Voya Prime Rate Trust First Quarter Portfolio Review
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Voya Prime Rate Trust
This Closed-End Fund seeks a high a level of current income, consistent with preservation of capital
Product Facts
| Ticker Symbol | PPR |
| CUSIP | 92913A100 |
| Inception Date | May 12, 1988 |
| Dividends Paid | Monthly |
About this Product
- Invests at least 80% of net assets in U.S.-dollar-denominated, floating-rate, secured senior loans
- Targets top-tier, non-investment grade senior loans seeking to achieve superior long term risk-adjusted returns with lower volatility
- Uses leverage to enhance return potential
Investment Objective
This Closed-End Fund seeks a high a level of current income, consistent with preservation of capital
Performance
Average Annual Total Returns %
As of June 30, 2020
As of June 30, 2020
| Most Recent Month End | YTD | 1 YR | 3 YR | 5 YR | 10 YR | Expense Ratios | |
|---|---|---|---|---|---|---|---|
| Gross | Net | ||||||
| Net Asset Value | -13.18 | -10.46 | -1.19 | +1.04 | +4.25 | 3.03% | 3.03% |
| Market Price | -16.93 | -9.33 | -3.37 | +0.88 | +3.20 | ||
| Net Asset Value | -13.18 | -10.46 | -1.19 | +1.04 | +4.25 | 3.03% | 3.03% |
| Market Price | -16.93 | -9.33 | -3.37 | +0.88 | +3.20 | ||
Inception Date - Class A:May 12, 1988
The performance quoted represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. The investment return and principal value of an investment in the Portfolio will fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. See above "Average Annual Total Returns %" for performance information current to the most recent month-end.
Returns for the other share classes will vary due to different charges and expenses. Performance assumes reinvestment of distributions and does not account for taxes.
Total investment return at net asset value has been calculated assuming a purchase at net asset value at the beginning of the period and a sale at net asset value at the end of the period; and assumes reinvestment of dividends, capital gain distributions and return of capital distributions/allocations, if any, in accordance with the provisions of the dividend reinvestment plan. Net asset value equals total Fund assets net of Fund expenses such as operating costs and management fees. Total investment return at net asset value is not annualized for periods less than one year.
The Adviser has contractually agreed to limit expenses of the Trust. This expense limitation agreement excludes interest, taxes, investment-related costs, leverage expenses, and extraordinary expenses and may be subject to possible recoupment. Please see the Trust's prospectus for more information. The expense limits will continue through at least 2021-07-01. If the Trust were not to borrow, or the interest expense on the borrowings is excluded from the expenses of the Trust, the net annual expenses would be 1.21%.
Portfolio
Portfolio Statistics
As of June 30, 2020
| Net Assets millions Net Assets: The per-share dollar amount of the fund, calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. | $675.3 |
| Number of Holdings Number of Holdings: Number of Holdings in the investment. | 372 |
| Outstanding Shares | 146,430,496 |
| Borrowings | $274,500,000.00 |
| Number of Issuers | 317 |
| Industries Represented | 34 |
| Total Assets Under Management | $949,804,591.7 |
| Borrowings as % Of AUM | 28.90% |
| Avg. Investment | 2,996,229.00 |
| Avg. Investment as % of AUM | 0.32% |
| Total |
Weighted Averages
As of June 30, 2020
| Weighted Avg. Rating Factor Weighted Avg. Rating Factor: Weighted Average Rating Factor is a measure that is used by credit rating companies to determine the credit quality of a portfolio. This measure allows rating companies to look at a portfolio as a single security, and assign it a single rating. | 2,364 |
| Weighted Average Spread Weighted Average Spread: Weighted Average Spread is the average contractual spread of each senior loan, above its base rate. | 3.24% |
| Weighted Avg. Coupon Weighted Avg. Coupon: Weighted Average Coupon is the weighted-average gross interest rates of the pool of senior loans at the time of calculation. | 3.69% |
| Weighted Average Maturity years Weighted Average Maturity: The length of time until the average security in a fund will mature or be redeemed by its issuer. It indicates a fund's sensitivity to interest rate changes: longer average weighted maturity implies greater volatility in response to interest rate changes. | 4.88 |
| Weighted Average Days To Reset Weighted Average Days To Reset: Weighted Average Reset measures the average number of days that the current interest rate contracts are in effect. | 43.50 |
| Weighted Average Market Price Weighted Average Market Price: Weighted Average Market Price is calculated as the market price of each loan divided by the par amount outstanding. | 92.29 |
| Total |
Portfolio Composition
