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17 Oct 2018 17:05
Volta Finance Limited: Estimated Net Asset Value as at 30 September 2018
Volta Finance Limited (VTA / VTAS) – September 2018 monthly report
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES
***** Guernsey, 17 October 2018
AXA IM has published the Volta Finance Limited (the “Company” or “Volta Finance” or “Volta”) monthly report for September. 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 September, Volta’s Estimated NAV* performance was -0.4% in total return, a slightly negative performance in a context of volatile credit and FX markets in general. Volta paid a dividend of 0.15 euro per share in September 2018, representing an 8.6% yield based on a share price of €7.20 as at end of September.
In September, mark-to-market performances of Volta’s asset classes, in local currencies, were: 0.0% for Bank Balance Sheet Transactions; +0.2% for CLO Equity tranches; +0.4% for CLO Debt tranches; +0.1% for Cash Corporate Credit deals; and +0.1% for ABS.
For the second consecutive month, the CLO market was characterised by an oversupply situation (mostly affecting the spread at which AAA/AA and A rated tranches are issued). The mezzanine tranches of CLO owned by Volta (mostly BB rated tranches) performed positively this month again reflecting the fact that on a fundamental basis these assets continue to perform well.
In October, one of the USD CLO warehouse facilities held by Volta since the early summer was distributed as a CLO. Volta purchased USD13m of the CLO Equity tranche. The exact performance of this facility will not be known before the closing, but we can reasonably expect a performance in the area of a 20% IRR.
During the month of September, Volta received capital calls under the warehouse facilities it had subscribed earlier and under the existing CMV. Volta also purchased $2m of a USD BB CLO Debt tranche. Through the month, a total of €17m equivalent was invested. On average and under market standard assumptions, the projected IRR of all instruments was in the area of 13%.
In September, Volta generated the equivalent of €0.9m 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.
As planned, we continue to allocate capital to CLO warehousing facilities in order to source new CLO Equity positions with attractive economic terms. As at the end of September 2018, Volta allocation to CLO Equity tranches moved in excess of 30% of the GAV for the first time in many years. We intend to increase the CLO Equity bucket as we consider this instrument as one of the rare instruments that can benefit from market volatility thanks to its reinvestment capabilities.
As at the end of September 2018, Volta’s Estimated NAV was €302.9m or €8.28 per share. The GAV stood at €348.9m.
*It should be noted that approximately 11.7% 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. The most recently available fund NAV was for 8.1% as at 31 August 2018 and for 3.6% as at 30 June 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.
This announcement contains information that is inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.
CONTACTS
For the Investment ManagerAXA Investment Managers ParisSerge Demayserge.demay@axa-im.com+33 (0) 1 44 45 84 47
Company Secretary and Portfolio AdministratorSanne Group (Guernsey) Limitedvoltafinance@sannegroup.com +44 (0) 1481 739810
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.
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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.
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This press release is distributed and 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.
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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.
*****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.
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Attachment
Volta - Monthly Report - September 2018