Volta Finance Share Discussion Threads

[cerrito] 13/7/2021 18:25

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 07:38

It does seem very unloved .

[hpcg] 07/7/2021 11:52

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 08:09

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

[cwa1] 01/7/2021 16:55

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 08:53

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 06:42

Steady as she goes, cap'n :-)

[davebowler] 27/5/2021 09:07

Liberum..... In combination with improving fundamentals (lower default rates, rising OC test cushions), the environment for CLO equity and mezzanine returns remains very favourable.

[rambutan2] 24/5/2021 21:12

davebowler, thanks for these snippets you post across the threads from the likes of Liberum and Numis. They can provide a welcome check that one is not completely deluded when it comes to ideas in less populated areas of the trust sector.

[davebowler] 24/5/2021 08:05

Liberum;
CLO Funds

Positive market backdrop

Event

Almost all of the listed CLO funds have reported NAV figures for April 2021, with incremental NAV growth supported by positive credit markets and a favourable outlook for CLO returns. Loan markets generated a return of 0.5% in the month and trailing 12-month default rates continue to tick downwards. Corporate earnings rebounded strongly in Q1 and other indicators such as the distressed ratio (loans trading below 80c) also point to a benign environment. The technical position for CLOs is also positive with strong demand for AAA tranches and healthy primary issuance.


Across the listed CLO funds, cash distributions for the April quarterly payments were strong as none of the CLO equity or debt positions suffered from a diversion of payments to senior debt holders. Fair Oaks Income Fund reported total distributions of $12.2m received by the Master Fund II in April 2021 in relation to its US CLO equity positions, compared to $10.1m in the prior year. YTD returns range from 5.0% for Blackstone GSO Loan Financing to 9.2% for Fair Oaks Income. Blackstone GSO Loan Financing uses a mark-to-model valuation policy and therefore has a smoother NAV return profile. The outlook for CLO equity returns remains favourable due to relatively benign conditions and tight spreads on AAA tranches, driving down the weighted average cost of debt and creating opportunities for value enhancements through refi/reset of debt structures.

[cerrito] 17/5/2021 11:33

Just gone through the April report and at the moment everything seems a bit of a yawn, which to be frank is the why I like it with VTA.
I see for the second month running they did not buy any assets. Not sure why and will be interesting to see now that they have built up more cash what they do in May.
Thanks Skyship for link to Hardman which I will need to read again and more thoroughly.

[yieldsearch] 09/4/2021 09:10

refinancing benefiting the equity:
senior tranche of the clo are repaying so the weighted cost of a clo structure is overtime more expensive.
also current market pricing of new issuance to be issued at cheaper cost, and cheaper cost for longer term than existing
so all this combine means that currently there are opportunities to increase the return of the clo equity.

[hpcg] 08/4/2021 23:27

Well the interim report was a rewarding read. I need to get out a pen and paper to fully get my head around how the refinancing of a CLO benefits the equity tranche. Lots to like anyway.

[hpcg] 01/4/2021 08:26

wolstencroft - not true about IG in their standard Share Dealing account (it is for ISAs, but legally they are all Sterling). On the My IG dashboard open up the menu for the Share Dealing account and go to the "currency conversion" option and change it to "manual".

[wolstencroft] 01/4/2021 07:39

The liquidity on Amsterdam is much higher and it is an order book system (you put in your own bid and offer when buying selling) rather than market maker (where an authorised firm on the stock exchange is offering to buy shares at bid and sell at offer and make a bit of money on the spread to make up for taking the risk of being an intermediary being buyers and sellers)

On Amsterdam if the bid/offer is 6.02 to 6.08, say, you could always put in a buy/sell order in the middle (6.05) and wait. I have done this a lot. ii for example allow this. IG share dealing do too and they have better EUR/GBP rates buy they only offer a sterling account, whilst with ii you can hold proceeds from sales in EUR rather having them be converted to GBP.

[stemis] 29/3/2021 07:46

And it seems to work...

[stemis] 28/3/2021 00:09

Peeps may remember my previous comment on not being able to deal VTA in my AJ Bell Youinvest account. I've actually had a reply from them:-

Thank you for your email.

This particualr stock is listed twice on the London Stock Exchange, onced priced in Euros (VTA) and once priced in GBP (VTAS). Where this happens, as both are the exact same investment, we only offer the sterling priced one to avoid our customers being charged an FX fee unecessarily.

So if you’d like to trade this stock please either search for the ticker ‘VTAS’ or the sedol code ‘BFZ4H11’;.

[contrarian joe] 18/3/2021 12:58

Great stuff,thanks hpcg,yieldsearch.

[yieldsearch] 18/3/2021 11:06

Contrarian

6.02/6.08 with central book disclosed showing depth of market

[hpcg] 18/3/2021 10:31

contrarian - on Amsterdam the spread is tight but the price tends to be higher, so you pay's your money etc. Liquidity is worth it though and any top ups I make will be made over there, and I'll sell my LSE holdings first when the time approaches.

[contrarian joe] 18/3/2021 09:48

Held these for quite a few years & have tried to top up on numerous occasions only to find the spread awful (5%).How many of you guys have had the same issues!!,also having the option of having divis paid in either Euros or sterling via registrars,my views are convert when sterling weak,would appreciate views on this.