As I mentioned earlier I was pondering some sales in my portfolio—and I have sold 2 issues.
I had held the Customers Bancorp (CUBI) 5.375% baby bonds (CUBB) for quite some time—and honestly it hasn’t performed since the original. I expected the issue to move and stay in the $22/share area, but it isn’t moving solidly higher and with regulatory issues the banker has recently had I am not sticking around any longer. The bank has performed fine and I am not expecting further regulatory action–but I simply don’t hang around if a bank is cutting corners–period.
Also today I sold the Runway Growth Finance 8% baby bonds (RWAYZ). I held this issue for just a month and further due diligence lead me to some discomfort with the company. Net asset value is moving lower by a fair amount now and their net investment income is moving lower–not really anything to worry about–but I do worry sometimes and I have no need to hold something I am not comfortable owning. Also a decent amount of their revenue is now PIK (payment in kind)—I want cash payments–hard cold cash. The larger PIK involvement the less I want to be involved with any company. I will be surveying all my holdings to try to avert surprises down the road. I took a small loss on the sale, but will receive a 50 cent dividend on 9/1.
I took the proceeds from the sales and invested it in the Eagle Point Income Fund 7.75% term preferred (EICB).
I will add both CUBB and RWAYZ on dip
I bought a few hundred RWAYZ back in June when it dropped down near $25 based on a recommendation from a friend (I was on the road and didn’t have time to do enough diligence at that moment). I bailed out a few weeks later with a small gain after i started digging in to it.
Thanks for confirming my action.
I had to look Private and I am not sure when I Bought RWAYZ but I sold it July 3rd for break even and a couple dividends.
Tim has a good point, When you see PIK growing it tells me they are unwilling to label the investment as not paying and add it to the non- accrual side of the ledger. Sometimes it pays off like in the case of TRIN cashing out it’s equity stake in Core Scientific.
thanks for the update. i was a little unsure about the bdc so it might be prudent to trim at least some of it
Oh, interesting. I still quite like CUBB. Just eyeballing it (somebody correct me if I’m wrong), the YTM is over 10% at current prices.
I’ve trimmed a little MTB-J lately. Otherwise pretty quiet.
Just under 9% YTM I believe on CUBB…….
Yes, you are correct!
I trimmed a little over 1/2
I went through my holdings and decided to reduce my risk and this was one I was overweight on.
Tim, I beat you to the exit door. I sold almost all my CUBB last 2 days and the RWAYZ a couple weeks ago. Took a.05 loss on the CUBB I sold and still sitting on about a 1/2 position I don’t want to take a loss on.