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  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    Chris - I can sure relate to your stop and ponder statement. The situation with TVA bonds that I took advantage of was an ability to PUT the bonds back to TVA at par if/when they reset the coupon rate downward. Since the bond only resets downward, never upward, I think they must have provided the put capability as a sweetener to the original buyers. TVC reset downward on 4/29 and you had until 5/22 to decide to put the bonds back on 6/1 at $25 plus the then .239375 coupon. Oddly, beginning on May 19 the bond started dropping in price below par so you could capture the par amount plus 1% for a riskless hold period of less than 2 weeks or an annualized 26% yield. I jumped all over that immediately but the bond kept dropping before the cutoff date to a point where the available annualized return actually doubled from what I achieved. I left a ton on the table and went through that stop and ponder phase wondering whether I had somehow missed the ability to put. It worked out fine, but not without a major bout of personal second guessing.
    Jun 28, 2015. 10:10 AM | 1 Like Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    Downtown - Thanks.... You've confirmed what I thought about the available calculators. More power to you for creating the spread sheet. I still have an old Texas Instruments hand held fixed income calculator that I haven't touched in 20 years, but maybe it has the capability to solve the problem, however relearning how to use it would be frightening to me nowadays.... What I've tried to do to get around the problem is treat the exchange traded notes as zero coupon bonds when putting the info into an online calculator. I figure by putting the par amount plus the coupon in as the call price, be it quarterly, monthly or whatever, then make the call date actual maturity instead of the stated call date, I am probably getting a little closer to accurate YTM for a "bond" traded without accrued.

    And as an old muni guy, we had to deal with yield curve differences all the time since so many issuers issued maturities from 1 -30 years or more in a single issue. So yes, there is a material difference in one year yields in the 7-8 year range, but again, today with compressed rates, it must be very small... Back then in the 7-8 year range it was usually 10 basis points or more. Today, it has to be smaller....

