VVR: When Others Panic, We Buy, 12% Yield (Rating Upgrade)
Summary
- On March 21, 2025, Invesco Senior Income Trust dropped -12.3% due to the termination of its managed distribution plan, marking a historic move.
- Lower Fed funds rates have reduced VVR's cash income, necessitating a cut in distributions to maintain long-term sustainability and avoid NAV-destructive ROC.
- VVR's price collapsed from a +7% premium to a -6% discount to NAV, highlighting the importance of avoiding CEFs trading at historic premiums.
- Despite the recent drop, VVR is now attractively priced for a tactical swing trade, offering a compelling opportunity compared to its leveraged loan CEF peers.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in VVR over 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.
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