Volta Finance Share Discussion Threads

[davebowler] 24/5/2016 09:04

Liberum;
Volta Finance Limited (BUY)
2% performance in April

Event
Volta’s estimated NAV at the end of April 2016 was €7.43 per share, 2% growth for the month taking into account the €0.31 per share dividend paid on 19 April 2016. The performance is in line with the credit markets’ improvement and mark-to-market gains from the CLO Equity tranches by 4.7%, the CLO Debt tranches by 2.1%, the Cash Corporate Credit deals by 1.2%, partially offset by loss from the Synthetic Corporate Credit deals by -1.7% and flat ABS.

During the month, Volta acquired one USD BB rated tranche of CLO for $4.5m with a projected yield of 10.2% and received €2.7m of principal proceeds from the maturity of a CHF denominated Bank Balance Sheet transaction. The company generated €4.5m in interest and coupons in April bringing the six month total cash generated to €18.9m.

Liberum view
Volta's portfolio cash flow is improving especially as the company continues to invest in high yield products such as the latest BB rated tranche of CLO. Volta is an attractive proposition on a 8.1% discount to its April NAV and a dividend yield of 8.9%.

[davebowler] 29/4/2016 14:52

The price is strangely a bit higher in Amsterdam-

[davebowler] 21/4/2016 09:06

Liberum;
Strong NAV rebound in March

Event
Volta's NAV rose 4.2% in March to €7.59 per share as credit markets recovered losses from earlier in the year. The mark-to-market movement across portfolio sub-sectors was CLO equity +8.0%, CLO debt +6.5%, Cash corporate credit +4.3%, synthetic corporate credit +1.2% and ABS +0.3%.

The sole warehouse position held by Volta was closed which led to a pricing of a new CLO and Volta re-invested €8m into the equity of the new CLO. In addition, Volta acquired two CLO debt positions in March. €16.6m was invested in total in March with an average projected yield of 11.6%.

Liberum view
The NAV uplift in March was achieved despite adverse FX movements in the month which we estimate would have had a negative impact of -1.2%. The underlying NAV increase was therefore in excess of 5% (of which 1.4% came from the warehouse transaction).

Volta has been reinvesting capital in recent months mainly in CLO debt tranches which are extremely attractive given the available yields and protection from default through the subordinated tranches. These should also lead to further improvements in the portfolio cash flow as capital has been rotated out of lower yielding debt assets to fund these investments.

Volta currently trades on a 13.7% discount to NAV (vs. 2.0% average discount for peers) and we believe it offers compelling value given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions and warehouse transactions).

[davebowler] 20/4/2016 09:57

Liberum mention;
re. Toro Limited
Positive read-across for CLO funds

Event
Toro's NAV rose 0.69% in March, driven by markups (0.85%) and cash flow realisations (0.59%), but partially offset by hedging costs (-0.75%). NAV total return in 2016 to date is -2.1%.

Synthetic credit markets experienced a very strong end to the quarter as a result of supportive central bank actions and statements. Spreads tightened considerably in both the US and Europe in March as evidenced by the movement in the iTraxx 5 year Crossover Index from 408 bps at 29 February to 304 bps at 31 March.



The European ABS market recovered some of the losses of the early part of the year. BB and B rated post-crisis CLO tranches tightened by 100bps and 150bps respectively.

Liberum view
The positive ABS market update highlighted by Toro should be helpful for CLO funds as the spread tightening should be reflected in CLO valuations in the near-term. The majority of these funds (Volta, Fair Oaks and Carador) have suffered significant mark-to-market writedowns in recent months and we believe the sector offers the strongest near-term recovery play in the alternative funds space.

[davebowler] 15/4/2016 13:23

Liberum;
AXA Investment Managers, the manager of Volta Finance, will be conducting meetings with investors and those unfamiliar with the investment case on 27th and 28th April.

Volta is a specialist structured credit fund. Volta has an impressive track record and an ability to access attractive returns in all asset classes (e.g. CLO’s bank balance sheet transactions and warehouse transactions). These returns underpin the current c.10% dividend yield.

