Volta Finance Share Discussion Threads

[cerrito] 30/3/2018 13:29

Interesting that both FAIR and VTA are saying in their monthly reports that now right time to increase their exposure to equity tranches.
In the case of VTA their equity tranche at end of February was 22% of the portfolio-up from 19% two years ago and down from the 27/28% of Q2 17.
FAIR give the breakdown by ratings and there has been no big shift over the last 12 months.
Given my exposure to the sector is going down with the rapid redemptions of CIFR looking at buying a bit more VTA.

[skyship] 19/3/2018 13:11

DB - Thnx again. That 16% discount should prompt them into some form of action at some stage. Buybacks perhaps?

Whatever - 700 was my target and I'm happy to be in here for the 9.1% yield. Tried to add but not available as YouInvest say no KIDs document. Need to look into that...

[davebowler] 19/3/2018 11:31

Liberum;
Volta's NAV rose 0.7% in February to €8.35 per share. Performance during the month benefited from FX tailwinds as a result of US Dollar appreciation.

Mark-to-market performance across the company's asset classes was +0.0% for CLO equity, +0.5% for CLO debt, +1.4% for bank balance sheet transactions; +5.6% for cash corporate credit deals and +0.4% for ABS.

Three new investments completed during the month including two BB tranches of US CLOs and a contribution to a US CLO warehouse deal. The expected return on these assets is 10.6%. Another US CLO warehouse deal is expected to open in March. The manager is seeking to increase CLO equity exposure as a result of the low cost of funding for the structures. The warehouse investments are expected to rotate into the CLO equity tranches that will be subsequently issued.

Liberum view

Despite an excellent long-term track record, Volta's share price discount to NAV remains persistently wide at -16.2% compared to an average -1.6% discount for the CLO fund peer group. Share liquidity remains an issue and has been hindered by the fact that trading volume is split between London and Amsterdam.

[skyship] 12/3/2018 10:28

Thnx DB...

[davebowler] 12/3/2018 09:23

12 Feb Liberum said -
CLO funds

Change is US risk retention rules

Event

On Friday, the Court of Appeals for the District of Columbia Circuit in the US ruled that CLOs should no longer be required to comply with risk retention requirements brought in by the Dodd-Frank Act. The rules were originally introduced to ensure there is alignment of interests between CLO managers and investors. The rules required managers of asset-backed securities to hold a 5% economic interest in a securitisation structure.

The Loan Syndications and Trading Association (LSTA) took the case in 2014 against the Fed and SEC, arguing that the rules shouldn't apply to CLO managers. The court ruled that the role of CLO managers is similar to mutual fund managers, who are not subject to the regulation. This is because the managers don't own or make the loans they are putting into a structure.

Liberum view

The risk retention rules came into effect in the US in December 2016 and CLO issuance was very strong in 2017 despite the introduction of the regulation; $118 billion of new deals completed in the year compared to $72 billion in 2016.


The change is likely to have a positive impact on smaller CLO managers who may not have had the capital to comply with the requirements. Larger CLO managers have been relatively well-positioned by setting up new vehicles to retain risk and issue CLOs.

CLOs account for c.60% of the investor base for the US leveraged loan market. The more pressing issue for the CLO market has been a lack of supply of loans, rather than a lack of demand. If the court ruling results in an increase in CLO issuance, this could place further pressure on loan spreads and reduce the returns available for CLO equity investors.


The ruling could be appealed and the Fed and SEC have 45 days in which to do so. There are no changes to risk retention rules for European CLOs which still have a 5% risk retention requirement. One potential implication for European-domiciled alternative investment funds (AIFs) is lower investment opportunities as they cannot invest in non-EU risk retention compliant CLOs. US managers may be less inclined to create CLOs that comply with European requirements in order to access the investor base.

There are five London-listed CLO funds, of which two are risk retention vehicles. Blackstone GSO Loan Financing is a risk retention vehicle for Blackstone's European and US CLOs. Marble Point Loan Financing starts trading today and the fund will invest in the equity tranches of Marble Point's US CLOs. It remains to be seen whether the ruling will have any implication of the long-term strategy of these funds. The remainder of the peer group have more flexible mandates and invest in third-party managed CLOs and should therefore be less affected by any regulatory changes.

