After trying to buy the new 6.375% baby bonds from OFS Capital last Friday at $24.80 and failing we did snag shares this morning for $24.90/share (bond).
These shares go into the Medium Duration Portfolio which brings the portfolio to 91% invested. Unfortunately on Friday 4/27 our long held Arbor Realty baby bonds (ABRN) will be called in which will generate $10,188 in proceeds. Buying the OFS shares while losing the Arbor Realty bonds means we lose a full percentage point in coupon as the ARBN bonds had a 7.375% coupon. This means that when the week ends we will be back to around 80% invested–10% under where we want to be as we plan to hold at around 90% awaiting a super bargain (from where I don’t know, but we want a little dry powder).
Recall that this portfolio is very close to how we handle our own personal holdings. We have many more issues overall, but that is a function of the size of the portfolio. This portfolio is a $100,000 model and because of the modest size it is easy to monitor. The model currently contains 10 issues. Since the portfolio was conceived on February 8th it is just now beginning to break into the “black”.
No flipping or trading occurs in this portfolio. Our preference is to be “buy and hold” as we don’t have time to monitor and make changes on a constant basis.