as of June 30, 2020
| Senior Loans | 100.00 |
| - First Lien | 98.29 |
| - Second Lien | 1.71 |
| - Secured | 100.00 |
| - Unsecured | 0.00 |
| Total | #,###.2 |
Top Issuers
as of June 30, 2020
| Asurion, LLC | 1.68 |
| Caesars Resort Collection | 0.90 |
| Altice France S.A. (fka SFR Group S.A., aka Numericable) | 0.87 |
| Reynolds Group Holdings Inc | 0.85 |
| Calpine Corp | 0.85 |
| Level 3 Financing, Inc | 0.82 |
| T-Mobile USA, Inc. | 0.80 |
| CenturyLink | 0.79 |
| Novolex (aka Flex Acquisition Company, Inc) | 0.79 |
| Nexstar Broadcasting, Inc. | 0.79 |
| Total | #,###.2 |
Credit Quality
% of Total Investments as of June 30, 2020
| Treasuries/Cash | 0.00 |
| ≥BBB | 6.60 |
| BB | 23.15 |
| B | 63.21 |
| CCC | 5.98 |
| <CCC | 0.50 |
| Not Rated | 0.56 |
| Total | #,###.2 |
The Standard & Poor's rating scale is as follows, from excellent (high grade) to poor (including default): AAA to D, with intermediate ratings offered at each level between AA and CCC. Anything lower than a BBB- rating is considered a non-investment grade or junk bond. Any security that is not rated by Standard & Poor's is placed in the NR (Not Rated) category.
Sector Weightings
% of Total Investments as of June 30, 2020
| Electronics/Electrical | 15.57 |
| Business Equipment & Services | 9.69 |
| Telecommunications | 8.96 |
| Health Care | 8.01 |
| Diversified Insurance | 5.56 |
| Leisure Goods/Activities/Movies | 4.49 |
| Radio & Television | 4.43 |
| Lodging & Casinos | 4.28 |
| Containers & Glass Products | 4.11 |
| Automotive | 4.04 |
| Total | #,###.2 |
Top Country Weightings
% of Total Investments as of June 30, 2020
| United States | 88.09 |
| Netherlands | 2.95 |
| Luxembourg | 2.75 |
| Canada | 2.16 |
| France | 1.16 |
| United Kingdom | 0.83 |
| Ireland | 0.52 |
| Australia | 0.36 |
| Cayman Islands | 0.28 |
| Sweden | 0.26 |
| Total | #,###.2 |
Information provided is not a recommendation to buy or sell any security. Portfolio data is subject to daily change.
Distributions
Payment Frequency: Monthly
| Ex-Date
Ex-Date: Date on which a stock begins trading without the benefit of the dividend. Typically, a stock’s price moves up by the dollar amount of the dividend as the ex-dividend date approaches, then falls by the amount of the dividend after that date. | Payable Date
Payable Date: Date on which a declared stock dividend or a bond interest payment is scheduled to be paid. | Ordinary Dividends
Ordinary Dividends: Payout to shareholders of interest, dividends, or other income received by the Fund, net of operating expenses. By law, all such income must be distributed to shareholders, who may choose to take the money in cash or reinvest it in more shares of the Fund. | Short Term Capital Gains
Short Term Capital Gains: The profit realized from the sale of securities held for less than one year. | Long Term Capital Gains
Long Term Capital Gains: Gain on the sale of a security where the holding period was 12 months or more and the profit was subject to the long-term capital gains tax. | Return of Capital
Return of Capital: Returns of capital are distributions by investment companies in excess of tax-basis earnings and profits. | Total Amount | ||
|---|---|---|---|---|---|---|---|---|
| 06/09/2020 | 06/22/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0148 | ||
| 05/08/2020 | 05/22/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0165 | ||
| 04/09/2020 | 04/22/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0200 | ||
| 03/09/2020 | 03/23/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0217 | ||
| 02/07/2020 | 02/25/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0229 | ||
| 12/30/2019 | 01/13/2020 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0233 | ||
| 12/09/2019 | 12/23/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0232 | ||
| 11/08/2019 | 11/22/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0250 | ||
| 10/09/2019 | 10/22/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0245 | ||
| 09/09/2019 | 09/23/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0260 | ||
| 08/09/2019 | 08/22/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0270 | ||
| 07/09/2019 | 07/22/2019 | $0.0000 | $0.0000 | $0.0000 | $0.0000 | $0.0270 | ||
| Totals: $0.2719 | ||||||||
Access Section 19 notices.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital, which will have the effect of reducing your cost basis in the Fund’s shares and thereby increasing the amount of capital gain, if any, or decreasing the amount of capital loss, if any, that you will realize when selling or exchanging Fund shares. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. When distributions exceed total return performance, the difference will reduce the Fund's net asset value per share. The final determination of the tax characteristics cannot be determined until after year end and reported to shareholders on Form 1099-DIV at that time.
