Volta Finance Limited - Net Asset Value as at 28 February 2019
Volta Finance Limited (VTA / VTAS) –
February 2019 monthly report
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES
***** Guernsey, 15 March 2019
AXA IM has published the Volta Finance Limited
(the “Company” or “Volta Finance” or “Volta”) monthly report for
February. The full report is attached to this release and will be
available on Volta’s website shortly (www.voltafinance.com).
PERFORMANCE and PORTFOLIO
ACTIVITY
In February, Volta’s NAV* total return
performance was +0.4%, bringing the YTD performance to 3.5% after a
volatile end to 2018.
Volta will pay its quarterly dividend (€15 cents
per share) on the 28th March (the ex-dividend date was the 7th
March).
This positive performance was driven mainly by
the good performance of bank balance sheet transactions (+1.2% for
the month) and of CLO debt tranches (+0.8%). The performances of
Volta’s other asset classes in local currencies were: -0.4% for CLO
Equity tranches; +0.1% for Cash Corporate Credit deals; and +0.5%
for ABS.
Volta is almost fully invested when taking into
account the need to keep cash for the dividend being paid in March.
In February we added $2m capital to a CLO warehouse.
Currently, we hold only one warehouse, which was opened in late
2018. At the time of writing this warehouse facility has been
successfully converted into a CLO. Because this warehouse was
opened late in 2018 we avoided the painful situation faced by some
market participants who have warehouse facilities holding expensive
loans purchased several months previously and who now are
struggling to convert the warehouse into a CLO.
Despite the recent volatility, Volta’s assets
continue to perform well. As an example, our CLO Equity positions,
both in Europe and the US, are exposed to loan portfolios that hold
fewer Caa1 or below rated loans than the market: 1.5% for our
European positions against 1.6% for the market and 2.6% for our US
positions against 4.1% for the market(1).
These statistics together with the very low
level of defaults experienced both for US and European loans are
signs that despite the recent volatility, the fundamentals are
still supportive.
As we are increasing our CLO equity tranches and
reducing CLO debt tranches, we are reducing Volta’s leverage on its
CLO debt by $10m. We now prefer to take exposure to leverage
through the long-term embedded borrowings provided by CLO Equity
rather than leveraging CLO Debt through the repo, even though the
repo is attractively structured. This repayment was done
through cashflow generation and not through sales of debt
tranches.
In February, Volta generated the equivalent of
€0.6m in interest and coupons net of repo costs (non-Euro amounts
translated into Euro using end-of-month cross currency rates). This
brings the total cash amount generated during the last six months
in terms of interest and coupons to €20.1m; 13.8% on an annual
basis of Volta’s NAV. The projected IRR of Volta’s current
portfolio is 12% using reasonable and market standard
assumptions. The 1.3% difference from the current yield of
the portfolio reflects the assumption that at some point in time we
will experience more defaults than we have experienced in recent
years.
As at the end of February 2019, Volta’s NAV was
€292m or €7.98 per share. The GAV stood at €340.9m.
*It should be noted that approximately 10.5% of
Volta’s GAV comprises investments for which the relevant NAVs as at
the month-end date are normally available only after Volta’s NAV
has already been published. Volta’s policy is to publish its own
NAV on as timely a basis as possible in order to provide
shareholders with Volta’s appropriately up-to-date NAV information.
Consequently, such investments are valued using the most recently
available NAV for each fund or quoted price for such subordinated
note. The most recently available fund NAV or quoted price was for
6.5% as at 31 January 2019 and for 4.0% as at 28 September 2018. **
“Mark-to-market variation” is calculated as the Dietz-performance
of the assets in each bucket, taking into account the
Mark-to-Market of the assets at month-end, payments received from
the assets over the period, and ignoring changes in cross currency
rates. Nevertheless, some residual currency effects could impact
the aggregate value of the portfolio when aggregating each
bucket.(1) Source Intex : comparable deals with same vintage and
currency
CONTACTS
For the Investment ManagerAXA
Investment Managers ParisSerge Demayserge.demay@axa-im.com+33 (0) 1
44 45 84 47
Company Secretary and
AdministratorBNP Paribas Securities Services S.C.A,
Guernsey Branch guernsey.bp2s.volta.cosec@bnpparibas.com +44
(0) 1481 750 853
Corporate Broker Cenkos Securities plc Andrew
WorneOliver PackardSapna Shah+44 (0) 20 7397 8900
***** ABOUT VOLTA FINANCE
LIMITED
Volta Finance Limited is incorporated in
Guernsey under The Companies (Guernsey) Law, 2008 (as amended) and
listed on Euronext Amsterdam and the London Stock Exchange's Main
Market for listed securities. Volta’s home member state for the
purposes of the EU Transparency Directive is the Netherlands. As
such, Volta is subject to regulation and supervision by the AFM,
being the regulator for financial markets in the Netherlands.
