TIDMNBMI
RNS Number : 2750F
NB Global Monthly Income Fund Ltd
15 July 2021
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES,
AUSTRALIA, CANADA OR JAPAN.
15(th) July 2021
NB Global Monthly Income Fund*
Monthly Commentary & Portfolio Update
30th June 2021
Key statistics
NAV (GBP) GBP 0.9559
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Current Portfolio Yield** 6.17%
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Number of Investments 293
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Number of Issuers 205
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Asset allocation:
Global High Yield: 32.26%
Global Floating Rate
Loans: 40.80%
Total Traditional Credit: 73.06%
----------------------------- -------
Private Debt: 14.55%
CLO Mezzanine Debt: 8.58%
Special Situations: 3.82%
Total Alternative Credit: 26.94%
----------------------------- -------
Credit rating breakdown: as at 30th June (excluding cash), the
portfolio was invested primarily in B (50.18%) and BBB/BB (15.92%)
rated investments (1)
Market Update
Non-investment grade credit had another good month driven by
better-than-expected earnings, strong economic activity and
accommodative-yet-vigilant central bankers who more recently have
focused on allaying investor concerns over higher inflation.
Senior floating rate loans ended the month of June in positive
territory on improving issuer fundamentals, large positive retail
inflows and strong new issue volume in CLOs. While the yield on the
10Y U.S. Treasury was rangebound in June and well off the recent
peak, investors are still seeking attractive yield opportunities
with durable income and lower interest rate risk as the debate
about inflation being transitory is still undecided. U.S. senior
floating rate loans, as measured by the S&P/LSTA Leveraged Loan
Index (the "S&P LLI"), returned 0.37% in June with the lowest
quality outperforming as BB, B and CCC returned 0.12%, 0.40% and
1.00%, respectively. The LL100, a measure of the largest, most
liquid issuers, returned 0.12% which also underperformed the total
S&P LLI. The European Leveraged Loan Index (the "ELLI")
returned 0.27% in June, excluding currency effects. Year to date
through June 30th, the S&P LLI returned 3.28% and the ELLI
returned 2.96%, excluding currency effects. The Second Lien Loans
index was up 1.24% in the month and 9.06% year to date.
The global high yield bond market rallied again in June
finishing up a strong second quarter and while issuance was solid
in the month it came off its record pace from earlier in the
quarter. The ICE BofA Global High Yield Constrained Index finished
the month, quarter and year-to-date period with returns of 0.93%,
2.62% and 3.42%, respectively. Dispersion of returns across rating
tiers moderated somewhat as the second quarter progressed but the
lowest quality and distressed issuers continued to rally. However,
BB rated issuers also outperformed the index in the second quarter
as the BB, B, CCC & lower rated categories of the ICE BofA
Global High Yield Index returned 1.07%, 0.38%, and 1.81%,
respectively.
CLO debt levels were stable in June, with the market continuing
to demonstrate its ability to adequately digest the continued
significant primary market activity. Fundamentally, the asset class
has benefitted from the potential of higher near-term rates and
strong underlying fundamental performance as well as continued
attractive relative value vs. other fixed income assets. The CLO BB
Index gained 0.42% over the month.
The pace of defaults and default expectations continued to
decline materially in both U.S. and European non-investment grade
credit markets, which is consistent with improving fundamentals.
Non-investment grade credit, especially given its lower duration
profile and attractive yields relative to other fixed income, will
likely continue to see favourable investor demand, especially given
that 65% of the global bond market still yields less than 1%.
Yield levels and spreads in non-investment grade credit are
compensating investors for the increasingly benign default outlook.
The economic recovery continues to play out and we would expect the
improving trajectory of growth and pricing power to be supportive
of issuer fundamentals. Continued progress on the rate of
vaccinations, combined with consumer pent-up demand for travel,
leisure and services, businesses rebuilding inventories and
rehiring plus patient-but-vigilant central bankers should continue
to support economic activity going forward. While new COVID
variants and mixed views over inflation could result in pockets of
short-term volatility, we believe our bottom-up, fundamental credit
research focused on individual credit selection while seeking to
avoid credit deterioration and putting only our "best ideas" into
portfolios, position us well to take advantage of any
volatility.
