Portfolio Update

RNS Number : 5670M

NB Global Floating Rate Income Fund

18 August 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.

The Company is pleased to announce that the fund was fully invested, as at 31 July 2011, with 178 investments across 139 issuers. The Company has opportunistically utilised around 17% out of the 20% bond allocation to capitalise on attractive yield-enhancing opportunities, particularly in secured bonds.

The invested portion of the portfolio is diversified across 31 industries, with no industry representing over 13%, and in terms of currency is split into approximately 83% U.S. Dollars, 11% Euro and 6% Sterling.  As at 30 July 2011, the portfolio is invested primarily in Ba (35.8%) and B (55.7%) rated investments¹ and has a gross yield of approximately 5.84%.

Market Environment²

In July, the S&P/LSTA Index returned 0.15% after losing 0.37% in June. For the year-to-date period, the Index has returned 2.76%. In Europe the S&P ELLI posted a negative 0.23% return in July, up from a negative 1.80% in June and the year to date return is now 2.69%.

US loan market technicals continue to be less robust. Retail inflows to US loan mutual funds dropped to $1.2 billion in July, an 11-month low. Fortunately, arrangers pulled back supply resulting in a six-month low of $13.7 billion of new issue coming to market versus a monthly average of $25.7 billion in the first half of 2011. The retail inflows combined with $14.5 billion of cash returned to investors via repayments enabled the new issues to clear in an orderly fashion. For the deals that did clear the market, they did so at a seven-month high of 6.43%, up from 5.75% in June.

Investment Pipeline

Conditions have materially changed since the end of July and this is reflected in the -1.14% Index return from August 1st- 5th. We expect loan returns to be driven by macro related news over the near term. We also expect arrangers to all-but shelve new deals until mid- September and only bring deals that are time sensitive (typically M&A transactions). Despite the significant change in investor sentiment, we continue to believe in the fundamentals of the corporate issuers in our universe. In fact, during the first week of August our analysts went through all their issuers to highlight any that may default in the coming 18-24 months if we were to go into a deep and prolonged recession. The response was nearly unanimous that all the issuers had created significant runway for themselves by extending most maturities past 2014 and increasing their cash positions over the past few years. In the case of the few issuers that could potentially default, our estimated recovery was par in each case.

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.

1. Moody's Investors Service.

2. Source: Standard & Poor's.

-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 LLC. 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.  

This document is intended only for the person to whom it has been delivered.  No part of this document may be reproduced in any manner without the written permission of NB Global Floating Rate Income Fund Limited ("NBGFRIF").  The securities described in this document may not be eligible for sale in some states or countries and it may not be suitable for all types of investors. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision.

The price of investments may fall as well as rise and investors may not get back the full amount invested. The target yield should not be taken as an indication of the Fund's expected future performance or results. The target yield is a target only and there is no guarantee that it can or will be achieved and it should not be seen as an indication of the Fund's actual or expected return.

This document is not intended to be an investment advertisement or sales instrument; it constitutes neither an offer nor an attempt to solicit offers for the securities described herein.  This document was prepared using the financial information available to NBGFRIF as at the date of this document.  This information is believed to be accurate but has not been audited by a third party.  This document describes past performance, which may not be indicative of future results. NBGFRIF does not accept any liability for actions taken on the basis of the information provided in this document.

Neuberger Berman is a registered trademark. © 2011 Neuberger Berman.

 

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