TIDMNBMI
RNS Number : 8890Z
NB Global Monthly Income Fund Ltd
16 January 2024
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES,
AUSTRALIA, CANADA OR JAPAN.
16(th) January 2024
NB Global Monthly Income Fund
Commentary & Portfolio Update
29(th) December 2023:
Key statistics
NAV (GBP) GBP 0.7656
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Current Portfolio Yield* 14.62%
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Number of Investments 30
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Number of Issuers 25
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Portfolio Assets: Applicable Time To Maturity Market Value
Ratings (years) %
============================== ================= =============
Private Debt 5.23 48.9
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B 5.06 1.5
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CCC 5.27 46.7
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CC 2.49 0.1
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NR 3.21 0.7
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Distressed Debt 3.30 12.4
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B 3.74 4.5
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CCC 2.77 6.6
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NR 4.51 1.3
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US Loans 3.94 6.8
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B 3.92 5.5
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NR 4.00 1.3
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EUR Loans 4.11 1.4
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B 4.11 1.4
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The time to maturity and market value percentage table excludes
equity holdings and cash, which represent 0.3% and 18%,
respectively, of Market Value as of 29 December 2023.
Currency Breakdown (excluding cash and FX)
USD 91%
EUR 8%
GBP 1%
Asset Type Asset Type
Secured 100% Fixed rate 12%
Unsecured 0% Floating rate 88%
Market Update
Non-investment grade credit markets finished the month of
December and the fourth quarter with strong returns driven by
risk-on sentiment as markets priced in rate cuts for 2024 despite
resilient economic data. For calendar year 2023, high yield bond
and loan market returns were among the highest since 2019. Yields
declined across fixed income during the month and quarter,
primarily driven by a fall in 10-year U.S. Treasury yields. The
yield on U.S. 10-Year Treasuries ended December at 3.87%, declining
36 basis points since the end of November and 71 basis points since
the end of the third quarter. Yields on 10-year U.K. Gilts and
German Bunds also declined over the month. Broadly, non-investment
grade issuer fundamentals of free cash flow, interest coverage and
leverage have remained in relatively favourable ranges with most we
believe well-positioned to navigate the current environment, but
some sectors and issuers are coming under pressure from slower
growth, and secular or idiosyncratic challenges. Also, some
lower-quality issuers have been experiencing earnings pressure
recently.
In December, U.S. senior floating rate loans-measured by the
Morningstar LSTA U.S. Leveraged Loan Index (the "LLI")-returned
1.65% with the lowest rated part of the credit spectrum
outperforming as the BB, B and CCC rated segments of the LLI
returned 1.23%, 1.79% and 2.70%, respectively. The Leveraged Loans
100 Index-a measure of the largest, most liquid issuers-returned
1.97% in December and 13.20% year to date. In 2023, CCCs and single
Bs outperformed the overall index with returns of 17.54% and
14.82%, respectively, compared to the BB rating tier's return of
10.18%. The Morningstar European Leveraged Loan Index ("ELLI")
returned 1.21% (excluding currency) in December as CCC and BB rated
loans underperformed with returns of 0.23% and 1.13% (excluding
currency), respectively, compared to the B index with a return of
1.26% (excluding currency). The ELLI returned 13.42% year to date
(excluding currency). The second lien loan index returned 3.42% in
December and 22.74% in 2023.
The global high yield bond market finished the month, quarter
and year with strong returns. The ICE BofA Global High Yield
Constrained Index returned 3.47% in December, 6.68% in the fourth
quarter and 12.97% year to date. In December, the lowest rated
credit tier outperformed as the BB, B, CCC & lower categories
of the ICE BofA Global High Yield Index returned 3.22%, 3.42%, and
5.33%, respectively. Year to date, the CCC & below and B rated
credit tiers of the index outperformed with returns of 17.70% and
14.18%, as compared to the BB rated segment of the index which
returned 11.36%.
CLO debt spreads were meaningfully tighter in the quarter, as
economic data and statements from the Federal Reserve indicated a
lower probability of future rate hikes, with the market
increasingly gravitating to a "soft landing" economic scenario.
Secondary non-investment grade CLO trading volumes declined 13%
quarter-over-quarter. The CLO BB index gained 7.33% during the
quarter and was up 24.52% for the full year 2023. Returns have been
driven approximately two thirds by coupon income, and one third by
price appreciation.
In our view, non-investment grade valuations are compensating
investors for the relatively benign default outlook; these
instruments will continue to provide durable income and are
especially attractive compared to other fixed income alternatives.
While the economy remains resilient, slowing real demand has helped
inflation continue to move downward. The lagged effects of monetary
tightening, higher current interest rates and shifts in consumer
behaviour are likely to keep pushing inflation toward central
banks' target ranges. However, higher interest rates could put more
pressure on the consumer and broader economy. As credit dispersion
has been on the rise, our analysts remain keenly focused on the
specific fundamentals of individual issuers in their coverage,
assessing the base and downside cases in the event of a
soft-landing or recession.