    If you're interested, I have played a special situation on TVA bonds, symbols TVE and TVC this year. That special situation havingto do with an ability to put bonds back to TVA at par has past and I don't expect it to happen again in the future, but TVE is now a 3.36% bond due 5/1/29 and TVC is q 3.55% due 6/1/28. last trade on TVE was 24.19 and 24.11 on TVC. Go figure on that one.... Identical credits.. Bid/ask spread can eat up the arb, but a month ago, you could sell TVE at the bid side at 24.27 and buy TVC at the offer of 24.19. Two weeks later you could buy TVE at 24.22 at the full offered side and sell TVC at 24.15 at teh bid. I think that could happen and if so, it's a better opportunity to arb than OXLCN vs OXLCO. It's getting close again now........
    Jun 27, 2015. 08:59 PM | 1 Like Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    Tack - hate to pick on you but unless I misunderstand what you're saying I don't think you're right....... It sounds as though you are saying that a bond purchaser pays accrued interest up to the next interest payment date. A bond purchaser does not pay extra for that interest in advance - he pays only for the interest that has accrued to the date he purchased (settlement date actually I think). He then receives the full amount of the coupon payment when it's paid, including that which he had to pay to the seller for the period of time the seller owned it from the last coupon payment.... I think that must be what you meant...
    Jun 27, 2015. 08:31 PM | Likes Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    Tack - Actually not true. OXLCP is called on July 24 at $25 par PLUS .13577 accrued. That's why it continues to trade above par.... Someone without transaction costs can earn an acceptable riskless annualized YTM buying OXLCP at a premium to par now... Actually I had hoped maybe there'd be a moment in time when the market agreed with you as I put in a 24.97 bid on the day of the announcement, but alas, it never happened and I doubt it will now.........
    Jun 27, 2015. 08:25 PM | Likes Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    I, too, see both sides of the argument. My bond background would have me siding with DIA on OXLCN vs OXLCO on the true absolute calculation of which is presently the better buy. However, this discussion has more of an intellectual bent to it (which I thoroughly enjoy reading) than a tradeable one because imho the differences at current market prices for all practical purposes are too slight to arbitrage. With a one year difference in maturities, OXLCN should be cheaper on a YTM basis than OXLCO, but that they are essentially equivalent is hardly exciting... I happen to be long OXLCN but see no reason to jump on a swap. One question for both of you, though, is what calculators do you use for YTM that takes into account the fact that both securities trade flat instead of with accrued interest? I've not been able to find one.
    Jun 27, 2015. 11:04 AM | 1 Like Like |Link to Comment
  • Boston Private Financial: Extra-Cautious Management [View article]
    Don't get me wrong IS - to me there's a whole lot more to be said about a an underperforming bank than one that's already firing on all cylinders. If it's already at the top of the class, the potential has already partially been achieved.... It just seemed to be unusual phrasing imho. And BTW, I personally have done no homework on BPFH - I just read a few SA articles that seem interesting by topic, then decide if I want to then do DD..... I should as a follow-up on this one, but I probably won't....I'll probably pass not so much as a comment on your penmanship but more on my reluctance to do practically anything..... Frustration rules in my world.
    Jun 25, 2015. 07:53 PM | Likes Like |Link to Comment
  • Boston Private Financial: Extra-Cautious Management [View article]
    I must be missing something in your analysis. It seems to me your conclusion essentially is that BPFH is doing so poorly when compared to its competitors that there's virtually nothing for it to do but improve its position over time, slowly over time at that.... It's not every day you hear someone saying things like "BPFH is not able to generate meaningful upside in its loan portfolio. Its net interest margin for the trailing four quarters is 2.99%, far lower than its peer median of 3.44% and peer average of 3.63%" and "BPFH's efficiency ratio is not healthy either" and using those observations to be positive on a stock...
    Jun 24, 2015. 05:33 PM | Likes Like |Link to Comment
  • An 11.2% Yield From A Diversified Shipping Company: Navios Maritime Holdings Preferred [View article]
    Mav - Though I get your point I detect a hint of paranoia in your reasoning, as if only the bond you happen to purchase will be the one to cause a default risk. If you buy longer maturity bonds for the reason you describe without researching the debt structure of the company overall, then you're overlooking the fact that you're subject to the very risk you're concerned about with every other bond issued by the company that matures in front of the longer one you buy....
    Jun 18, 2015. 09:22 AM | Likes Like |Link to Comment
  • An 11.2% Yield From A Diversified Shipping Company: Navios Maritime Holdings Preferred [View article]
    Maverick - Can I ask why you say you don't want to hold a bond or preferred that is within a couple of years of maturity if they're junk rated???? Are you commenting about the yield curve in general or something you perceive to be associated with maturing junk vehicles?
    Good point, BTW, about the effect of cumulative payments in all circumstances except bk
    Jun 17, 2015. 06:37 PM | Likes Like |Link to Comment
  • An 11.2% Yield From A Diversified Shipping Company: Navios Maritime Holdings Preferred [View article]
    Richard- Again I respectfully disagree when you say it doesn't make sense to include expected price appreciation on the bonds while excluding it for the preferred. Consider the two main factors that will affect price - corporate developments and interest rates. When you consider all the directional combinations of the two, there are numerous scenarios where the preferred would not experience any appreciation during the time the 2019 bond is outstanding (considered at the bond's maturity date only), but there's only one where the bond wouldn't and that would be default.... And in that scenario, the preferred would decline even more than the bond, so to me, it DOES make sense to include appreciation on the bond but not count it as a given on the preferred.
    Jun 14, 2015. 09:40 AM | 1 Like Like |Link to Comment
  • An 11.2% Yield From A Diversified Shipping Company: Navios Maritime Holdings Preferred [View article]
    Richard - Your response doesn't make sense to me. The preferreds are perpetual while the bond has a stated maturity. To say the actual return on the preferred will actually be higher "assuming that things go well for NM" ignores the impact of rising interest rates on the price of the preferred. As a fixed rate instrument, if interest rates are going up, then the price of the perpetual will go down, with the drop potentially tempered if things go well at NM over the same period. Only the bond, with its stated maturity, is guaranteed to appreciate over a specified time assuming no deterioration in NM's performance. So to me, if the bond with its better positioning in corporate structure as debt has a given yield to a stated maturity of 14% while the preferred with no stated maturity and counted as equity has a current yield of only 11.20% today, then to me the bond is the much better deal. Where am I going wrong?
    Jun 13, 2015. 10:07 AM | 1 Like Like |Link to Comment
  • American Homes 4 Rent, The Preferred Route To Dividends [View article]
    Thanks for your take, Nishtu. That pretty well confirms what my rating agency would have said as well... However, from the issuer's point of view, I don't see the pressure to call at the earliest date possible. The 5% and 5 1/2% rates seem relatively attractive and the likelihood of an increasing interest rate environment between now and 2017/18 high, so I suspect your take must be for AMH to escape an increasing home price appreciation factor to be the determining factor to call at the first available date.
    May 31, 2015. 09:52 AM | Likes Like |Link to Comment
  • American Homes 4 Rent, The Preferred Route To Dividends [View article]
    I've been hoping an SA article on AMH preferreds would come out ever since I bot into the B's about 2 months ago. I had been looking for stated maturity preferreds as a way to minimize interest rate risk vs. a classic preferred and when I came upon these I was fascinated. Not only are they going to act like stated maturity preferreds due to the doubling of the coupon rate in 2020 if they remain outstanding, but, as Reuben points out, they also have protected equity like potential on the upside due to the home price appreciation factor that potentially increases the "par" for the preferred from $25 upward, while $25 always being the minimum par. And the interesting thing is that if the preferreds end up remaining outstanding after 2020, the doubling (on the A's and B's) of the interest rate from 5% to 10% is calculated at the new "par" amount at the time of the conversion, not on the original $25. That again pretty well seals the "stated maturity" aspect of the preferreds, hopefully, since I do not want to think about a credit deterioration possibility or an overall interest rate explosion scenario that could cause these to remain outstanding 5 years from now...

    So my question for those who have studied AMH as a credit and these preferreds specifically is how would you rate these if you were a rating agency? What rating would you assign AMH and what rating would you give to the preferreds? - Junk status? Higher? All 3 series of preferreds are sizable in original issue amount, so a decision was made to market each as unrated for some reason.... Why?
    May 30, 2015. 06:11 PM | Likes Like |Link to Comment
  • 8% Yield With Interest Rate Protection From PennantPark Floating Rate Capital [View article]
    Chris - Am I figuring this correctly that this is essentially a cash deal in the sense that the PFLT shares to be received will equal a value of $4.521 no matter PFLT'S market price at or near settlement date? I'm ignoring the other aspects and potentials for the sake of argument, just trying to understand whether or not the market price of PFLT on or about 9/1/15 is irrelevant.
    May 1, 2015. 10:56 AM | 1 Like Like |Link to Comment
  • A HCM Strategy That Has Outperformed The S&P 500 By 300% TTM [View article]
    I think your performance chart understates ADP's performance over the past 12 months, doesn't it? CDK Global [CDK] was spun out from ADP in October and I don't think your chart takes that into account.... And to top it off, CDK is up over 50% since it was split out. ADP's the only one of your 5 I happen to own.
    Feb 22, 2015. 10:40 AM | Likes Like |Link to Comment