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 printed the Volta Finance Restricted (the “Firm” or “Volta Finance” or “Volta”) month-to-month report for February. The complete 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 implications 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 adverse efficiency was primarily pushed by the mark-to-market affect on European CLO tranches (-10.2% for European CLO Fairness and -4.6% for European CLO money owed). It’s truthful to say that at this level, the US CLO market has been much less affected by the present Ukrainian state of affairs. Additionally, Volta has for a few years been lengthy USD towards EUR figuring out that being lengthy USD could act as a hedge towards market turbulence. In February, EUR was secure versus USD nevertheless it has moved decrease just lately and we count on the lengthy USD place to offer some reduction 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 affect of the Ukrainian disaster on Volta, one huge unknown is the length of the evolving commodity disaster. When Volta’s underlying property there are usually 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 traditional fastened earnings 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 way more money than a couple of 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 response to our data, essentially the most uncovered European firm from this perspective 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 are usually not anticipated to be materials from a credit score danger perspective in CLO tranches.
Nevertheless, the affect of an rising commodity disaster could effectively show important.
Companies which are closely depending on vitality or some meals commodities are going to undergo. Relying on the size of the commodity squeeze, the capability of such corporations to cross by means of price will increase, and the extent of presidency actions looking for to defend customers from value spikes, default charges could effectively rise. We at present count on the affect could be corresponding to the affect from the Covid disaster (at worst, in Europe the trailing12-month default charge reached 2.8% in October 2020). The European mortgage default charge is at present at 0.6% and will attain 3% or extra in 2023. If the commodity disaster was to final for a number of years. It will possible have a big affect on general financial progress and delay and even cancel rate of interest hikes.
To finish up with a extra optimistic tone, this commodity disaster clearly will take time to develop so Volta cashflows can proceed to be fairly estimated for the subsequent couple of quarters. For the 6 months ended February 2022, Volta obtained €21.1m curiosity and coupons representing a 16.3% annualized return on NAV. This sturdy money movement continues to underpin Volta’s dividend and gives 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 printed. Volta’s coverage is to publish its NAV on as well timed a foundation as attainable to offer shareholders with Volta’s appropriately up-to-date NAV data. Consequently, such investments are valued utilizing essentially the most just lately out there NAV for every fund or quoted value for such subordinated observes. Probably the most just lately out there fund NAV or quoted value 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 property in every bucket, bearing in mind the Mark-to-Market of the property at interval ends, funds obtained from the property over the interval, and ignoring modifications in cross–forex charges. However, some residual forex results may affect the combination 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 Companies 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 Corporations (Guernsey) Regulation, 2008 (as amended) and listed on Euronext Amsterdam and the London Inventory Trade’s Foremost Marketplace for listed securities. Volta’s residence 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 goals are to protect capital throughout the credit score cycle and to offer a secure stream of earnings to its shareholders by means of dividends. Volta seeks to realize its funding goals predominantly by means of diversified investments in structured finance property. The property that the Firm could spend money on both straight or not directly embody, however are usually not restricted to: company credit; sovereign and quasi-sovereign debt; residential mortgage loans; and, car loans. The Firm’s method to funding is thru autos and preparations that primarily present leveraged publicity to portfolios of such underlying property. 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 property.
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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 property beneath administration as of the tip of December 2021.
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This press launch is printed by AXA Funding Managers Paris (“AXA IM”), in its capability as different 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 data 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 could flow into copies of this doc in breach of such limitations or restrictions. This doc shouldn’t be a proposal on the market of the securities referred to herein in the USA 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 provide can be restricted by relevant regulation. Such securities might not be offered in the USA absent registration or an exemption from registration from the Securities Act. Volta Finance doesn’t intend to register any portion of the provide of such securities in the USA or to conduct a public providing of such securities in the USA.
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This communication is simply being distributed to and is simply directed at (i) individuals who’re outdoors the UK or (ii) funding professionals falling inside Article 19(5) of the Monetary Companies and Markets Act 2000 (Monetary Promotion) Order 2005 (the “Order”) or (iii) excessive web price 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, provide or settlement to subscribe, buy or in any other case purchase such securities will likely be engaged in solely with, related individuals. Any one who shouldn’t be a related particular person 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 accommodates statements which are, or could 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”, “could”, “will” or “ought to”. They embody the statements concerning the extent of the dividend, the present market context and its affect 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 are usually not ensures of future efficiency. Volta Finance’s precise outcomes, portfolio composition and efficiency could 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 data relies on sure assumptions as to future occasions which can not show to be realised. Because of the uncertainty surrounding these future occasions, the targets are usually not supposed to be and shouldn’t be thought to be earnings or earnings or every other kind of forecasts. There could be no assurance that any of those targets will likely be achieved. As well as, no assurance could be provided 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 evaluate, the quotation of particular trades or methods is meant as an instance among the funding methodologies and philosophies of Volta Finance, as carried out by AXA IM. The historic success or AXA IM’s perception sooner or later success, of any of those trades or methods shouldn’t be indicative of, and has no bearing on, future outcomes.
The valuation of monetary property can differ considerably from the costs that the AXA IM may get hold of if it sought to liquidate the positions on behalf of the Volta Finance as a result of market situations and common financial atmosphere. Such valuations don’t represent a equity or related 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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