Asset Realisation Update
The Managed Wind-down of the Portfolio, as described in the
Circular of 20th December 2022, has been in effect since the EGM
shareholder approval of 27th January 2023. In the period between
from 27th January 2023 to-date there have been five compulsory
redemptions reflecting the realisation of a total value of GBP143.9
million of portfolio assets. This is approximately 79.8% of the NAV
as of 27th January 2023 which exceeds the previously stated target
of having distributed 75% of that NAV in cash by the year-end.
To access the December 2023 Factsheet, please click here .
The Fund's website can be found at the following address:
www.nbgmif.com
* Current Portfolio Yield is a market-value weighted average of
the current yields of the holdings in the portfolio, calculated as
the coupon (base rate plus spread) divided by current price. The
calculation does not take into account any Fund expenses or sales
charges paid, which would reduce the results. The Current Yield for
the Fund will fluctuate from month to month. The Current Yield
should be regarded as an estimate of the Fund's rate of investment
income, and it may not equal the realised distribution rate for
each share class. You should consult the Fund's prospectus for
additional information about the Fund's dividends and distributions
policy.
Past performance is not a reliable indicator of current or
future results.
-S-
For further information, please contact:
Neuberger Berman Europe Limited (Manager)
Elizabeth Papadopoulos +44 (0) 20 3214 9078
Numis Securities Limited (Broker)
Hugh Jonathan
Matt Goss +44 (0) 20 7260 1000
Sanne Fund Services (Guernsey) Limited
(Company Secretary)
Matt Falla
Gemma Berry +44 (0) 20 3530 3600
Background Information
Neuberger Berman, founded in 1939, is a private, independent,
employee-owned investment manager. The firm manages a range of
strategies-including equity, fixed income, quantitative and
multi-asset class, private equity, real estate and hedge funds-on
behalf of institutions, advisors and individual investors globally.
Neuberger Berman's investment philosophy is founded on active
management, engaged ownership and fundamental research, including
industry-leading research into material environmental, social and
governance factors. Neuberger Berman is a PRI Leader, a designation
awarded to fewer than 1% of investment firms. With offices in 26
countries, the firm's diverse team has over 2,800 professionals.
For nine consecutive years, Neuberger Berman has been named first
or second in Pensions & Investments Best Places to Work in
Money Management survey (among those with 1,000 employees or
more).
The firm manages $463 billion in client assets as of December
31, 2023. For more information, please visit our website at
www.nb.com .
The Company is a registered closed-ended investment company
incorporated in Guernsey. It is managed by Neuberger Berman Europe
Limited, which has delegated certain of its responsibilities and
functions to the AIFM, Neuberger Berman Investment Advisers LLC,
both of which are indirect wholly owned subsidiaries of Neuberger
Berman Group LLC.
RISK CONSIDERATIONS
Market Risk : The risk of a change in the value of a position as
a result of underlying market factors, including among other
things, the overall performance of companies and the market
perception of the global economy.
Risks associated with Managed Wind-Down: The Portfolio will be
reduced and concentrated in fewer less liquid holdings. The Company
might experience increased volatility in its Net Asset Value and/or
its Share price as a result of changes to the Portfolio
Structure.
Liquidity Risk: The risk that the fund may be unable to sell an
investment readily at its fair market value.
Credit Risk: The risk that bond issuers may fail to meet their
interest repayments, or repay debt, resulting in temporary or
permanent losses to the Fund.
Interest Rate Risk: The risk of interest rate movements
affecting the value of fixed-rate bonds.
Counterparty Risk: The risk that a counterparty will not fulfil
its payment obligation for a trade, contract or other transaction,
on the due date.
Counterparty Risk: The risk that a counterparty will not fulfil
its payment obligation for a trade, contract or other transaction,
on the due date.
Operational Risk: The risk of direct or indirect loss resulting
from inadequate or failed processes, people and systems including
those relating to the safekeeping of assets or from external
events.
Derivatives Risk: The Fund is permitted to use certain types of
financial derivative instruments ("FDI") (including certain complex
instruments) which can give rise to particular risks, including
market risk, liquidity risk and counterparty credit risk. This may
increase the Fund's leverage significantly which may cause large
variations in the value of your share.
Currency Risk: Investors who subscribe in a currency other than
the base currency of the Fund are exposed to currency risk.
Fluctuations in exchange rates may affect the return on
investment.
The past performance shown is based on the share class to which
this factsheet relates. If the currency of this share class is
different from your local currency, then you should be aware that
due to exchange rate fluctuations the performance shown may
increase or decrease if converted into your local currency.
IMPORTANT INFORMATION
Source of all data and charts (unless stated otherwise):
Neuberger Berman Europe Limited, Bloomberg and Blackrock
Aladdin.
