Voya Asia Pacific High Dividend Equity Income Fund T.IAE

Primary Symbol: IAE

Voya Asia Pacific High Dividend Equity Income Fund (the Fund) is a diversified, closed-end management investment company. The Fund’s investment objective is total return through a combination of current income, capital gains and capital appreciation. The Fund seeks to achieve its investment objective by investing primarily in a portfolio of dividend yielding equity securities of Asia Pacific companies. The Fund will seek to achieve its investment objective by investing at least 80% of its managed assets in dividend producing equity securities of, or derivatives having economic characteristics similar to the equity securities of Asia Pacific Companies that are listed and traded principally on Asia Pacific exchanges. The Fund will invest in approximately 60-120 equity securities and will select securities through a bottom-up process that is based upon quantitative screening and fundamental analysis. Voya Investments, LLC is an investment adviser of the Fund.

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Voya Asia Pacific High Dividend Equity Income Fund > RBC Analyst Upgrade from $1.50 to $1.70

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Post by Naka2112on Apr 24, 2015 9:18am

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Post# 23660408

RBC Analyst Upgrade from $1.50 to $1.70

From RBC

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"Balance sheet boost ahead of refinancing

Our view: The sale of the Norwegian exploration portfolio for $60m to MOL provides a welcome and unanticipated boost to Ithaca's balance sheet. This is ahead of the scheduled debt redetermination (and extension) of the RBL at the end of April. As a result, we have increased our price target to $1.70/share (100p/share).

Key points:

Transaction adds $30m cash: Ithaca has announced the sale of its

wholly owned subsidiary, Ithaca Petroleum Norge, to MOL for an initial

consideration of $60m and up to $30m dependent on exploration success

from the portfolio. The transaction sees the complete sale of Ithaca's

Norwegian assets, has an effective date of 1 January 2015, and is expected

to complete in Q3/15. It is subject to the usual Norwegian approvals.

After repaying its Norwegian exploration financing facility and expected

working capital adjustments, Ithaca anticipates the sale to result in an

initial net cash inflow of ~$30m. The company plans to offset this against

its existing bank debt facility; we estimate net debt of ~$780m at the

end of Q1/15. The deal is a welcome boost ahead of the company’s debt

redetermination scheduled for the end of this month. Following this deal,

we have increased our price target to $1.70/share (100p/share) and we

reiterate our Outperform rating.

Debt re-determination: Ithaca is currently undergoing a scheduled six monthly re-determination on its $610m Reserves Based Loan (RBL) facility and extending the repayment schedule beyond Stella first oil (expected Q2/16). Although lenders will use lower oil price decks, we anticipate that they will use cost deflation assumptions and Ithaca will benefit from full recognition of the reserves from the Summit acquisition made in 2014. We expect a further recovery in the share price once this processes is completed and investors' near-term balance sheet concerns are eased.

Exploration near-term: Future bonus payments (up to $30m) depend on successful discoveries being drilled on the acreage between 2015 and 2017, with any payments based on a sliding scale depending on discovery size. The Myrhauk and Snomus exploration wells are scheduled to be drilled in 2015, with at least one well in early 2016. As a result, any bonus payments could come sooner rather than later.

Capex uncertainty reduced: Ithaca's capex is heavily weighted toward H1/15. The rig drilling the Ythan well is currently completing operations. This, alongside the completed Stella Ekofish development well, represents Ithaca's most significant 2015 capex. As both of these have been completed in line with expectations, any risk of mounting cost overrun has been mitigated. FY15 capex guidance of $150m is funded from FY15 cash flows, underpinned by the strong hedging position (75% of current production at $76/bbl to mid 2016)."