you are leaving Destracapital.com

It is important to note that by clicking on this link you will be leaving this website and any information viewed there is not the property of Destra Capital Investments LLC.

 

Destra International & Event-Driven Credit Fund

A continuously offered Closed-End Interval Fund

I Shares

  • ticker: CEDIX
  • cusip: 250 65R 109

Portfolio Managers

BlueBay Asset Management

BlueBay Asset Management is an industry leader in multi-asset credit and event-driven credit investing, managing over $50Bn in assets, all of it exclusively in income markets worldwide. BlueBay has offices and around the globe.

Investment Team

Blair Reid
Portfolio Manager
Multi-Asset Credit

Tim Leary
Portfolio Manager
Event-Driven Credit

Duncan Farley
Portfolio Manager
Event-Driven Credit

Investment Objective

The Fund’s investment objective is to provide attractive total returns, consisting of income and capital appreciation.

Investment Strategy and Philosophy

The Fund invests in credit related instruments and/or investments considered by the Fund to have the potential to provide a high level of total return. Credit related instruments include:

  • Bonds
  • Debt securities
  • Loans issued by various U.S. and non-U.S. public- or private-sector entities
  • Derivatives
  • Cash equivalents

The Fund will allocate its assets between two strategies:

  • Multi-Strategy International Credit
  • Event-Driven Credit

Due to the episodic nature of event-driven credit opportunities, the Fund will have a varying degree of exposure to the strategy, anticipated exposure to be between 0% and 50% of Fund assets.

Investment Process

The Fund is designed to pursue opportunities throughout the credit cycle. The Fund is a continuously offered, closed-end interval fund, that seeks to provide long-term investors the potential for:

1

Income from worldwide multi-asset credit investments

2

Total return opportunities from select event-driven credit

3

Professional management from BlueBay, a premier global credit manager

Multi-Asset Credit Investment Process

The sub-advisor seeks to achieve balance between top down and bottom up views when selecting the Multi-Asset Credit portion of the portfolio.

Top Down
BlueBay's Multi-Asset Decision Group decides on asset allocation and capital preservation (increase cash and/or hedge risk)
Best ideas
Specialist Portfolio Managers select their best ideas within each asset class
Bottom Up

Event-Driven Credit: What is it?

Events are happening all the time to corporations and other entities, that are reflected in the market prices of their securities. To the skilled credit analyst, some of these events may translate into investment opportunities. Below is a partial list and description of “events” that BlueBay evaluates daily around the globe.

Strategy Characteristics
Stressed Situations
  • Value creation through discount to intrinsic value
  • Financial/operational turnaround
  • Cyclical/structural recovery
Event Driven/ Opportunistic
  • Specific identifiable near to medium term exit event
  • Take out can be any of refinancing, M&A, change of control, realization of proceeds on asset or business disposal, new equity infusion
Restructuring
  • Reinstated debt
  • Post reorganization equity
  • Rescue financing

Credit Shorts

  • Liquidity/cash flow crisis
  • Restructuring candidate
  • Bankruptcy/insolvency

Core Income

  • Par credit
  • Focus on coupon return
  • Income funds short positions

Performance

as of 9/30/18

Ticker Net Asset Value MTD QTD YTD 1 Year
CEDIX I Shares at NAV (5/9/2018) $24.50 0.54 0.70 - -

Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 877.855.3434 or access our website at destracapital.com for performance current to the most recent month end.

Since the commencement of Fund operations, the Adviser has voluntarily absorbed all of the operating expenses of the Fund. Fund returns and distribution rates would have been lower had expenses, such as management fees, not been waived during the period. The Adviser will continue to bear such expenses on a going forward basis at it's discretion and is under no obligation to continue to do so for any specified period of time. Additionally, the Fund has contractually agreed to waive its fees to the extent that they exceed 2.25% for Class I. The total gross expense ratio is 5.43% for Class I. The Expense Limitation Agreement will remain in effect at least through May 9, 2019. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Portfolio Characteristics

as of 9/30/18

Number of Holdings 85
Interest Rate Duration 3.37
Credit Spread Duration 4.03
Non-US Dollar Exposure 0.00
Distrubutions Quarterly
Equity Exposure (%) 1.61
Average Credit Rating (incl Cash) BB
Manager Destra Capital Advisors LLC
Sub-Advisor BlueBay Asset Management

Ratings Breakdown (excluding cash)

as of 9/30/18

Standard & Poor's

A- 1%
BBB 3%
BBB- 4%
BB+ 7%
BB 10%
BB- 11%
B+ 22%
B 13%
B- 7%
CCC- 3%
CCC 1%
C 1%
NR 3%

Credit Ratings, as rated by S&P and Moody’s, is an assessment of the credit worthiness of an issuer of a security. AAA is the highest rating, the obligors capacity to meet is financial commitments is strong. As ratings decrease, the obligor is considered more speculative by market participants. Credit ratings apply only to the bonds and preferred securities in the portfolio and not to the shares of the fund which will fluctuate in value.


