Volta Finance Restricted (VTA / VTAS) – February 2022 month-to-month report
NOT FOR RELEASE, DISTRIBUTION, OR PUBLICATION, IN WHOLE OR PART, IN OR INTO THE UNITED STATES
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Guernsey, 11 March 2022
AXA IM has revealed the Volta Finance Restricted (the “Firm” or “Volta Finance” or “Volta”) month-to-month report for February. The total report is connected to this launch and will likely be out there on Volta’s web site shortly (www.voltafinance.com).
PERFORMANCE and PORTFOLIO ACTIVITY
On the finish of February, the results of the Ukrainian invasion had been starting to be felt within the credit score markets. February efficiency was -3.9% after a +1.7% efficiency in January.
This damaging efficiency was primarily pushed by the mark-to-market impression on European CLO tranches (-10.2% for European CLO Fairness and -4.6% for European CLO money owed). It’s honest to say that at this level, the US CLO market has been much less affected by the present Ukrainian scenario. Additionally, Volta has for a few years been lengthy USD in opposition to EUR understanding that being lengthy USD might act as a hedge in opposition to market turbulence. In February, EUR was secure versus USD but it surely has moved decrease just lately and we anticipate the lengthy USD place to offer some aid in March (c.+0.8% on March NAV on the time of publishing this launch).
Turning to the broad asset courses, the month-to-month performances** had been: +0.8% for Financial institution Stability Sheet transactions, -5.6% for CLO fairness tranches; -2.9% for CLO debt; -0.2% for Money Company Credit score and ABS (collectively representing 3.0% of NAV).
Concerning the impression of the Ukrainian disaster on Volta, one large unknown is the period of the evolving commodity disaster. When taking a look at Volta’s underlying belongings there usually are not any direct exposures to Russian or Ukrainian corporations however Volta does have some exposures to corporations which have a part of their revenues or have some manufacturing websites in these two international locations. Nevertheless, it’s worthwhile noting that CLOs have a tendency to carry loans issued by corporations of decrease dimension, having mechanically much less revenues out of Europe/UK/NorthAmerica than many international gamers in basic fastened revenue credit score markets. One other mitigant si that we’re simply exiting from the Covid disaster and all of the stress it generated so that almost all corporations have rather more money than just a few years in the past.
Within the European mortgage universe, there are only a few corporations with greater than 10% of revenues reliant on manufacturing capacities in Russia or Ukraine: in accordance with our info, probably the most uncovered European firm from this standpoint is Stada, a pharmaceutical firm, is deemed having c.14% of its revenues in Russia in addition to 2 manufacturing websites. Consequently, the direct penalties of the present disaster and sanctions usually are not anticipated to be materials from a credit score danger perspective in CLO tranches.
Nevertheless, the impression of an rising commodity disaster might nicely show vital.
Companies which can be closely depending on power or some meals commodities are going to endure. Relying on the size of the commodity squeeze, the capability of such corporations to cross by value will increase, and the extent of presidency actions looking for to defend shoppers from worth spikes, default charges might nicely rise. We presently anticipate the impression is likely to be similar to the impression from the Covid disaster (at worst, in Europe the trailing12-month default price reached 2.8% in October 2020). The European mortgage default price is presently at 0.6% and will attain 3% or extra in 2023. If the commodity disaster was to final for a number of years. It might seemingly have a big impression on general financial development and delay and even cancel rate of interest hikes.
To finish up with a extra constructive tone, this commodity disaster clearly will take time to develop so Volta cashflows can proceed to be moderately estimated for the subsequent couple of quarters. For the 6 months ended February 2022, Volta acquired €21.1m curiosity and coupons representing a 16.3% annualized return on NAV. This sturdy money move continues to underpin Volta’s dividend and offers helpful reinvestment alternatives.
As on the finish of February 2021, Volta’s NAV was €259.9m or €7.10 per share.
*It needs to be famous that roughly 8.5% of Volta’s GAV includes investments for which the related NAVs as on the month-end date are usually out there solely after Volta’s NAV has already been revealed. Volta’s coverage is to publish its NAV on as well timed a foundation as potential to offer shareholders with Volta’s appropriately up-to-date NAV info. Consequently, such investments are valued utilizing probably the most just lately out there NAV for every fund or quoted worth for such subordinated notices. Essentially the most just lately out there fund NAV or quoted worth was 7.9% as at 31 January 2022 and 0.6% as at 30 September 2021.
** “performances” of asset courses are calculated because the Dietz-performance of the belongings in every bucket, taking into consideration the Mark-to-Market of the belongings at interval ends, funds acquired from the belongings over the interval, and ignoring modifications in cross–foreign money charges. Nonetheless, some residual foreign money results might impression the mixture worth of the portfolio when aggregating every bucket.
CONTACTS
For the Funding Supervisor
AXA Funding Managers Paris
Serge Demay
serge.demay@axa-im.com
+33 (0) 1 44 45 84 47
Firm Secretary and Administrator
BNP Paribas Securities Providers S.C.A, Guernsey Department
guernsey.bp2s.volta.cosec@bnpparibas.com
+44 (0) 1481 750 853
Company Dealer
Cenkos Securities plc
Andrew Worne
Daniel Balabanoff
+44 (0) 20 7397 8900
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ABOUT VOLTA FINANCE LIMITED
Volta Finance Restricted is included in Guernsey beneath The Firms (Guernsey) Legislation, 2008 (as amended) and listed on Euronext Amsterdam and the London Inventory Alternate’s Fundamental Marketplace for listed securities. Volta’s dwelling member state for the needs of the EU Transparency Directive is the Netherlands. As such, Volta is topic to regulation and supervision by the AFM, being the regulator for monetary markets within the Netherlands.
