CQS New City High Yield has published results for the year ended 30 June 2015. The return on net assets for the year was 1.0% but the discount widened and so the return to shareholders was -3.6%.
They declared one interim dividend of 0.94p, two of 0.96p and one of 1.45p. The Company has in recent years paid three interim dividends at the same rate and a larger fourth interim dividend. The gap between the size of the first three interim dividends and the fourth had become increasingly large, and the Board concluded that it would be in shareholders’ interests for the gap to be narrowed. The aggregate payment of 4.31p per share represents a 2.4% increase on the 4.21p paid last year.
CQS New City High Yield replaced its existing £20m loan facility with a new £30m loan facility with Scotiabank in December 2014. At an all-in rate of 1.42% the new facility is significantly cheaper than the one that it replaced and shareholders benefited from this reduction in cost. £23m was drawn down at 30 June 2015 and the Company had effective gearing of 11%.
There isn’t much information on the individual positions that drove the performance of the fund but the manager does say there has been an increase in the number of bonds called by the issuers at the first possible opportunity, more noticeable than last year as we are in a more sustained recovery. Examples of this are Moto Finance 10.25%, Europcar 9.375%, and both AA 9.5% bonds. Most refinancings were by bonds yielding on average 3% less than those they replaced.
NCYF : CQS New City High Yield sees uptick in early calls by bond issuers