Volta Finance Share Discussion Threads

[cwa1] 03/2/2020 11:11

Hardman research:-



Investment summary: Volta is an investment for sophisticated investors, as
there could be sentiment-driven, share-price volatility. Long-term returns have
been good: ca.10% p.a. returns (dividend reinvested basis) over five years. The
current portfolio-expected cashflow IRR is above this level. The dividend yield of
9.5% will be covered, in our view, by predictable income streams.

[davebowler] 22/1/2020 09:08

Liberum:CLO Funds Positive end to a volatile 2019EventThe majority of the CLO funds have reported NAV figures for December with mark-to-market uplifts across the sector (average NAV increase of 3.3%). Loan markets were relatively strong (US +1.7%) on the back of positive economic news and favourable technical factors (low new issue supply and steady demand from CLOs). The 12-month default rate for loans also remains low at 1.4%. Returns in the month ranged from 1.8% for Blackstone/GSO Loan Financing to 5.0% for Marble Point Loan Financing. This is broadly as expected as Blackstone/GSO Fund uses a mark-to-model valuation approach and should produce a lower return than peers during periods of strong mark-to-market gains. Overall in 2019,  Blackstone/GSO's 14.4% NAV return was the highest in the sector as peers suffered from weak CLO equity valuations.  

[yieldsearch] 13/1/2020 23:55

yes it is an honourable mention but in my view it is very misleading.
to quote the article, "the last decade" started in 2009, which is at the bottom of the GFC...
taking VTA for instance, it was at 0.41 in Jan 2009 and now it is at 6.50.. so tremendous growth?
Well for the poor people who owned VTA in May 2007, it was trading at 9.25!! so it went from 9.25 to 0.41 in less than 2 years

[cerrito] 13/1/2020 21:28

Thanks for that davebowler and no surprise that the volatility of return at 59.22 was the second highest with a big gap between that and the third biggest volatility Polar at 23.85.
I have never owned Tetragon Finance and I see their vol is 91.37 so no point holding unless you have nerves of steel.

[davebowler] 10/1/2020 13:00

Honourable mention here as one of the top 20 -

[yieldsearch] 25/11/2019 21:23

www.bloomberg.com/amp/opinion/articles/2019-11-21/clos-cracked-like-no-other-credit-market-so-now-what

[davebowler] 14/11/2019 09:27

Liberum on Fair Oaks:Technical pressures remain on the CLO market as evidenced by a fall of 11% in the JP Morgan B-rated CLO index in October. The loan market was also relatively weak amid concerns over an increase in downgrades and an expectation of an increase in defaults from low levels. Fair Oaks intends to increase the Master Fund's allocation to US CLO mezzanine notes to capitalise on price weakness. Fair Oaks has retained cash from investments exits in 2019 as primary CLO equity investments have not offered sufficient returns. The price of US CLO B and BB notes has fallen to levels not seen since 2016 and currently offer yields of 14% and 10% respectively. The company also expects to distribute two further dividends of 0.7 cents for the year, bringing the total to 8.4 cents. This is lower than 2018 (11.15 cents) and reflects an increased level of cash held in addition to greater volatility in the period. Liberum viewThe decision to increase the company's exposure to US CLO mezzanine tranches mimics the company's strategy in 2016 following a similar price adjustment in the market. This was one of the key reasons behind the 24.9% NAV return in 2016. Fair Oaks approach to current investment opportunities contrasts with Volta Finance, which is increasing CLO equity exposure at the expense of CLO debt tranches. Volta believes CLO equity offers a superior play in a volatile loan market as the equity tranches are able to benefit by reinvesting in loans at a discount to par in this environment. 

[cerrito] 13/11/2019 21:00

What with £ gaining against the euro and the continued decline in the NAV which is now E7.49 the lowest since June 2016, the £ price is under pressure.
Do not see myself buying or selling at these prices but for those with no or v small exposure worth a look.

[cerrito] 09/11/2019 21:26

I would encourage people to have a look at the VTA AR and good commentary from the Investment Manager on the increase in clo equity, default rates, Projected IRR, impact of covenant lite and volatility. Good tables but would have preferred that we had prior year comparisons.
Fact is that NAV increase to end of July with dividend reinvested at 2.5% was very low compared to last 5/6 years and the main reason was unrealized portfolio losses of 9.3%.Exoenses were 1.9% of NAV-the same as the year before.
The Chairman was also pleased with the reduction of the discount following the various initiatives they had taken.
We do need to note that as in the previous year dividends used E22m of cash and that net profit was E7m in the year to July 2019 compared to E22.7m in the year previous.
I also see that between the July31 year end and end of September the NAV has decreased from 7.94 to 7.64 in euros with a greater loss for £ based investors like me.
I do not see myself buying or selling in the immediate future.

[cwa1] 07/11/2019 16:19

Director purchase...

