Added Asset Coverage Data to CEF Preferred Page

We have added asset coverage to the listing of CEF Preferreds found here.  CEFs are required to have asset coverage ratios of 200% or more for preferred stock sold to be used as leverage by the funds.

This data is only published a few times a year (although with some effort one could make a good daily guess at it) so the data is not right up to date, but is as of the semi-annual or annual report.

Obviously with the beatings that stocks have taken recently most of these coverage ratios will be lower when they are next published.  Interestingly there are a couple of Gabelli managed funds which had ratios of 248% as of 6/30/2018 so we will see how they react as they approach the 200% level.

NOTE–common shares may have been sold by some of these funds since the last asset coverage was published.  ALSO some funds may have sold preferred shares since last publication.  These activities either raise or lower the asset coverage.  We will publish asset coverages and update them from time to time but for those wanting up to the minute knowledge one will have to look up whether the fund has sold preferreds, debt or common shares since the last update.

17 thoughts on “Added Asset Coverage Data to CEF Preferred Page”

  1. Tim, in previous lists of this asset type (preferreds of CEFs) you have listed ECCA and ECCB. I believe they are appopriate for the list, as they are organized at 1940 act funds and have the same requirements as the other funds listed. Indeed, similar preferreds OXLCM and OXLCO are listed. It would be nice to get them on the list here if in fact they do qualify, as they are under par. If things settle down without the underlying funds imploding, it would be a good time to buy. Those two in particular (ECCA and ECCB), rarely trade below par. By the way, I love this site – good to see you publishing again after selling your legacy site, and nice to get a break from Seeking Alpha.

    1. Hi RJ–don’t know why I didn’t add them on the list. They do qualify for the list as they are a closed end management company and very similar to Oxford. I will get them on the list this weekend.

  2. What a timesaver having all of this information in one list, thanks so much! Now maybe if you could just add a column with TOMORROW’s price then we’d all be set!

    1. 2chinooks—hell let’s not mess with tomorrow–how about next years price.

  3. Powell has a speech scheduled for Jan 10 at the Economic Club of Washington. My bet is that he says something more conciliatory then.

    But there is plenty of money to be lost between now and January 10.

  4. another great resource.. oops the S&P just went negative again… love all this volatility, my watch lists are ringing alerts like crazy..( time to revisit buy target pricing!!)

    some funds use pfd and debt to lever..example is KYN.. 200% on the pfd, 300% asset covg on the debt.. they break this out on the co website..

    to complicate this even further, Tortoise (say on NTG) says 300% on debt, 225% on combo of pfd/debt.. this may be particular to them and a requirement of their debt/pfd issues.. link… https://cef.tortoiseadvisors.com/ntg/asset-leverage/

    bottom line as Tim says, in a big down market these ratios are important (more so to the CEF itself vs the pfd/debt which have 1st dibs on assets..) and in a crash worth monitoring. Another way they can get hit is a general disfavor and big negative sentiment in a sector like ’15-’16 in energy CEF’s (and now?!!) when ETF’s/mutual funds etc disgorge shares.

    Look at the long term history of SRV and SRF (Cushing funds) which almost went out of biz during that time, did a big reverse split on the shares.. and have never recovered… to see what can happen

    1. Sounds like the Fed is trying to walk back its comments similar to last time when Mr. Powell spoke and spooked the markets. I am starting to dislike this Mr. Powell fellow, sort of like the grinch who stole Christmas (rally)

  5. My daily FED rant. Fed member Williams today said the the Fed may consider changing interest plans and balance sheet reduction for 2019 if the economy slows. Market rallied, now giving up gains.

    Did he say that the Fed had no plans to hike interest rates and will decide to look at economic data? No, he said change plans. That IMHO is why the market is giving back gains. This is almost acknowledging that the plan is to hike but could change if economy tank. Hardly a sign we are neutral.

    Remember, I have been the anti-fed guy on this site and feel they are doing a bad job. I am about as far from balanced and objective as you get.

  6. I prefer to invest in issues that have credit ratings. But I had an inconsistent approach and hesitation with the CEF’s. Why? Do not really like a business borrowing money to buy stocks particularly in a down market. But with this new sheet, I not only have the credit agency ratings, I can confirm myself with the coverage ratios backed by SEC regulations to enforce.

    This is truly a no brainer.

    Thanks you are incredible.

  7. SteveA–I love these for safety, but they are interest rate sensitive (i.e. share prices move lower if interest rates rise).

  8. Tim, thank you again for helping us understand! I look forward to your posts, and the group follow-up.
    Reading yesterday’s posts helped me ride out the smack down. My preferreds are ok , it’s the income funds that are getting slaughtered.
    Almost bailed out of them yesterday,
    but held on ….lessons being learned right now. Just trying to stay ahead of the wolves.

    1. Well Bigbear–this shall pass–at least we sure hope so as it has been painful for all of us.

      1. Re: GGN: I don’t know if the managers of GNN read Tim’s site, but the appalling management of the fund’s PRICE is magnified in the commodity downtrend. Price DOES matter! The proportionate stubbornness to maintain a stable monthly payout in the face of a manager 1) balancing ROC, 2) moving out the calls (which should not have been necessary in the face of falling prices, a call writer’s dream environment!) or 3) just a temporary reduction of payout. Principal has been purposely destroyed. I’ve read their rationale and have a small position which I did not tend to (my bad), but this fund needs to be liquidated and forgotten.
        The preferred is also a crater for a reason.

          1. Hi Joel–haha. I am not a gold person so don’t really know this one, but sounds like you have some history.

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