Carador Income Share Discussion Threads

[specuvestor] 20/2/2015 10:48

I looked at Volta two or three years ago and decided not to buy because a) they were denominated in Euros b) I was unable to claim gross dividends in my ISA as I do with Carador by submitting a W8-BEN form and (c)they were quoted on Euronext which seemed to make dealing in amounts over £10,000 difficult on Interactive Investor at the time.

Perhaps when they move to a London Listing these obstacles will be removed.

[davebowler] 20/2/2015 09:34

Liberum;
CLOs

Carador Income Fund (BUY)
Energy names drag index performance

Event
Carador's NAV total return in Jan-15 was -0.23%, with a NAV decline of 3.0% to $0.8722 post the dividend payment. The S&P leveraged loan index delivered a return of +0.33% in the month, with a positive return excluding the energy sector of over 0.5%. In terms of volumes, the primary market was quiet - the lowest level of issuance since September 2011 and retail flow continuing to exit the market, with $2.1bn of redemptions in the month.

The negative NAV performance in the month was due to a decline in market valuations as the demand for CLO income notes shifted in favour of the buyer. Capital recycling continued in the month, with CIFU disposing of a BB investment (Mountain View) and purchasing three new CLO 2.0 opportunities. A controlling stake in Keuka Park for a target 12.5% was acquired, as well as a BB bond from CVC's most recent US CLO for a target 9.2% IRR. A position in Dorchester Park was also purchased, GSO's most recent primary transaction (12.4% target return from the income note).

Liberum view
Markets remain volatile and this has impacted market loan issuance, as investors hold back capital until volatility settles, or take advantage of lower-priced secondary tranches in CLO positions that have fallen in value recently, particularly in the energy sector. CIFU has continued to switch out of CLO 1.0 positions into CLO 2.0, and we expect this weighting to increase going forward.

The fund trades at a small 0.3% premium to NAV, in line with the recent historical range, but on a relative basis, investors should look at Volta Finance (VTA NA), which trades on a 9.8% discount to NAV, some 10 percentage points wider, yielding 9%. The shares have already started to rerate from an 18% discount to NAV in advance of the move to a London listing from Euronext (due by May) and we expect further discount compression over the coming weeks.

[skyship] 13/2/2015 08:32

VOLTA trading back up at E6.75 - recovered back to Spring/Summer 2014 levels, having drifted to E6.00 in the meantime. At the moment not sure of yield or NAV.



EDIT - Found they issue monthly reports:

[davebowler] 12/2/2015 09:55

Thanks for the update on Volta.
Investec;

Following the Company's statement in its December 2014 monthly report that it expected to be admitted to trading on the LSE by mid-February 2015, the Company has suffered a delay due to an unforeseen technicality relating to the eligibility criteria for listing on the Official List of the UK Listing Authority The Board remains committed to seeking admission to trading on the LSE and, subject to obtaining shareholder approval for the changes to the investment policy, the Company anticipates becoming admitted to trading on the LSE during May 2015.

Investec Insight

¢ As we have previously highlighted, VTA looks especially attractive at current levels of discount, especially when comparables like the London listed Carador (CIFU) and Blackstone GSO Loan Financing (BGLF) are trading at small premiums to NAV and are invested in roughly the same areas.

¢ Returns have been excellent over the full cycle and AXA, the Paris based manager, has managed to deliver annualised returns of 10.7% over the most volatile period in the history of the asset class.

¢ The fund has been hampered by the poor liquidity on the Euronext and we believe the planned London listing should help with both the profile of the fund and liquidity of its shares going forward.

¢ Access Fund Detail Here

[cwa1] 12/2/2015 08:06

Delay in listing for Volta FWIW:-

[davebowler] 11/2/2015 16:55

Volta is now moving up sharply.

[davebowler] 09/2/2015 14:15

End of Feb.

[ryandj2222] 09/2/2015 08:37

do you know when?

[davebowler] 06/2/2015 10:57

Volta is about to gain a UK listing.

[yieldsearch] 30/1/2015 14:20

Any concerns with oil and gas exposure in the underlying leveraged vehicles? Most of the exposures are equity clo so would take direct hit?Own this and volta.

[atholl91] 30/1/2015 09:59

Have a look at Fair Oaks (FAIR). IPO in July '14 headed by Miguel F-R who was the Manager who got CIFU going. Rated as one of the best in this area and CIFU has never performed as well since he left.

[deadly] 28/1/2015 13:48

Looking stronger by the day.
But goes XD tomorrow so maybe some late buying for that.

[wirralowl] 23/1/2015 15:47

Yep, welcome aboard Skyship, good to see you here. I also topped up yesterday, in view of their latest positive update.

[specuvestor] 23/1/2015 14:54

Welcome aboard Skyship. I have been in Carador since Feb 2010. It has been one of my best ever holdings.

I look forward to reading your measured analysis.

[skyship] 23/1/2015 12:01

Yes, but was always of the view that losing half of the good yield through the falling NAV & sp, discounted a position here. That changed recently due to the US$ strength - which I expect to continue...

