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MCI: Likely Dividend Cut And Significant Risk To NAV With Pending Mark-To-Market, 25% Downside

Babson Capital Corporate Investors (NYSE:MCI) is a closed-end fund ("CEF") focused primarily on private high-yield debt. Asset composition from the latest quarter is found below:

Most CEFs are marked-to-market daily. However, given the nature of MCI's portfolio being mostly private/144A paper, the NAV only gets marked on a quarterly basis. The last NAV was as of 9/30/15.

Normally, in a typical market environment, the quarterly lag of NAV isn't problematic for investors making an investment decision to buy (or sell) the fund, as the asset values are generally stable (i.e. you can assume the last posted NAV correctly represents the current NAV). Investors have assumed this to be the case currently despite the broader market backdrop. Data below

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