This document has been issued by NB Global Monthly Income Fund
Limited (the "Company"), and should not be taken as an offer,
invitation or inducement to engage in any investment activity and
is solely for the purpose of providing information about the
Company. This document does not constitute or form part of, and
should not be construed as, any offer for sale or subscription of,
or solicitation of any offer to buy or subscribe for, any share in
the Company or securities in any other entity, in any jurisdiction.
This product is only suitable for institutional, professional and
professionally advised retail investors, private client fund
managers and brokers who are capable of evaluating the merits and
risks of the product and who plan to stay invested until the end of
the recommended holding period and can bear loss of capital. An
investor with reasonable knowledge of loans and alternative credit
would need to be assessed by the advisor or distributor to
establish suitability for this product.
Full product details, including a Key Information Document, are
available on our website at www.nbgmif.com .
Due to the inherent risk of investment in the debt market
particularly related to alternative credit, it is expected that a
qualified investor would be able to understand the risks in such
security types and the potential impact of investing in the
product. This product is designed to form part of a portfolio of
investments.
The Company is a closed-ended investment company incorporated
and registered in Guernsey and is governed under the provisions of
the Companies (Guernsey) Law, 2008 (as amended), and the Registered
Collective Investment Scheme Rules 2008 issued by the Guernsey
Financial Services Commission ("GFSC"). It is a non-cellular
company limited by shares and has been declared by the GFSC to be a
registered closed-ended collective investment scheme. The Company's
shares are admitted to the Official List of the UK Listing
Authority with a premium listing and are admitted to trading on the
Premium Segment of the London Stock Exchange's Main Market for
listed securities.
Neuberger Berman Europe Limited is authorised and regulated by
the Financial Conduct Authority and is registered in England and
Wales, at The Zig Zag Building, 70 Victoria Street, London, SW1E
6SQ.
This document is presented solely for information purposes and
nothing herein constitutes investment, legal, accounting or tax
advice, or a recommendation to buy, sell or hold a security. We do
not represent that this information, including any third-party
information, is complete and it should not be relied upon as such.
Any views or opinions expressed may not reflect those of the
Company as a whole. All information is current as of the date of
this material and is subject to change without notice. No part of
this document may be reproduced in any manner without prior written
permission of the Company.
An investment in the Company involves risks, with the potential
for above average risk, and is only suitable for people who are in
a position to take such risks. No recommendation or advice is being
given as to whether any investment or strategy is suitable for a
particular investor. Each 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. It should not be
assumed that any investments in securities, companies, sectors or
markets identified and described were or will be profitable.
Investment in the Company should not constitute a substantial
proportion of an investor's portfolio and may not be appropriate
for all investors. Diversification and asset class allocation do
not guarantee profit or protect against loss.
Past performance is not a reliable indicator of current or
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
performance data does not take account of the commissions and costs
incurred on the issue and redemption of units.
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.
Tax treatment depends on the individual circumstances of each
investor and may be subject to change, investors are therefore
recommended to seek independent tax advice.
This document, and the information contained therein, is not for
viewing, release, distribution or publication in or into the United
States, Canada, Japan, South Africa or any other jurisdiction where
applicable laws prohibit its release, distribution or publication,
and will not be made available to any national, resident or citizen
of the United States, Canada, Japan or South Africa. The
distribution of this document in other jurisdictions may be
restricted by law and persons into whose possession this document
comes must inform themselves about, and observe, any such
restrictions. Any failure to comply with the restrictions may
constitute a violation of the federal securities law of the United
States and the laws of other jurisdictions.
The Company's shares have not been and will not be registered
under the US Securities Act of 1933, as amended (the "Securities
Act"), or with any securities regulatory authority of any state or
other jurisdiction of the United States. The shares may not be
offered, sold, resold, pledged, delivered, distributed or otherwise
transferred, directly or indirectly, into or within the United
States, or to, or for the account or benefit of, US persons (as
defined in Regulation S under the Securities Act). No public
offering of the shares is being made in the United States.
The Company has not been and will not be registered under the US
Investment Company Act of 1940, as amended (the "Investment Company
Act") and, as such, holders of the shares will not be entitled to
the benefits of the Investment Company Act. No offer, sale, resale,
pledge, delivery, distribution or transfer of the shares may be
made except under circumstances that will not result in the Company
being required to register as an investment company under the
Investment Company Act. In addition, the shares are subject to
restrictions on transferability and resale in certain jurisdictions
and may not be transferred or resold except as permitted under
applicable securities laws and regulations. Any failure to comply
with these restrictions may constitute a violation of the
securities laws of any such jurisdictions.
The "Neuberger Berman" name and logo are registered service
marks of Neuberger Berman Group LLC.
(c) 2024 Neuberger Berman Group LLC. All rights reserved.
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END
PFUBSGDBSUBDGSL
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January 16, 2024 10:00 ET (15:00 GMT)
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