Last close As at 05/08/2026
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Market capitalisation
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Research: Investment Companies
Marble Point Loan Financing (MPLF) is temporarily suspending its dividend due to the impact of COVID-19.The recent economic disruption has resulted in rating agencies downgrading the underlying collateral of MPLF’s collateralised loan obligations (CLOs) at a pace that could trigger its need to make provisions. The heightened risk is above that modelled by MPLF and could affect cash flow. MPLF’s policy is to maintain a well-funded dividend. In the last five quarters cash distributions have exceeded dividends by a good margin. With the total impact of COVID-19 uncertain, management believes it is prudent to preserve cash now, which will provide more flexibility for when dislocations in the credit market provide good investment opportunities.
Written by
Marble Point Loan Financing |
Dividend suspended |
COVID-19 uncertainty |
Investment trusts |
15 April 2020 |
Share price performance
Gearing
Analyst
Marble Point Loan Financing is a research client of Edison Investment Research Limited |
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Marble Point Loan Financing (MPLF) is temporarily suspending its dividend due to the impact of COVID-19.The recent economic disruption has resulted in rating agencies downgrading the underlying collateral of MPLF’s collateralised loan obligations (CLOs) at a pace that could trigger its need to make provisions. The heightened risk is above that modelled by MPLF and could affect cash flow. MPLF’s policy is to maintain a well-funded dividend. In the last five quarters cash distributions have exceeded dividends by a good margin. With the total impact of COVID-19 uncertain, management believes it is prudent to preserve cash now, which will provide more flexibility for when dislocations in the credit market provide good investment opportunities.
6 months to |
Share price |
NAV |
S&P Lev Loan |
Credit Suisse |
S&P 500 |
31/08/18 |
3.0 |
(1.3) |
2.1 |
1.9 |
7.8 |
28/02/19 |
(16.1) |
(3.9) |
1.3 |
(3.8) |
(2.9) |
31/08/19 |
6.2 |
(3.4) |
2.0 |
10.3 |
6.2 |
29/02/20 |
(0.5) |
(6.2) |
1.4 |
(5.2) |
1.9 |
Note: *Refinitiv. All % on a total return basis in US dollars.
In February, MPLF’s NAV per share dropped 7.1% to $0.71 as concerns mounted about the economic impact of the COVID-19 pandemic. The concerns are industry-wide; in the same month the leveraged loan market saw retail outflows of $2.6bn. By the end of February, MPLF’s lagging 12-month default rate had remained constant at 1.83% and MPLF had no exposure to the five constituents of the Credit Suisse Leveraged Loan Index that defaulted that month. However, the economic impact of the pandemic has worsened and the leveraged investment default rate is likely to increase. The Federal Reserve rate cut in March 2020 also dented investor demand for CLOs as they pay a floating rate which tracks the Fed’s policy rate.
On 2 January 2020, the company’s continued good performance led MPLF to significantly increase its quarterly dividend from $0.020 per share to $0.025. The dividend was paid on 30 January. The annualised yield would be 16.4% if MPLF retains the quarterly dividend of $0.025 per share when it is reinstated.
At the end of February, MPLF’s investment portfolio was $171.8m, of which 69% was in equity tranches of 10 different Marble Point CLO issues. The remaining portfolio was split between CLO debt tranches (9%), CLO fee participations (2.8%), the NAV of the funding subsidiary (11.2%) and the Marble Point loan accumulation facility (8%). It also had $2.9m in other assets. Subsequent to month end on 24 March, MPLF invested approximately $20m in the equity of MarblePoint CLO XVII. The equity tranches had an effective yield of 8.6%, the debt had an all-in yield of 3.7% and fee participations were 18.2%.
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Research: Industrials
Trading uncertainties arising from the coronavirus pandemic are currently overshadowing some positive aspects seen in Tyman’s H219 performance. Steps are being taken to reduce costs and control cash outflows (including cancelling the FY19 final dividend) to manage business liquidity within existing funding facilities and sustain operational agility to respond to normalising conditions when they occur. For now forward guidance has been withdrawn, as have our estimates.