Carador has published its results for 2014. The statement says risk assets and sub-investment grade corporate credit markets in particular experienced considerable price volatility with the Credit Suisse Indices for both leveraged loans and high yield bonds delivering just 2.1% and 1.9%, respectively. Against this backdrop, the Company delivered a 6.3% total shareholder return in 2014, outperforming the Credit Suisse Leveraged Loan Index by 4.2% and the Credit Suisse High Yield Bond Index by 4.4%.
The company is paying a dividends of 10 cents per annum now (down from 13.1 cents in 2013) split into four equal quarterly payments. they say in 2014 the dividend was covered 1.1x by cash flow from the portfolio.
The manager extended the maturity profile of the portfolio. Loan prices fell on average, falling from 98.29 on 31 December 2013 to 95.92 on 31 December 2014. A total of 28 companies representing US$70.2 billion in high yield bonds and leveraged loans defaulted during the year, which marked the second highest year on record. However, 77% of this amount is composed of just two borrowers.
Over half the portfolio is invested in CLOs issued by GSO / Blackstone, Neuberger Berman and BNP Paribas. The largest exposures are to Calpine, First Data and Community Health Systems but the exposure to the top ten borrowers amounts to less than 7% of the portfolio – highlighting its diversification.
CIFU : Carador beats loan and high yield indices in 2014