Portfolio Update

RNS Number : 2875I

NB Global Floating Rate Income Fund

13 June 2011

 



NB Global Floating Rate Income Fund

Portfolio Update

NB Global Floating Rate Income Fund ("the Company") today announces an update in relation to the Company's investment portfolio.

As at 31 May 2011, the Company had deployed approximately 65% of its net assets, with 111 investments across 87 issuers.  When fully invested the Company anticipates holding in excess of 125 investments across more than 100 issuers. The Company has opportunistically utilised around 18% out of the 20% bond allocation to capitalise on attractive yield enhancing opportunities, particularly in secured bonds.  The Company remains in line to be full invested within three months, as communicated at the time of listing.

The invested portion of the portfolio is diversified across 27 industries, with no industry representing over 12%, and in terms of currency is split into approximately 80% U.S. Dollars, 12% Euro and 8% Sterling.  The portfolio is invested primarily in Ba (30.32%) and B (58.41%) rated investments and has a gross yield of approximately 6.17%.

Market Environment

Demand for loans remains strong, with investors committing a total of $3.7 billion to loans via mutual funds in May, bringing the year-to-date total to $22.4 billion.  Institutional leveraged loan volume jumped to a post-credit crunch high of $25 billion as arrangers rolled out large transactions such as Chrysler ($3 billion), Asurion ($2.2 billion first-lien and $1.27 billion second-lien term loans) and Quintiles ($2 billion).  There has also been a solid performance in returns, with the year-to-date return being 5.58%, up from 2.97% during the first five months of last year.  In May the S&P European Leveraged Loan Index (ELLI) posted a 0.77% return (excluding currency) up from a 0.54% return in April, while the US S&P/LSTA Leveraged Loan Index fell 0.09% amid softening technical conditions and a pullback in the broader capital markets.  Meanwhile, the default environment has remained benign with only one default in May and three in the year to date. The lagging 12-month loan default rate by principal amount decreased to a 40-month low of 0.91%, from 0.95% in April.

Investment Pipeline*

The Company believes that June will bring another good month of supply, although at a slightly lower level than May.  The forward calendar of US institutional loans stood at $32.5 billion as at May 25, down from a recent peak of $41.3 billion a month earlier.  Included in this forward calendar are $16.5 billion of M&A-related deals - a good measure of new-money flow.  In Europe, forward volume for June stands at €3.40 billion from 11 deals, up on the €2.03 billion from 10 deals in May.

An accompanying factsheet on the information provided above can be found on the Company's website www.nbgfrif.com.  Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

-ENDS-

For further information please contact:

Neuberger Berman Europe Limited          [phone]

Anji Stewart

Financial Dynamics                                       [phone]

Neil Doyle                   

Ed Berry

Laura Pope

Background Information

The Company is a registered closed-ended investment company incorporated in Guernsey. The Company is managed by Neuberger Berman Europe Limited, which has delegated certain of its responsibilities and functions to the sub-investment manager, Neuberger Berman Fixed Income LLC, both of which are indirect wholly owned subsidiaries of Neuberger Berman Group. The Company's investment objective is to provide its shareholders with regular dividends, at levels that are sustainable, whilst growing the capital value of its investment portfolio over the long term. To pursue its investment objective, the Company will invest mainly in floating rate senior secured loans issued in U.S. Dollars, Sterling, and Euros by North American and European Union corporations, partnerships and other business issuers.

Established in 1939, Neuberger Berman is one of the world's leading private, independent employee-controlled asset management firms, managing approximately $199 billion in assets as of March 31, 2011. Neuberger Berman provides a broad range of global investment solutions to institutions and individuals through customized separately managed accounts, funds and alternative investment products.  

*Source: S&P LCD.

 

END

 

 

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