Volta Finance Share Discussion Threads

[yeild hunter] 15/3/2016 12:53

Tried to buy some through Halifax and was told there was no liquidity and you could only sell! I've not come across this before

[skyship] 04/3/2016 09:25

Ahh - OK, thnx - interesting analogy.....

[joan of arc] 03/3/2016 18:52

Based on last year's report it would seem that VTA do have a large exposure to US equity and BB/BBB CLO debt.

[skyship] 03/3/2016 15:26

RECI is totally unaffected; their's is a portfolio of individual asset backed loans - not pooled obligations.



EDIT:
Good performance from RECI last month:

[yieldsearch] 03/3/2016 14:54

Reci is now mainly real estate loans..not sure if the manager is doing mark to market on this.Cifu vta and others are more in equity piece of clo, ie much more leveraged positions, more volatile and also more price visibility in the secondary market. Recp really no concern for me given the asset coverage and the fact ggat tge manager has declared that they would invest in short duration position to match the near recp maturityWell thats my view

[skyship] 03/3/2016 13:53

Hi eeza - yes read that - that CLO problem more of a hit for CIFU & FAIR than VTA, or NBDG for that matter.

Further downside risk is already in the price here; and it should perhaps be noted that the NBDG NAV has risen over 4% over the past two weeks as the debt market has bounced off the bottom. Many commentators such as Goldman Sachs saying we've seen the worst of it - a good market for bottom-fishing.

"The view of AXA IM, is that the current stress in the US loan and other
credit markets reflects the expectation of an increase in default rates
in the US loan market from prevailing levels, which are far below the
historical average, to be closer to historical average levels by end
2016 - mid 2017. This potential turn in the credit markets seems to have
taken some participants by surprise. However, this has been AXA's
central scenario for some time. Accordingly the portfolio has been
orientated to retain a significant portion of 1.0 CLO tranches (which
have less sensitivity to episodes of stress such as that currently being
experienced), to be very selective in our exposure to CLO Equity
tranches and to increase the exposure to European assets."

[eeza] 03/3/2016 12:27

CLO 2 article from ZeroHedge - doesn't paint a pretty picture.

[yieldsearch] 03/3/2016 11:20

hm i guess for the broker limited upside of offering this (5pounds), vs potential litigation with client re limited disclosure of risk etc..
Historical PPI issues caused the financial markets providers to tighten their offering across all financial products.
welcome to a new world of boring stuff!

[yieldsearch] 02/3/2016 11:58

Seems that these are not available to purchase through iweb..not sure why

[yieldsearch] 01/3/2016 17:28

Skyship: re post 87: I dont think there is a defined date or continuation vote for this company, my understanding is that it a permanent fund. Last time i looked i couldnt find any details in the offering memorandum.

[yieldsearch] 01/3/2016 17:25

"Banks cut issuance outlook on collateralised loan obligations"


I guess could also impact on the refinancing of existing positions held by CIFU, VTA

[skyship] 26/2/2016 15:17

By the way, some here may recollect I ducked out of VTA last time I held, sold @ 7.00 in November so as to buy into LMS. It was a great trade as LMS announced another Tender in their liquidation programme.

LMS have since drifted back to a great BUY level again. They are just starting to move better ahead of the Prelims in c2weeks time.

In the meantime the NAV should have been advancing due to the $ strength. I estimate now at 100p versus the share price of 69.5p-71.2p.

I don't have to sell VTA this time around as they appear to be great value on a 21% discount and 10.4% yield. Still, I've loaded up with LMS again, ready for the next roll of the dice there...

[skyship] 26/2/2016 15:09

Likewise of course - thnx DB

By the way, does anyone know whether there is a wind-up date for this trust; or perhaps a Continuation Vote?

[yieldsearch] 26/2/2016 14:27

Davebowler: tks for posting, always appreciated

[davebowler] 26/2/2016 11:51

Liberum;
Volta Finance (BUY)
Mark-to-market losses drive 4% NAV fall in January

Event
Volta's NAV at 31 January 2016 was €7.51 per share which represents a decline of 4.0% in the month mainly due to a mark-to-market decline in prices of CLO debt tranches.

The mark-to-market performance by asset class was CLO equity -2.4%, CLO debt -5.7%, Cash corporate credit +2.5%, synthetic corporate credit -0.2% and ABS +0.6%.

In terms of portfolio activity, Volta sold two US CLO debt tranches at an average projected yield of Libor +350bps and received the principal payment from one Euro CLO debt tranche. These proceeds were recycled into assets with significantly wider spreads (Libor +975bps on average).

Liberum view
The CLO market has experienced significant mark-to-market movement since the end of June 2015. During this time, Volta's NAV total return has been -4.8% which is ahead of peers that value on a mark-to-market basis (BGLF uses a mark-to-model approach rather than mark-to-market and has a smoother NAV return profile as a result). Volta's relative outperformance is due to the company's defensive weighting to pre-crisis CLO debt tranches.


VTA currently trades on a 22.6% discount to NAV (10.5% prospective dividend yield) which represents a 10% discount to the sector which we believe is unwarranted given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions).

