19th Apr 2016 07:13
LONDON (Alliance News) - NB Global Floating Rate Income Fund Ltd, the FTSE 250 closed-ended investment company which invests in floating rate senior secured loans issued by North American and European Union businesses, on Tuesday said recent pressure on senior loan asset values offers "compelling" valuations across the asset class.
Managed by Neuberger Berman, a fixed income money manager, NB Global Floating Rate Income Fund aims to generation income for shareholders while preserving their capital and protecting against rising interest rates.
"Generally, we feel that the issuers are performing steadily, leverage is being controlled and cash cover metrics are strong. We believe that US GDP growth will continue in its recent range and that the US Federal Reserve will continue to increase interest rates during 2016. We think a combination of these factors should be positive for loan performance over the next 12 months," Neuberger Berman said in a report coinciding with NB Global Floating Rate Income Fund's full-year financial results on Tuesday.
NB Global Floating Rate Income Fund's net asset value - the difference between its assets and liabilities - increased by 0.75% in 2015 on a total return basis before fees, according to Neuberger Berman, versus the -0.68% produced by the S&P/LSTA Leveraged Loan Index, due to a combination of "positive" credit selections, "higher quality" bias and remaining underweight to "more problematic" sectors, such as oil and gas.
As of December 31, about 94% of the company was invested in US dollar denominated assets, 4.6% invested in euro denominated assets and 1.8%in sterling denominated assets.
"Against a backdrop of weak global economic growth led by concerns over a slowdown in China and further declines in oil prices, senior loan assets demonstrated dogged resilience relative to other global bourses in 2015," Chairman William Frewen said in a statement.
In 2015, the company's NAV per share dropped by 3.77% and 3.56% for the dollar shares and sterling shares. The NAV return plus dividends declared in the year was 0.08% and 0.32% for the dollar shares and sterling shares.
During 2015, the annualised dividend yield of the company on dividends paid was 4.1% for both share classes.
By Samuel Agini; [email protected]; @samuelagini
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