16th May 2014 12:22
LONDON (Alliance News) - New City High Yield Fund Ltd Friday said its net asset value per share on a total return basis rose by 3.9% in the first three months of the year.
Its NAV per share increased to 62.30 pence from 60.85 pence in the three months ended March 31. Its share price rose to 65.75 pence from 64.13 pence. The premium of the shares to net asset value rose to 5.5% to 5.4%.
New City High Yield's investment objective is to provide investors with a high dividend yield and the potential for capital growth by investing mainly in high yielding fixed interest securities.
New City High Yield said it added to its holdings in the AA 9.5% PIK 2019, Investec 9 5/8% 2022, Commerzbank 8.151% 2031 and started a holding in Odeon 9.5% 2019 in January. The fund said it took a profit in part of its holding in the the F&C 6 3/4% 2026 following the bid by Bank of Montreal for F&C Asset Management PLC.
Elsewhere the fund said it sold its long-term holding of Enterprise Inns 6.5% 2018 "well above par" on a redemption yield of only 5.4% which would be giving up capital for the benefit of the income account. In February, post the recent tap issue, the fund said it took the opportunity to add to core holdings in Phoenix 7.25% perpetual, British Airways 6.75% perpetual, Galaxy Finco 7 7/8% 2021 and increase weightings of holdings in Odeon 9% 2018 and Matalan 9 5/8% 2017.
"March was a reasonably active month deploying more of the proceeds of the tap issue into existing holdings," the fund said.
"Away from this, Ocean Rig 9.5% 2016 was called by the issuer; this was replaced by a new bond in the same company with a lower coupon of 7.25% and a longer maturity to 2019," the fund said.
"The holding in Co-op Bank ordinary shares which resulted from the restructuring of the 7 7/8% bond at a price of 375p were sold at 530p and as a result the company made its money back on the original purchase of the bond which was originally purchased in April last year. The equity holding in Skyepharma was sold at a level giving a good profit, the holding of Detour gold 5 1/2% convertible was also sold as despite still having 3 years to run the 275% conversion premium does not offer a good risk reward for the portfolio. To add to the diversity of the portfolio new holdings were opened in Thames Water 7 3/4% 2019 and Southern Water 8 1/2% 2019," the fund said.
New City High Yield Fund shares were off 0.1% at 65.92 pence Friday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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