Net Asset Value & Publication of Monthly Report
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21 February 2019
Marble Point Loan Financing Limited
Unaudited Net Asset Value and Publication of Monthly Report
As at the close of business on 31 January 2019, the estimated unaudited net asset value ("NAV") per Ordinary Share of Marble Point Loan Financing Limited ("MPLF") is as follows:
Share class | January 2019 Month End NAV (1) | December 2018 Month End NAV(1) | Monthly Change in NAV (1) | Total Return since Admission (1) |
Ordinary Shares | USD 0.8621 | USD 0.8172 | USD 0.0450 | (5.95%) |
MPLF's NAV total return increased 8.15% in January, as the broad-based selloff in loans that was prevalent in the fourth quarter of 2018 reversed throughout the month. The average price of the CSLLI increased 1.72 points during the month to 95.81. As described below, we believe the drawdown in loans and subsequent rebound was principally technical in nature. The CSLLI, the ICE BAML HYI and the S&P 500 Index registered total returns of 2.30%, 4.59% and 8.01%, respectively.(2) While January's return in loans was the highest since March 2016, it follows the -2.29% loss in the CSLLI in December, the worst month in over seven years.
The technical factor that drove the sharp decrease in loan prices during December abated during January. While retail loan funds still experienced net outflows of $4.7 billion in January, this was significantly less and more measured than the over $15 billion of net outflows during the month of December and over $20 billion in the fourth quarter of 2018 according to J.P. Morgan. This easing of selling pressure from retail funds and opportunistic buying by many who felt the market was oversold, enabled the CSLLI to retrace a significant portion of its December loss, further increasing in price since January month end to 96.23 as at 19 February.
As discussed in prior commentary, we believe the cash flow generating capabilities of our CLOs were not adversely impacted throughout the recent loan market volatility. Since the Marble Point CLOs were not forced sellers of loans during the market decline, the decrease in loan prices during the quarter presented an opportunity to increase the level of investment in loans at attractive prices.
The Company received estimated cash distributions of $6.2 million from its CLO equity investments in January, compared to $4.2 million in October 2018. While a large component of this distribution improvement results from the first distribution in January by MP CLO VII following its reset transaction which closed on 12 September 2018, quarterly distributions by the other CLO equity positions were 9.3% higher in the aggregate.
The closing of Marble Point CLO XIV on 31 December 2018 allowed MPLF to crystalize its return on the associated loan accumulation facility ("LAF") in which MPLF had invested $28 million, achieving a realized IRR of over 15%. A substantial portion of the CLO's loan portfolio was acquired in the loan market during the period between pricing and closing, a period when loan prices were declining. During the month of December, MPLF invested $15 million of proceeds from its notes offering in a newly formed LAF which is presently accumulating loans with the intention of converting the LAF into a new CLO investment in the future.
During January, MPLF funded an incremental $4.5 million into the above mentioned LAF to continue accumulating loans with the intention of converting the LAF into a new CLO investment later this year. MPLF's total investment in the LAF stands at $19.5 million at 31 January 2019. Supported by this and third party equity capital, the total amount of ramped assets is $143.9 million as at 31 January 2019.
There were 10 new U.S. CLOs issued in January, representing approximately $5.12 billion of volume, according to LCD. Refinancing volume was $0.49 billion and reset volume was $1.30 billion in January.
One constituent of the S&P/LSTA Leveraged Loan Index, API Heat Transfer, defaulted in January. Despite this default the lagging 12-month default rate decreased to a 17-month low of 1.42% as two issuers rolled off of the lagging 12-month calculation. MPLF had no exposure to API Heat Transfer.
MPLF's January 2019 Monthly Report is available on its website: www.mplflimited.com
(1) NAV figures are provided for informational purposes only and are unaudited, estimated by Marble Point Credit Management LLC ("Marble Point"), the investment manager of MPLF, and subject to adjustment. Marble Point estimates MPLF's NAV on a monthly basis. Estimates with respect to a date falling on a calendar quarter end are subject to revision when the quarterly NAV is determined. NAV is calculated as the sum of the value of MPLF's investment portfolio, any cash or cash equivalents and other assets less liabilities. NAV total return figures shown are estimated, unaudited and subject to adjustment and reflect the net total NAV return, inclusive of dividends, for the periods shown and as from MPLF's admission to the Specialist Fund Segment of the London Stock Exchange on 13 February 2018, after taking into account listing and offering costs and pre-admission profits and loss. Monthly and cumulative performance figures are non-annualised and such results reflect the deductions of applicable management fees and expenses at the underlying investment levels.
(2) The Credit Suisse Levered Loan Index ("CSLLI") tracks the investable universe of the US dollar denominated leverage loan market. The ICE BofAML US High Yield Index ("ICE BofAML HYI") tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. The S&P 500 tracks the performance of US equity markets. Index returns do not reflect any deductions for fees, expenses or taxes. You cannot invest directly in an index.
