nbls12 Oct 2012 14:56
Corporate loan investment company NB Global Floating Rate Income Fund said its investment focus for the rest of the year will be on the US primary market, as the European new issue market is effectively closed for the remainder of the year.
The group revealed that at the end of September, just 2.39% of its investment portfolio was denominated in euros, while 2.66% was denominated in sterling; the rest was all in dollars.
NB Global is invested primarily in investments rated B and Ba by debt rating agencies, with B rated investments accounting for the lion's share at the portfolio at 54.55%; Ba investments comprise 39.20% of the portfolio.
Company rules allow for up to 20% of the portfolio to be invested in bonds, but the firm reduced its bond position to 6.7% at the end of September from 11.6% at the end of June, due to narrowing spreads between loans and bonds.
The group has also reduced its non-US exposure, with European assets down from 7.4% at the beginning of the third quarter to 5.1% at the end, largely because the firm has cashed in on some investments and has not replaced them with new issues, most of which have had the portfolio manager reaching for the barge-pole.
"Our view on default rates for 2012 is sustained, with the US below 2.0% and Europe at 7.0%, with current trailing 12 month default rates of 1.00% and 6.2% respectively," the firm revealed.