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Volta is no different from any other investment company in that it identifies when the market has mispriced long-term cashflows. In this note, we examine its success in that current cashflows are at near-record levels and 2.7x the dividend payment. Looking forward, we review why defaults may not rise to the level now built into loan prices – a view consistent with that of rating agencies and Volta – as well as the risks to this position. We note the current level of inflation is positive, as long as it is not sustained for too long. We also highlight Volta’s diversification and geographical exposure. Bearing in mind these issues, the discount is anomalous.
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