Riverstone Credit bucks poor energy markets for 2020

Riverstone Credit bucks poor energy markets for 2020 – Riverstone Credit Opportunities Income has published results for the year ended 31 December 2020. The company finished the year with an NAV of $1.04. It was also able to declare dividends totalling 7 cents per share for 2020. These were covered by earnings of 7.59 cents.

The result comes against a backdrop of severe pressure on the oil price (which hit negative figures at one point). Over the year the WTI oil price fell by 21% and the S&P Energy Index (which is an index of equities in the energy sector) fell by 36%. The fund invests in loans, however, a better comparison might be the LCD leveraged loans index which rose by 3% over the year (although within that, loans to energy companies performed relatively poorly).

Against this backdrop, Riverstone Credit’s portfolio of loans to small and middle-market energy companies covering both the fossil fuel and low carbon sub-sectors was relatively resilient.

The fund’s discount is too wide and the board authorised the repurchase of 8.5m shares in an effort to address this. There is more work to do here, however. The share price fell from $0.955 to $0.683 over the year.

At the end of the year, the fund held nine investments, including a $6.9m commitment to a community solar development company, Aspen. 78% of the fund was committed to investments at the year end and the fund had cash of $19.2m.

[All in all, this is a pretty decent result in what must have been a difficult year for the managers. It is just a shame about the discount. Although that means that new investors can buy into the fund on a very attractive yield. With the share price last night at 76 cents, the historic yield is now 9.2%.]

RCOI : Riverstone Credit bucks poor energy markets for 2020