Volta Finance Share Discussion Threads

[skyship] 19/11/2015 16:06

Stupidly late in the day I took the rapid 8.0% hit here:

# 2.75% from the spread
# 4.25% from the currency loss
# 1.00% from the book loss

Decided that I should use the cash to top-up my LMS holding which to my mind offers a near-certain 10%+ upside over the next few weeks; so a good place to recover cash lost in a Euro-denominated investment.

See my Post No.48308 on the SHA thread:



If not already holding, I strongly advise others to consider the same move. See the Post for today's comments by IC companies editor Simon Thompson at IC Online...

[davebowler] 22/10/2015 15:29

Liberum;
Volta Finance (BUY, TP €8.55)
Spread widening impacts September NAV

Event
VTA's NAV fell by 1.7% in September 2015 to €8.02 per share due to continuing market volatility in the month. NAV total return in 2015 to date is +8.6%. The mark-to-market performance by asset class was CLO equity -2.3%, CLO debt -1.2%, Cash corporate credit -0.9%, synthetic corporate credit -0.7% and ABS +1.5%.

VTA has borrowerd a further $15m under the repurchase agreement with Societe Generale (total amount of debt drawn is now $45m). The debt raised allowed Volta to acquire assets following spread widening. Three assets were acquired in the month for €9.3m with a projected yield of 9.5%.

Liberum view
The market volatility in European and US credit spreads can be seen in the table below. We note that spreads have tightened in October reversing most of the movement of the prior month and would expect a mark-to-market uplift as a result.

Figure 2: US & European credit spreads (bps)


31/08/2015
30/09/2015
21/10/2015
iTraxx 5 Yr European Main Index
71
91
78
iTraxx 5 Yr European Crossover Index
323
384
326
CDX 5 Yr Investment Grade Index
82
93
82
CDX 5 Yr High Yield Index
392
503
446


Source: Bloomberg



Volta's NAV total return of 8.6% in 2015 to date remains the highest of the London-listed CLO funds (BGLF +6.9%, FAIR +1.5%, CIFU -1.0%). We believe the flexibility to access asset classes (such as the CLO warehouse and bank balance sheet transactions offering relative value opportunities gives it an edge over peers. Volta trades on a 14% discount to NAV which is c 15 percentage points wider than the peer group average.

[skyship] 21/9/2015 16:08

bt - yes, should be as only 0.2% & the yield here is c8%pa. I'm obviously hoping the capital value won't disappoint. Been rather scuppered by CIFU & NBDG in that respect - in the short-term at least!

[davebowler] 21/9/2015 15:57

Annoyingly VTA.AS is trading at Euro 6.90

[badtime] 21/9/2015 15:55

ouch @ nearly £30 commission ..was it worth it? :)

[skyship] 21/9/2015 14:37

Yes did so - had to pay the higher commission, but only bt 3k @ 728c

[davebowler] 21/9/2015 14:13

Yes you are right Skyship -this is the message you get from AJ Bell-
''Your order cannot be processed online. For further assistance, or to place your order via the telephone, please contact the Dealing Services Team on 0845 373 3473 quoting reference 530''
You have to place a telephone order instead.

[tiltonboy] 21/9/2015 13:21

No stock on offer via the RSP.

You need to go to a proper broker to buy stock!

[skyship] 21/9/2015 11:05

Same problem as 7th Sept when I posted; and since - unable to buy any of these online thru' Youinvest. MM not returning a quote.

Does anyone know if this is really so, or is it a problem at Youinvest?

[davebowler] 21/9/2015 09:22

Liberum;
CLOs

Volta Finance (BUY, TP €8.55)
US dollar depreciation causes small NAV decline

Event
Volta's NAV fell 0.6% in August 2015 to €8.16 per share mainly due to FX movements in the month. The mark-to-market performance by asset class was CLO equity +0.8%, CLO debt +0.1%, Cash corporate credit +3.0%, synthetic corporate credit +0.7% and ABS -0.1%.

Volta entered a new CLO warehouse transaction for €15.5m with a projected yield of 13-15%. The manager expects to rotate out of short term instruments (mainly old debt tranches of CLOs) into more sensitive assets that could be acquired at higher discounts during periods of volatility.

Liberum view
Volta's portfolio performed relatively well in the month despite the market volatility and consequent credit spread tightening. We calculate the NAV performance prior to FX movements was +0.2%. VTA's NAV total return in 2015 to date is 10.4% or 7.2% after adjusting for FX gains. This is the highest amongst the peer group. We believe the flexibility to access asset classes (such as the CLO warehouse transaction above) offering relative value opportunities gives it an edge over peers. Volta trades on a 13.6% discount to NAV which is c 15 percentage points wider than the peer group average. Our €8.55 TP offers 18% upside - BUY.