[joan of arc] 31/10/2019 19:54

I know nothing about the first point but am aware of the second with which I agree.

[kenny] 31/10/2019 19:14

Don't know for certain but there are rumoured problems in the CLO market in the US.

I think that it does not help that management of VTA are very greedy and only running it for their ability to extract fees. No interest in increasing value accruing for shareholders.

[joan of arc] 31/10/2019 17:56

We appear to be in a slow free fall. Anyone know why?

[davebowler] 20/9/2019 18:20

Liberum;

Specialist Finance

CLO Funds

Weak loan prices drive CLO equity markdowns

Event

Weak leveraged loan prices have resulted in a reasonably poor NAV return for the majority of the listed CLO funds in August. Loan markets were impacted by weak sentiment due to ongoing trade wars. Technical pressures also contributed to a reduction in loan prices. Retail fund outflows continued against a backdrop of expected rate declines. We also note commentary from Fair Oaks capital that secondary liquidity in CLO equity BWIC auctions (bids wanted in competition) was significantly lower in the month ($67m traded across 9 positions compared to $177m traded in August 2018).

The average loan price of the US S&P/LSTA Leveraged Loan Index fell from 97.1 to 96.3 over the month, weighing on CLO equity NAVs. Average loan prices have recovered marginally to to 96.5 in September.


Returns for the funds ranged from -0.2% for Blackstone GSO Loan Financing to -4.0% for Marble Point Loan Financing. Blackstone GSO Loan Financing tends to outperform during times of market volatility due to its mark-to-model valuation approach. The remainder of the peer group uses mark-to-market pricing.

CLO Funds - NAV TR performance



Aug-19

YTD 2019

2018

Prem/(Disc)

Div Yield

Blackstone/GSO Loan Financing

-0.2%

9.1%

6.7%

-11.9%

12.6%

Fair Oaks Income Fund

-3.9%

0.0%

0.4%

-5.1%

13.4%

Marble Point Loan Financing

-4.0%

5.2%

-12.9%

-0.7%

9.6%

Volta Finance

-1.5%

5.5%

0.0%

-13.0%

9.1%



Source: Liberum, Bloomberg


Managers remain relatively confident on the outlook for future returns as underlying CLO managers have been able to reinvest cash and prepayments at lower loan prices. The trailing 12-month default rate in the US loan market remains low at 1.3% and market expectations for US loan defaults remain well below the historical average of 2.9%. The loan market has grown significantly over recent years but a relatively small proportion of the market matures before 2022 (less than 10% of outstanding loans mature before 2022).

[davebowler] 05/8/2019 11:15

We get a mention-

[holts] 18/6/2019 12:28

CErrito

I had a reply as follows

Technically speaking, the only final dividend is the one declare in November (following the publication of the annual report).
This 15 cents interim dividend isn't really a change in the dividend policy. It could be compensated through the comings distributions.
Obviously we will communicate on any change (if it happens to be the case).

[cerrito] 16/6/2019 15:50

Thought of your question Holts when I saw in the preliminary May report that in six months to end of May they generated E20.2m in interest/coupons; expenses and interest would have been E4m approx and the 31c in dividends would have cost E11.2m so could have afforded to be less stingy.

[cerrito] 04/6/2019 20:09

Good question, Holts and I have no answer.
I note in their monthly statements they say how cash generating their portfolio is and I just checked the Chairman#s statements in the interims as of January this year and nothing there to suggest they were going to cut the dividends that they have paid in the last years.

[holts] 31/5/2019 19:56

Why was the div declared not the same as equivalent last year ?

[cerrito] 31/5/2019 09:27

April figures showed a record amount received in coupons and dividends. Note that overall CLO equity was 43% of portfolio-comfortably the highest percentage since I started following in Marc 16, when CLO were 19%.
I note that 30.4.19 NAV was Eu8.02 per share compared with 8.25 at 4.18.
Also note that Euro assets were 73% of total-the highest for some time but the notes suggest more the way the cookie crumbled than any overall plan.
PS Good that we are back to getting the regular information

[cerrito] 14/5/2019 10:29

Thanks as always davebowler for that.
Btw, the report as at the end of March is garbled and does not have the normal information.
I have written to the Manager requesting a fix; no reply and if others can write in all the better.

[davebowler] 14/5/2019 08:09

Via Liberum

[davebowler] 14/5/2019 08:08

Volta has released an early NAV estimate for April. NAV per share at 30 April 2019 was €8.02 representing an increase of 1.9% in the month. Currency movements had limited impact in the period.Liberum viewThe NAV uplift maintains the strong start to the year for Volta. NAV total return in the four months to April is 6.0%. Returns in 2019 have benefited from a recovery in the leveraged loan indices, resulting in improved CLO equity NAVs. Volta deployed additional capital in CLO equity positions in early January following the market sell-off.

[dendria] 09/5/2019 09:24

An update from Edison today: