New guidance on MONINT.
music selection: “Don’t Let Him Go” — REO Speedwagon
I have two changes to report to my portfolio of distressed bonds. First, I sold the LB 1NOV2035 maturity 6.875 coupon bond. I originally purchased on 1OCT2018 for 83.4 cents on the dollar. I sold at 85 cents on the dollar on 20DEC2018. The trade was in force for 80 days and returns an annualized amount of 7.65% on the principal. During the holding period, the coupons were good for an additional 8.24% annualized for a total annualized return of 15.89%. This is a very good return for a low risk investment. I would have liked to hold longer but I needed some liquidity in my main trading account and this was an easy decision to sell.
I have changed my mind about the Monintronics MONINT 1APR2020 maturity 9.125 coupon bond. It looked like the company had agreements in place with the majority of its institutional holders to make an exchange for a blended cash-pay/PIK bonds with a later maturity. A couple of key banks have since pulled out and it is unclear whether the company can now avoid bankruptcy. I am attempting to sell my bonds, for a loss. My broker is noting my lot size of 10 bonds is too small to clear the market so I may be stuck. In a full liquidation, I expect to take a beating. But so would the institutional bond holders and the banks that are backing out of the agreement previously on the table. So I am hopeful this is just a negotiating tactic and something will still get worked out. I’ll keep the blog updated with how this shakes out.
Devour your prey raptors!