Volta’s funding targets are to protect capital throughout the credit score cycle and to offer a secure stream of revenue to its shareholders by dividends. Volta seeks to achieve its funding targets predominantly by diversified investments in structured finance belongings. The belongings that the Firm might put money into both instantly or not directly embody, however usually are not restricted to: company credit; sovereign and quasi-sovereign debt; residential mortgage loans; and, car loans. The Firm’s method to funding is thru automobiles and preparations that basically present leveraged publicity to portfolios of such underlying belongings. The Firm has appointed AXA Funding Managers Paris an funding administration firm with a division specialised in structured credit score, for the funding administration of all its belongings.
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ABOUT AXA INVESTMENT MANAGERS
AXA Funding Managers (AXA IM) is a multi-expert asset administration firm throughout the AXA Group, a worldwide chief in monetary safety and wealth administration. AXA IM is among the largest European-based asset managers with 2,460 professionals and €887 billion in belongings beneath administration as of the tip of December 2021.
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This press launch is revealed by AXA Funding Managers Paris (“AXA IM”), in its capability as various funding fund supervisor (throughout the that means of Directive 2011/61/EU, the “AIFM Directive”) of Volta Finance Restricted (the “Volta Finance”) whose portfolio is managed by AXA IM.
This press launch is for info solely and doesn’t represent an invite or inducement to amass shares in Volta Finance. Its circulation could also be prohibited in sure jurisdictions and no recipient might flow into copies of this doc in breach of such limitations or restrictions. This doc just isn’t a proposal on the market of the securities referred to herein in america or to individuals who’re “U.S. individuals” for functions of Regulation S beneath the U.S. Securities Act of 1933, as amended (the “Securities Act”), or in any other case in circumstances the place such supply can be restricted by relevant regulation. Such securities is probably not offered in america absent registration or an exemption from registration from the Securities Act. Volta Finance doesn’t intend to register any portion of the supply of such securities in america or to conduct a public providing of such securities in america.
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This communication is barely being distributed to and is barely directed at (i) individuals who’re exterior the UK or (ii) funding professionals falling inside Article 19(5) of the Monetary Providers and Markets Act 2000 (Monetary Promotion) Order 2005 (the “Order”) or (iii) excessive web value corporations, and different individuals to whom it might lawfully be communicated, falling inside Article 49(2)(a) to (d) of the Order (all such individuals collectively being known as “related individuals”). The securities referred to herein are solely out there to, and any invitation, supply or settlement to subscribe, buy or in any other case purchase such securities will likely be engaged in solely with, related individuals. Any one that just isn’t a related individual mustn’t act or depend on this doc or any of its contents. Previous efficiency can’t be relied on as a information to future efficiency.
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This press launch incorporates statements which can be, or might deemed to be, “forward-looking statements”. These forward-looking statements could be recognized by way of forward-looking terminology, together with the phrases “believes”, “anticipated”, “expects”, “intends”, “is/are anticipated”, “might”, “will” or “ought to”. They embody the statements concerning the extent of the dividend, the present market context and its impression on the long-term return of Volta Finance‘s investments. By their nature, forward-looking statements contain dangers and uncertainties and readers are cautioned that any such forward-looking statements usually are not ensures of future efficiency. Volta Finance’s precise outcomes, portfolio composition and efficiency might differ materially from the impression created by the forward-looking statements. AXA IM doesn’t undertake any obligation to publicly replace or revise forward-looking statements.
Any goal info is predicated on sure assumptions as to future occasions which can not show to be realised. As a result of uncertainty surrounding these future occasions, the targets usually are not meant to be and shouldn’t be thought to be earnings or earnings or every other sort of forecasts. There could be no assurance that any of those targets will likely be achieved. As well as, no assurance could be on condition that the funding goal will likely be achieved.
The figures offered that relate to previous months or years and previous efficiency can’t be relied on as a information to future efficiency or construed as a dependable indicator as to future efficiency. All through this assessment, the quotation of particular trades or methods is meant for instance a number of the funding methodologies and philosophies of Volta Finance, as applied by AXA IM. The historic success or AXA IM’s perception sooner or later success, of any of those trades or methods just isn’t indicative of, and has no bearing on, future outcomes.
The valuation of economic belongings can fluctuate considerably from the costs that the AXA IM might get hold of if it sought to liquidate the positions on behalf of the Volta Finance because of market situations and normal financial surroundings. Such valuations don’t represent a equity or comparable opinion and shouldn’t be thought to be such.
Editor: AXA INVESTMENT MANAGERS PARIS, an organization included beneath the legal guidelines of France, having its registered workplace situated at Tour Majunga, 6, Place de la Pyramide – 92800 Puteaux. AXA IMP is permitted by the Autorité des Marchés Financiers beneath registration quantity GP92008 instead funding fund supervisor throughout the that means of the AIFM Directive.
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