Volta Finance Limited - Net Asset Value as at 30 September 2021
Volta Finance Limited
(VTA / VTAS)
– September
2021
monthly report
NOT FOR RELEASE, DISTRIBUTION,
OR PUBLICATION, IN WHOLE OR PART, IN OR INTO THE UNITED
STATES
***** Guernsey, 12 October 2021
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
September’s performance, including the €0.14
dividend per share paid at the end of September, was outstanding at
1.9% relative to the negative performance for most equity markets.
The year-to-date total return of the company is 15.0%.
This recently observed uncorrelated performance
may result from being predominantly invested in floating-rate
instruments (corporate loans through CLOs) and having a relatively
short duration. Noting that this negative correlation may be
temporary.
With ongoing cash flows continuing at a pace
close to 20% (annualized), Volta's strategy is expected to differ
from investments like equity strategies (especially growth stocks)
that may be more sensitive to long-term interest rates. In this
way, Volta looks like a perfect complement to classic equity
exposure, with a performance that exhibits less dependence on
long-term dividend growth and profitability and more on short to
medium-term company solvency.
At the end of September, the 12-month default
rate was at 0.5% for US loans and 0.8% for European loans.
Companies can more easily refinance their debt and M&A activity
is frequently providing an exit strategy to some of the stocks that
suffered the most from the Covid crisis. Whatever the exit strategy
being pursued so far, many loans found a way to refinance and the
maturity wall is being extended towards 2027-2028, reducing
significantly the probability of default for the coming few
years.
Turning to the details, the monthly asset class
performances** were: +0.8% for Bank Balance Sheet transactions,
+2.1% for CLO equity tranches; +0.2% for CLO debt; +0.3% for Cash
Corporate Credit and ABS (together representing 3.0% of NAV). In
September, USD appreciation against Euro contributed +0.8% to the
overall performance
As usual, September is a relatively low volume
month in terms of interest and coupons with the currency equivalent
of €1.3m being received. On a 6-month rolling basis, Volta had
received the currency equivalent of €26.5m to the end of September,
representing a 20.0% annualised cash flow yield, based on the end
of the month NAV.
In September, Volta had a €1m BB tranche called
and made no new investment. As at the end of September Volta held
nearly €12m of cash available for re-investment. The pipeline in
the primary market for CLO issuance, both in the US and in Europe,
is extremely high for October (with an unprecedented volume YTD)
that we are expecting some spread widening and to be able to
reinvest cash at attractive levels.
As at the end of September 2021, Volta’s NAV was
€264.8m or €7.24 per share.
*It should be noted that approximately 8.0% 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 1.7% as at 31
August 2021, 5.5% as at 31 July 2021, and 0.8% as at 30 June
2021.
** “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 ManagerAXA
Investment Managers ParisSerge Demayserge.demay@axa-im.com+33 (0) 1
44 45 84 47
Company Secretary and
AdministratorBNP Paribas Securities Services S.C.A,
Guernsey Branchguernsey.bp2s.volta.cosec@bnpparibas.com +44
(0) 1481 750 853
Corporate BrokerCenkos Securities plcAndrew
WorneDaniel 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
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 767 investment
professionals and €866 billion in assets under management as of the
end of June 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.
*****
- Volta - September Monthly Report
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