Marble Point Loan Financing Limited Net Asset Value & Publication of Monthly Report (3447F)

TIDMMPLF

RNS Number : 3447F

Marble Point Loan Financing Limited

16 November 2020

16 November 2020

MPLF NAV per share increases for seventh consecutive month; 15.8% dividend yield

The net asset value ("NAV") of Marble Point Loan Financing Limited ("MPLF") as at the close of business on 30 October 2020 is as follows:

 
 Share class     *October 2020     September 2020     Monthly Change 
                NAV per Ordinary   NAV per Ordinary     in NAV per 
                   Share (1)          Share (1)          Share (1) 
  Ordinary        USD 0.5813         USD 0.5741         USD 0.0072 
    Shares 
              ------------------  -----------------  --------------- 
 

*October NAV is net of dividend paid 6 November 2020

Performance

-- In October MPLF grew NAV per share and outperformed the Credit Suisse Leveraged Loan Index (CSLLI) for the seventh consecutive month.

-- NAV total return was 4.53% in the month, compared to the total return of the Credit Suisse Leveraged Loan Index (CSLLI) of 0.17%. MPLF also outperformed the ICE BAML High Yield Index and S&P 500 which posted returns of 0.47% and (2.66%), respectively.

-- In a month characterized as a tale of two markets, loan prices were largely unchanged despite macro sentiment that was adversely impacted by a re-emergence of lockdown measures, largely in Europe, to stem the spread of COVID-19. The market rallied in the first part of the month with a continuation of strong demand for loans spurred by new CLO creation and ramping. While not as strong as September, October new issue loan supply at $38.74 billion was the second highest since the start of the pandemic. With the looming U.S. Presidential election, issuers' desire to complete transactions in advance put pressure on the market's ability to absorb the new issue resulting in the postponement of some deals and the retracement of gains posted by the loan market earlier in the month. Despite this dynamic, MPLF's October return largely reflected the receipt of attractive quarterly distributions on MPLF's CLO equity securities in excess of the changes in the values of those CLO equities.

-- Consistent with the prior two payment dates in 2020, none of the Marble Point CLOs in the MPLF portfolio were required to divert cash available for distribution to equity due to a failing junior overcollateralization ratio test in connection with the October payment dates. Despite the disruption to the global economy from the pandemic, no Marble Point CLO has failed to make an equity distribution in 2020.

-- The quarterly gross distributions received in October by MPLF from its CLO equity, CLO debt and Fee Participation investments totaled approximately $10.9 million, or 5.3 cents per share. This represents the largest quarterly gross distribution tally since IPO.

-- MPLF has continued to outperform relevant benchmarks in recent months, delivering a cumulative NAV return of 59.5% since March compared to 14.4%, 15.3% and 27.8%, respectively, for the CSLLI, ICE BAML High Yield Index and S&P 500.

-- At 30 October 2020, the percentage of loans in the MPLF loan portfolios marked at a price of 80% or lower was 3.31% as compared to 4.85% for the S&P/LSTA Index. Marble Point ranks in the top quartile of U.S. CLO Managers with at least 4 reinvesting CLOs for this metric at 30 October 2020, according to BofA Securities Research.

-- As at 30 October 2020, none of MPLF's investment vehicles held either of the two S&P/LSTA index constituents that defaulted in October. Due to other defaults rolling off the calculation, the index's lagging 12-month default rate by notional amount decreased to 4.11%.

Market

-- The loan market posted its seventh consecutive monthly gain with the CSLLI delivering a 0.17% return in October. The average indicative bid price of CSLLI moved up to 92.87% at 30 October from 92.77% at 30 September. The weighted average indicative bid price of MPLF's loans declined slightly to 94.75% at 30 October from 95.02% at 30 September. During the month loan prices increased for the first three weeks, before moving down in sync with broader market declines caused by a COVID-19 global resurgence, a heightened risk of economic disruption and issues related to the market's absorption of a large new issue supply prior to Election Day in the U.S.

-- CLO issuance in October accelerated as 32 deals totaling $12.6 billion priced during the month. This surpassed September's $11.5 billion total and represented the most active month of 2020, and the largest monthly total since April 2019. This volume was spurred by CLO managers and investors issuing new deals ahead of anticipated market volatility accompanying the elections in the United States in early November.

