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15 Apr 2020 15:29
London, UK, 15 April 2020
Edison issues flash on Marble Point Loan Financing (MPLF)
Marble Point Loan Financing (MPLF) is temporarily suspending its dividend due to the impact of COVID-19.The recent economic disruption has resulted in rating agencies downgrading the underlying collateral of MPLF's collateralised loan obligations (CLOs) at a pace that could trigger its need to make provisions. The heightened risk is above that modelled by MPLF and could affect cash flow. MPLF's policy is to maintain a well-funded dividend. In the last five quarters cash distributions have exceeded dividends by a good margin. With the total impact of COVID-19 uncertain, management believes it is prudent to preserve cash now, which will provide more flexibility for when dislocations in the credit market provide good investment opportunities.
At the end of February, MPLF's investment portfolio was $171.8m, of which 69% was in equity tranches of 10 different Marble Point CLO issues. The remaining portfolio was split between CLO debt tranches (9%), CLO fee participations (2.8%), the NAV of the funding subsidiary (11.2%) and the Marble Point loan accumulation facility (8%). It also had $2.9m in other assets. Subsequent to month end on 24 March, MPLF invested approximately $20m in the equity of MarblePoint CLO XVII. The equity tranches had an effective yield of 8.6%, the debt had an all-in yield of 3.7% and fee participations were 18.2%.
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