mavericks

Barron's Mid-2007 Analyst Roundtable

PFN is leveraged about 38%. I've owned 2k shares for a long time and was thinking about shedding some shares but its sister fund PFL trades at an even higher premium, lower yield. Risks are if the Fed cut rates since their portfolios are all securities tied to LIBOR + a percentage. The securities are typically in a Senior position but are usually not very liquid compared to corporate bonds. But unlike corporate bonds, when interest rates go up, so does their income which more than offsets their borrowing costs.