VOLTA FINANCE - INTERIM MANAGEMENT STATEMENT 23 NOVEMBER 2012
2012-11-23 18:05:28 -
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO
THE UNITED STATES
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Guernsey, 23 November 2012 - Volta Finance Limited (the "Company" or
"Volta
Finance" or "Volta") has published its Interim Management Statement. The
full
report is attached to this release and is available on Volta Finance Limited's
financial website (www.voltafinance.com).
Dear Shareholders and Investors,
Over the quarter, from the end of July 2012 to the end of October 2012, the
Gross Asset Value* (the "GAV") of Volta Finance Limited (the "Company" or
"Volta
Finance" or "Volta") went from €174.9m or €5.57 per share, to €203.0m
or €6.47
per share. It reflects a positive 16.2% quarterly performance in its value.
It should be noted that the Company decided to subtract from the end of October
GAV approximately €4.1m of expenses not yet settled at this time (€0.13 per
share), relating to the Investment Manager's Management and Performance Fees for
the semi-annual period ended 31 July 2012 (see Annual Report recently published
for more details) in order to better reflect in its GAV the value of assets per
share.
The Company is expected (it is submitted for approval to shareholders at the 3
December 2012 AGM) to pay a €0.26 dividend per share by the end of December
2012. Shareholders will then have the opportunity to elect to receive all or
part of this dividend payment in shares of the Company.
During the quarterly period, the Company purchased 2 assets for €3.8m and sold a
portion of its position in a USD CLO Equity tranche (Northwoods Capital VIII)
for the equivalent of €2.4m.
During the quarter, cash flows generated by the Company's assets, excluding
asset sales and principal payments from assets, amounted to €9.6m (non euro
amounts being translated in euro using the end of month currency rate). This
amount could be compared to €8.8m for the most recent comparable 3-month period
(from the end of January 2012 to the end of April 2012). The cash generated by
the assets, during the quarter under review, is rather significant, being close
to an annual rate of 23% of Volta's asset valuation, excluding cash, at the
beginning of the period (€167.8m).
The cash position in the Company's accounts went from €7.1m at the end of July
2012 to €9.6m in cash, including €0.3m posted in respect to the currency hedge
transactions at the end of October 2012 and excluding the €4.1m not yet settled.
Considering the pace at which cash flows are generated and the necessity to
finance the next dividend payment, Volta could be considered as being able to
invest €4 to 5m.
The increase in the GAV during the quarter is due to decreases in discount
margins attached to structured credit products as well as to the high level of
cash flows generated by its assets.
MARKET ENVIRONMENT AND LATEST DEVELOPMENTS
From the end of July 2012 to the end of October 2012, the 5y European iTraxx
index (series 17) and the 5y iTraxx European Crossover index (series 17)
tightened significantly, from respectively 159 and 633 bps to respectively 124
and 462 bps. During the same period, credit spreads in the US, as illustrated by
the 5y CDX main index (series 18), decreased from 107 to 89 bps at the end of
October 2012. According to the CSFB Leverage Loan Index, the average price for
US liquid first lien loans increased from 94.80% to 96.23%. **
VOLTA FINANCE PORTFOLIO
Over the quarter, no material event affected the Synthetic Corporate Credit
holdings. However, the first loss positions in this bucket (ARIA III and the
residual positions in JAZZ III) remain highly sensitive to any new credit event,
especially to debt of financial institutions considering the significant
exposures to banks held through these positions.
Over the quarter, the value of the Equity positions went from €9.5m to €14.8m.
They generated €2.1m of interest or coupons during the quarter.
The value of the debt tranches went from €17.7m to €19.6m (€23.5m of principal
amount) and generated €0.1m of coupons during the quarter.
The value of the Bank Balance Sheet transactions went from €7.1m to €7.5m at the
end of October 2012 and generated €0.1m of coupons during the quarter.
CLO Equity and Debt tranches
During the quarter, on average, defaults and downgrades in the underlying loan
portfolios continued to occur, albeit at a slower pace than in the more recent
quarters which remained low compared to historical average for USD deals but at
an increasing pace and at above historical average rate for European deals. This
situation has no material consequences for Volta over the quarter.
Over the quarter, the value of USD CLO equity positions went from €36.5m (74% of
par on average) to €39.5m (87% of par) taking into account a partial sale for
€2.4m. They generated €3.5m of cash flows.
The value of Euro CLO equity positions went from €2.9m (32% of par on average)
to €3.0m (33% of par) and generated €0.5m of cash flows.
The value of USD CLO Debt positions went from €42.6m (74% of par on average) to
€48.1m (84% of par) including a recent purchase valued for €2.2m at the end of
the quarter. They generated €0.5m of cash flows.
The value of Euro CLO Debt positions went from €27.5m (56% of par on average) to
€37.1m (68% of par) including a recent purchase valued for €1.7m at the end of
the quarter. They generated €0.6m of cash flows.
Cash Corporate Credit
Over the quarter, one deal in this bucket (Promise Mobility) was priced down in
order to take into account a slight resumption of credit events at the
underlying loan level. No material event affected the other positions in this
bucket during the quarter.
