Change of name and lower fees for New City High Yield

New City High Yield’s interim results statement for the six months ended 31 December 2014 shows the company generating a negative return on net assets of -2.1% but a return shareholders of +2.1% as the company moved to trade on a higher premium.

The net asset value slipped by 5.8% but the dividend was increased by 3.3%. The Company declared one interim dividend of 0.94 pence in respect of the period, and one of 0.96 pence. The payment of 0.96 pence per share represented a 4.3% increase on the 0.92 pence per share paid in respect of the same period last year, and a 2.1% increase on the 0.94 pence per share first interim dividend paid in November 2014.  The directors want to smooth the dividends through the year and so they plan that the third interim dividend will be at least equal to the second interim dividend, and that the fourth interim dividend will be maintained at last year’s level.  Based on an annualised rate of
4.31 pence and a share price of 61.8 pence at the time of writing, this represents a yield of 7.0%.

The Company replaced its existing £20m loan facility with a new £30m loan facility with Scotiabank in December. At an all-in rate of 1.42% the new facility is significantly cheaper than the one that it replaces. Gearing at the year end was 6%.

The current management fee of 0.8% per annum on total assets will now reduce to 0.7% per annum on total assets in excess of £200m. The Company’s total assets are currently £198.6m. They hope to raise more money soon.

They plan to change the name of the fund to CQS New City High Yield Fund Limited which is more of a mouthful but they want the fund to be better associated with the manager, CQS.

NCYF : Change of name and lower fees for New City High Yield