HICL Just Blew Up My Thesis

When a 23 percent discount stops being the real story.

Last week I shared a long piece on HICL Infrastructure. The short version was simple. A 7 percent covered yield, a 23 percent discount to audited NAV, conservative leverage, and a portfolio of long lived, mostly availability based assets. It sat on my watchlist as a potential core ballast holding for the PYE portfolio.

This morning that thesis changed.

The original post can be viewed here.

HICL and The Renewables Infrastructure Group (TRIG) have agreed to combine into what they call the largest listed infrastructure investment company in the UK. The deal is still subject to shareholder and regulatory approvals, but the direction of travel is clear enough that I need to address it now.

What follows is not a rewrite of that piece. It is a reset.