-- Institutional loan activity remained strong in October with $38.7 billion of issuance, the second highest monthly total since January 2020. While gross volumes are higher, this loan issuance appears largely opportunistic versus loans created by new leveraged buyout activity. According to S&P/LCD refinancing and recapitalization deals accounted for 52% of the total loan issuance in September and October.

-- Retail fund outflows totaled approximately $0.5 billion in October as reported by J.P. Morgan. This remains a consistent dynamic in the loan market as retail funds have not registered a single monthly inflow since September 2018.

-- Since the end of October, the average indicative bid price of the CSLLI has increased by 1.49% to 94.36% (as at 12 November 2020). Technical loan market forces from consistent CLO issuance have provided a tailwind to the market and supported secondary price levels. Moreover, following the 9 November announcement by pharmaceutical companies of significant progress in a COVID-19 vaccine efficacy rate, broader risk markets rallied, including the prices of leveraged loans.

Investment

-- Pursuant to its stock buyback programme, during the month MPLF repurchased $3 million shares at a price of $0.49869. This represents a 14.2% discount to the October 2020 NAV.

-- During the month Marble Point opened a new loan accumulation facility ("LAF") and MPLF invested $5.0 million in the facility, which is presently ramping assets with the intention of converting into a new CLO in early 2021. The total principal amount of ramped assets in the LAF was $14.5 million as at 30 October 2020.

   MPLF's October 2020 Monthly Report is available on its website:   www.mplflimited.com 

Enquiries:

Marble Point Loan Financing Limited

Investor Relations

T: [phone]

   E:   [e-mail] 

Website: www.mplflimited.com

Corporate Broker :

Stifel Nicolaus Europe Limited

T: [phone]

Financial Public Relations :

Charlie Barker / Catherine Chapman

MHP Communications

T: [phone]

[e-mail]

(1) NAV figures are provided for informational purposes only and are unaudited, estimated by Marble Point Credit Management LLC ("Marble Point"), the investment manager of MPLF, and subject to adjustment. Marble Point estimates MPLF's NAV on a monthly basis as at the end of each month. Estimates with respect to a date falling on a calendar quarter end are subject to revision when the quarterly NAV is determined. NAV is calculated as the sum of the value of MPLF's investment portfolio, any cash or cash equivalents and other assets less liabilities. NAV is reduced by the amount of a dividend to the extent the ex-dividend date occurs during the period presented. NAV total return figures shown are estimated, unaudited and subject to adjustment and reflect the net total NAV return, inclusive of dividends, for the periods shown and as from MPLF's admission to the Specialist Fund Segment of the main market of the London Stock Exchange on 13 February 2018, after taking into account applicable listing and offering costs and pre-admission profits and loss. Monthly and cumulative performance figures are non-annualised and such results reflect the deductions of applicable management fees and expenses at the underlying investment levels.

(2) The indices shown have not been selected to represent a benchmark for MPLF's performance, but rather to allow for comparison of MPLF's returns to those of known, recognized and/or similar indices. The Credit Suisse Leveraged Loan Index (CSLLI) tracks the investable universe of the U.S. leveraged loan market. The ICE BofAML US High Yield Index (ICE BAML HYI) tracks the performance of USD-denominated below investment grade corporate bonds publically issued in the U.S. domestic market. The Standard & Poor's 500 Index (S&P 500) tracks the performance of U.S. public equity markets and is based on the market capitalization of 500 large companies having common stock listed on NYSE or NASDAQ. The performance of any index is not an exact representation of any particular investment as you cannot invest directly in an index.

Past performance is not indicative or a guarantee of future performance.

This release contains inside information.

About Marble Point Loan Financing

Marble Point Loan Financing Ltd. (LSE Ticker: MPLF LN (USD); MPLS LN (GBX)) is a Guernsey-domiciled closed-ended investment company. MPLF's investment objective is to generate stable current income and grow net asset value by earning a return on equity in excess of the amount distributed as dividends.

MPLF is invested in a diversified portfolio of US dollar denominated, broadly syndicated floating rate senior secured corporate loans owned via collateralised loan obligations ("CLOs") and related vehicles managed by Marble Point Credit Management LLC.

About Marble Point Credit Management LLC

Marble Point Credit Management LLC ("Marble Point") is a specialist asset manager focused exclusively on leveraged loans. Marble Point was founded by Thomas Shandell in partnership with Eagle Point Credit Management, a leading investor in CLO securities. As at 30 October, 2020, Marble Point manages approximately $5.5 billion of assets across CLOs and other managed accounts.

