Vivion - rotating

Vivion:

- With its large cash balance, Vivion should be able to capitalise on any German RE crisis, should it unfold. Meanwhile, its own assets should remain stable as the UK and German covid measures receede.

- The name carries downside from a potential unwinding of the Fürst transaction, even if Vivion might have bidders waiting to step in. Should management choose to be as aggressive as Vonovia have been, then Aggregate should have trouble and Vivion might have to deal with an administrator enforcing the German side of the law onto Vivion. However, the actual risk to Vivion from taking back the Fürst should be minimal as the asset undoubtedly is in strong demand. In June 21 the bond gained a mere 2 points from the sale to Aggregate. So the short-term risk should not be that much larger.

- The 2024s are yielding over 5.5% on the offer and given cash balance and steady asset base should tighten in the coming months.

- We are buying 5% of NAV.