Portfolio Positioning
The overall Fund exposure to floating rate assets is at 66%
leading to an average duration of 1.04yrs for the Fund. Floating
Rate Loans remain the largest allocation at 40.8%, but as in recent
months that allocation reduced in June as the team sold loans at or
close to par seeing better opportunities for that capital in other
buckets. In June, allocations to both CLO Debt Tranches and Special
Situations increased whilst the Private Debt allocation remained
static. Our current allocation to BBB/BB rated credits ended the
month at 15.9% while our exposure to CCC and below rated names
finished the month at 28.6% slightly down month on month. The new
issue markets were again buoyant in June. Amongst others, the Fund
invested in new issuance from Picard (a frozen food retailer based
in France) and Comstock Resources.
Recent Investments
David Lloyd is an upper-tier gym operator in the UK with a well
invested estate and large facilities in suburban locations. After a
difficult period through Covid with gyms being completely shut
during the UK's two lockdowns, the company is seeing very healthy
demand for membership without the need for discounting in recent
months driven by the more affluent sections of the UK consumer base
with savings to spend and limited holiday options abroad. The
company approached the European High Yield bond market in June with
a Senior Secured 6yr GBP bond offering which priced at par with a
5.5% fixed coupon. Owner, TDR Capital, as part of this refinancing
transaction, have injected new equity into the business. In a
downside scenario (additional lockdowns) we view the starting
leverage point and lack of near-term maturities as providing a
sufficient margin of safety and so overall view the return on offer
as attractive.
The fund also invested in a new senior secured loan issuance
from Solera brought to market in June. The company is a leading
provider of risk and asset management software and services to the
automotive and property marketplace, including the property and
casualty insurance industry. Serving over 280,000 customers across
90 countries an estimated 93% of revenues are recurring providing
high degree of visibility into future top line trends. The fund
purchased 1st lien term loans due 2028 with a 525bps margin above
SONIA, a 0% floor and at a price of 99.
To access the June 2021 Factsheet, please click here
http://www.rns-pdf.londonstockexchange.com/rns/2750F_1-2021-7-14.pdf
The Fund's website can be found at the following address:
www.nbgmif.com
1. Source: Standard & Poor's
* Effective 9 September 2020, the fund has changed its
investment policy and name to NB Global Monthly Income
Fund Limited. For more information, please refer to here.
** The Fund's 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 fees, 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 realized
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 no
guarantee of 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
Praxis Fund Services Limited (Company Secretary)
Matt Falla
Gemma Woods +44 (0) 1481 737 600
KL Communications (PR)
Charles Gorman
Will Sanderson +44 (0) 20 7995 6673
Background Information
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.
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.
With offices in 25 countries, Neuberger Berman's diverse team has
over 2,300 professionals.
For seven consecutive years, the company 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). In
2020, the PRI named Neuberger Berman a Leader, a designation
awarded to fewer than 1% of investment firms for excellence in
Environmental, Social and Governance (ESG) practices. The PRI also
awarded Neuberger Berman an A+ in every eligible category for our
approach to ESG integration across asset classes. The firm manages
$402 billion in client assets as of March 31, 2021. For more
information, please visit our website at www.nb.com .
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.
Liquidity Risk: The risk that the Fund may be unable to sell an
investment readily at its fair market value. In extreme market
conditions this can affect the Fund's ability to meet redemption
requests upon demand.
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
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.
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 ("NBEL"), the Company's Manager,
is authorised and regulated by the Financial Conduct Authority
("FCA") and is registered in England and Wales, at The Zig Zag
Building, 70 Victoria Street, London, SW1E 6SQ and is also a
Registered Investment Adviser with the Securities and Exchange
Commission ("SEC") in the U.S. and regulated by the Dubai Financial
Services Authority.
This document is addressed to professional clients only.
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 or NBEL 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 and NBEL.
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) 2021 Neuberger Berman Group LLC. All rights reserved.
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END
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