Volta Finance Share Discussion Threads

[cwa1] 11/2/2022 18:04

PERFORMANCE and PORTFOLIO ACTIVITY

A good start for 2022 with a gain of 1.7% in January despite a challenging environment. Many markets, especially fixed income credit markets and equities are adapting themselves to a new environment regarding central banks' actions. The Fed is now expected to increase its rate by more than 100bps in 2022 while a first hike from the ECB is now priced for 2022 (AXA IM Research, January 2022).

As noted previously, Volta's performance is mostly dependent on loans' default rates and spreads and bear little correlation to wider markets. Loan cash flows remained resilient again this month and no meaningful news arose to alter the expectation that defaults will remain low and cash flows strong for 2022/2023.

[skyship] 24/1/2022 09:20

db - thnx for that. Suggests that VTA should at the very least hold steady as the yield at the offer price of E6.30 = 9.52%. (Disc. = 13.34%)

[davebowler] 24/1/2022 09:16

Liberum;
High income generation leads strong 2021

Event

All of the listed CLO funds have reported NAV figures for December 2021, with incremental NAV growth underpinned by positive credit markets. US and European loan markets both delivered positive returns of 5.2% in 2021. Loan market performance has remained positive in January (+0.7% YTD), reflecting the appeal of floating-rate assets. Loan default rates also continue to trend downwards. The trailing 12-month default rate in the US loan market has fallen to 0.3%, the lowest level since mid-2011. Other indicators such as the distressed ratio (loans trading below 80c) also point to a benign environment. During 2021, CLO issuance reached record levels in both the US ($187bn) and Europe (€39bn).


Across the listed CLO funds, NAV total returns ranged from 17.0% for Chenavari Toro Income Fund to 22.7% for Fair Oaks Income in 2021. Blackstone GSO Loan Financing recorded the highest return in December (+2.3%), partially due to mark-to-model increases (+1.0%) as a result of reduced CCC and default expectations and marginal spread increases. We believe the CLO funds will continue to perform well in 2022 with potential for rising income distributions and a benign credit environment.

[bluemango] 12/1/2022 21:44

Appreciate the welcome.

Thanks also to Skyship who alerted me to this a while ago.

Slightly off the mainstream compared to my other holdings like PHNX, CSN, BA., various ITs and private equity trusts, pref shares etc, but that regular strong dividend is certainly attractive.

[cwa1] 12/1/2022 17:37

Welcome aboard bluemango, good fortune to you...

December NAV has just been issued...



PERFORMANCE and PORTFOLIO ACTIVITY

Volta's performance was positive once again in December, rising by 0.3%, including the dividend of EUR0.15 per share accounted for in the period. This brings the total return for the full calendar year to 17.9%. Once again this month, the performance of Volta's portfolio bore little correlation to wider markets: loan cash flows remained resilient and no meaningful news arose to alter the expectation that defaults will remain low and cash flows strong.

...

As at the end of December 2021, Volta's NAV was EUR265.8m or EUR7.27 per share.

[cwa1] 16/12/2021 08:06

XD this morning, pay day 27/1/22

[cwa1] 10/12/2021 17:11

AXA IM has published the Volta Finance Limited (the “Company” or “Volta Finance” or “Volta”) monthly report for November. The full report is attached to this release and will be available on Volta’s website shortly (www.voltafinance.com).

PERFORMANCE and PORTFOLIO ACTIVITY

November’s performance was positive at +1.0%. The year-to-date total return of the Company is 17.5%. Once again this month, the performance of Volta’s portfolio bore little correlation to wider markets: loan cash flows remained resilient and no meaningful news arose to alter the expectation that defaults will remain low and cash flows strong.

As at the end of November 2021, Volta’s NAV was €270.6m or €7.40 per share.

[cwa1] 09/12/2021 07:28

Guernsey, 9 December 2021

Volta Finance Limited ("the Company") hereby announces a fourth interim dividend for the financial year commencing 1 August 2020.

The Company announces that it has declared a quarterly interim dividend of EUR0.15 per share payable on 27 January 2022 amounting to approximately EUR5.49 million, equating approximately to an annualised 8% of net asset value. The ex-dividend date is 16 December 2021 with a record date of 17 December 2021.

[cwa1] 30/11/2021 11:30

In this note, we explore three aspects of Volta’s portfolio, highlighting their simplification – simplified. Firstly, unless there is a compelling, opportunistic case, new investments will be in CLO structures only, and not in other structured finance instruments. The asset mix is being simplified. Second, there should be an increased weighting to AXA IM managed CLO vehicles, reflecting good performance and lower fees. The manager mix is being simplified. Third, we detail why CLOs are, at heart, simple cashflow structures, which should be viewed as such, free from the terminology that may confuse a clear story.

