For details regarding the HHY Off-Market Buy-Back please
click the link below:
Link: HHY Off-Market Buy-Back
Overview
Hastings High Yield Fund (HHY or the Fund) is an ASX listed fund
investing in debt securities with the objective of providing unitholders with a regular source of income. Quarterly
distributions are funded from interest received, participation fees and
realised gains. Investments are made in debt securities sourced from
transactions associated with:
· infrastructure and privatisation;
· private equity;
· acquisitions and financial restructures; and
· other leveraged finance transactions.
Strategy
The key elements of
HHY's investment strategy are as follows:
· target investment in unlisted and unrated securities that are
not otherwise readily accessible to Australian Securities Exchange (ASX)
investors;
· invest in debt securities issued by Australian and
international entities that:
- are exposed to the
infrastructure and essential services industry sectors;
- hold a significant market
position;
- generate predictable cash
flows;
- rank ahead of an appropriate
level of shareholder equity; and
- share an alignment of
interests with management and shareholders;
· invest in debt securities that provide for potential gains
flowing from re-rating, early repayment and equity participation;
· target active involvement to generate fee income and
positively influence the terms of investment; and
· hold investments for the medium to long term.
Generation of returns
Returns to unitholders comprise regular cash distributions,
distribution of annual tax credits and movements in the traded price of units
listed on the ASX.
Cash distributions are predominately derived from:
· periodic income, in the form of interest and dividends,
generated by the Fund's investment portfolio of debt securities;
· fee income associated with investments;
· any realised gains, in the form of gains on sale, early
repayment and equity participation; and
· surplus cash on balance sheet.
Information on distribution history and
guidance is available in the HHY
Investor Centre.
Assets
investment portfolio
At 30 June 2011, the Fund was invested in 10 securities; the
details of each investment are set out below:
|
Initial
Investment Date
|
Investment source
|
Transaction
instrument
|
Investment
at
30 June 2011(1) ($’000)
|
|
AB Ports
|
October 2006
|
Infrastructure
|
Junior Floating
Rate Loan
|
7,574
|
|
Arqiva
|
July 2007
|
Infrastructure
|
Junior Floating
Rate Loan
|
18,382
|
|
BAA
|
August 2006
|
Infrastructure
|
Toggle Facility
|
18,582
|
|
Cory
Environmental
|
June 2007
|
Infrastructure
|
Junior Floating
Rate Loan
|
11,286
|
|
DCA Group
|
January 2007
|
Private equity
|
Senior Term Loan,
Ordinary Equity
and Warrants
|
2,477
|
|
EnviroWaste
|
June 2007
|
Private equity
|
Junior Floating
Rate Loan
|
16,019
|
|
Hyne Timber
|
April 2005
|
Financial
restructure
|
Ordinary Equity
|
14,292
|
|
Maher Terminals
|
July 2007
|
Infrastructure
|
Junior Floating
Rate Loan
|
21,922
|
|
South East Water
|
December 2007
|
Infrastructure
|
Junior Floating
Rate Loan
|
14,576
|
|
Total
|
|
|
|
125,110
|
Key Performance Indicators
|
|
Year ended
30 June 2011
|
Year ended
30 June 2010
|
|
Weighted average earnings per unit
|
cents
|
(7.08)
|
5.11
|
|
Cash distribution per unit
|
cents
|
14.8
|
14.6
|
|
Distribution per unit (inclusive of tax credits)
|
cents
|
15.1
|
15.0
|
|
Net asset value per unit
|
$
|
1.52
|
1.75
|
|
Market value per unit(3)
|
$
|
1.11
|
1.15
|
|
Distribution yield based on market value per unit(4)
|
%p.a.
|
13.1
|
13.1
|
|
Market capitalisation (trading value of the Fund)(4)
|
$ million
|
124.4
|
127.3
|
|
Net debt(5)
|
$ million
|
–
|
41.1
|
|
Gearing (drawn debt/total assets)
|
%
|
–
|
20.5
|
|
Management and performance fees, and administrative costs
on market capitalisation (MER) (inclusive of GST)
|
%p.a.
|
1.26
|
1.17
|
|
Number of unitholders
|
|
3,941
|
4,034
|
Note: All dollar amounts are denoted in Australian
dollars.
(1) Includes mark-to-market on related derivative security, if any.
(2) After taking into account taxation on realised and unrealised gains where
applicable, accounting adjustments, and after provision for the 30 June 2011
distribution.
(3) Distribution yield includes cash distributions together with tax credits.
(4) Market value per unit and market capitalisation are
based on the closing price at the end of each period, i.e. $1.15 on 30 June
2010 and $1.11 on 30 June 2011.
(5) Net debt is outstanding debt less cash. The Fund’s debt facility was repaid
in full in March 2011.
The latest Product Disclosure
Statement, Annual Report and Quarterly Report can be downloaded in the Reports
section of the HHY
Investor Centre.