Volta Finance Share Discussion Threads

[skyship] 07/4/2018 06:28

Incidentally RAM, thnx for the Fidante research above. Very useful.

[rambutan2] 06/4/2018 12:27

The full interims, which are a good read:

[skyship] 05/4/2018 08:06

Excellent CHAIRMAN’S STATEMENT in the Interim Report. First 3 paras posted below. Particularly like the bit at the end of the 2nd para re Discount Control:
=========================================================================

Dear Shareholder
When I wrote to you in the autumn of last year some caution seemed merited towards the ebullience in financial markets. Subsequently, this enthusiasm has, indeed, been tempered. Government bond yields have risen sharply in some regions, most particularly the United States, and “risk assets” such as equities have seen an increase in volatility. Against this backdrop, the net asset value (“NAV”) total return of Volta, at 2.7% for the six months to 31 January 2018 (and an estimated gain of 0.7% in February 2018) is respectable, if below the long-term target run-rate of returns.

More disappointing, however, is the share price total return of -0.7% for the six months to 31 January 2018. This reflects a widening of the discount of the share price to NAV to 14.2% as at that date. Despite efforts to bring Volta to the attention of a wider audience and ongoing attempts to address any structural impediments to an improved share price rating, so far this has not been reflected in a narrower share price discount. I would note in this context the recent reduced ratings across a broad peer group of incomeorientated listed investment funds including direct Company peers. So Volta’s de-rating is not unique. That said, the Board, Investment Manager and broker have recently discussed this and we will redouble our efforts in the coming year. In my meetings with some Shareholders there has been a suggestion that our Company should commence either a regular tender at NAV or repurchase shares in the market. These mechanisms can be a double-edged sword, as some have found to their cost. However, they have a time and a place. The Board are active in their consideration and will use such discount control measures if they believe them to be in the best interests of Shareholders as a whole.

Before we become too glum, it is important to remember that Volta’s share price, with dividends reinvested, has generated an annualised return of 11.2% since inception in 2006. It also offers a dividend yield of 8.7% on the share price as at 31 January 2018. More importantly, this dividend is comfortably covered from income and coupons received on the underlying portfolio. In an environment where cash rates in euro are still negative, this is a highly attractive yield, particularly given the risk profile embedded in the underlying portfolio. As I have noted previously, it is the extent and quality of these cash flows that will, ultimately, drive total returns, not the vagaries of investor sentiment. Further, these cash flows come from a variety of different sources. Volta’s diversification can sometimes be a hindrance to understanding the nuances of the Company. However, that diversification is a real strength, particularly when compared to our peers.

etcetcetc

[rambutan2] 31/3/2018 19:43

Of sectoral interest. Recent research note on (the rather unloved) TORO, including a comparison with the "competition".

[skyship] 31/3/2018 08:26

Crunch point approaching:


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[skyship] 31/3/2018 08:17

double Ah...😊

[dendria] 31/3/2018 07:48

CIFR is the Repurchase Pool shares of CIFU.

[yieldsearch] 31/3/2018 06:53

Carador income fund

[cerrito] 30/3/2018 12:29

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: