Volta Finance Share Discussion Threads

[skyship] 15/12/2015 16:48

Hmm - what do you think of NBDG offered at 65.5p versus last NAV of 73.3p - perhaps lower now of course! Likely to start buybacks again in the first week of the New Year, so suspect we are at or very close to the bottom over there...

[tiltonboy] 15/12/2015 16:30

Getting a little uncomfortable in the short-term, and will undoubtedly throw up some opportunities, but can we take advantage of them!

[skyship] 15/12/2015 14:39

There are currently a considerable number of articles on the problems in the debt markets. IMO the inference from these articles is that no matter which section of the debt market you look at, the overall move is to falling prices, higher yields, increasing spreads. With the mark-to-market requirements, fund prices will fall and opportunities will appear.

ACD, CIFU, DREF, NBDD, NBDG, VTA etc have already fallen and may be nearing attractive buy levels.

Chaos in the debt markets as Third Avenue liquidates:



Could be opportunities for cheap stock soon - as GS suggest:

[cousin jack] 28/11/2015 22:53

Thanks Skyship. Should be an interesting 2/3 weeks.

[skyship] 28/11/2015 08:10

CJ - thnx for your kind comments.

Personally I have found over now 4yrs of playing these Tender offers from liquidating companies (as per the SL thread); that for the best outcome you should tender 100% and wait for your allocation, as one can get lucky with the overages and do a lot better than the official rate.

In liquidation scenarios the shares never fall back too far as there is always another Tender around the corner.

I have the utmost respect for Tilts, a friend and a broker who really knows his stuff, especially in the absolute returns sectors of the Market. In the case of LMS I think his concerns about portfolio concentration are not yet relevant; and also there are obvious reasons for believing that the rump holdings may be unlikely to contain a few duds as the Rayne interests were more than happy to assume the assets & liabilities, as were the potential new holders.

[cousin jack] 27/11/2015 17:39

Skyship: I bought some after the Boards change of direction a few months ago. I wouldn't have considered them had you not highlighted them on a number of boards so thank you for doing so. And for holding firm to your view about the likely tender despite the doubts of recent weeks and mistrust of the Board.

Bearing in mind the views of Tilts and others I am now minded to play safe, take the profits and move on........but am unsure whether to do so I would be better (a) tendering everything and then selling what is not accepted in the tender at whatever the price drops to ; or (b) simply selling everything on the last possible day before tender submission. Based on your experience of these situations have you a view on this?

Thanks

[skyship] 27/11/2015 16:22

I do hope others followed that LMS trade I recommended on the 19th. All in all I haven't played this year very well; but that was a real no-brainer...the Tender duly arrived this morning and the share price now up 8%.

[davebowler] 23/11/2015 14:41

Liberum;
NAV benefits from currency gains

Event
VTA's NAV rose 0.1% in October 2015 to €8.03 per share. YTD NAV performance for 2015 is +8.7%. NAV performance benefitted from the US Dollar's 1.6% appreciation against the Euro in the month.

The mark-to-market performance by asset class was CLO equity +0.7%, CLO debt -1.4%, Cash corporate credit +0.1%, synthetic corporate credit +0.9% and ABS +0.3%.

Volta acquired three assets in the month: two BB rated debt tranches of USD CLOs and an additional investment in Saint Bernard Fund (which predominantly invests in US RMBS). The average projected yield on the CLO debt tranches is 9.5% and the Saint Bernard Fund has delivered 14% p.a. since inception in 2008. The CLO debt tranches acquired are longer duration (and therefore more sensitive to spread widening) and the manager expects to rotate out of older CLO debt tranches that are less sensitive to market volatility into more sensitive assets that can be purchased at lower prices (higher discount margin).

€9.1m of principal was received from two deals in October: a USD CLO debt position and a USD CLO equity position that the manager decided to call. The CLO equity tranche has delivered an 18.8% IRR and was reimbursed at 133% of par.

Liberum view
Volta's portfolio continues to perform steadily with a YTD NAV total return of 8.7% which remains the highest of the London-listed CLO funds (BGLF +7.7%, FAIR +1.7%, CIFU -1.9%). We note the significant beneficial movement in the USD/EUR FX rate in November which we estimate will add c1.5% to NAV in November (based on the latest FX rate). We believe the flexibility to access asset classes offering relative value opportunities (such as the CLO warehouse and bank balance sheet investments) gives it an edge over peers. Volta trades on a 13.6% discount to NAV which is c.10 percentage points wider than the peer group average.

[skyship] 19/11/2015 16:06

Stupidly late in the day I took the rapid 8.0% hit here:

# 2.75% from the spread
# 4.25% from the currency loss
# 1.00% from the book loss

Decided that I should use the cash to top-up my LMS holding which to my mind offers a near-certain 10%+ upside over the next few weeks; so a good place to recover cash lost in a Euro-denominated investment.

See my Post No.48308 on the SHA thread:



If not already holding, I strongly advise others to consider the same move. See the Post for today's comments by IC companies editor Simon Thompson at IC Online...

[davebowler] 22/10/2015 14:29

Liberum;
Volta Finance (BUY, TP €8.55)
Spread widening impacts September NAV

Event
VTA's NAV fell by 1.7% in September 2015 to €8.02 per share due to continuing market volatility in the month. NAV total return in 2015 to date is +8.6%. The mark-to-market performance by asset class was CLO equity -2.3%, CLO debt -1.2%, Cash corporate credit -0.9%, synthetic corporate credit -0.7% and ABS +1.5%.

VTA has borrowerd a further $15m under the repurchase agreement with Societe Generale (total amount of debt drawn is now $45m). The debt raised allowed Volta to acquire assets following spread widening. Three assets were acquired in the month for €9.3m with a projected yield of 9.5%.

Liberum view
The market volatility in European and US credit spreads can be seen in the table below. We note that spreads have tightened in October reversing most of the movement of the prior month and would expect a mark-to-market uplift as a result.

Figure 2: US & European credit spreads (bps)


31/08/2015
30/09/2015
21/10/2015
iTraxx 5 Yr European Main Index
71
91
78
iTraxx 5 Yr European Crossover Index
323
384
326
CDX 5 Yr Investment Grade Index
82
93
82
CDX 5 Yr High Yield Index
392
503
446


Source: Bloomberg



Volta's NAV total return of 8.6% in 2015 to date remains the highest of the London-listed CLO funds (BGLF +6.9%, FAIR +1.5%, CIFU -1.0%). We believe the flexibility to access asset classes (such as the CLO warehouse and bank balance sheet transactions offering relative value opportunities gives it an edge over peers. Volta trades on a 14% discount to NAV which is c 15 percentage points wider than the peer group average.

[skyship] 21/9/2015 15:08

bt - yes, should be as only 0.2% & the yield here is c8%pa. I'm obviously hoping the capital value won't disappoint. Been rather scuppered by CIFU & NBDG in that respect - in the short-term at least!

[davebowler] 21/9/2015 14:57

Annoyingly VTA.AS is trading at Euro 6.90

[badtime] 21/9/2015 14:55

ouch @ nearly £30 commission ..was it worth it? :)

[skyship] 21/9/2015 13:37

Yes did so - had to pay the higher commission, but only bt 3k @ 728c

[davebowler] 21/9/2015 13:13

Yes you are right Skyship -this is the message you get from AJ Bell-
''Your order cannot be processed online. For further assistance, or to place your order via the telephone, please contact the Dealing Services Team on 0845 373 3473 quoting reference 530''
You have to place a telephone order instead.

[tiltonboy] 21/9/2015 12:21

No stock on offer via the RSP.

You need to go to a proper broker to buy stock!

[skyship] 21/9/2015 10:05

Same problem as 7th Sept when I posted; and since - unable to buy any of these online thru' Youinvest. MM not returning a quote.

Does anyone know if this is really so, or is it a problem at Youinvest?

[davebowler] 21/9/2015 08:22

Liberum;
CLOs

Volta Finance (BUY, TP €8.55)
US dollar depreciation causes small NAV decline

Event
Volta's NAV fell 0.6% in August 2015 to €8.16 per share mainly due to FX movements in the month. The mark-to-market performance by asset class was CLO equity +0.8%, CLO debt +0.1%, Cash corporate credit +3.0%, synthetic corporate credit +0.7% and ABS -0.1%.

Volta entered a new CLO warehouse transaction for €15.5m with a projected yield of 13-15%. The manager expects to rotate out of short term instruments (mainly old debt tranches of CLOs) into more sensitive assets that could be acquired at higher discounts during periods of volatility.

Liberum view
Volta's portfolio performed relatively well in the month despite the market volatility and consequent credit spread tightening. We calculate the NAV performance prior to FX movements was +0.2%. VTA's NAV total return in 2015 to date is 10.4% or 7.2% after adjusting for FX gains. This is the highest amongst the peer group. We believe the flexibility to access asset classes (such as the CLO warehouse transaction above) offering relative value opportunities gives it an edge over peers. Volta trades on a 13.6% discount to NAV which is c 15 percentage points wider than the peer group average. Our €8.55 TP offers 18% upside - BUY.

[skyship] 15/9/2015 13:34

db - thnx as ever. Seems however that on this occasion Winterflood just reiterated recent statement & stats rather than giving an opinion!
==================================================================

NB Distressed Debt Investment – Quarterly update and return of capital:

On 18 August NB Distressed Debt Investments published its quarterly update for the three months to 30 June. The NAV per share of the Ordinary, Extended Life and Global shares fell by 2.5%, 3.3% and 7.3% respectively. There were no investment exits during the period and all three share classes underperformed the HFRI Distressed / Restructuring Index, which was down 0.3% over the quarter.

