Toro has published its first set of accounts. The company’s shares were admitted for trading on the 8 May 2015. The share price was 83 cents as of 31 March 2016, trading then at a discount to NAV of 13.82%. Over the period the company generated a loss of EUR4.5 million or a loss of 1.23 cents per share. The Net Asset Value per share was 96.31 cents at 31 March 2016. The NAV decreased during the period by 1.24% (dividend reinvested). Since inception, Toro has declared three dividends of 2 cents each. The total dividend for the six months period is 4 cents, to be compared with an annual target of 5 per cent of the Issue Price per Share as set out in the IPO prospectus. Following the period end, the Company announced a dividend of 2.0 cents per Ordinary share for the quarter ending 31 March 2016 which is due to be paid on 3 June 2016.
The Chairman’s statement says, despite the realization of some investments and the increase of the cash position of the fund, the general market downward trend in prices has impacted the fund performance, in particular in January and February 2016.
The manager says, from October to December 2015, EUR80m of ABS was traded, with the company a net buyer of risk. Over time, this position tactically increased the Company’s exposure, taking advantage of technical weakness. Among others, a few UK non-conforming RMBS positions were added with a focus on second pay investment grade tranches, Italian lease mezzanine ABS and a German consumer loans ABS. As the company’s long risk exposure increased during the quarter some hedges were also traded. Performance was modestly positive, due to cash flows and coupons received, while the market weakness continued.
From January to March 2016, EUR53m was traded, with the Company a net seller of risk. A number of positions were exited primarily in UK RMBS and CDO of ABS. The Company also benefitted from natural amortisation and coupons on some of the existing positions. While some bonds were purchased, they were relatively small in size: EUR3.9m increase in a Portuguese SME CLO, one UK RMBS and two CLOs, most on the back of forced seller inquiries. Company performance in January and February was weighed down by markdowns in the portfolio, although some prices started to recover in March.
TORO : Widening discount hits Toro’s returns