Simpler portfolio: Over recent years, Volta has seen an increasing weight to CLO investments. It has been agreed with the board to put into policy that reinvestment, when non-CLO assets mature, will be into CLOs, making the mandate much clearer. The portfolio will be more focused, as assets roll over.
Greater AXA IM managed CLO investments: AXA IM has been awarded “Best US CLO Manager of the Year” (in 2021, by Credit Flux), highlighting AXA IM’s performance. Volta is also not paying management fees on AXA IM CLO positions, and, over time, AXA IM CLOs are expected to be a higher share of the portfolio.
Valuation: Volta trades at a double discount: its share price is at a 15% discount to NAV, and we believe its mark-to-market NAV includes a further sentiment-driven discount (5%-10%) to the present value of expected cashflows. Volta targets an 8% of NAV dividend (9.8% 2022E yield on current share price).
Risks: Credit risk is a key sensitivity. We examined the valuation of assets, highlighting the multiple controls to ensure its validity, in our initiation note, in September 2018. The NAV is exposed to sentiment towards its own and underlying markets. Volta’s long $ position is only partially hedged.
Investment summary: Volta is an investment for sophisticated investors, as there could be sentiment-driven share price volatility. Long-term returns have been good: c.9% p.a. (dividend reinvested basis) since initiation. With above-average returns on recent reinvestments, the portfolio’s past six-month cashflow (annualised) yield is c.20%. We expect near 2x 2022 dividend cover.

[holts] 15/11/2021 20:44

Cwa , yieldsearch,

Thanks for replies , it’s the Sterling version I have , as far as Axi goes it will return when they send the cost document to II , so have emailed them .

[cerrito] 15/11/2021 12:13

I see the 31.10.21 NAV highest since 28.2.20 as one would expect but way down from the 8.39 three years ago at 31.10.18 when it was E8.39 and 31.10.17 when it was E8.42.
So still some way to go.
Interesting the comments about the maturity wall being pushed back-something referenced before- and begs the question as to what the maturity profile of the underlying loans is and indeed how many are bullets.

[yieldsearch] 15/11/2021 10:54

Holts your 551:
have a look at
hxxps://www.voltafinance.com/key-information-document

[davebowler] 15/11/2021 09:09

Liberum on FAIR -
Strong quarterly cash flows

Mkt Cap £201m | Share price $0.665 | Prem/(disc) -0.8% | Div yield 15.0%

Event

Fair Oaks Income's NAV per share as at 31 October 2021 was $0.670, representing a 1.9% NAV total return in the month (+22.6% YTD).

US and European loan markets generated returns of 0.3% and 0.2% during the month. Defaults remain very low with the 12-month trailing default rate in the US declining from 0.44% to 0.35%. European default rates also fell from 0.85% to 0.75%. Strong primary CLO issuance in the US and Europe has continued in Q4. Primary AAA spreads have remained stable at Libor +1.18% in the US and Euribor +0.99% in Europe.


All of FAIR's CLO equity investments made their scheduled quarterly distributions in October. Master Fund III received $18.8m in distributions, representing a 15% increase over the same period in the prior year. The portfolio has benefited from reduced exposure to lower coupon CLO mezzanine investments and strong cash flow generation from the CLO equity positions. Two recent CLO equity investments were not scheduled to make a distribution in October and their first payments are expected in January 2022.

Liberum view

Strong cash flow generation leaves FAIR well-placed to maintain its 15% dividend yield. The benign default environment and tightening in CLO spreads has created a favourable environment for CLO equity performance. The outlook for defaults remains low due to strong fundamentals and the maturity profile of the market continues to be pushed. The overcollateralisation test cushion in FAIR's portfolio has steadily built up since mid-2020. We estimate an increase in the average OC test cushion in FAIR's US CLO equity investments from 2.2% in July 2020 to 3.9% currently. The arbitrage spread of the portfolio over the cost of financing has also increased steadily since mid-2020 to 1.93%, the highest level since August 2016.

[cwa1] 15/11/2021 08:46

Slightly strange as I can trade VTA through II at the moment with a dummy buy. I also actually hold it with II/can get a dummy sell price for them too.

I can also place a limit order on the Euronext through II, as I did the last time I purchased, and got a reasonably advantageous price after a couple of days waiting.

I CAN'T trade the Sterling option VTAS on II though due to there not being a KID...

[holts] 15/11/2021 08:26

Does anyone happen to know if there is KID for this stock , II will not trade it , nir will they trade AXI for which I knoe there is one , the nanny state is getting tiresome

[davebowler] 21/10/2021 09:14

Liberum;
CLO Funds

Favourable environment for returns

Event

All of the listed CLO funds have reported NAV figures for September 2021, with incremental NAV growth supported by positive credit markets and a favourable outlook for CLO returns. US and European loan markets delivered positive returns of 0.7% and 0.4% during the month. Loan default rates also continue to trend downwards. The trailing 12-month default rate in the US loan market has fallen to 0.4%, the lowest level since August 2011. Other indicators such as the distressed ratio (loans trading below 80c) also point to a benign environment. US CLO issuance reached a record in September ($130bn YTD). Primary AAA spreads have remained stable at Libor +1.19% in the US and have fallen slightly to Euribor +1.01% in Europe.

