I’m putting in a good till canceled bid on Under Armour bonds.
music selection: “No Woman, No Cry” — Fugees
weigh-in: 209.6 +1.0
The spread between US benchmark Treasuries and high yield bonds is widening. There will be lots of great opportunities to buy money good bonds trading at distressed prices in the coming months. Today, I’m putting in a stink bid on a very strong bond that has recently traded irrationally low.
My bid is 90 cents for the Under Armour 15JUN2026 maturity 3.250 coupon bond. The underlying company gushes free cash flow far in excess of its debt service requirements. It also has a wide moat in the form of a dominant brand. The bond is currently trading at 92 cents but I hope to catch a bid on weakness in the coming weeks. I have bid on 8 bonds. I’ll write an update if the bid clears market.
Devour your prey raptors.
**UPDATE – This bond cleared market at 11:57. I paid 90 cents on the dollar, 8 dollars in commissions and 96.78 in accrued interest for total cash outlay of 7,304.78. Yield to maturity is 5.15%