[skyship] 15/9/2015 14:34

db - thnx as ever. Seems however that on this occasion Winterflood just reiterated recent statement & stats rather than giving an opinion!
==================================================================

NB Distressed Debt Investment – Quarterly update and return of capital:

On 18 August NB Distressed Debt Investments published its quarterly update for the three months to 30 June. The NAV per share of the Ordinary, Extended Life and Global shares fell by 2.5%, 3.3% and 7.3% respectively. There were no investment exits during the period and all three share classes underperformed the HFRI Distressed / Restructuring Index, which was down 0.3% over the quarter.

Negative returns were driven by mark‐to‐market declines and the manager
highlighted that higher levels of volatility tend to be associated with a widening of bid/ask spreads. In addition, the Global share class, which is sterling denominated, was impacted by adverse foreign exchange movements, which accounted for more than 50% of its NAV per share decline over the period.

During the quarter the Global share class bought back 450,000 shares as part of its discount control mechanism. On 17 August the fund had also announced that it would return capital to both Ordinary (‘NBDD’) and Extended Life (‘NBDX’) shareholders by way of compulsory partial redemptions that then took place on 27 August. The fund returned US$7m to NBDD shareholders (equivalent to approximately 9.31% of NAV) at $1.2276/share (being the last published NAV per NBDD share prior to the announcement). The fund also returned US$17.5m to NBDX shareholders (equivalent to approximately 4.83% of NAV) at US$1.1302 per share (being the last published NAV per NBDX share prior to the announcement).

[davebowler] 15/9/2015 13:00

Hi Skyship.Here is Winterfloods recent info;

NB Distressed Debt Investment – Quarterly update and return of capital
On 18 August NB Distressed Debt Investments published its quarterly update for the three
months to 30 June. The NAV per share of the Ordinary, Extended Life and Global shares fell by
2.5%, 3.3% and 7.3% respectively. There were no investment exits during the period and all three
share classes underperformed the HFRI Distressed / Restructuring Index, which was down 0.3%
over the quarter. Negative returns were driven by mark‐to‐market declines and the manager
highlighted that higher levels of volatility tend to be associated with a widening of bid/ask
spreads. In addition, the Global share class, which is sterling denominated, was impacted by
adverse foreign exchange movements, which accounted for more than 50% of its NAV per share
decline over the period.
During the quarter the Global share class bought back 450,000 shares as part of its discount
control mechanism. On 17 August the fund had also announced that it would return capital to
both Ordinary (‘NBDD’) and Extended Life (‘NBDX’) shareholders by way of compulsory partial
redemptions that then took place on 27 August. The fund returned US$7m to NBDD shareholders
(equivalent to approximately 9.31% of NAV) at $1.2276 per share (being the last published NAV
per NBDD share prior to the announcement). The fund also returned US$17.5m to NBDX
shareholders (equivalent to approximately 4.83% of NAV) at US$1.1302 per share (being the last
published NAV per NBDX share prior to the announcement).

[skyship] 07/9/2015 16:24

BT - been watching and waiting. Tried to buy a few @ E7.33 this afternoon, but no online offer.

I admit I'm slightly concerned about the Euro. If the Chinese economy does take a hit then the effect on Germany' exports will be significant; and no amount of Draghi stardust will be able to do anything it. Germany has been living on the high hog using an undervalued currency to sell cars into other European countries; and cars and machine parts into China. Could all be going pear-shaped just as Merkel plays Sister Bountiful to the Syrians. That scenario doesn't bode well for the Euro!

db - you have been consistently generous with your posts on Winterflood and Liberum research - here, on the RECI & CDI threads ....and others.

Could you possibly take a look and see if there is any coverage on NBDD. Personally I hold the global shares - NBDG.

[badtime] 01/9/2015 12:25

This has stayed pretty stable over the last couple of volatile weeks

[davebowler] 25/8/2015 08:26

In contrast FAIR's NAV in 31 July 2015 was $0.9748 up by 0.91% for the month and is trading at a 3.4% premium, the highest of its peer group.

[davebowler] 24/8/2015 16:54

Liberum;
Volta Finance (BUY, TP €8.55)
July NAV growth +0.2%

Event
At the end of July 2015, the NAV of Volta was €299.9m or €8.21 per share, an increase of €0.01 per share since the end of June 2015. The monthly performance was +0.2%, in line with stable credit markets. The slight appreciation of the USD against the Euro (+1.5% in July) contributed to generate positive monthly performance. The YTD performance for the 2015 calendar year, including the April dividends paid, stands at +11.1% and the GAV at €330.2m as at the end of July.

