Volta Finance Limited (VAT /VTA) – Can 2021 monthly report
NOT FOR BROADCAST, DISTRIBUTION, OR PUBLICATION, IN WHOLE OR IN PART, IN OR TO THE UNITED STATES
Fordrnsey, June 9 2021
AXA IM has released the Volta Finance Limited (the “Company” or “Volta Finance” or “Volta”) monthly report for the month of May. The full report is attached to this press release and will soon be available on Volta’s website (www.voltafinance.com).
PERFORMANCE and PORTFOLIO ACTIVITY
Volta continued to perform well in May with +0.4%, reaching a total return of 8.9% for the first five months of 2021.
This time around, performance was driven almost evenly by the good performance of CLO shares, CLO debt tranches and bank balance sheet transactions. This month, the depreciation of the dollar cost 0.7% of the monthly performance.
The monthly performances of asset classes** were: +1.4% for bank balance sheet transactions, +1.6% for CLO equity tranches; +1.2% for CLO debt; -2.6% for Cash Corporate Credit and ABS (together representing 3.1% of GAV).
In terms of fundamentals, 12-month trailing default rates continued to decline in May, reaching new post-Covid lows with a default rate of 1.7% for both US and European loans. We expected default rates to converge between the US (where the impact of Covid has been greater) and Europe thanks to a faster economic recovery in the US at some point in 2021. It came earlier than expected and towards a drop in defaults (our view was to expect a convergence of around 2/2.5%).
This relatively low default rate is manageable for CLOs and improving the situation should be good for the Company. This gives ground to our strategy of strengthening our CLO Equity pocket in recent years.
In terms of cash flows, May is structurally a weak month for the Volta. Interest and coupons received during the month amount to the equivalent of €1.7 million. On a rolling 6-month basis, Volta received the equivalent of €20.7 million at the end of May, representing an annualized cash yield of 15.9%, based on the NAV at the end of May. We continue to expect overall cash flow to continue to increase over the next few months/quarters.
In May, Volta converted a USD CLO warehouse into a new CLO and an existing USD CLO tranche was reset. In total, the equivalent of €2.3 million was allocated to these operations. On average, using standard market assumptions, the projected IRR of these add-ons was around 13%.
At the end of May 2021, Volta’s NAV was €260.6 million or €7.12 per share.
The cash position at the end of the month was €14.5 million.
*It should be noted that approximately 9.5% of Volta’s GAV includes investments for which the relevant NAVs at the month-end date are normally only available after publication of the Volta’s NAV. It is Volta’s policy to publish its net asset value as soon as possible in order to provide shareholders with up-to-date information on Volta’s net asset value. Accordingly, these investments are valued using the most recent net asset value available for each fund or the quoted price for that subordinated rating.s. The most recent net asset value or quoted price available for the fund was 8.5% like a 3April 0 2021 and 1.0% at 31 March 2021.
** “performances” asset classes are calculated as the Dietz performance of the assets of each sub-fund, taking into account the Mark-to-Market of the assets to be period ends, payments received from assets during the period, and ignoring changes in to cross–exchange rate. Nevertheless, some residual currency effects could have an impact on the aggregate value of the portfolio when aggregating each sub-fund.
For the investment manager
AXA Investment Manager Paris
+33 (0)1 44 45 84 47
Company Secretary and Director
BNP Paribas Securities Services SCA, Guernsey Branch
+44 (0) 1481 750 853
Cenkos Securities plc
+44 (0) 20 7397 8900
ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in Guernsey under the Companies (Guernsey) Act 2008 (as amended) and is listed on Euronext Amsterdam and the main market of the London Stock Exchange for listed securities. Volta’s home member state for the purposes of the EU Transparency Directive is the Netherlands. As such, Volta is subject to the regulation and supervision of the AFM, which is the financial markets regulator in the Netherlands.
