TIDMAEFS
RNS Number : 8900Y
Alcentra European Fltng Rate Inc Fd
11 December 2017
Alcentra European Floating Rate Income Fund Limited
Market Commentary
November was an interesting month for credit markets, with some
real weakness in High Yield bonds early in the month and then a
more stable second half that saw High Yield bonds recover to a
modest -0.30% loss for the month as a whole[1]. Much of this was
down to weakness in Telecoms names in the period, following weaker
results in Wind[2] and Altice[3] and the latter also announcing a
series of management changes. But other credits in the sector were
also under pressure, including SFR[4]. As you would expect, a more
volatile reaction was seen in the equity and High Yield markets,
whereas the loans in both borrowers were more stable. At one point
the Altice bonds had lost 9.25%, and the equity was down over 50%,
whereas the senior secured loans were down about a point(3) .
High Yield bonds had close to EUR1.6 billion of outflows over
the second half of the month[5].
Overall loan performance for November was muted but still
positive, with demand remaining consistent and new CLOs continuing
to price. The Credit Suisse Western European Leveraged Loan Index
("CS WELLI") was up +0.07%, bringing year to date returns to
+3.29%[6].
Year to date new issue loan volume hit EUR115 billion, up 72% on
the prior year[7]. A meaningful percentage of this was refinancing
activity (EUR52 billion) which can see borrowers extracting lower
pricing for their debt, but it is still encouraging to see a
meaningful pick up in real new deal supply. Nets[8], Paysafe,
Ceramtec, Refresco, Picard and TMF all launched new facilities in
excess of EUR1 billion7.
Portfolio Update
The majority of the loans in the portfolio were stable over the
period, with the weakest performers being a small number of bond
positions that were down 2% to 4%. The Fund did not own any of the
junior debt in the Telecoms credits that saw much more volatility.
The top performers were loans and floating rate notes that were up
between 1.3% and 3%.
ENDS.
For further information please contact:
Alcentra Limited
Simon Perry +44 20 7367 5272
Factsheet
An accompanying factsheet which includes the information above
as well as wider commentary on the investments made by the Fund can
be found on the Fund's website www.aefrif.com.
Background Information
Alcentra European Floating Rate Income Fund Limited, a Guernsey
Authorised Closed-Ended Collective Investment Scheme, regulated by
the Guernsey Financial Services Commission and listed on the Main
Market of the London Stock Exchange invests predominantly in senior
secured loans and senior secured bonds issued by European
corporates and targets returns (net of fees and expenses) of 7% to
10% per annum. The Fund targets a dividend yield of 5.5 pence per
GBP1.00 issue price of the initial offering of shares in the Fund
for the first full year of investment, paid quarterly.
Important Notices
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This report is aimed at existing investors in the fund and has
not been approved by any competent regulatory authority.
The information contained in this document is given as at the
date of its publication (unless otherwise marked) and is based on
past performance. Past performance is not a guide to future
performance and the value of investments and investment value can
go down as well as up. The future performance of the Fund will
depend on numerous factors which are subject to uncertainty.
Including changes in market conditions and interest rates and
exchange rates and in response to other economic, political or
financial developments, investment return and principal value of
your investment will fluctuate, so that when your investment is
sold, the amount you receive could be less than what you originally
invested. Past or current yields are not indicative of future
yields.
This document does not contain any representations, does not
constitute or form part of any solicitation of any offer to sell or
invitation to purchase any securities of the Fund, nor shall it or
any part of it or the fact of its distribution form the basis of or
be relied upon in connection with any contract therefor, and does
not constitute a recommendation regarding the securities of the
Fund. Nothing in this document should be construed as a profit or
dividend forecast.
This document includes statements that are, or may be deemed to
be, "forward-looking statements". These forward-looking statements
include, without limitation, statements typically containing words
such as "believes", "considers", "intends", "expects",
"anticipates", "targets", "estimates", "will", "may", or "should"
and words of similar import. The forward-looking statements are
based on the beliefs, assumptions and expectations of future
performance and market development of Alcentra Limited
("Alcentra"), taking into account information currently available
and made as at the date of this document. These can change as a
result of many possible events or factors, not all of which are
known or within Alcentra's control. If a change occurs, the Fund's
business, financial condition, liquidity and results of operations
may vary materially from those expressed in the forward-looking
statements. By their nature, forward-looking statements involve
known and unknown risks and uncertainties. Forward-looking
statements are not guarantees of future performance. Alcentra
qualifies any and all of the forward-looking statements by these
cautionary factors. Please keep this cautionary note in mind while
reading this document.
An investment in the Fund is suitable only for investors who are
capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear losses (which
may equal the whole amount invested) that may result from such an
investment. An investment in the Fund should constitute part of a
diversified investment portfolio. Accordingly, typical investors in
the Fund are expected to be sophisticated and/or professional
investors who understand the risks involved in investing in the
Fund.
Alcentra gives no undertaking to provide recipients of this
document with access to any additional information, or to update
this document or any additional information, or to correct any
inaccuracies in it which may become apparent including in relation
to any forward-looking statements. The distribution of this
document shall not be deemed to be any form of commitment on the
part of Alcentra to proceed with any transaction.
This document is issued by Alcentra Limited, which is authorised
and regulated in the United Kingdom by the Financial Conduct
Authority and whose registered address is at 160 Queen Victoria
Street, London, United Kingdom, EC4V 4LA.
BNY Mellon is the corporate brand of The Bank of New York Mellon
Corporation and may also be used as a generic term to reference the
Corporation as a whole or its various subsidiaries generally.
(c) 2017 The Bank of New York Mellon Corporation. All rights
reserved. Trademarks and logos belong to their respective
owners.
[1] S&P LCD News, Bond prices drop as decliners continue to
dominate, 17 November 2017
[2] S&P LCD News, Altice bonds steady on asset-disposal
news, 1 December 2017
[3] S&P LCD News, Altice bonds in freefall amid major
management reshuffle, 10 November 2017
[4] S&P LCD News, Topical: HY suffers volatility bout, but
primary unscathed, 30 November 2017
[5] S&P LCD News, European HY funds record EUR806M outflow,
20 November 2017
[6] Credit Suisse Western European Leveraged Loan Index, hedged
to EUR, 30 November 2017
[7] S&P LCD European Weekly, 1 December 2017
[8] S&P LCD News, Nets allocates EUR2.16B buyout financing;
terms, 29 November 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
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