December was a quiet month characterised by lower issuance activity, reduced activity in the secondary market and generally declining risk appetite. This is probably a reflection of the fact that the market has put behind it a hectic year with a high level of activity, a significant general repricing of risk and pressure on credit spreads throughout the year, across most sectors and geographies.
The fund participated in two share issues during the month. One issue was Panoro, an attractively priced E&P company with low leverage and a limited investment programme going forward. The company is now in a position where it can begin to capitalise on past investments, and thus appears more like a cash flow case. It is also worth noting that neither oil nor cash flows are channelled through Africa, which limits emerging market risk.
The second issue was Equipe Holding BV, a Dutch staffing and consulting company with a solid track record and stable earnings. The company's customer base consists mainly of municipalities, counties and central governments, and the majority of its contracts have a duration of 2-4 years with approximately 90 % of recurring revenue.
Beyond this, the fund has mainly made minor portfolio adjustments in existing positions.
The portfolio is solid and consists of liquid loans. We will continue to exercise capital discipline and follow our strategy, focusing on what we consider to be the best risk-adjusted investment opportunities.
The effective interest rate in Kraft Nordic Bonds is 11.27 %.* The current interest rate in Kraft Nordic Bonds is 7.07 %.* The effective interest rate and the current interest rate may change from day to day and are therefore no guarantee of the return in the period for which they are calculated.
*Før costs related to management