Volta’s investment objectives are to preserve capital throughout the credit cycle and to provide a stable stream of income to its shareholders through dividends. Volta seeks to achieve its investment objectives primarily through diversified investments in structured finance assets. Assets in which the Company may invest directly or indirectly include, but are not limited to: corporate credits; sovereign and quasi-sovereign debt; residential mortgages; and, car loans. The Company’s approach to investing is through vehicles and arrangements which essentially provide leveraged exposure to portfolios of these underlying assets. The Company has entrusted AXA Investment Managers Paris with a management company with a division specializing in structured credit, for the financial management of all of its assets.
ABOUT AXA INVESTMENT MANAGERS
AXA Investment Managers (AXA IM) is a multi-expert asset management company within the AXA Group, the world leader in financial protection and wealth management. AXA IM is one of Europe’s largest asset managers with 679 investment professionals and €858 billion in assets under management at end-December 2020.
This press release is issued by AXA Investment Managers Paris (“AXA IM”), in its capacity as alternative investment fund manager (within the meaning of Directive 2011/61/EU, the “AIFM Directive”) of Volta Finance Limited (the “Volta Finance”) whose portfolio is managed by AXA IM.
This press release is purely informative and does not constitute an invitation or an inducement to acquire shares of Volta Finance. Its distribution may be prohibited in certain jurisdictions, and no recipient may distribute copies of this document in violation of such limitations or restrictions. This document does not constitute an offer for sale of the securities referred to in the United States or to persons who are “United States persons” for the purposes of Regulation S under the United States Securities Act of 1933, as amended. (the “Securities Act”), or otherwise in circumstances where such an offer would be rrestricted by applicable law. These securities may not be sold in the United States without registration or exemption from registration under the Securities Act. Volta Finance does not intend to register any part of the offering of such securities in the United States or to conduct a public offering of such securities in the United States.
This communication is only being distributed and directed to (i) persons located outside the United Kingdom or (ii) investment professionals falling under section 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) asset holding companies and other persons to whom they may lawfully be disclosed, falling within section 49(2)(a) to (d ) of the Ordinance (all these persons being designated together as “data subjects”). The securities referred to herein are only available to relevant persons and any invitation, offer or agreement to subscribe, purchase or acquire such securities will only be entered into with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Past performance cannot be taken as an indication of future performance.
This press release contains statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes”, “anticipates”, “expects”, “intends”, “is/are expected”, “may”, “will” or “should”. They include statements regarding the level of the dividend, the current market the context and its impact on Volta’s long-term performance Financeinvestments. By their nature, forward-looking statements involve risks and uncertainties, and readers are cautioned that these forward-looking statements are not guarantees of future performance. The actual results, portfolio composition and performance of Volta Finance may differ materially from the impression created by the forward-looking statements. AXA IM assumes no obligation to publicly update or revise any forward-looking statements.
All target information is based on certain assumptions about future events which may not turn out to be realized. Due to the uncertainty surrounding such future events, the targets are not intended to be and should not be considered earnings or profit or any other type of forecast. There can be no assurance that any of these objectives will be achieved. Furthermore, no assurance can be given as to the achievement of the investment objective.
Figures provided which relate to past months or years and past performance cannot be taken as an indication of future performance or construed as a reliable indicator of future performance. Throughout this review, the citation of specific businesses or strategies is intended to illustrate some of Volta Finance’s investment methodologies and philosophies, as implemented by AXA IM. Historical success or AXA IM’s confidence in the future success of any of these businesses or strategies is not indicative and has no bearing on future results.
The valuation of financial assets may differ significantly from the prices that AXA IM could obtain if it sought to liquidate the positions on behalf of Volta Finance due to market conditions and the general economic environment. Such valuations do not constitute a fairness opinion or similar opinion and should not be relied upon as such.
Publisher: AXA INVESTMENT MANAGERS PARIS, a company incorporated under French law, with its registered office in Tour Majunga, 6, Place de la Pyramid – 92800 Puteaux. AXA IMP is approved by the Authority from Markets Financial under number GP92008 as an alternative investment fund manager within the meaning of the AIFM Directive.
Volta – Monthly Report – May 2021