To obtain an estimate of the components for each distribution please refer to the distribution press releases.
The Fund intends to make regular quarterly distributions based on the past and projected performance of the Fund.
The tax treatment and characterization of the Fund’s distributions may vary significantly from time to time, depending on whether the Fund has gains or losses on the call options written on its portfolio versus gains or losses on the equity securities in the portfolio. The Fund’s distributions will normally reflect past and projected net investment income, and may include income from dividends and interest, capital gains and/or a return of capital. The final composition of the tax characteristics of the distributions cannot be determined with certainty until after the end of the year, and will be reported to shareholders at that time. The amount of quarterly distributions will vary, depending on a number of factors. As portfolio and market conditions change, the rate of distributions on the common shares will change. There can be no assurance that the Fund will be able to declare a distribution in each period.
Investment Team
Portfolio Management Team
Voya Investments, LLC
Investment Adviser
Voya Investment Management Co. LLC
Investment Sub-Adviser
Jeffrey A Bakalar
Group Head and Chief Investment Officer, Senior Loans
Years of Experience: 34
Years with Voya: 22
Dan Norman
Group Head and Senior Managing Director, Senior Loans
Years of Experience: 35
Years with Voya: 28
Chuck E LeMieux, CFA
Senior Vice President, Portfolio Manager
Years of Experience: 33
Years with Voya: 22
Press Releases
Disclosures
Principal Risks
All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. The Trust invests primarily in below investment grade, floating rate senior loans that carry a higher than normal risk that borrowers may default in the timely payment of principal and interest on their loans, which would likely cause the value of the Trust’s Common Shares to decrease. Changes in short-term market interest rates will directly affect the yield on the Trust’s Common Shares. If such rates fall, the Trust’s yield will also fall. If interest rate spreads on Trust’s loans decline in general, the yield on the Trust’s loans will fall and the value of the Trust’s loans may decrease. When short-term market interest rates rise, because of the lag between changes in such short term rates and the resetting of the floating rates on loans in the Trust’s portfolio, the impact of rising rates will be delayed to the extent of such lag. Because of the limited secondary market for floating rate senior bank loans, the Trust’s ability to sell its loans in a timely fashion and/or at a favorable price may be limited. An increase in the demand for loans may adversely affect the rate of interest payable on new loans acquired by the Trust, and it may also increase the price of loans purchased by the Trust in the secondary market. A decrease in the demand for loans may adversely affect the price of loans in the Trust’s portfolio, which would cause the Trust’s NAV to decrease. The Trust’s use of leverage through borrowings or issuance of preferred shares can adversely affect the yield on the Trust’s Common Shares. The Trust may invest up to 20% of its assets in loans to borrowers in countries outside of the U.S. and Canada. Investment in foreign borrowers involves special risks, including potentially less rigorous accounting requirements, differing legal systems and potential political, social and economic adversity. The Trust may invest up to 15% of its assets in loans that are denominated in certain foreign currencies, however, the Trust will engage in currency exchange transactions to seek to hedge, as closely as practicable, 100% of the economic impact to the Trust arising from foreign currency fluctuations. Other risks include but are not limited to: Borrowings; Preferred Shares; Diversification Risks; and Concentration Risks.