The last couple of months have seen credit markets rebound after several months of negative performance, and this is yet to be fully reflected in the pricing of CLOs.

Market dislocation can be seen from the movement in Volta's projected portfolio IRR from 8.7% at 31 July 2015 to 10.4% (11.4% geared) at 31 January 2016. These projections from the manager have typically been quite conservative as Volta has generally exceeded expectations. There is upside potential to the projected IRRs as 25% of the portfolio could be called prior to maturity.



Volta's NAV at 29 February 2016 was €7.29 per share which represents a 2.9% decline in the month. The NAV performance is due to mark-to-market losses mainly on the portfolio's CLO equity and debt tranches. The mark-to-market movement across portfolio sub-sectors was CLO equity -3.3%, CLO debt -4.0%, Cash corporate credit -0.6%, synthetic corporate credit +0.0% and ABS -0.1%.

Volta had one CLO warehouse position at the end of February and the month-end valuation was negatively impacted by the drop in European loan prices. The CLO subsequently priced successfully and will close at the end of March 2016 with the warehoused loan portfolio transferred to the CLO at acquisition cost. The estimated impact on the March NAV is +1.4%.

In terms of portfolio activity, one European CLO debt tranche was sold for €1.8m and four US CLO BB debt tranches were acquired with an average projected yield of 12.0%.

Liberum view
Volta's relative outperformance against peers continues and this is predominantly due to the company's defensive portfolio positioning ahead of the market correction in H2 2015. Volta's NAV total return since 30 June 2015 is -7.6% which compares to -22.2% for Carador.

The newly acquired BB CLO debt tranches are extremely attractive given the available yields and protection from default through the subordinated tranches. These should also lead to further improvements in the portfolio cash flow as capital has been rotated out of lower yielding debt assets to fund these investments.

Volta currently trades on a 14.4% discount to NAV (vs. 1.8% average discount for peers) and we believe it offers compelling value given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions and warehouse transactions).

[langland] 07/4/2016 07:12

ex the 31 cent div

[tiltonboy] 04/4/2016 13:37

Nothing wrong with taking a profit. Had I bought some more, I would probably looking to do the same.

Only got a half holding so staying put.

[skyship] 04/4/2016 13:24

Sadly decided to take the turn of a tad over 13% in just over 2months. 8% from the share price gain, topped up with 5% from the currency. This latter is my reason for exiting ahead of my E6.50 target. I'm expecting Euro weakness; at least a reversal of the recent strength.

[skyship] 31/3/2016 12:01

...and not forgetting that 10% yield - COVERED!

[davebowler] 31/3/2016 09:38

Liberum;
Relative outperformance continues

Event
Volta's NAV at 29 February 2016 was €7.29 per share which represents a 2.9% decline in the month. The NAV performance is due to mark-to-market losses mainly on the portfolio's CLO equity and debt tranches. The mark-to-market movement across portfolio sub-sectors was CLO equity -3.3%, CLO debt -4.0%, Cash corporate credit -0.6%, synthetic corporate credit +0.0% and ABS -0.1%.

Volta had one CLO warehouse position at the end of February and the month-end valuation was negatively impacted by the drop in European loan prices. The CLO subsequently priced successfully and will close at the end of March 2016 with the warehoused loan portfolio transferred to the CLO at acquisition cost. The estimated impact on the March NAV is +1.4%.

In terms of portfolio activity, one European CLO debt tranche was sold for €1.8m and four US CLO BB debt tranches were acquired with an average projected yield of 12.0%.

Liberum view
Volta's relative outperformance against peers continues and this is predominantly due to the company's defensive portfolio positioning ahead of the market correction in H2 2015. Volta's NAV total return since 30 June 2015 is -7.6% which compares to -22.2% for Carador.

The newly acquired BB CLO debt tranches are extremely attractive given the available yields and protection from default through the subordinated tranches. These should also lead to further improvements in the portfolio cash flow as capital has been rotated out of lower yielding debt assets to fund these investments.

Volta currently trades on a 14.4% discount to NAV (vs. 1.8% average discount for peers) and we believe it offers compelling value given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions and warehouse transactions).

