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A Couple Small Buys Today

Today I made a couple modest buys in the portfolio–1 was additive to a current position and the other was a new position.

1st off I added to my Eagle Point Income (EIC) 7.75% term preferred (EICB) position. EIC owns mainly the debt tranche (70% more or less) of collateralized loan obligations–with equity tranches at about 30% or so.

I double checked the leverage ratio of EIC and they are running at about 300%–very solid coverage for senior securities.

I initiated a new position of the Oxford Lane Capital 6.25% term preferred (OXLCP) which has a yield to maturity of around 8.9%. Once again I checked the most recent (3/31/2024) coverage ratio and like the EIC issue they are right around 300%—again very solid for the coverage of the senior securities.

Of course there were other available closed end fund financial baby bonds and term preferreds available–many with similar yields etc and there is no right nor wrong issue necessarily to buy.

Sometime today I will get these issues added to the laundry list of holdings.

12 thoughts on “A Couple Small Buys Today”

  1. There’s an interesting recent Seeking Alpha article from ADS Analytics from comparing different Preferred and Baby Bond offerings from CLO funds: https://seekingalpha.com/article/4703492-our-latest-picks-in-the-8-9-percent-yielding-clo-equity-senior-security-sector

    The interesting part is that he attempts a “stress test” of what happens if the CLO market collapses. The exact results obviously depend on the exact collapse scenario, but this is the graph he produces: https://static.seekingalpha.com/uploads/2024/7/1/30644215-17198113906476262_origin.png

    I give the direct link hoping the graph should be visible without paywall or popup. The issues in the top right corner are what he recommends for high yields with good coverage in a bad CLO market: OCLCZ, EICC, XFLT-A, EICA, OXLCI, OZSQZ, and OXSQG.

    I thought it was a good way to look at choosing between some of these. In particular, it made me think that the EIC issues probably are a better choice than the ECC issues given the small difference in YTM they have.

  2. UTG kept the dividend at 19cents a month for the next 3 months.
    Yields 8%. I have owned it for years and never a cut yet. Good for my IRA.
    Anyone here own it?

    1. I like the vanilla cefs like utg. if regulatory bodies approve 9.5 ROE and studies show they realize +- 150 bps then paying 1% fee to own a bundle of them seems like an okay deal. I buy some of the wonkier ones like bst too, but have been more interested in the preferred shares in qualified accounts.

    2. Likewise, have held this monthly payer for years as its’ performance has been mostly steady. Currently a slight discount from my original cost basis, but when adjusted for dividends I’m well ahead and pleased. Would like to find one or two more equivalent monthly payers.

  3. Does the credit quality concern you at all? For OXLC it was B+ per Morningstar, the other no listing.

  4. OCCIN trading at 8.56% YTM (12/31/2026) vs sister issue of OCCIO trading at 7.87% YTM @ 4/30/2026

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