Across the listed CLO funds, YTD returns range from 13.7% for Chenavari Toro Income Fund to 20.4% for Fair Oaks Income. Blackstone GSO Loan Financing recorded the highest return in September (+3.2%), partially due to upside from resets and a 0.6% NAV impact following adjustments to its mark-to-model valuation. The outlook for CLO equity returns remains favourable due to relatively benign conditions an improvement in arbitrage spreads.

[davebowler] 14/10/2021 09:38

Liberum on FAIR _
Fair Oaks Income

Enduring arbitrage opportunity

Mkt Cap £200m | Share price $0.675 | Prem/(disc) -1.2% | Div yield 14.8%

Event

Fair Oaks Income's NAV per share as at 30 September 2021 was $0.683, representing a 1.5% NAV total return in the month (+20.5% YTD). US and European loan markets delivered positive returns of 0.7% and 0.4% during the month. The trailing 12-month default rate in the US loan market has fallen to 0.4%, the lowest level since August 2011.

US CLO issuance reached a record in September ($130bn YTD). Importantly, primary AAA spreads have remained stable at Libor +1.19% in the US and have fallen slightly to Euribor +1.01% in Europe. The manager reset the CLO liabilities of Fair Oaks Loan Funding III, reducing the weighted average coupon from Euribor +2.01% to Euribor +1.79%. The investment period has also been extended by almost three years. The expected return on the investment has increased by 4.8% pa.

The current valuation of the CLO equity positions implies relatively low cash flow multiples. The average cash flow multiple of the CLO equity tranches is 3.5x, compared to 4.8x in January 2020.

Liberum view

FAIR's portfolio has generated strong cash flows in 2021 and we see this as a compelling entry point for a fund offering a 15% dividend yield and double-digit prospective NAV returns. The maturity profile of the market continues to be pushed out, reducing the probability of default in the near term. The arbitrage spread of the portfolio over the cost of financing has increased steadily since mid-2020 to 1.91%, the highest level since August 2016. The benign default environment and tightening in CLO spreads has created a favourable environment for CLO equity performance. We also note the pricing on the reset of Fair Oaks Loan Funding III was narrower than Blackstone's Deer Park CLO (which priced on the same day). The fund has three investments in CLOs run by the investment manager. These have demonstrated strong credit performance and achieved attractive funding costs.

[cerrito] 12/10/2021 17:24

With everything that is going on in the markets, I found it uplifting to read such a positive monthly update

[cwa1] 23/9/2021 08:36

XD today for a healthy 14c, pay day being a very swift 30/9

[hpcg] 21/9/2021 16:30

I use Amsterdam, plenty of liquidity there.

[skyship] 21/9/2021 16:00

hpcg - small spread! Not a comment usually made of VTA...

[hpcg] 21/9/2021 11:25

I sold yesterday. Concerned about high European energy prices and any Evergrande fallout. I figure it will drop by the dividend amount when it trades ex anyway, and the spread is small so buying back in not a big deal.

[davebowler] 16/9/2021 13:24

Liberum on FAIR;
Fair Oaks Income

High cash generation

Mkt Cap £198m | Share price $0.67 | Prem/(disc) 0.3% | Div yield 14.8%

Event

Fair Oaks Income's NAV per share as at 31 August 2021 was $0.673, representing a 0.3% NAV total return in the month (+18.7% YTD). US and European loan markets rose by 0.5% and 0.4% respectively during the month. The trailing 12-month default rate in the US loan market has fallen to its lowest level since August 2011. European default rates also remain low at 1.1%.


The CLO equity positions have continued to generate strong cash flows in recent quarters. The current valuation of the CLO equity positions implies relatively low cash flow multiples. The average cash flow multiple of the CLO equity tranches is 3.4x based on the latest distribution, compared to 4.8x in January 2020.


Liberum view

FAIR's portfolio has generated strong cash flows in H1 2021 and we see this as a compelling entry point for a fund offering a 15% dividend yield and double-digit prospective NAV returns. The benign default environment and tightening in CLO spreads has created a favourable environment for CLO equity performance. Based on current rolling default rates, the modelled return for FAIR's portfolio is 17%. The medium-term outlook for defaults is favourable with only 5% of the US loan market maturing between now and the end of 2023. Fair Oaks is particularly well-placed to capitalise on these conditions as a control CLO equity investor.

[cwa1] 15/9/2021 07:22

Guernsey, 15 September 2021

Volta Finance Limited ("the Company") hereby announces a third 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 30 September 2021 amounting to approximately EUR5.12 million, equating approximately to an annualised 8% of net asset value. The ex-dividend date is 23 September 2021 with a record date of 24 September 2021.

[skyship] 17/8/2021 15:45

Likewise...