Volta Finance Limited NET ASSET VALUE AS AT 30 JUNE 2024
Volta Finance Limited (VTA / VTAS) – June
2024 monthly report
NOT FOR RELEASE, DISTRIBUTION, OR PUBLICATION, IN WHOLE
OR PART, IN OR INTO THE UNITED STATES
*****
Guernsey, July 17th, 2024
AXA IM has published the Volta Finance Limited
(the “Company” or “Volta Finance” or “Volta”) monthly report for
June 2024. The full report is attached to this release and will be
available on Volta’s website shortly (www.voltafinance.com).
PERFORMANCE and PORTFOLIO
ACTIVITY
Dear investors,
In June, Volta Finance had another positive
month with a net performance of +0.28%, bringing the year-to-date
return at +9.8%. This performance is to be put in perspective with
broader Credit markets, especially US High Yield which returned
+2.62% year-to-date and European High Yield which returned
+3.13%.
However, June was quite volatile with market nervousness around
the politic calendar given the French snap elections taking place
as well as the looming UK general elections. The first round of the
French elections calmed the markets as the far-right party did not
gain a parliament majority, reducing de facto the
probability of a Frexit-type of scenario. European equity markets
rallied and the OAT-Bund spreads narrowed to their tightest levels
on the month.
In terms of market performance, both High Yield Credit indices CDX
(US) and Xover (Europe) widened by 20bps to 25bps+, thus erasing
the gains made in May. Loan markets were also softer, European
loans lost c. half a point while its US counterpart lost 35 cents.
Despite this volatility, the Primary CLO markets continued to show
strong momentum with significant issuance in the US and Europe.
Spreads tightened across the capital structure although
non-Investment Grade tranches were trading slightly wider in
Secondary on a month-to-date basis.
Economically, weaker US data - US payroll growth slowing down,
jobless rate up to 4.1% - raised hopes for additional Fed rate cuts
in 2024. US government bonds yields declined while US equity
markets reached record highs by the end of the month.
Loan fundamentals in both Europe and the US
remained strong with default rates sub 1.5% in both regions and
less than 10% of both loan markets trading at a price below 90.00%
of par. Meanwhile, loan refinancings continued to gain momentum
while recoveries finally trended back up towards $60.00.
Volta Finance’s investment portfolio was hit by
the volatility , particularly in its US CLO Equity pocket, as lower
loan valuations drove the prices of some amortizing CLO Equities
down. All the other investment pockets were positive though, with
CLO debts generating a steady stream of income. In terms of
activity, in addition to funding of capital calls on the CLO
warehouses, Volta Finance was a net buyer of BB and single-B risk
purchasing respectively EUR 1.5mm and EUR 7.5mm of bonds (note that
EUR 2.9mm of single-B risk paid par back). Objective was to reduce
the overall cash balance of the fund and deploy into the CLO
Primary debt tranches. The cashflow generation over the last 6
months remained strong at €28.3m equivalent of interests and
coupons, representing c.21% of the month’s NAV on an annualized
basis.
Volta’s underlying sub asset classes monthly
performances** were as follow: +1.0% for Bank Balance Sheet
transactions, -0.45% for CLO Equity tranches, +1.35% for CLO Debt
tranches and +0.1% for Cash Corporate Credit &
ABS***, cash representing c.4% of NAV.
As of end of June 2024, Volta’s NAV was €263.9m,
i.e. €7.21 per share.
*It should be noted that approximately 0.48%
of Volta’s GAV comprises investments for which the relevant NAVs as
at the month-end date are normally available only after Volta’s NAV
has already been published. Volta’s policy is to publish its NAV on
as timely a basis as possible to provide shareholders with Volta’s
appropriately up-to-date NAV information. Consequently, such
investments are valued using the most recently available NAV for
each fund or quoted price for such subordinated notes. The most
recently available fund NAV or quoted price was 0.25% as at 30
April 2024, 0.23% as at 31 March 2024.
** “performances” of asset classes are
calculated as the Dietz-performance of the assets in each bucket,
taking into account the Mark-to-Market of the assets at period
ends, payments received from the assets over the period, and
ignoring changes in cross-currency rates. Nevertheless, some
residual currency effects could impact the aggregate value of the
portfolio when aggregating each bucket.
*** The cash Corporate Credit and ABS bucket is currently made
of 3 legacy assets representing 0.8% of GAV.
CONTACTS
For the Investment Manager
AXA Investment Managers Paris
François Touati
francois.touati@axa-im.com
+33 (0) 1 44 45 80 22
Olivier Pons
Olivier.pons@axa-im.com
+33 (0) 1 44 45 87 30
Company Secretary and
Administrator
BNP Paribas S.A, Guernsey Branch
guernsey.bp2s.volta.cosec@bnpparibas.com
+44 (0) 1481 750 853
Corporate Broker
Cavendish Securities plc
Andrew Worne
Daniel Balabanoff
+44 (0) 20 7397 8900
*****
ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in
Guernsey under The Companies (Guernsey) Law, 2008 (as amended) and
listed on Euronext Amsterdam and the London Stock Exchange's Main
Market 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 regulation and supervision by the AFM,
being the regulator for financial markets in the Netherlands.
Volta’s Investment objectives are to preserve
its capital across the credit cycle and to provide a stable stream
of income to its Shareholders through dividends that it expects to
distribute on a quarterly basis. The Company currently seeks to
achieve its investment objectives by pursuing exposure
predominantly to CLO’s and similar asset classes. A more
diversified investment strategy across structured finance assets
may be pursued opportunistically. The Company 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 2,600 professionals and €824
billion in assets under management as of the end of June
2023.
*****
This press release is published 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 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
document is not an offer for sale of the securities referred to
herein in the United States or to persons who are “U.S. persons”
for purposes of Regulation S under the U.S. Securities Act of 1933,
as amended (the “Securities Act”), or otherwise in circumstances
where such offer would be restricted by applicable law. Such
securities may not be sold in the United States absent registration
or an exemption from registration from the Securities Act. Volta
Finance does not intend to register any portion of the offer 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 to and is only directed at (i) persons who are outside
the United Kingdom or (ii) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (iii) high net
worth companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as “relevant
persons”). The securities referred to herein are only available to,
and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in 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.
*****
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 Finance'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. AXA IM
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.
The figures provided that relate to past
months or years and past performance cannot be relied on as a guide
to future performance or construed as a reliable indicator as to
future performance. Throughout this review, the citation of
specific trades or strategies is intended to illustrate some of the
investment methodologies and philosophies of Volta Finance, as
implemented by AXA IM. The historical success or AXA IM’s belief in
the future success, of any of these trades or strategies is not
indicative of, and has no bearing on, future results.
The valuation of financial assets can
vary significantly from the prices that the AXA IM could obtain if
it sought to liquidate the positions on behalf of the Volta Finance
due to market conditions and general economic environment. Such
valuations do not constitute a fairness or similar opinion and
should not be regarded as such.
Editor: AXA INVESTMENT MANAGERS PARIS, a
company incorporated under the laws of France, having its
registered office located at Tour Majunga, 6, Place de la Pyramide
- 92800 Puteaux. AXA IMP is authorized by the
Autorité des Marchés Financiers
under registration number GP92008 as an alternative
investment fund manager within the meaning of the AIFM
Directive.
*****
- Volta - Monthly report-June 2024
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