Today I’m detailing my bond positions and the stink bids I have out for more bonds.

music selection:  “No Matter What” — Badfinger

First up is the bonds I’ve already purchased.  I’m a little overweight in “C” grade bonds and hope to get more stink bids out on “B” grade bonds next week.  Annualized yield is a weight average estimate of the return of capital assuming normal default rates and normal recovery rates, plus the coupon yield over cost.

DateTickerWhatGradeExpiryCouponPriceAnnualized
08-Dec-15BBEPBreitburn EnergyC15-Oct-20   8.62528.263 81%
19-Nov-15BTUPeabody CoalC15-Nov-18   6.00020.500 133%
08-Dec-15CLFCliffs nat resC15-Jan-18   5.95029.538 107%
07-Dec-15EACEriksonB01-May-20   8.25060.500 28%
08-Dec-15LINELinn EnergyC15-May-19   6.50023.000 122%
17-Nov-15NORNoranda AluminumC01-Jun-1911.00020.500 141%
20-Nov-15NRPNatural Res PartnersB01-Oct-18   9.12568.000 29%
07-Dec-15SGMSScientific GamesB15-Sep-18   8.12579.000 19%
08-Dec-15SSEChesapeakeC15-Nov-19   6.62536.550 60%
20-Nov-15VNRVanguardB01-Apr-20   7.87555.000 26%
08-Dec-15XUS SteelB01-Feb-18   7.00063.000 36%
Weighted Average Annualized Return (Estimate)49.7%

I have some stink bids open on a few more “C” rated bonds that are not clearing.  I’ll add more stink bids to “B” rated bonds next week.

TickerWhatGradeExpiryCouponBid
CMLScummulus radioC01-May-19   7.75033.150
EXXIenergy xxiC15-Feb-18   8.25025.000
IHRTiheart clear channelC15-Jan-1810.00030.600
MPOmidstates petroleumC01-Oct-2010.75013.600
REXXrex energyC01-Dec-20   8.87520.400

I have no estimated return for these as I need an open date to calculate such.

I’ll get these added to the open positions tab shortly.

Devour your prey raptors!

 

 

 

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Current Discounted Bond Positions

Never miss another opportunity to devour prey!

2 thoughts on “Current Discounted Bond Positions

  • December 10, 2015 at 3:45 pm
    Permalink

    Given the deteriorating balance sheets, liquidity and cashflow positions of several of the C rated companies, how did you make your investment decision on which bonds to purchase?

    Thanks

    Rob

    Reply
    • December 10, 2015 at 3:55 pm
      Permalink

      Robert,

      It is more art than science. First I look to see if there is interest coverage from cash flows (even 1x gives me comfort). Else, I try to learn about their assets and determine if the collateral has value. Chesapeake is a good example of that. They may not continue to have sufficient cash flow but their assets are the best in the business. Buyers can be found. Assets can be spun off and loaded with some of the debt in the process. And they can dilute shareholders to raise cash.

      But I want to be at least half B rated companies. I’m already there on a weighted average cost basis but I want to be there on an issue count basis as well. The C rated companies are still a great bargain under 40 cents but bankruptcies can take time, which ties up capital into non performing assets.

      Reply

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