It is time to cut losses on CUSIP: 609453AG0

music selection:  “The Next Episode” Dr. Dre

I bought the Monitronics 9.125 coupon bond with 1APR2020 maturity on 2JUL2018 for 65 cents on the dollar.  It looked highly likely that the company would be able to refinance its bond without any trouble.  Investors have since soured on the company’s prospects and bidders have walked away from the table.  The bond is trading below 25 cents on the dollar.

The odds of refinancing now are about 50/50.  I project trivial recovery out of bankruptcy if this goes to a liquidation.  I have set a good till canceled sell order for 30 cents a share.  I will book 3,500 in capital losses, offset by about a thousand in coupons collected.  I’m willing to wait to exit this position as I think the company will continue to make coupon payments and positive rumors about the refinancing effort should push the bonds briefly back above 30.

Devour your prey raptors!

Update Monitronics Bond 609453AG0

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