NOTE: PAST PERFORMANCE IS NOT INDICATIVE OF, OR A GUARANTEE OF, FUTURE PERFORMANCE.
This release contains inside information.
Enquiries:
Marble Point Loan Financing Limited
Investor Relations
T: +44 (0) 20 7259 1500
Website: www.mplflimited.com
Corporate Broker:
Stifel Nicolaus Europe Limited
Neil Winward, Corporate Broker - Investment Funds
T: +44 (0) 20 7710 7600
IMPORTANT INFORMATION
Marble Point Loan Financing Limited (the "Company") is a closed-ended investment company incorporated in Guernsey with its ordinary shares ("Shares") admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange (ticker: MPLF.LN). The Company is invested in a diversified portfolio of US dollar denominated, broadly syndicated floating rate senior secured corporate loans via CLOs, loan accumulation facilities and other vehicles managed by Marble Point Credit Management LLC ("Marble Point") or its affiliates. Marble Point is an investment adviser registered with the U.S. Securities and Exchange Commission.
This document is provided for informational purposes only and does not constitute an offer to sell any Shares, notes or other securities (collectively, "Securities") issued by the Company or a solicitation of an offer to purchase any such Securities in the United States, Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction. This document may not be relied upon, and should not be used, for the purpose of making any investment decision. This document and the information and views included herein do not constitute investment advice or a recommendation or an offer to enter into any transaction with the Company or any of its affiliates. Any recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of any investment and should consult its own legal counsel and financial, actuarial, accounting, regulatory and tax advisers to evaluate any such investment. This document has been issued by the Company and is the sole responsibility of the Company.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold in the United States to, or for the account or benefit of, U.S. persons unless they are registered under applicable law or exempt from registration. The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, and investors will not be entitled to the benefits of such Act.
The information shown herein is estimated, unaudited, for background purposes only, representative as of the dates specified herein, subject to adjustment and not purported to be full or complete. Nothing herein shall be relied upon as a representation as to the current or future performance or portfolio holdings of the Company or any strategy or investment vehicle. Certain information presented herein has been obtained from third party sources and is believed to be reliable. However, neither the Company nor Marble Point represents that the information contained in this document (including third party information) has been independently verified or is accurate or complete, and it should not be relied upon as such. Index information, if any, has been provided for illustration purposes only. Any such information does not reflect the effect of transaction costs, management fees or other costs which would reduce returns. An investor cannot invest directly in an index.
Any of the views or opinions expressed herein are current views and opinions only and may be subject to change. Statements made herein are as of the date of this document and should not be relied upon as of any subsequent date. All information is current as of the date of this document and is subject to change without notice.
There is no guarantee that any of the goals, targets or objectives described in this document will be achieved. The investment strategies of the Company may not be suitable for all investors and are not intended to constitute a complete investment program. Neither Marble Point nor the Company makes any representation or warranty (express or implied) with respect to the information contained herein (including, without limitation, information obtained from third parties) and each of them expressly disclaims any and all liability based on or relating to the information contained in, or errors or omissions from, these materials; or based on or relating to the use of these materials; or any other written or oral communications transmitted to the recipient or any of its affiliates or representatives in the course of its evaluation of the information herein.
Past performance is not a reliable indicator of current of future results. The value of investments may go down as well as up and investors may not get back any of the amount invested. The value of investments designated in another currency may rise and fall due to exchange rate fluctuations in respect of the relevant currencies. Adverse movements in currency exchange rates can result in a decrease in return and a loss of capital.
A Note on Forward Looking Statements. This document includes forward-looking statements. Forward-looking statements include all matters that are not historical facts. Actual results may differ materially from any results projected in the forward-looking statements and are subject to risks and uncertainties. Such statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, and other factors that may cause actual results to differ materially from the anticipated results expressed or implied by such forward-looking statements. The Company and Marble Point caution readers not to place undue reliance on such statements. Neither the Company nor Marble Point undertakes, and each specifically disclaims, any obligation or responsibility, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Actual results may differ materially from the Company's and/or Marble Point's expectations and estimates.
None of the Company, Marble Point or any of their respective parent or subsidiary undertakings, or the subsidiary undertaking of any such parent undertakings, or any of such person's respective partners, shareholders, directors, members, officers, affiliates, agents, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any information or opinions presented or contained in this document nor shall they accept any responsibility whatsoever for, or make any warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this document (or whether any information has been omitted from the document) or any other information relating to the Company, Marble Point or their respective subsidiaries or associated companies, in any form whatsoever, howsoever transmitted or made available or for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. This shall not affect any liability any such person may have which may not be excluded under applicable law or regulation.
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