I made a new stink bid for a discounted bond today.
music selection: “Give To Live” — Sammy Hagar
weigh-in: 212.6 – no change
Teck Resources is a base metals mining company. They are struggling a little lately like all companies with a lot of exposure to commodities pricing. However, operating cash flow covers interest expense several times over. They are not particularly heavily indebted for a mining company and they have wiggle room in cash flow with the ability to cut dividends in an emergency. I think this company will easily roll over its debt when it comes due.
I put in a good till canceled stink bid at 85% of the most recent sale price for the 15AUG2017 maturity 3.850 coupon at a price of 71.40 cents on the dollar. This is another “B” rated bond. If I can get filled, the expected annualized return assuming normal default and recovery rates for a “B” rated bond is upwards of 25%.
Devour your prey raptors!