In July, Volta purchased four assets (one USD CLO Equity tranche and three USD CLO Debt tranches, all rated BB) for a total of €15.0m. The projected yield for the USD CLO Equity tranche was in the area of 10% and 8.5% for the BB debt tranches.

At the end of July, Volta held €22.8m in cash, excluding €0.9m which is pledged as margin under Volta's currency hedging facilities as well as €15.0m earmarked for the purchases made in July that are to be settled in August. At the same time, most of the surplus cash should be deployed with a new European CLO warehouse.

In July, Volta received the equivalent of €3.6m of interest and coupons bringing the total cash amount received during the last six months to €15.4m.

Liberum view
Volta's NAV performance of 11% YTD 2015 is comfortably the highest of the London-listed funds investing in the CLO sector. The share rating (-14% discount to NAV) looks particularly anomalous given the company's strong track record and the favourable credit environment. We expect Volta to rerate towards NAV in the near term and we believe the flexibility to access asset classes offering relative value opportunities gives Volta an edge over peers so we maintain our BUY rating.

CLOs

[davebowler] 22/7/2015 09:40

Liberum;
Volta's NAV fell 0.8% in June 2015 to €8.20 per share (May 2015: €8.26) and the YTD NAV total return to the end of June is now +11.0%.

The small NAV movement was due to a widening in credit spreads in the market as a result of the Greek crisis and concerns over emerging markets. Volta's asset classes produced returns averaging around zero for the month and the depreciation of the US Dollar against Euro contributed to the negative monthly performance.

The mark-to-market performance by asset class was CLO equity +0.5%, CLO debt -0.7%, Cash corporate credit -0.3%, synthetic corporate credit -0.5% and ABS -0.3%.

In June, Volta acquired three assets (one bank balance sheet transaction and two CLO debt tranches) for €11.3m. The projected yield for the bank balance sheet transaction is 9% and 7% for the US CLO debt investments. Volta received €22.6m of principal from the closing of the European warehouse that started in November 2014. The company is in the final stage of signing a European CLO warehouse to deploy a significant portion of the current cash balance of €31.8m.

Liberum view
Volta's NAV performance of 11% in H1 2015 is comfortably the highest of the London-listed funds investing in the CLO sector. The share rating (-9.1% discount to NAV) looks particularly anomalous given the company's strong track record, the favourable credit environment the the relatively strong share rating that the majority of specialist credit funds currently enjoy. For example, the average premium to NAV for Volta's London-listed peers is 0.8% and we expect Volta to rerate towards NAV in the near term.

[davebowler] 06/7/2015 16:41

Having sold out a lot of my RECI -a hard act to follow -because of its premium to NAV I have gone for VTA and JPSL as a vaguely similar mix to replicate what I have sold.

[davebowler] 22/6/2015 09:52

Liberum;
Volta Finance (BUY, TP €7.65)
Strong performance continues in May

Event
Volta's NAV rose 1.6% in May 2015 to €8.26 per share (April 2015: €8.13) and the YTD NAV total return to the end of May is now +11.7%.

All of Volta's assets generated positive performance in the month. The mark-to-market performance by asset class was CLO equity +1.0%, CLO debt +1.0%, Cash corporate credit +0.2%, synthetic corporate credit +0.7% and ABS +0.9%. NAV performance also benefited from FX gains in the month (we calculate almost half of the NAV uplift is due to US dollar appreciation).

Liberum view
Volta's YTD NAV uplift of +11.7% is the highest of the listed funds investing in the CLO sector. Part of this uplift is attributable to FX gains (we estimate a NAV uplift of 7.7% after stripping out currency movements). The company's ABS investments have also contributed to outperformance with an estimated mark-to-market uplift of 32% in the five months to May 2015.



Volta trades on the lowest rating in the sector (11.9% discount to NAV compared to an average 1.1% premium for peers). We believe this discount emanates from the Euronext listing and we expect the shares to re-rate now that the London listing has completed.

[ben12358] 17/6/2015 19:34

To be clear, Ranger direct more risky + price ahead of nav,so not as good value as Volta, but projected divs are much higher, in the future, so dyor and take the risk you want to...only suggested because Ranger is denomonated in GBP. ...

[ben12358] 17/6/2015 19:18

HL wont do it because denominated in Euro rather than GBP. Try TD Waterhouse or switch to Ranger Direct ?

[danieldruff2] 17/6/2015 14:49

Has anyone been able to buy this using an execution only broker? Hargreaves and Halifax won't allow it, whereas Selftrade didn't recognise the ticker for a while... now does... but you can't buy online without going to negotiated.

[tiltonboy] 02/6/2015 22:54

Topped up with a few more today.

[badtime] 02/6/2015 20:58

Well....spread has narrowed as i thought it might ..but after my nibble :(