News Column

Carador Income Fund Reports Total Net Asset Value Return Of 3.99%

April 29, 2014

Samuel Agini

LONDON (Alliance News) - Carador Income Fund PLC Tuesday said its total net asset value return was 3.99% in 2013.

The closed-ended limited liability investment company, managed by GSO/Blackstone Debt Funds Management LLC and investing in senior secured loan portfolios via collateralised loan obligations (CLOs), said its dividend income payments were USD0.1310 per share, while the dollar shares traded at a 3.02% premium to NAV over the year.

Chairman Werner Schwanberg said the company started the year with a NAV per dollar share of USD1.0261 and ended the year at USD0.9466, a decrease of 7.75%. But he said the quarterly dividends more than offset the NAV decrease. Schwanberg said that whilst cashflow and dividends have remained strong, the decrease in income note valuations, in particular, has depressed the total NAV return.

Schwanberg said 2013 was a year of transition for the company.

"The board remains comfortable with the target dividend we announced in October last year, although we note that the ongoing tightening in corporate credit spreads will continue to put pressure on future cashflows whilst we remain in a benign default environment. Such pressure is however mitigated by the low loss rates we expect to sustain in our underlying loan portfolio during

this period," the chairman said.

A June extraordinary general meeting allowed the company to realign its investment approach with the evolving primary market and secondary CLO markets, while it also signed a USD50.0 million short-term liquidity facility to allow it to operate more efficiently in the primary and secondary CLO markets.

The investment manager increased the performance fee hurdle rate to the greater of 12-month US dollar Libor or 4%, plus, in each case, 2%, effective from January 1 2014.

During the year the company traded its first European CLO for 33 months, purchasing income notes from Richmond Park CLO.

At the end of December 2013, the company held 74 CLO tranches managed by 24 different loan managers, had look through exposure to over 1,300 corporates, and was fully invested.

Carador Income Fund shares were Tuesday flat at USD0.935.

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Source: Alliance News

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