TIDMVTA
Volta Finance Limited (VTA / VTAS) -- November 2022 monthly
report
NOT FOR RELEASE, DISTRIBUTION, OR PUBLICATION, IN WHOLE OR PART,
IN OR INTO THE UNITED STATES
*****
Guernsey, 13 December 2022
AXA IM has published the Volta Finance Limited (the "Company" or
"Volta Finance" or "Volta") monthly report for November. The full
report is attached to this release and will be available on Volta's
website shortly (www.voltafinance.com).
PERFORMANCE and PORTFOLIO ACTIVITY
November was a strong month for Volta with a performance of
+6.3%.
It is mainly due to the solid performance of Volta's CLO Equity
positions, especially European ones, catching-up following months
of underperformances but it is also due to better-than-expected
recoveries on specific distressed names held in Volta's loan
funds.
Diving into Volta's underlying sub asset classes, monthly
performances** were as follow: +1.7% for Bank Balance Sheet
transactions, +7.2% for CLO Equity tranches (+16.8% for European
CLO Equity tranches); +2.5% for CLO Debt tranches; and +44.4% for
Cash Corporate Credit and ABS (which represent circa 2.3% of the
fund's NAV).
November is usually a relatively quiet month in terms of CLO
Equity distributions. Volta received in November the equivalent of
EUR2.1m in terms of interests and coupons. Over the usual
6-month-basis time frame Volta received EUR23.9m of interests and
coupons. A 21.8% annualized cash flow to NAV.
Over the month, we purchased a European CLO Equity position
(EUR2m nominal, purchased at 56%) with a projected yield in the 24%
context (under reasonable assumptions).
There are still slightly more downgrades than upgrades in both
the US and the European loan markets, although at a very moderate
pace. In terms of default rates, we have been, for
the-last-12-month measure, at 0.4% default rate for European loans
and 0.7% for US loans. After the invasion of Ukraine, rating
agencies were forecasting 2022 default rates to be between 2% and
2.5% for the US and European loan markets. We are one month from
the end of the year and still far from such levels.
Rating agencies currently forecast default rates between 4% and
5.5% for 2023. Our default rates view for 2023 still lands in the
2% to 3% area for both US and European loans.
Such kind of default pattern should not materially impact the
distribution of interests of Volta's assets in the near term. We
believe that we can maintain a high level of coupons in the coming
quarters and are actively looking to seize investment opportunities
with the extra cash that is being generated.
Despite being relatively constructive and convinced that, at
current prices, there is a lot of long-term value in Volta
portfolio, we believe the recession that everybody expect in 2023
might be more pronounced that what we have in mind. We decided to
hedge part of this risk by adding some overlay in terms of
duration. We built some positions recently and Volta is long
duration on a 4 years Euro swap for the equivalent of 0.8 years of
duration (at 2.85% yield level) and long T-notes at roughly 3.9%
yield level for circa 2 years of duration.
The idea here is to consider that if we are wrong on the
fundamental scenario and if things get worse than our current
anticipations, rates will very likely decrease, generating positive
performances on our duration overlay positions. At the time of
writing this comment we have a mark-to-market gain in the 0.6%
area.
As at the end of November 2022, Volta's NAV was EUR219.8m or
EUR6.01 per share.
*It should be noted that approximately 6.9% 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 NAV on as
timely a basis as possible 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 or quoted price for such subordinated notes. The most
recently available fund NAV or quoted price was 6.3% as at 31
October 2022, 0.6% was at 30 September 2022.
** "performances" of asset classes are calculated as the
Dietz-performance of the assets in each bucket, taking into account
the Mark-to-Market of the assets at period ends, 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
For the Investment Manager
AXA Investment Managers Paris
Serge Demay
serge.demay@axa-im.com
https://www.globenewswire.com/Tracker?data=OC21u2SCiN7CIj6UMwjbtf0PiOL9goeAYv-w4400fUlKVuCEAQyHyVHx6bgXxkBT1roA8nL6v3qIrTolNIgMyzrWyz8e5HA82SkIwCaFWQM=
+33 (0) 1 44 45 84 47
Company Secretary and Administrator
BNP Paribas S.A, Guernsey Branch
guernsey.bp2s.volta.cosec@bnpparibas.com
https://www.globenewswire.com/Tracker?data=YwPQlmUk7hXDc_EeVYh-eVRltVnoSc8oIRj51TuAUKDqv1P5aJMyc1ABWOVv2Gap7ao6q9313eTNTvLBbqbc1k5mKTjviX_1crfaRmEl8XA10wp7q4ijAZI2GiJ8vcbdN4PnzE2zAb8VGnlTK1Y10pT2fxpS7a7jJEfq6hCkVJoraw8jzP8f9vZkE1D7S8SjSlRW69YTd9B1Tv7wQVQSGcIu-Mdt2xfn1E9UFbB4IABPkeDqspvsZNz5GPwzInaDha7FIxsjPQYIVJfgV7accWW1oRrejnu7t_-CblFyv_CbqnVej-MrzC-QDj_RW8ur3i_Zq76y4nrt3yX2qIQpOyMRdj68KwDDmEmb54Z2a4urtSUdP1k3R8Ym02zCRkOf
+44 (0) 1481 750 853
Corporate Broker
Cenkos Securities plc
Andrew Worne
Daniel Balabanoff
+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.
*****
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 2,460 professionals and
EUR887 billion in assets under management as of the end of December
2021.
*****
This press release is 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.
*****
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.
*****
Attachment
-- Volta - Monthly Report - November 2022
https://ml-eu.globenewswire.com/Resource/Download/ef3a71a2-3e36-4b9b-a0e0-39f56f8afc7b
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December 13, 2022 04:27 ET (09:27 GMT)
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