s economy struggling to grow, the odds on Bank of England (BoE) rate cuts are rising.

I also like this property stock because residential rents are tipped to continue increasing at a strong pace. Lettings listing giant Zoopla, for instance, expects tenant costs to rise on average by 5% this year as the homes shortage rolls on.

As well as offering that large yield, PRS REIT shares trade on a price-to-earnings growth (PEG) ratio of just 0.6. Any reading below 1 indicates a stock is undervalued.

Primary Health Properties

FTSE 250-quoted Primary Health Properties (LSE:PHP) is another top-value REIT on my watchlist today. I already hold a position in this company. But its undemanding price-to-earnings (P/E) ratio of 15 times and 6.6% dividend yield for 2024 are tempting me to buy more shares.

The company has similarities to PRS REIT in that it operates in a highly defensive sector. It operates primary healthcare facilities like GP surgeries, a sector which benefits from stable demand and where rents are guaranteed by government bodies. It also stands to benefit from a likely reduction in BoE rates.

This UK share arguably also offers superior long-term growth potential, thanks to demographic changes in its British and Irish markets. Rising life expectancies means demand for medical treatment will also move higher, providing the business with excellent opportunities to boost earnings.

Primary Health Properties is tipped to have grown its annual dividend for the 27th straight year in 2023. Despite the threat of higher-than-usual build costs, it’s another great passive income stock I’d like to buy in the New Year.