NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES
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Guernsey, 25 March 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 30.01.15 | At 27.02.15 |
| Gross Asset Value (GAV / € million) | 290.2 | 293.9 |
| GAV per share (€) | 7.95 | 8.05 |
PERFORMANCE
At the end of February 2015, the Gross Asset Value* (the "GAV") of Volta Finance Limited (the "Company", "Volta Finance" or "Volta") was €293.9 m or €8.05 per share, an increase of €0.10 per share or 1.3% since the end of January 2015 GAV.
The YTD performance for 2015 stands at +5.0% as at the end of February. It is an encouraging start to the year following a gain of 12.4% for 2014 (including the April & December 2014 dividends).
During the preparation of Volta`s interim financial report, to be published in the coming days, the reconciliation of the end of January GAV estimate published last month has identified a small understatement. The January GAV should have been €7.95 per share rather than the reported €7.92.
The February mark-to-market variations* of Volta`s asset classes were: +1.4% for Synthetic Corporate Credit deals, +4.0% for CLO Equity tranches; +1.9% for CLO Debt tranches, -0.3% for Cash Corporate Credit deals and +0.3% for ABS. The positive performance of Volta in February is in line with the better tone to credit markets and the further appreciation of the USD against Euro. At 27th February 2015 Volta had 43.1% net exposure to the US Dollar, after accounting for the impact of currency hedging.
Volta`s assets generated the equivalent of €2.4m cash flows in February 2015 (non-Euro amounts translated 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 €17.2m.
In February, Volta invested the equivalent of €4.7m in 2 CLO tranches : the B and the equity tranche of a new USD CLO (Flatiron 2015-1). Together, these two positions have an expected performance circa 10%. The equivalent of €9.6m was drawn down on existing commitments. No assets were sold during the month.
At the end of February, Volta held €6.4m in cash, excluding €2.5m pledged as margin under its currency hedging facilities and €4.7m.due to broker in relation with the most recent purchases.
Since the end of February Volta has announced that it has entered into a repurchase agreement with Societe Generale. USD30m has been received against some of the USD CLO debt tranches of the Company. The proceeds will be used principally to purchase debt tranches of CLOs. This should increase the implied IRR of the portfolio and boost the net yield. A further USD30m can be drawn using a similar repurchase agreement, subject to certain conditions.
Through this repurchase agreement Volta will, in effect, have incurred leverage and contracted a debt for USD30m. As Volta has now direct leverage in operating its investment strategy, the Company will provide additional reporting henceforth to allow investors to have a clearer understanding of the gross and net asset values of the Company.
The Company will continue to calculate and report a Gross Asset Value ("GAV") in accordance with the existing methodology and the Company`s investment restrictions will continue, where relevant, to be measured and monitored in relation to GAV.
The Company will report a new measure on a monthly basis - an Estimated NAV. Estimated NAV will be net of the liabilities coming from repurchase agreements. The Estimated NAV will continue to allow shareholders to have a fairly accurate estimate of the likely NAV of the Company on a monthly basis. A fully reconciled NAV will continue to be reported as at 31st January and 31st July, as previously.
MARKET ENVIRONMENT
In February 2015, credit market spreads tightened significantly both in the US and in Europe. The tightening was more pronounced in Europe than in the US following the introduction of Quantitative Easing from the ECB. The 5 year iTraxx European Main index and 5 year iTraxx European Crossover Index (series 22) spreads tightened from 60 and 323 bps at the end of January 2015 to 50 and 261 bps at the end of February 2015. In the US, the 5y CDX main index (series 23) tightened from 70 to 61 bps. According to the CSFB Leverage Loan Index, the average price for US liquid first lien loans increased modestly from 96.12% at the end of January 2015 to 97.18% at the end of February 2015. In Europe, the price of the S&P European Leveraged Loan Index increased as well from 96.54% to 96.73%. **
VOLTA FINANCE PORTFOLIO
In February 2015, 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.
SHARE PRICE PERFORMANCE
Recent share price performance has been encouraging, with the shares rallying from around €6.25 at the beginning of the year to around €7.00 by mid March. Strong buying interest has been seen from a range of existing and new investors. According to Bloomberg and including volume across brokers, 6.2m shares traded in February. As a result, the share price discount has narrowed to approximately 10% relative to the previously published GAV. However, the discount remains markedly wider than the Company`s London listed peers.
As recently announced, the Company`s listing on the London Stock Exchange is anticipated to occur in May 2015.
* "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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February Monthly Report
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#1906291
