NB Global Floating Rate Income Fund C Share Update (1618J)
12 Luglio 2013 - 8:00AM
UK Regulatory
TIDMNBLS TIDMNBCS TIDMNBLU
RNS Number : 1618J
NB Global Floating Rate Income Fund
12 July 2013
NB Global Floating Rate Income Fund
Limited C Share Update
The Neuberger Berman Global Floating Rate Income Fund Limited
targets income generation whilst seeking to preserve investors'
capital and give protection against rising interest rates.
The Fund's managers seek to generate this yield by investing in
a global portfolio of below investment grade senior secured
corporate loans with selective use of senior secured bonds,
diversified by both borrower and industry. The Fund is managed by
three experienced Portfolio Managers backed by what we believe to
be one of the largest and most experienced credit teams in the
industry.
The Portfolio, as at 30 June 2013 (excluding Cash):
-- was split 89.13% USD, 8.45% EUR, 2.42% GBP
-- had 7.89% allocated to bonds out of the maximum 20% allowable
-- was invested primarily in B (56.30%) and Ba (37.06%) rated investments(1)
Market Environment (2)
After a very strong start to the year, we began to see some
volatility in May in the broader credit markets, primarily driven
by the concerns that the Fed may taper/withdraw Quantitative
Easing. While the loan market was more resilient than other fixed
income sectors, many of which experienced 3-5% losses, we did see
the year-to-date return on the US S&P/LSTA Leveraged Loan Index
reduce from 3.23% as at 22nd May to 2.28% by the end of June. May
did produce a positive return, but in June the Index suffered a
0.59% loss which was the first monthly fall since May 2012. A
similar theme was seen in Europe where the S&P European
Leveraged Loan Index year-to-date return fell from 3.27% to 2.78%
over the same period, with a drop of 0.39% seen in June, the first
negative return for 18 months. Despite the decline in both the US
and Europe, loans have been the best performing fixed income asset
class year to date. The loan market decline was caused by
developments in the high yield market. Whilst historically high
yield has been resilient to moves in Treasuries, we saw underlying
nervousness from retail investors with the resulting outflows
causing a 200bp widening in yields from 5% to 7%. These redemption
notices triggered a selling of bank loans by high yield bond
managers. Despite the volatility, flows into loans remained robust
and came from the usual sources i.e. US CLOs and mutual funds
brought in a combined $76bn as at the end of June. A handful of
European CLOs have also printed this year; seven in total for
EUR2.4bn.
The positive side of the volatility is that some of the more
aggressive repricing/dividend recapitalisation transactions that
were in the market were pulled and spreads on recent new issues
have widened by 50-100bp from early May lows. The year-to-date
issuance numbers remain strong and in the US we have seen some
$267bn ($120bn in Q2) of institutional loans launched versus $120bn
for the comparable period last year. Whilst the majority of these
were repricing/refinancing transactions we did start to see some
M&A related issuance which has helped grow the US market to
just under $600bn, up almost $50bn on the 2012 year end and in line
with its record level. We have also seen $36bn (YTD 2012 $39bn) of
senior secured bonds and, in Europe, EUR23bn (EUR8bn) of
institutional loans have been originated with EUR20bn (EUR7bn) of
senior secured bonds.
Portfolio Management
The bias towards the US reflects our more positive views on the
US economy where we expect modest economic growth and below trend
default rates over the next 12-24 months. However, we have invested
selectively in European transactions where the credit metrics
mirror those of the US counterparts e.g. Douwe Egberts Master
Blenders and Oxea and our exposure to Europe has increased to 10.8%
from 9.1% during the investing period. We have seen attractive
opportunities in single B names and are overweight at
56.3%.Additionally we have taken advantage of some relative value
opportunities in secured fixed rate bonds, particularly over the
last six weeks of the period where we selectively added names such
as Ista, Reynolds Group and HCA all at prices some five points
below where they were trading in early May. Our fixed rate exposure
ended the quarter at 7.9% of NAV.
Outlook
We remain positive on issuer fundamentals and, as such, we
remain comfortable with the current portfolio construction,
particularly our continued overweight to single B names, and our
allocations should remain reasonably constant for the next 6-12
months. We still think loans offer an attractive combination of
current yield and short duration and therefore believe that demand
for the asset class will continue. In the short term the loan
market will likely take its lead from the HY market. Despite recent
turbulence, our full year return forecast of 5-6% remains
intact.
Source: BNP Paribas and Bloomberg. Data as at 30 June 2013. Past
performance is not indicative of future returns.
1. Source: Moody's Investors Service.
2. Source: S&P LCD.
-ENDS-
For further information please contact:
Neuberger Berman Europe Limited +44 (0)20 3214 9000
Anji Stewart
FTI Consulting +44 (0)20 7269 7243
Neil Doyle
Ed Berry
Laura Ewart
Background Information
The Company is a registered closed-ended investment company
incorporated in Guernsey. The Company is managed by Neuberger
Berman Europe Limited, which has delegated certain of its
responsibilities and functions to the sub-investment manager,
Neuberger Berman Fixed Income LLC, both of which are indirect
wholly owned subsidiaries of Neuberger Berman Group LLC. The
Company's investment objective is to provide its shareholders with
regular dividends, at levels that are sustainable, whilst growing
the capital value of its investment portfolio over the long term.
To pursue its investment objective, the Company will invest mainly
in floating rate senior secured loans issued in U.S. Dollars,
Sterling, and Euros by North American and European Union
corporations, partnerships and other business issuers.
Established in 1939, Neuberger Berman is one of the world's
leading private, independent employee-controlled asset management
firms, managing approximately $216 billion in assets as of March
31, 2013. Neuberger Berman provides a broad range of global
investment solutions to institutions and individuals through
customized separately managed accounts, funds and alternative
investment products.
This document is intended only for the person to whom it has
been delivered. No part of this document may be reproduced in any
manner without the written permission of NB Global Floating Rate
Income Fund Limited ("NBGFRIF"). The securities described in this
document may not be eligible for sale in some states or countries
and it may not be suitable for all types of investors. Securities
in the fund may not be offered or sold directly or indirectly into
the United States or to U.S. Persons. Prospective investors are
advised to seek expert legal, financial, tax and other professional
advice before making any investment decision. The price of
investments may fall as well as rise and investors may not get back
the full amount invested. The target yield should not be taken as
an indication of the Fund's expected future performance or results.
The target yield is a target only and there is no guarantee that it
can or will be achieved and it should not be seen as an indication
of the Fund's actual or expected return. Statements contained
herein, including without limitation, statements regarding the
credit markets, are based on current expectations, estimates,
projections, opinions and/or beliefs of the managers. Such
statements involve known and unknown risks, uncertainties and other
factors, and undue reliance should not be placed thereon. Such
statements are necessarily speculative in nature, as they are based
on certain assumptions. It can be expected that some or all of the
assumptions underlying such statements will not reflect actual
conditions. Accordingly, there can be no assurance that any
projections, forecast or estimates will be realized. This document
is not intended to be an investment advertisement or sales
instrument; it constitutes neither an offer nor an attempt to
solicit offers for the securities described herein. This document
was prepared using the financial information available to NBGFRIF
as at the date of this document. This information is believed to be
accurate but has not been audited by a third party. This document
describes past performance, which may not be indicative of future
results. NBGFRIF does not accept any liability for actions taken on
the basis of the information provided in this document. Neuberger
Berman is a registered trademark.
(c) 2013 Neuberger Berman.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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