Volta’s investment objectives are to preserve
capital across the credit cycle and to provide a stable stream of
income to its shareholders through dividends. Volta seeks to attain
its investment objectives predominantly through diversified
investments in structured finance assets. The assets that the
Company may invest in either directly or indirectly include, but
are not limited to: corporate credits; sovereign and
quasi-sovereign debt; residential mortgage loans; and, automobile
loans. The Company’s approach to investment is through vehicles and
arrangements that essentially provide leveraged exposure to
portfolios of such underlying assets. The Company has appointed AXA
Investment Managers Paris an investment management company with a
division specialised in structured credit, for the investment
management of all its assets.
*****
ABOUT AXA INVESTMENT
MANAGERSAXA Investment Managers (AXA IM) is a multi-expert
asset management company within the AXA Group, a global leader in
financial protection and wealth management. AXA IM is one of the
largest European-based asset managers with 766 investment
professionals and €759 billion in assets under management as of the
end of June 2018.
*****
This press release is published by AXA
Investment Managers Paris (“AXA IM”), in its capacity as
alternative investment fund manager (within the meaning of
Directive 2011/61/EU, the “AIFM Directive”) of Volta Finance
Limited (the "Volta Finance") whose portfolio is managed by AXA
IM.
This press release is for information
only and does not constitute an invitation or inducement to acquire
shares in Volta Finance. Its circulation may be prohibited in
certain jurisdictions and no recipient may circulate copies of this
document in breach of such limitations or restrictions. This
document is not an offer for sale of the securities referred to
herein in the United States or to persons who are “U.S. persons”
for purposes of Regulation S under the U.S. Securities Act of 1933,
as amended (the “Securities Act”), or otherwise in circumstances
where such offer would be restricted by applicable law. Such
securities may not be sold in the United States absent registration
or an exemption from registration from the Securities Act. Volta
Finance does not intend to register any portion of the offer of
such securities in the United States or to conduct a public
offering of such securities in the United States.
*****
This communication is only being
distributed to and is only directed at (i) persons who are outside
the United Kingdom or (ii) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (iii) high net
worth companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as “relevant
persons”). The securities referred to herein are only available to,
and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with,
relevant persons. Any person who is not a relevant person should
not act or rely on this document or any of its contents. Past
performance cannot be relied on as a guide to future
performance.
*****This press release
contains statements that are, or may deemed to be, "forward-looking
statements". These forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "anticipated", "expects", "intends", "is/are expected",
"may", "will" or "should". They include the statements regarding
the level of the dividend, the current market context and its
impact on the long-term return of Volta Finance's investments. By
their nature, forward-looking statements involve risks and
uncertainties and readers are cautioned that any such
forward-looking statements are not guarantees of future
performance. Volta Finance's actual results, portfolio composition
and performance may differ materially from the impression created
by the forward-looking statements. AXA IM does not undertake any
obligation to publicly update or revise forward-looking
statements.
Any target information is based on
certain assumptions as to future events which may not prove to be
realised. Due to the uncertainty surrounding these future events,
the targets are not intended to be and should not be regarded as
profits or earnings or any other type of forecasts. There can be no
assurance that any of these targets will be achieved. In addition,
no assurance can be given that the investment objective will be
achieved.
The figures provided that relate to past
months or years and past performance cannot be relied on as a guide
to future performance or construed as a reliable indicator as to
future performance. Throughout this review, the citation of
specific trades or strategies is intended to illustrate some of the
investment methodologies and philosophies of Volta Finance, as
implemented by AXA IM. The historical success or AXA IM’s belief in
the future success, of any of these trades or strategies is not
indicative of, and has no bearing on, future results.
The valuation of financial assets can
vary significantly from the prices that the AXA IM could obtain if
it sought to liquidate the positions on behalf of the Volta Finance
due to market conditions and general economic environment. Such
valuations do not constitute a fairness or similar opinion and
should not be regarded as such.
Editor: AXA INVESTMENT MANAGERS
PARIS, a company incorporated under the laws of France, having its
registered office located at Tour Majunga, 6, Place de la Pyramide
- 92800 Puteaux. AXA IMP is authorized by the Autorité des Marchés
Financiers under registration number GP92008 as an alternative
investment fund manager within the meaning of the AIFM
Directive.
*****
- February 2019 Monthly Press Release final
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