June started with the fund receiving the proceeds of the Lloyds Covered FRN tenders, we had tendered three tranches of short dated bonds.

We added to our holding of GCP Infrastructure as their discount was the widest of our infra holdings. In the secondary market, we added to our Close Brothers 2T 23’s, Orange 5.875 Perps and sold the new Siemens 0.875 23’s we had bought at the beginning of May for a spread profit of 30 basis points. We also sold a chunk of short Gilts, the 2’s 20, to fund purchases, along with our position in BUPA 2’s 24.

The primary market window remained firmly open as corporates continued to access capital markets. We took several new issues over the month, they all attracted significantly oversubscribed books and have performed strongly in the secondary market. First up was a new issue from Lloyds Bank Corporate Markets (the non-ring-fenced entity), paying Gilts + 155 basis points. We then took the new Legal and General T2 Hybrid, which priced paying over 5.625 %. We took the new BP Capital hybrid at 4.25% and switched out of our SSE 3.875 hybrids, due to be called in September, into the new issue SSE 3.74’s with a call in 2028. We took some longer issues, notably the rolling stock leasing company Eversholt issued a 30 year, helping the duration of the fund to continue to move out, it now stands at 5.2.

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