Volta Finance Share Discussion Threads

[hpcg] 17/8/2021 14:37

SteMiS - I only have VTA. I think it was a bigger discount when I bought in, or perhaps it was a bigger yield, or both? In any case I thought owning more than one would be additional monitoring with no benefit

[skyship] 17/8/2021 14:18

DB - thnx for that...useful to have it there for instant access.

[stemis] 17/8/2021 13:58

Any views of Fair v VTA ? Fair seems to have the highest yield but possibly higher risk. Or do people hold both ?

[davebowler] 17/8/2021 13:39

OK Skyship -I've added it as you asked.

[cwa1] 17/8/2021 10:35

FWIW I picked up some at the tail end of last week at E6.02 by leaving them on the Euronext book for a couple of days and they were eventually taken

[skyship] 17/8/2021 09:53

db - as per my 529 above, could you possibly add the Euronext Quote link to the Header.

On offer at E6.12 over there; but I would have to pay a much larger commission and a currency charge of 1% both in and out. Would still be cheaper there than here however...

[skyship] 17/8/2021 08:47

All sounds good. Decided too small an allocation at 5%; so wnated to increase.

Problem as ever is the spread; also they are firmer than shown - actually 508p-533p.

[cwa1] 17/8/2021 08:11

Short interview with Mark Thomas of Hardman on Volta:-

[hpcg] 16/8/2021 09:27

Thanks as ever Dave, always good to read about the sector.

[davebowler] 16/8/2021 09:05

Liberum on FAIR-

Loan default rates continue to fall

Mkt Cap £198m | Share price $0.68 | Prem/(disc) -3.0% | Div yield 13.3%

Event

Fair Oaks Income's NAV per share as at 31 July 2021 was $0.696, representing a 1.4% NAV total return in the month (+18.3% YTD). CLO and loan markets were broadly unchanged in July. US and European loan markets rose by 0.0% and 0.1% respectively during the month.

In terms of fundamentals, trailing 12-month loan default rates fell from 1.2% to 0.6% in the US and increased marginally from 1.1% to 1.2% in Europe. The default outlook for bank loans also remains encouraging, with the distressed ratio (loans trading below 80c) at 1.1% in the US and 1.2% in Europe. CLO issuance remains at elevated levels, with YTD 2021 volumes tracking well ahead of prior year.

The Fair Oaks Master Fund received $18.7m of distributions in July, significantly ahead of the $11.1m received in the same month last year. Distributions have benefitted from the reduced exposure to lower coupon CLO mezzanine notes and the strong cash-flows from CLO subordinated investments. Based on current default rates, Master Fund cash flows for Q2 2022, when the first distributions for the new CLO subordinated note investments are expected, are projected to be $24m. The weighted average over-collateralisation test headroom for Master Fund’s CLO subordinated investments has increased from 3.5% in December 2020 to 4.0% at the end of July.


Liberum view

July was another favourable month for CLO funds, with loan default rates continuing to trend downwards and compressing AAA spreads present opportunities to significantly reduce the cost of funding. Fair Oaks is particularly well-placed to capitalise on these conditions as a control CLO equity investor. Over recent months, Fair Oaks has realised significant gains on CLO mezzanine positions and has recycled capital into a number of new CLO equity investments. The flexible investment strategy enables the company to invest across the various different parts of the CLO structure to take advantage of relative value opportunities. Several positions have been sold to date, realising returns of 31%-52%. The upside on many of the remaining positions is capped from refi/reset activity in the market and the proceeds can be recycled into primary CLO equity positions, offering attractive returns in a benign default environment. Importantly, all of FAIR's CLO equity investments are control investments, enabling the manager to generate additional returns through cost reductions, portfolio selection and optimal call timing. We see this as a compelling entry point for a fund offering a 13% dividend yield and strong prospective NAV returns.

[cerrito] 15/8/2021 13:58

Congrats to them for a good July and I note increase in cash despite paying a dividend. Thinking in rather a vague way of buying more...as a £ based investor do I want more Euro denominated assets??

[skyship] 02/8/2021 12:34

davebowler - might you please add to the Header yieldsearch's link to the Euronext quote (P.No.502):

[holts] 28/7/2021 19:52

Thanks , be good if it could raise some interest .

[cwa1] 15/7/2021 08:28

XD day today. The nice payment should hit the electronic doormat on or around 29/7

[skyship] 13/7/2021 20:47

Hardly likely surely - At 610c the discount is 16.21% and the yield on a 56c dividend = 9.18%. But that dividend is based upon the NAV - so will be rising further.

Unknown and unloved; but heck, I'm being paid a good whack whilst waiting for new investors to discover VTA!

[cerrito] 13/7/2021 19:25

A good month bringing in a successful semester but the market was unmoved. Perhaps it feels the discount is too thin.

[holts] 08/7/2021 08:38

It does seem very unloved .

[hpcg] 07/7/2021 12:52

Bond yields are not going up, least of all in Europe. This has an unusually large spread against other high yield instruments. No reason to think it can't get to 6.5 just on its basic attributes.

[skyship] 07/7/2021 09:09

Is that a glimmer of BLUE. Someone buying for the divi perhaps...

[cwa1] 01/7/2021 17:55

For the record:-

Guernsey, 1 July 2021

Volta Finance Limited ("the Company") hereby announces a second interim dividend for the financial year commencing 1 August 2020.

The Company announces that it has declared a quarterly interim dividend of EUR0.14 per share payable on 29 July 2021 amounting to approximately EUR5.12 million, equating approximately to an annualised 8% of net asset value. The ex-dividend date is 15 July 2021 with a record date of 16 July 2021.

[davebowler] 16/6/2021 09:53

Liberum on FAIR-
Event

Fair Oaks Income Fund's NAV per share at 31 May 2021 was $0.678, representing a 5.7% NAV total return in the month (+15.3% YTD). In addition to positive loan markets, NAV performance was boosted by upside from recent reset activity across the CLO equity tranches:

FOLF II - the reset of FOLF II priced in May. The previous structure had relatively low leverage and a weighted average coupon of Euribor +2.41%. The coupon has reduced to Euribor +1.68% and the reinvestment period has been extended by 4.5 years. The addition of BB and B rated tranches to the structure will enable the return of €19.5m of Master Fund II's initial €47m equity investment. The overall value of the position has risen by 36% in the month.
AIMCO 2017-A - the pricing of the AIMCO 2017 reset completed in March. The reset resulted in a reduction in the cost of funding of 24 bps and a five year extension to the investment period. The price of the CLO equity tranche has risen from 48 at the end of February to 81 currently. The valuation is backed up by transactional evidence. A $5.5m position in AIMCO 2017-1 traded in May, with a cover (or second highest bid) of 81.

The manager has crystallised gains on a significant portion of CLO mezzanine tranches, reducing the total allocation to mezzanine tranches to 18% of the portfolio (28% in the prior month). Part of the proceeds have been reinvested in the equity tranche of Allegro XIII, a primary US CLO (target return of 15-17%). Master Fund II has committed to two other US CLO control equity investments.

Liberum view

We have published a note on FAIR, outlining our expectation of strong returns across the portfolio. Two factors are the key drivers of CLO equity returns – loan default rates and the arbitrage spread of the loan pool over the cost of financing. In both instances, the outlook appears very favourable. Loan default rates continue to trend downwards and compressing AAA spreads present opportunities to significantly reduce the cost of funding. FAIR is well-placed to capitalise on these conditions as a control CLO equity investor. We see this as a compelling entry point for a fund offering a 13% dividend yield and strong prospective NAV returns.

[cwa1] 11/6/2021 07:42

Steady as she goes, cap'n :-)