VOLTA FINANCE - DECEMBER 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 January 2015 - Volta Finance Limited (the "Company" or "Volta Finance" or "Volta") has published its monthly report. The full report is attached to this release and is available on Volta Finance Limited`s financial website (www.voltafinance.com).
Gross Asset Value
At 28.11.14 | At 31.12.14 | |
Gross Asset Value (GAV / € million) | 290.2 | 280.0 |
GAV per share (€) | 7.95 | 7.67 |
At the end of December 2014, the Gross Asset Value* (the "GAV") of Volta Finance Limited (the "Company", "Volta Finance" or "Volta") was €280.0 m or €7.67 per share, a decrease of €0.28 per share from the end of November 2014 GAV. However, during the course of December the Company paid a dividend of €0.30 per share. Accounting for this, the GAV per share gained €0.02 per share in December.
This brings the performance for calendar 2014 to +12.4% including the April and December dividends: the overall performance was comprised €0.60 of dividend payments and €0.30 GAV increase per share.
The December mark-to-market variations* of Volta`s asset classes were: -1.0% for Synthetic Corporate Credit deals, -0.1% for CLO Equity tranches; -0.9% for CLO Debt tranches, -1.2% for Cash Corporate Credit deals and +6.1% for ABS. The modest but positive performance of Volta in December is in line with a limited deterioration of credit markets although the intra-month volatility was quite high.
Volta`s assets generated the equivalent of €2.6m cash flows in December 2014 (non-Euro amounts converted to Euro using end-of-month cross currency rates and excluding principal payments from debt assets) bringing the total cash generated during the last six months to €15.8m.
In December, Volta invested the equivalent of €12.5m through 3 transactions:
- A BB rated tranche of a new European CLO. Under standard assumptions this debt tranche is expected to have an IRR close to 8.5%;
- A second capital call in relation with the European CLO warehouse opened in November. This warehouse is expected to have an IRR between 13% and 17%;
- An investment in a fund (BDOF, Bank Deleveraging Opportunity Fund) managed by AXA IM Paris. The Company has invested €7.5m in the fund, which takes exposure to European bank balance sheet transactions. It has an expected performance in the region of 9 to 11%. For the avoidance of doubt, Volta invests into a share class of the fund which is free of management and performance fees to avoid double charging to investors in the Company.
During the month, Volta sold 4 debt tranches of CLO (3 in USD, 1 in Euro) for the equivalent of €13.9m. On average, the assets sold had projected IRRs near 4%.
At the end of December, after the settlement of the dividend payment (€10.9m paid), Volta held €6.7m in cash, excluding €4.8m pledged as margin under its currency hedging facilities. Presently, taking into account unsettled commitments, Volta can be considered as fully invested.
Markets have experienced a number of dislocations over recent months. As noted in the last commentary, Volta has limited exposure to the debt of oil and oil services companies and so an increase of the default rate for these companies is anticipated to have no direct material impact upon the portfolio or the Company`s likely performance.
In addition, foreign exchange markets have experienced considerable volatility, most recent in the weakening Euro against the Dollar and the sudden strengthening of the Swiss Franc. The Company seeks to maintain a relatively stable exposure to the US Dollar, typically around 40-45% of GAV. This has been maintained during the recent bout of Dollar strength, with exposure to the Dollar at approximately 45% at the end of December.
The Company has had no adverse impact from recent Swiss Franc volatility.
MARKET ENVIRONMENT
In December 2014, credit market spreads were highly volatile and closed the month with some widening both in Europe and in the US: the 5 year iTraxx European Main index and 5 year iTraxx European Crossover Index (series 22) spreads went respectively from 58 and 319 bps at the end of November 2014 to 63 and 349 bps at the end of December 2014. In the US, in the same vein, the 5y CDX main index (series 23) widened from 62 to 66 bps. According to the CSFB Leverage Loan Index, the average price for US liquid first lien loans decreased from 97.78% at the end of November 2014 to 96.28% at the end of December 2014. In Europe, the price of the S&P European Leveraged Loan Index decreased significantly from 97.20% to 95.34%. **
VOLTA FINANCE PORTFOLIO
In December 2014, no particular event materially impacted any of Volta`s assets.
We continue to see opportunities in several structured credit sectors including mezzanine or equity tranches of CLOs, RMBS tranches as well as tranches of Cash or Synthetic Corporate Credit portfolios.
UPDATE ON LONDON STOCK EXCHANGE LISTING
In accordance with the Company`s announcement in December, Volta continues to make significant progress in relation to the Admission of shares to trading on the Main Market of the London Stock Exchange. Admission is anticipated by mid-February. A further announcement will be made shortly.
* "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.
** Index data source: Markit, Bloomberg.
(Full monthly report in attachment or on www.voltafinance.com)
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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 NYSE Euronext Amsterdam. Its investment objectives are to preserve capital and to provide a stable stream of income to its shareholders through dividends. For this purpose, it pursues a multi-asset investment strategy targeting various underlying 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; automobile loans. Volta Finance Limited`s basic approach to its underlying assets is through vehicles and arrangements that provide leveraged exposure to some of those underlying assets.
Volta Finance Limited 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 €607 billion in assets under management as of the end of September 2014. AXA IM employs approximately 2,300 people around the world and operates out of 21 countries.
CONTACTS
Company Secretary
Sanne Group (Guernsey) Limited
voltafinance@sannegroup.com
+44 (0) 1481 739810
Portfolio Administrator
Sanne Group (Guernsey) Limited
voltafinance@sannegroup.com
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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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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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Volta Finance Limited via GlobeNewswire
HUG#1888683