Negative returns were driven by mark‐to‐market declines and the manager
highlighted that higher levels of volatility tend to be associated with a widening of bid/ask spreads. In addition, the Global share class, which is sterling denominated, was impacted by adverse foreign exchange movements, which accounted for more than 50% of its NAV per share decline over the period.

During the quarter the Global share class bought back 450,000 shares as part of its discount control mechanism. On 17 August the fund had also announced that it would return capital to both Ordinary (‘NBDD’) and Extended Life (‘NBDX’) shareholders by way of compulsory partial redemptions that then took place on 27 August. The fund returned US$7m to NBDD shareholders (equivalent to approximately 9.31% of NAV) at $1.2276/share (being the last published NAV per NBDD share prior to the announcement). The fund also returned US$17.5m to NBDX shareholders (equivalent to approximately 4.83% of NAV) at US$1.1302 per share (being the last published NAV per NBDX share prior to the announcement).

[davebowler] 15/9/2015 12:00

Hi Skyship.Here is Winterfloods recent info;

NB Distressed Debt Investment – Quarterly update and return of capital
On 18 August NB Distressed Debt Investments published its quarterly update for the three
months to 30 June. The NAV per share of the Ordinary, Extended Life and Global shares fell by
2.5%, 3.3% and 7.3% respectively. There were no investment exits during the period and all three
share classes underperformed the HFRI Distressed / Restructuring Index, which was down 0.3%
over the quarter. Negative returns were driven by mark‐to‐market declines and the manager
highlighted that higher levels of volatility tend to be associated with a widening of bid/ask
spreads. In addition, the Global share class, which is sterling denominated, was impacted by
adverse foreign exchange movements, which accounted for more than 50% of its NAV per share
decline over the period.
During the quarter the Global share class bought back 450,000 shares as part of its discount
control mechanism. On 17 August the fund had also announced that it would return capital to
both Ordinary (‘NBDD’) and Extended Life (‘NBDX’) shareholders by way of compulsory partial
redemptions that then took place on 27 August. The fund returned US$7m to NBDD shareholders
(equivalent to approximately 9.31% of NAV) at $1.2276 per share (being the last published NAV
per NBDD share prior to the announcement). The fund also returned US$17.5m to NBDX
shareholders (equivalent to approximately 4.83% of NAV) at US$1.1302 per share (being the last
published NAV per NBDX share prior to the announcement).

[skyship] 07/9/2015 15:24

BT - been watching and waiting. Tried to buy a few @ E7.33 this afternoon, but no online offer.

I admit I'm slightly concerned about the Euro. If the Chinese economy does take a hit then the effect on Germany' exports will be significant; and no amount of Draghi stardust will be able to do anything it. Germany has been living on the high hog using an undervalued currency to sell cars into other European countries; and cars and machine parts into China. Could all be going pear-shaped just as Merkel plays Sister Bountiful to the Syrians. That scenario doesn't bode well for the Euro!

db - you have been consistently generous with your posts on Winterflood and Liberum research - here, on the RECI & CDI threads ....and others.

Could you possibly take a look and see if there is any coverage on NBDD. Personally I hold the global shares - NBDG.

[badtime] 01/9/2015 11:25

This has stayed pretty stable over the last couple of volatile weeks

[davebowler] 25/8/2015 07:26

In contrast FAIR's NAV in 31 July 2015 was $0.9748 up by 0.91% for the month and is trading at a 3.4% premium, the highest of its peer group.

[davebowler] 24/8/2015 15:54

Liberum;
Volta Finance (BUY, TP €8.55)
July NAV growth +0.2%

Event
At the end of July 2015, the NAV of Volta was €299.9m or €8.21 per share, an increase of €0.01 per share since the end of June 2015. The monthly performance was +0.2%, in line with stable credit markets. The slight appreciation of the USD against the Euro (+1.5% in July) contributed to generate positive monthly performance. The YTD performance for the 2015 calendar year, including the April dividends paid, stands at +11.1% and the GAV at €330.2m as at the end of July.

In July, Volta purchased four assets (one USD CLO Equity tranche and three USD CLO Debt tranches, all rated BB) for a total of €15.0m. The projected yield for the USD CLO Equity tranche was in the area of 10% and 8.5% for the BB debt tranches.

At the end of July, Volta held €22.8m in cash, excluding €0.9m which is pledged as margin under Volta's currency hedging facilities as well as €15.0m earmarked for the purchases made in July that are to be settled in August. At the same time, most of the surplus cash should be deployed with a new European CLO warehouse.

In July, Volta received the equivalent of €3.6m of interest and coupons bringing the total cash amount received during the last six months to €15.4m.

Liberum view
Volta's NAV performance of 11% YTD 2015 is comfortably the highest of the London-listed funds investing in the CLO sector. The share rating (-14% discount to NAV) looks particularly anomalous given the company's strong track record and the favourable credit environment. We expect Volta to rerate towards NAV in the near term and we believe the flexibility to access asset classes offering relative value opportunities gives Volta an edge over peers so we maintain our BUY rating.

CLOs