IMPORTANT INFORMATION

Marble Point Loan Financing Limited (the "Company") is a closed-ended investment company incorporated in Guernsey with its ordinary shares ("Shares") admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange (ticker: MPLF.LN). The Company is invested in a diversified portfolio of US dollar denominated, broadly syndicated floating rate senior secured corporate loans via CLOs, loan accumulation facilities and other vehicles managed by Marble Point Credit Management LLC ("Marble Point") or its affiliates. Marble Point is an investment adviser registered with the U.S. Securities and Exchange Commission.

This document is provided for informational purposes only and does not constitute an offer to sell any Shares, notes or other securities (collectively, "Securities") issued by the Company or a solicitation of an offer to purchase any such Securities in the United States, Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction. This document may not be relied upon, and should not be used, for the purpose of making any investment decision. This document and the information and views included herein do not constitute investment advice or a recommendation or an offer to enter into any transaction with the Company or any of its affiliates. Any recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of any investment and should consult its own legal counsel and financial, actuarial, accounting, regulatory and tax advisers to evaluate any such investment. This document has been issued by the Company and is the sole responsibility of the Company.

The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold in the United States to, or for the account or benefit of, U.S. persons unless they are registered under applicable law or exempt from registration. The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, and investors will not be entitled to the benefits of such Act.

The information shown herein is estimated, unaudited, for background purposes only, representative as of the dates specified herein, subject to adjustment and not purported to be full or complete. Nothing herein shall be relied upon as a representation as to the current or future performance or portfolio holdings of the Company or any strategy or investment vehicle. Certain information presented herein has been obtained from third party sources and is believed to be reliable. However, neither the Company nor Marble Point represents that the information contained in this document (including third party information) has been independently verified or is accurate or complete, and it should not be relied upon as such. Index information, if any, has been provided for illustration purposes only. Any such information does not reflect the effect of transaction costs, management fees or other costs which would reduce returns. An investor cannot invest directly in an index.

There is no guarantee that any of the goals, targets or objectives described in this document will be achieved. The investment strategies of the Company may not be suitable for all investors and are not intended to constitute a complete investment program. Neither Marble Point nor the Company makes any representation or warranty (express or implied) with respect to the information contained herein (including, without limitation, information obtained from third parties) and each of them expressly disclaims any and all liability based on or relating to the information contained in, or errors or omissions from, these materials; or based on or relating to the use of these materials; or any other written or oral communications transmitted to the recipient or any of its affiliates or representatives in the course of its evaluation of the information herein.

Any of the views or opinions expressed herein are current views and opinions only and may be subject to change. Statements made herein are as of the date of this document and should not be relied upon as of any subsequent date. All information is current as of the date of this document and is subject to change without notice.

Past performance is not a reliable indicator of current of future results. The value of investments may go down as well as up and investors may not get back any of the amount invested. The value of investments designated in another currency may rise and fall due to exchange rate fluctuations in respect of the relevant currencies. Adverse movements in currency exchange rates can result in a decrease in return and a loss of capital.

A Note on Forward Looking Statements. This document includes forward-looking statements. Forward-looking statements include all matters that are not historical facts. Actual results may differ materially from any results projected in the forward-looking statements and are subject to risks and uncertainties. Such statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, and other factors that may cause actual results to differ materially from the anticipated results expressed or implied by such forward-looking statements. The Company and Marble Point caution readers not to place undue reliance on such statements. Neither the Company nor Marble Point undertakes, and each specifically disclaims, any obligation or responsibility, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Actual results may differ materially from the Company's and/or Marble Point's expectations and estimates.

None of the Company, Marble Point or any of their respective parent or subsidiary undertakings, or the subsidiary undertaking of any such parent undertakings, or any of such person's respective partners, shareholders, directors, members, officers, affiliates, agents, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any information or opinions presented or contained in this document nor shall they accept any responsibility whatsoever for, or make any warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this document (or whether any information has been omitted from the document) or any other information relating to the Company, Marble Point or their respective subsidiaries or associated companies, in any form whatsoever, howsoever transmitted or made available or for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. This shall not affect any liability any such person may have which may not be excluded under applicable law or regulation.

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November 16, 2020 02:00 ET (07:00 GMT)