[badtime] 23/1/2015 10:11

Welcome Sky..you may have missed the best part re currency gain

[skyship] 23/1/2015 10:08

With Liberum expecting the NAV to stabilise and perhaps improve in 2015; I've decided to join you here. Only a small allocation at the moment...

Dendria - Thnx for the regular broker updates.

[dendria] 23/1/2015 08:19

Analyst comment on Dec 14 NAV:

N+1 Singer, 22 January 2015, “2015 dividend expectations confirmed”
The Year End NAV, Q4 2014 dividend and the target for 2015 dividends are all in line with our expectations. The 2014 dividend was just 96% of distributable income (the fund is required to distribute at least 85% to maintain excluded status under NMPI rules). For 2015 the fund is targeting at least a maintained US$10.0¢ annual dividend with any excess up to the 85% distribution requirement paid at the Q4 stage. Given the scale of transition in the portfolio over 2014 the 6.3% NAV total return is testament to the stability of the asset class.


Liberum Capital, 22 January 2015, “Target dividend of $0.10 for 2015”
Carador's performance in 2014 represents an improvement over 2013 (+6.0% vs.+3.8% assuming no reinvestment of dividends) although investors may have expected more from a portfolio weighted towards CLO equity positions. Returns should improve going forward with a high weighting to CLO 2.0 positions. The growing CLO pipeline could result in weak prices in the short term but should enable investors in the space to lock in attractive returns on primary opportunities.
The unchanged dividend target for 2015 is likely to be well received by investors and the dividend equates to a yield of 11.1% based on the current price. Carador trades on a discount of 0.2% to NAV.


Dexion Capital, 22 January 2015, “Carador Income – December 2014 NAV and dividend”
Carador had a much stronger month than its sister fund, BGLF, possibly because of the US focus but also because initial weakness in the CLO equity markets may have been pronounced on the more recently issued structures. The commentary, however, suggests that the immediate outlook (i.e for January 2015) may continue to be somewhat weak.

[wirralowl] 22/1/2015 10:42

Dividend payments should benefit nicely now from the dollar strength, with cable currently under 1.52.

More than happy with the prospect of 10 cents pa for the coming year too; as they say a yield of 11% at yesterday's price.

[dendria] 22/1/2015 07:48

Dec 14 NAV = $0.8993 (-0.07% change; -0.07% monthly performance).

$2.5c dividend payable 4 Feb 2015 (ex-div 29 Jan 2015).

[badtime] 06/1/2015 14:31

So far this has been a good currency play

[dendria] 19/12/2014 07:27

Nov 14 NAV = $0.8999 (+0.65% change; +0.65% monthly performance).

[dendria] 20/11/2014 12:44

Oct 14 NAV = $0.8941 (-2.15% change; +0.59% monthly performance).

Analyst comment on Oct 14 NAV:

N+1 Singer, 20 November 2014, " Income Prospects Continue to Improve"

In the latest monthly update (with NAV and cashflows in line) the fund has reported significant further progress in the transition of the portfolio. The seventh controlling position in a post crisis CLO 2.0 has been acquired along with a smaller minority income note position. Together these add US$29m to the income note part of the portfolio. Sales of 2 pre crisis Mezz positions worth US$7.7m has taken the proportion of income notes in the portfolio to 69% with 50% being in CLO 2.0s. The adds further upward momentum to cashflows when looking into 2015 and beyond. The successful transition of the portfolio is securing the already very high level of income for several years longer.

Liberum Capital, 20 November 2014, "+0.6% Return in October"

CIFU is trading on a 1.5% premium to NAV and the shares have delivered a 6.5% total return in 2014 to date. Carador's NAV returns are beginning to pick up, although the return to date in 2014 of +5.7% is slightly below the level we would expect for a portfolio of this nature. NAV performance should improve going forward, given that over 70% of the portfolio is now weighted to CLO 2.0 investments.

[cwa1] 30/10/2014 09:26

Morning

So, XD today. Hard to get used to this Thursday XD lark!

[dendria] 21/10/2014 17:49

Analyst comment on Sep 14 NAV:

N+1 Singer, 21 October 2014, "Steady NAV, Dividend in Line"

September is the quietest month in the quarter for cashflows with just one income note payment received. Hence the NAV was virtually stable (+0.11% in part due to disposals), cashfows were in line with expectations (distributable income of US$2.37¢ in the quarter, US$7.72¢ for the nine months). With a further US$2.5¢ quarterly dividend announced today the nine month payment of US$7.5¢ remains fully covered. Further transition of the portfolio was completed in the month with the acquisition of a US$21m nominal controlling position in Babson 2013-1 acquired and $38m nominal of Mezz positions sold or called.


Liberum Capital, 21 October 2014, "Volatile Loan Markets"

NAV returns were lower than expected due to volatility in loan markets. US leveraged fund flows from mutual funds have been negative for 14 consecutive weeks with a total of c$9bn of outflows in Q3 2014. The current dividend equates to a yield of 10.9% with $7.72c of distributable income generated per share and a total of $7.5c paid YTD (103% covered). We believe there is a risk that the share rating will weaken unless NAV returns improve.