VOLTA FINANCE LIMITED VOLTA FINANCE - JANUARY MONTHLY REPORT
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES
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Guernsey, 23 February 2015 - Volta Finance Limited (the "Company" or "Volta Finance" or "Volta") has published its monthly report. The full report is attached to this release and is available on Volta Finance Limited's financial website (www.voltafinance.com).
Gross Asset Value
At 30.01.15 | At 31.12.14 | |
Gross Asset Value (GAV / € million) | 289.1 | 280.0 |
GAV per share (€) | 7.92 | 7.67 |
PERFORMANCE
At the end of January 2015, the Gross Asset Value* (the "GAV") of Volta Finance Limited (the "Company", "Volta Finance" or "Volta") was €289.1 m or €7.92 per share, an increase of €0.25 per share or 3.3% since the end of December 2014 GAV. This is an encouraging start to the year following a gain of 12.4% for 2014 (including the April & December dividends).
The January mark-to-market variations* of Volta's asset classes were: -0.9% for Synthetic Corporate Credit deals, -0.4% for CLO Equity tranches; +0.8% for CLO Debt tranches, +1.6% for Cash Corporate Credit deals and +0.2% for ABS. The positive performance of Volta in January is in line with stable
st
credit markets and with the significant appreciation of the USD against Euro. At 31
January 2015
Volta had 43.5% net exposure to the US Dollar, accounting for the impact of currency hedging.
Volta's assets generated the equivalent of €5.7m cash flows in January 2015 (non-Euro amounts converted to Euro using end-of-month cross currency rates and excluding principal payments from debt assets) bringing the total cash generated during the last six months to €18.1m.
The significant increase in the 6-month rolling cash flows is due to:
- a one-off payment of interest from the warehouse that closed in January
- the fact that the most recent purchases made in the first half of 2014 have now started paying their cash flow
- continued strong cash flows from the CLO 1.0 equity positions as prepayment rates have slowed down during the last 3 to 4 months especially in the US loan market.
In January, Volta invested the equivalent of €6.5m in 2 tranches: the B and the equity tranche of a new
USD CLO. Altogether, these two positions have an expected performance circa 10%.
During the month, Volta received the final payments (interest and principal) of the CLO warehouse priced in December and closed in January, as well as the equivalent of €2m for two CLO debt tranches that were called.
At the end of January, Volta held €14.1m in cash, excluding €6.0m pledged as margin under its currency hedging facilities and the €6.5m invested in January but not yet settled as of the end of the month. Presently, taking into account unsettled commitments, Volta can be considered as almost fully invested. As a result of the last 6 month's performance, an estimated €3.2m performance fee is provisioned in the GAV.
MARKET ENVIRONMENT
In January 2015, credit market spreads lacked any clear direction although European markets slightly outperformed the US thanks to the announcement of Quantitative Easing from the ECB. The 5 year iTraxx European Main index and 5 year iTraxx European Crossover Index (series 22) spreads decreased modestly from 63 and 345 bps at the end of December 2014 to 60 and 323 bps at the end of January 2015. In the US, in the opposite vein, the 5y CDX main index (series 23) widened from 66 to 70 bps. According to the CSFB Leverage Loan Index, the average price for US liquid first lien loans decreased modestly from 96.28% at the end of December 2014 to 96.12% at the end of January
2015. In Europe, the price of the S&P European Leveraged Loan Index increased modestly from
96.38% to 96.54%. **
VOLTA FINANCE PORTFOLIO
In January 2015, no particular event materially impacted any of Volta's assets.
We continue to see opportunities in several structured credit sectors including mezzanine or equity tranches of CLOs, RMBS tranches as well as tranches of Cash or Synthetic Corporate Credit portfolios.
SHARE PRICE PERFORMANCE
Recent share price performance has been encouraging, with the shares rallying from around €6.25 to around €6.90 by late February. Strong buying interest has been seen from a range of existing and new investors. As a result, the share price discount has narrowed to approximately 12% relative to GAV. However, the discount remains markedly wider than the Company's London listed peers.
As recently announced, the Company's listing on the London Stock Exchange is anticipated to occur in May 2015.
* "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.
** Index data source: Markit, Bloomberg.
(Full monthly report in attachment or on www.voltafinance.com)
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ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in Guernsey under The Companies (Guernsey) Law, 2008 (as amended) and listed on NYSE Euronext Amsterdam. Its investment objectives are to preserve capital and to provide a stable stream of income to its shareholders through dividends. For this purpose, it pursues a multi-asset investment strategy targeting various underlying 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; automobile loans. Volta Finance Limited's basic approach to its underlying assets is through vehicles and arrangements that provide leveraged exposure to some of those underlying assets.
Volta Finance Limited 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 MANAGERS
AXA 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 €607 billion in assets under management as of the end of September 2014. AXA IM employs approximately 2,300 people around the world and operates out of 21 countries.
CONTACTS
Company Secretary
Sanne Group (Guernsey) Limited voltafinance@sannegroup.com
+44 (0) 1481 739810
Portfolio Administrator
Sanne Group (Guernsey) Limited voltafinance@sannegroup.com
For the Investment Manager AXA Investment Managers Paris Serge Demay
serge.demay@axa-im.com
+33 (0) 1 44 45 84 47
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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. The company 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.
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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.
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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'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. Volta Finance 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.
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