Axiom European Financial Debt Fd Ld Company update (8486H)
March 27 2020 - 6:00AM
UK Regulatory
TIDMAXI
RNS Number : 8486H
Axiom European Financial Debt Fd Ld
27 March 2020
27 March 2020
Axiom European Financial Debt Fund Limited
Company update
In the last month markets have experienced a significant
correction as the severe impact of the coronavirus continues to
spread globally. The Board of Axiom European Financial Debt Fund
Limited (the "Company") and the Company's investment manager, Axiom
Alternative Investments SARL, (the "Investment Manager") wish to
provide an update on the Company's portfolio.
As noted in the Company's most recent monthly fact sheet, the
Company's portfolio includes a material exposure to various liquid
instruments, in addition to 5% in cash. In these unprecedented
market conditions, the closed-end structure should prove to be a
very efficient format to absorb the price volatility in the
underlying portfolio and the Board remains confident in the
Investment Manager's ability to capitalise on opportunities in the
subordinated financial debt universe.
Commenting on behalf of the Investment Manager, David Benamou
commented:
"The current crisis is not a banking crisis but is a public
health and economic crisis. European banks are this time not the
problem and are expected to play a key role in the solution. Thanks
to the efforts over the last 10 years, never before have European
banks approached a crisis so well capitalised with an average 14%
of CET1 vs 8% in 2008. As shown by the European Banking Authority
2018 stress tests, European banks can afford a significant hit (400
basis points in CET1, corresponding to an 8.3% GDP deviation),
leaving them with a strong 10% CET1 capital position, hence they
are likely to be immune to a resolution risk. The support from the
states and central banks, combined with measures announced by
regulators to soften coupon payment risk, are in our view extremely
positive for European Banks' subordinated debt. I n the current
market correction, financial subordinated debt has fallen sharply
in recent weeks to levels that we have not seen for a long time.
Current spread levels are above 1000 bps on Legacy bonds and above
1400 bps on AT1/RT1 bonds (Source: Solaxicc index). For these
reasons we believe that banks subordinated debt is one of the most
attractive areas of the credit market, creating a unique window of
investments for the Company."
The Board also notes the Company's authority to issue up to
8,545,202 new ordinary shares ("Shares") on a non pre-emptive
basis, which was granted at the Company's general meeting held on 5
October 2018, expires on 5 April 2020. Shares issued pursuant to
this authority must be issued at a premium to NAV per Share. The
Board intends to seek shareholder approval to issue further Shares
on a non pre-emptive basis at the Company's AGM, which is expected
to be held in July 2020.
For further information please contact:
Axiom Alternative Investments
SARL
David Benamou, Managing Partner +44(0)20 3807 0670
Winterflood Securities Limited
Neil Morgan +44(0)20 3100 0000
Further details of the Company can be found on its website
www.axiom-ai.com
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END
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