[skyship] 29/3/2016 15:01

OK - thnx Tilts...

Fondul - what the hell is that?

[tiltonboy] 29/3/2016 13:09

SKYSHIP,

It was their comments on JPEL and Fondul.

[skyship] 29/3/2016 12:15

Thnx for that DB - reassures me that there really is very good value here. Hopefully the end Feb'16 NAV won't disappoint. May have to increase my allocation.

I see the last line of your post was the Header for Private Equity. Could I prevail upon you to post that content to the PE thread - especially interested if they are commenting upon last week's SEP Interims, or the imminent MTH Tender.

[davebowler] 29/3/2016 10:09

Liberum;
Volta Finance (BUY)
Conservative portfolio positioning protects against market weakness

Event
Volta's interim report has highlighted a NAV return of -5% for the six months to 31 January 2016. The negative performance in the period was due to mark-to-market losses caused by a widening of the discount rate by 170bps since July 2015. NAV return in 2015 as a whole was +10.0%.

Cash flows received in the six months equate to 11.5% of NAV on an annualised basis. Cash flows were rising towards the end of the period as capital has been recycled into higher coupon debt instruments. €50.6m was invested in 13 assets with an average projected yield of 11.4%. Five assets were sold for €11.3m (projected yield of 5.3%) and five assets were called (€15.9m).

Only 2.5% of the portfolio is exposed to the oil and gas industry and most of this comes from US CLOs as European CLOs have minimal exposure to oil and gas. Volta has illustrated the relatively minor impact this sector could have on the projected returns for the company's US CLO debt and equity tranches under base and stressed scenarios.

The stressed scenario assumes:

50% default rate in oil and gas and metals and mining (base assumes defaults in line with long-term averages)
50% recovery rate (base case assumes 70% recovery)
25% loan prepayment (30% for base case)


Separately, Volta has also announced an unchanged semi-annual dividend of €0.31 per share (10.2% prospective dividend yield).

Liberum view
The company's outperformance versus peers is mainly due to the more conservative portfolio positioning with only 21% of the portfolio in CLO equity at the start of the period. Carador, which has a much higher weighting to US CLO equity, experienced a NAV decline of 17% over the same six-month period.

The market dislocation can also be seen from the movement in Volta's projected portfolio IRR from 8.7% at 31 July 2015 to 10.4% (11.4% geared) at 31 January 2016. These projections from the manager have typically been quite conservative as Volta has generally exceeded expectations. There is upside potential to the projected IRRs as 25% of the portfolio could be called prior to maturity. We note reassuring comments regarding the sustainability of the dividend and this is helped by the increased weight of cash flows coming from CLO debt assets which should provide a relatively stable source of income.

VTA currently trades on a 19% discount to NAV and we believe it offers compelling value given the manager's track record of outperformance and ability to access attractive returns in other asset classes (e.g. bank balance sheet transactions).

Private Equity

[skyship] 25/3/2016 14:34

Pretty encouraging Interim Report - both the Chairman & Investment Manager's Report sound pretty positive and underwrite the VALUE here. 10.3% yield and 20% NAV discount as at Jan'16. Should have the end Feb'16 NAV this coming week.

[skyship] 25/3/2016 14:34

Pretty encouraging Interim Report - both the Chairman & Investment Manager's Report sound pretty positive and underwrite the VALUE here. 10.3% yield and 20% NAV discount as at Jan'16. Should have the end Feb'16 NAV this coming week.

[wolstencroft] 18/3/2016 17:11

Roughly same price as on the UK market - about 6 EUR

[skyship] 18/3/2016 12:51

Price here looks to be on the turn - if you're a potential buyer, get them in soonest! I tried for an online top-up just now - nothing doing!

[skyship] 18/3/2016 12:48

Are they still trading at a discount over there/

[wolstencroft] 18/3/2016 12:40

buy on the Amsterdam exchange it is much more liquid and you can bid within the spread. But you have to deal in Euros...

[skyship] 15/3/2016 13:19

CIFU have risen 12% over the past week!

[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.