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!

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Teck Resources discounted bond

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