Sector Breakdown

as of 9/30/18

Top 10 Countries

as of 9/30/18

Top 10 Issuers

as of 9/30/18

Momentive Performance Materials Inc3.1%
Hellenic republic Government Bond2.5%
Spring Capital Corp2.5%
Deoleo SA 2.0%
Chesapeake Energy Corp2.0%
EA Partners II BV 2.0%
Fieldwood Energy LLC 2.0%
California Resources Corp 2.0%
EnQuest PLC 1.7%
Valeant Pharmaceuticals International 1.6%

Holdings are subject to change without notice. There is no assurance that the investment process will lead to successful investing.

All compositions are subject to daily changes with market actions.

Literature

Glossary

Risks

Because of the risks associated with investing in high-yield securities, an investment in the Fund should be considered speculative. Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus contains this and other information relevant to an investment in the fund. Please read the prospectus or summary prospectus carefully before you invest or send money. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.855.3434

Past Performance is no indication of future results. An investment in the Fund involves a high degree of risk. In particular: The Fund’s shares will not be listed on an exchange in the foreseeable future, if at all. It is not anticipated that a secondary market for the shares will develop and an investment in the Fund is not suitable for investors who may need the money they invest within a specified timeframe. The Fund is suitable only for investors who can bear the risks associated with the Fund’s limited liquidity and should be viewed as a long-term investment.The amount of distributions that the Fund may pay, if any, is uncertain.The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund’s performance, such as a return of capital, borrowings or expense reimbursements and waivers.

Summary of Investment Strategy. Under normal market conditions, the Fund will invest at least 80% of its total assets (including borrowings for investment purposes) in credit related instruments and/or investments that have similar economic characteristics as credit related instruments that are considered by the Fund to have the potential to provide a high level of total return. Credit related instruments include bonds, debt securities and loans issued by various U.S. and non-U.S. public- or private-sector entities, including issuers in emerging markets, derivatives and cash equivalents. There is no limit on the credit quality, duration or maturity of any investment in the Fund’s portfolio. Under normal market conditions, the Fund will invest at least 40% of its total assets in securities of non-U.S. issuers.

The Fund will allocate its assets between two strategies: (i) Multi-Strategy International Credit and (ii) Event-Driven Credit. The allocation to Multi-Strategy International Credit is expected to be between 0% and 100% of Fund total assets. Due to the episodic nature of Event-Driven Credit opportunities, the Fund will have a varying degree of exposure to the strategy, typically expected to be between 0% and 50% of Fund total assets.

The Multi-Strategy International Credit strategy focuses on investments in non-U.S. credit related instruments and/or investments that have similar economic characteristics as credit related instruments that are considered by the Fund to have the potential to provide a high level of total return. Credit related instruments include bonds, debt securities and loans issued by various U.S. and non-U.S. public- or private-sector entities, including issuers in emerging markets, derivatives and cash equivalents.

The Multi-Strategy International Credit strategy focuses on investing in non-investment grade securities (commonly referred to as “junk bonds”) from issuers globally. The Fund selects securities for purchase or sale through active security selection, asset allocation and capital preservation techniques. Non-investment grade securities are securities rated Ba1 or BB+ or below by Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), respectively, or unrated securities deemed comparable by the Fund. Junk bonds are regarded as having predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. Because of the risks associated with investing in high-yield securities, an investment in the Fund should be considered speculative.

The Event-Driven Credit strategy focuses on investing in securities of companies facing a corporate, market or regulatory event. The goal is to identify securities with a favorable risk-reward ratio based on the likely outcome, as a result of such event occurring. Such events include, but are not limited to, corporate events, such as restructurings, spin-offs, mergers and tender offers; significant litigation; initial and seasoned debt/equity offerings; launches of new products; regulatory changes; analysts meetings; earnings announcements; covenant issues; bankruptcies; corporate reorganizations; shareholder activism; and significant management and external changes that dramatically change the company’s profit margins. Opportunities are created by the reluctance of traditional investors to assume the risk associated with certain corporate, market or regulatory events.

The Event-Driven Credit strategy will focus on investing in long and short positions of debt (fixed or floating rate bonds and loans) or equity securities, including exchange-traded funds (“ETFs”), preferred stock, warrants, and options on these securities, depositary receipts such as American Depositary Receipts (ADRs), and derivatives such as futures and options on futures. These investments may be traded over-the-counter or on an exchange. The Fund may invest in issuers of any size, and in U.S. and non-U.S. issuers. Under normal market conditions, the Fund’s investments in equity securities, at the time of investment, will be limited to 20% of its total assets.

There is no currency limitation on securities acquired by the Fund. The Fund uses the market value of its derivative contracts for the purposes of its 80% investment policy in credit related instruments.

For a further discussion of the Fund’s principal investment strategies, see “Investment Objective, Opportunities and Strategies.”