The value of the Cash Corporate Credit positions went from €16.8m at the end of
July 2012 to €15.5m at the end of October 2012. They generated €0.6m of interest
and coupons during the quarter.
ABS
Over the quarter, no material event affected the ABS holdings.
During the quarter the value of the positions in this bucket went from €8.6m to
€8.5m and generated €1.4m of cash flows.
The Company considers that opportunities could arise in several structured
credit sectors in the current market environment. Amongst others, mezzanine or
senior tranches of CLOs, European or US ABS as well as tranches of Cash or
Synthetic Corporate Credit portfolios could be considered for investment.
Potential investments could be done depending on the pace at which market
opportunities could be seized and cash is available. Depending on market
opportunities, the Company may aim to take advantage of the current volatility
in prices to sell some assets in order to reinvest the sale proceeds on assets
representing, at the time of purchase, those which the Company considers a
better opportunity.
Unless stated otherwise, the figures in this Interim Management Statement are as
at the end of October 2012 as valuations are available only on a monthly basis
with some delays. Between the end of October 2012 and 22 November 2012, the date
of publication of this Interim Management Statement, the Company is not aware of
any significant event, materially affecting the Company's financial position or
the Company's controlled undertaking.
* GAV : In order to give a better indication of the value of assets for
shareholders the GAV has been diminished by Management and Incentive Fees due
for the financial period recently closed but not yet settled at the end of the
reported period
** Index data source: Markit, Bloomberg.
(Full Interim Management Statement attachment on www.voltafinance.com)
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ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in Guernsey under the Companies (Guernsey)
Laws, 1994 to 1996 (as amended) and listed on Euronext Amsterdam. Its investment
objectives are to preserve capital and to provide a stable stream of income to
its shareholders through dividends. For this purpose, it pursues a multi-asset
investment strategy targeting various underlying assets. The assets that the
Company may invest in either directly or indirectly include, but are not limited
to: corporate credits; sovereign and quasi-sovereign debt; residential mortgage
loans; automobile loans. Volta Finance Limited's basic approach to its
underlying assets is through vehicles and arrangements that provide leveraged
exposure to some of those underlying assets.
Volta Finance Limited has appointed AXA Investment Managers Paris, an investment
management company with a division specialised in structured credit, for the
investment management of all its assets.
ABOUT AXA INVESTMENT MANAGERS
AXA Investment Managers (AXA IM) is a multi-expert asset management company
within the AXA Group, a global leader in financial protection and wealth
management. AXA IM is one of the largest European-based asset managers with €547
billion in assets under management as of the end of June 2012. AXA IM employs
approximately 2,415 people around the world and operates out of 21 countries.
CONTACTS
Company Secretary
State Street (Guernsey) Limited
volta.finance@ais.statestreet.com
+44 (0) 1481 715601
Portfolio Administrator
Deutsche Bank
voltaadmin@list.db.com
For the Investment Manager
AXA Investment Managers Paris
Serge Demay
serge.demay@axa-im.com
+33 (0) 1 44 45 84 47
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This press release is for information only and does not constitute an invitation
or inducement to acquire shares in Volta Finance. Its circulation may be
prohibited in certain jurisdictions and no recipient may circulate copies of
this document in breach of such limitations or restrictions.
This press release is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
with the United States Securities and Exchange Commission or an exemption from
registration under the U.S. Securities Act of 1933, as amended (the "Securities
Act"). Volta Finance has not registered, and does not intend to register, any
portion of any offering of its securities in the United States or to conduct a
public offering of any securities in the United States.
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This document is being distributed by Volta Finance Limited in the United
Kingdom only to investment professionals falling within article 19(5) of the
Financial Services and Market Act 2000 (Financial Promotion) Order 2005 (the
"Order") or high net worth companies and other persons to whom it may lawfully
be communicated, falling within article 49(2)(A) to (E) of the Order ("Relevant
persons"). The shares are only available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire the shares will be engaged
only 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
relied on as a guide to future performance.
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This press release contains statements that are, or may deemed to be, "forward-
looking statements". These forward-looking statements can be identified by the
use of forward-looking terminology, including the terms "believes",
"anticipated", "expects", "intends", "is/are
expected", "may", "will" or
"should". They include the statements regarding the level of the dividend, the
current market context and its impact on the long-term return of Volta's
investments. By their nature, forward-looking statements involve risks and
uncertainties and readers are cautioned that any such forward-looking statements
are not guarantees of future performance. Volta Finance's actual results,
portfolio composition and performance may differ materially from the impression
created by the forward-looking statements. Volta Finance does not undertake any
obligation to publicly update or revise forward-looking statements.
Any target information is based on certain assumptions as to future events which
may not prove to be realised. Due to the uncertainty surrounding these future
events, the targets are not intended to be and should not be regarded as profits
or earnings or any other type of forecasts. There can be no assurance that any
of these targets will be achieved. In addition, no assurance can be given that
the investment objective will be achieved.
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Interim Management Statement:
hugin.info/137695/R/1660403/537692.pdf
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Source: Volta Finance Limited via Thomson Reuters ONE
[HUG#1660403]
