I exited my FLR bonds.
music selection: “Someday (ft. Mark Knopfler)” — Eric Clapton
On 21SEP2020, I bought CUSIP 343412AC6 for 88 cents on the dollar (7 bonds). I paid seven dollars in commissions and 66.69 in accrued interest. At the time, I felt the bond was “money good” and due to rally. Today, I sold for par (100 cents on the dollar). I paid 14.75 in commissions and collected 131.35 in coupons and accrued interest for holding. Total proceeds of 7,116.60 against total cash outlay of 6,233.69 yields 882.91 in profit over 134 days. That is good for 38.58% annualized return. A very good return for such a safe investment.
I continue to look for good distressed bond opportunities but the market has a rather cheery consensus for distressed debt right now. Interest rate spreads between the 10 year Treasury are near all time lows. The tide will turn again whether it is because of COVID or the bull running out of legs. When it does, spreads will increase and margin of safety will rise making distressed bonds good investments again.
Devour your prey raptors!