CLO funds overview



1 Blackstone/GSO Loan Financing

2 Marble Point Loan Financing

3 Volta Finance

4 Fair Oaks Income Fund

5 Carador Income Fund

a Risk Retention

1Yes

2Yes

3No

4No

5No

b US CLO Equity

1 28%

2 100%

3 11%

4 68%

5 88%

c EUR CLO Equity

1 39%

2 0%

3 12%

4 1%

5 0%

d US CLO Debt

1 0%

2 0%

3 40%

4 31%

5 12%

e EUR CLO Debt

1 0%

2 0%

3 2%

4 0%

5 0%

Other

1 33%

2 0%

3 35%

4 0%

5 1%



Source: Company data

[davebowler] 12/3/2018 09:18

Liberum's note today shows it appearing in their 'Cheap - Funds list trading at more than 2 standard deviations below 1 year avg premium/discount

[skyship] 10/3/2018 14:31

davebowler - could you possibly post the latest Liberum view on VTA?

[pejaten] 10/3/2018 12:45

The spreads on loans continue to tighten. Have to run harder to make money;

[skyship] 09/3/2018 17:01

At 688 the discount is 17.6% & the yield = 9.3%. The dip below 700 is technical associated with the XD. IMO this is the turnround level @ the 38.2% FIB retracement:


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[joan of arc] 09/3/2018 16:13

VTA has now gone to a 17% discount to NAV and 9% divi. Anyone any idea as to why it has run into the buffers like this?

[skyship] 08/3/2018 09:26

XD today:

Volta Finance Limited (the "Company") announces that it has declared a quarterly interim dividend of €0.15 per share payable in March 2018, amounting to €5.5 million. The ex-dividend date is 8 March 2018 with a record date of 9 March 2018 and a payment date of 29 March 2018.

[skyship] 13/2/2018 15:21

Sp hit the 694 level shown in my P. No. 190 above; so decided to take a few at that.

Next qtly divi should be declared to the back-end of next week.

At 694c the discount = 16.4% & the yield = 9.2%.

[davebowler] 15/1/2018 15:59

9 January 2018

According to our early computations, the end of December Early Estimated
NAV(*) of Volta is at EUR8.32 per share. Volta's Early Estimated NAV(*)
performance is +0.6% for December 2017, taking into account the EUR0.16
per share dividend payment that occurred in December.

[skyship] 11/1/2018 07:51

Thnx YS - looks interesting:

[rcturner2] 19/12/2017 13:31

Thanks for the replies everyone.

[yieldsearch] 18/12/2017 11:20

CWA1
pls see below:
On 21 December, Volta will pay a quarterly dividend of 0.16 euro per share (with an ex-dividend date of 30 November) representing an annualised yield of 9% based on the end of November share price.

[cerrito] 18/12/2017 11:15

Good question RCTurner2 as to why the share price has fallen.
Have no real answer but point out a small decline in the NAV since its peak of 8.58 at the end of February; also the Liberum April commentary kindly posted by davebowler commented on VTA being on course for a double digit NAV increase this year and today they are talking about a 6% increase. Look forward to the views of others.
You could say why did the share price increase so much mid year and that I guess reflected the rapid increase in the NAV in Q416 and Q117 at the time of a sizeable discount; indeed I have just checked and I made a very modest top up at 7.49 in April.
I continue to be very comfortable with what I have and do not see myself buying or selling in the immediate future-and of course the bid/off spread discourages activity.
Thanks davebowler as always for the Liberum report:interesting to see CLO equity had a poor month compared to CLO debt.

[cwa1] 18/12/2017 11:12

Morning All

Apologies for laziness but I'm hoping that someone has the figure to hand, what is the current yield here? Cheers.

[skyship] 18/12/2017 11:09

Could well be concerns over the level of the Euro.....that is the only thing holding me at bay.

Europe has many problems to face in 2018; so long Euro bets may well come off the table ahead of Greek elections, Italian elections, German government talks etcetcetc

[yieldsearch] 18/12/2017 10:59

same question from me. long term hold for me, but surprised it is underperforming cifu or fair

[rcturner2] 18/12/2017 09:52

Any views on why this has dropped off its peak?

[davebowler] 18/12/2017 09:26

Liberum;
Event

Volta's NAV at 30 November 2017 was €8.43 per share which represents a 0.1% gain in the month. US Dollar depreciation reduced NAV by 0.7% in November.

Performance by segment in the month was +0.2% for CLO Equity tranches; +1.3% for CLO Debt tranches, +0.9% for Bank Balance Sheet transactions; 0.0% for Cash Corporate Credit deals; and +0.5% for ABS.

Exposure to CLO equity and bank balance sheet investments rose during the month and this is expected to continue as the company rotates capital out of CLO debt investments given the significant spread tightening in 2017.

Volta has generated a NAV return of 6.0% to date in 2017 and c.7.4% over the past 12 months. The shares currently trade on a 14.4% discount to NAV in comparison to an average 2.0% premium for peers.

[skyship] 05/12/2017 13:45

As per 184 above, VTA getting close to a BUY level:


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