[davebowler] 19/2/2016 09:44

Liberum;
Carador Income Fund
Further NAV decline in January

Event
CIFU's NAV fell 5.0% in January 2016 to $0.6873 per share due to ongoing volatility in credit markets. Every tranche within the JPM CLO Index experienced negative returns in January.

The US CLO new issue market experienced a slow start to the year with weakened demand for CLO equity following the decline in CLO equity positions in the second half of 2015. Market forecasts for the expected leveraged loan default rate have risen from 2% to 3% but this is still below the long-run average.

CIFU recently guided towards a target dividend of $0.09 per share for 2016 which is expected to be covered from net cashflows. This reflects a 10% reduction from 2015 ($0.10 per share). The reduced dividend is a result of a lower allocation to CLO equity positions and a higher weighting in cash in order to offer some downside protection to the company's NAV.

Liberum view
The NAV decrease in January follows a NAV total return of -8.5% for 2015 which is predominantly due to the high weighting to post-crisis USD CLO equity investments. CIFU currently trades on an 11.5% discount to NAV. The combnation of the discount and the 14.1% dividend yield will attract attention from opportunistic investors but we believe VTA offers better value (25% discount to NAV) and has had a superior track record in recent years

[davebowler] 27/1/2016 10:50

Liberum;
Carador Income Fund
Reduced dividend for 2016

Event
CIFU has guided towards a target dividend of $0.09 per share for 2016 which is expected to be covered from net cashflows. This reflects a 10% reduction from 2015 ($0.10 per share).

The reduced dividend is a result of a lower allocation to CLO equity positions and a higher weighting in cash in order to offer some downside protection to the company's NAV.

Liberum view
The target dividend for 2016 is still comfortably the highest yield in the alternative fund space at 13.7%. The reduction is not unexpected as the company's capital base has been declining in recent years as dividends have tended to be well ahead of NAV total return. The company's total asset value has fallen from $557m at December 2012 to $393m at the end of 2015. CIFU currently trades on a 9.4% discount to NAV. The 13.7% dividend yield will inevitably attract attention but we believe VTA offers better value (23% discount to NAV) and has had a superior track record in recent years.

Real Estate

[skyship] 26/1/2016 16:08

Bought another 2500 @ E5.80 with cash raised from selling the last of my CIFU - stupidly hung on to a few of those when selling half back up in the 80s versus the 64 now! Hope this will recover a good part of that loss.

[badtime] 26/1/2016 15:13

Looks a well timed buy..I would hav bought yesterday myself but no free funds apart from the SIPP in preparation for another tranche due to be withdrawn in April

[skyship] 25/1/2016 11:00

"VTA currently trades on a 26% discount to NAV (10.8% prospective dividend yield) and we believe it offers the best value in the sector given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions)."

Exactly; actually a 26.6% at the E5.74 I've just paid for 2500. A small re-entry and may add. After reading through today's RNS the value here does now look rather extreme and the fall well overdone.

Liberum's target of E8.55 may be relevant in the long term; but in the Medium Term, if they continue to avoid bullets in the way they have done, a return to the E7.00 level could well be on the cards. At that level, 22% up on where we are now, the discount to the current NAV would be 10.5% and the yield 8.9%.

Surprised I was able to buy at no price change today!

[davebowler] 25/1/2016 09:44

Volta Finance (BUY, TP €8.55)
10% NAV total return in 2015

Event
Volta's NAV at 31 December 2015 was €7.82 per share which is unchanged after adjusting for the dividend payment in the month. NAV total return for 2015 was +10.0%.

The mark-to-market performance by asset class was CLO equity -0.7%, CLO debt -0.8%, Cash corporate credit +1.6%, synthetic corporate credit +0.1% and ABS +35.8%. The ABS positions benefited from an upward revaluation resulting from the sale of one of the positions significantly above book value.

During the second half of the year, the average price of VTA's USD CLO equity tranches fell from 75.5 to 53.9 and now account for 13% of GAV. Within this, post-crisis CLOs account for only 5.6% of GAV.

The average price of USD CLO debt tranches declined to 86.8 from 95.4 at the end of June 2015. Current pricing more than discounts the manager's expectations that US loan defaults will rise towards average historical levels by the end of 2016. Accordingly, the manager does not expect much NAV volatility in 2016.

In terms of portfolio activity, VTA rotated capital out of its CLO debt tranches (which have been relatively insensitive to recent credit spread widening) into more recent transactions at deeper discount margins. Other acquisitions totaled €12m and have a projected IRR of 11%.

Liberum view
Volta's NAV performance in December has again been well ahead of peers that invest in US CLO assets. This has been achieved despite a c.-1% impact from adverse currency movements in the month (USD exposure is now equivalent to 32% of NAV). Over the year, Volta has the highest NAV return of the peer group partially due to FX gains and the company's more conservative portfolio positioning.


Recent market volatility has highlighted the benefit of the mandate which allows the manager flexibility to allocate capital to the best relative value opportunities in structured credit. The company's highly cash-generative ABS positions have delivered significant gains.

VTA currently trades on a 26% discount to NAV (10.8% prospective dividend yield) and we believe it offers the best value in the sector given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions).

[skyship] 22/1/2016 08:25

CIFU announced an NAV fall for December of 5.4%!