UK MORTGAGES LIMITED
(a closed-ended investment company incorporated in Guernsey with
registration number 60440)
LEI 549300388LT7VTHCIT59
Final Net Asset Value
| FUND NAME |
NAV |
ISIN |
NAV DATE |
| UK Mortgages
Limited |
£0.7794 |
GG00BXDZMK63 |
31
August 2021 |
UKML RNS: Commentary accompanying UK
Mortgages Limited August 2021 NAV
The UKML NAV per share was calculated for August 2021 month end at 77.94 pence per share, an increase of
0.61 pence per share.
NAV performance in August was primarily driven by the income
generated from the Company’s underlying investments which, as
highlighted in previous communications, continues to grow from one
month to the next and comfortably exceeds the 0.375 pence per share necessary to cover the
monthly equivalent of the dividend.
Incorporated in this month’s figure, and similar to the previous
month, the further upwards shift in the yield curve has the dual
effect of increasing the pull-to-par of the Oat Hill No. 2
transaction (purchased at a discount) whilst compressing the
premium erosion from the Company’s other portfolios which were all
purchased above par. This represented about 0.06 pence per share of the monthly NAV gain,
alongside a number of smaller items.
As mentioned in the most recent factsheet, the Company’s hedging
structure effectively nullifies any fixed-rate exposure in our
underlying mortgage pools, essentially generating floating rate
returns for the Company, which thereby benefits in two ways from
rises in interest rates. Absolute income will be higher when the
underlying interest rate benchmarks (e.g. Sonia) rise, and as the
term yield curve rises or steepens this accelerates the dual
pull-to-par effect highlighted above.
The Company’s investments continue to perform in line with
expectations, and further details will be available in the
Company’s next factsheet.
Enquiries:
Northern Trust
International Fund Administration Services (Guernsey) Limited
Andrew Bonham
44 (0)1481 745302
Date: 18 October 2021