Recession Proofing With Investment Grade Bonds

Summary

• This should be excellent timing for a discussion of investment grade (“IG”) notes/bonds for lower-risk investors that do not mind lower yields/returns.
• These notes were previously overpriced, but prices have declined and are now at attractive levels, most of which are yielding between 5% and 8%.
• This update discusses “Interest Expense Coverage” and “Asset Coverage” ratios for each BDC. No BDC has ever defaulted on a debt obligation.
• I would suggest focusing on the higher quality notes with relatively higher yields (for similar durations).
• Stock market volatility is likely to remain high, and these notes allow investors to lock in a 7% annualized return.
• This idea was discussed in more depth with members of my private investing community, Sustainable Dividends. Learn More »

Chunumunu

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I have positions in 19 BDC stock positions, none of which were discussed in this article.