Volta Finance Limited (VTA) - August 2015 monthly report
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES
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Guernsey, 21 September 2015
PERFORMANCE
At the end of August 2015, the Estimated NAV of Volta Finance Limited (the "Company", "Volta Finance" or "Volta") was €297.8m or €8.16 per share, a decrease of €0.05 per share since the end of July 2015.
The YTD performance for the 2015 calendar year, including the April dividend paid, stands at +10.4% as at the end of August.
The GAV stood at €327.9m at the end of August.
MARKET REVIEW AND PORTFOLIO ACTIVITY
In August, the "devaluation" of the Yuan triggered volatility in global equity markets and currencies as speculation mounted that the Chinese economy faces ongoing headwinds and difficulties. Credit spreads were not immune from these events and spread widening was observed almost everywhere. High yield spreads rose around 80bps in the US mid-month before tightening somewhat into month-end.
That said, the structured finance markets in which Volta invests were only modestly impacted as illustrated by the monthly performances that were observed: August mark-to-market variations* of Volta's asset classes were: +0.7% for Synthetic Corporate Credit deals; +0.8% for CLO Equity tranches; +0.1% for CLO Debt tranches; +3.0% for Cash Corporate Credit deals; and, -0.1% for ABS. The negative performance for August mainly reflects the 2% depreciation in the USD against the EUR during the month. As at the end of August, Volta's exposure to USD represented 43.7% of the Estimated NAV.
In August, Volta entered into a new CLO warehouse in Euro for €15.5m. Under a reasonable hypothesis, the projected yield for this warehouse is between 13 and 15% per annum.
At the end of August, Volta could be considered to be fully invested.
In August, Volta received the equivalent of €1.7m of interest and coupons (non-Euro amounts translated into Euro using end-of-month cross currency rates) bringing the total cash amount received in terms of interest and coupons during the last six months to €15.1m.
In August 2015, no particular event materially impacted any of Volta's assets. In Volta's portfolio there are still some short-term instruments (some old debt tranches of CLOs mainly) that are very insensitive to the kind of volatility that was observed in August. This kind of situation is likely to be an opportunity to accelerate the rotation of the portfolio from these old debt assets into more sensitive assets that could be purchased at a lower price/ higher discount margin.
We continue to see opportunities in several structured credit sectors including mezzanine or equity tranches of CLOs, CMVs (Capitalized Manager Vehicles: structures that permit issuing CLOs satisfying the retention rule), RMBS tranches as well as tranches of Cash or Synthetic Corporate Credit portfolios.
BOARD COMPOSITION
The Company announced on 10th September that Jim Gilligan will be stepping down from the board at the forthcoming AGM and will be succeeded by Paul Meader, the current Senior Independent Director, subject to Mr Meader's re-election at the AGM.
Paul Varotsis will assume the role of Senior Independent Director, subject to Mr Varotsis' re-election at the AGM. A search and selection process for a new independent director is nearly complete and an announcement will be made in due course.
* "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.
CONTACTS
Company Secretary and Portfolio Administrator
Sanne Group (Guernsey) Limited
voltafinance@sannegroup.com
+44 (0) 1481 739810
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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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 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 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 €689 billion in assets under management as of the end of March 2015. AXA IM employs approximately 2,350 people around the world and operates out of 22 countries.
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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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