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Added to My Carlyle Credit Income Fund Term Preferred

It took a few hours but I added to my current position in the Carlyle Credit Income Fund 8.75% term preferred (CCIA) at a buy price of $25.40—it is now trading at $25.29.

This may look like a pure ‘yield chase’, but it part of my plan–lower yielding, safe issues balanced with higher yielding issues. This term preferred issue with a mandatory redemption in 2028 is perfect for me. Folks worry about collaterallized loan obligations (CLOs), but on a historical basis going back to 1994 less than 1% of the loans held has defaulted–the reward pays for the risk in my opinion. This issue is superior to all of the Eagle Point Credit (ECC) term preferreds as well as the Oxford Lane Capital (OXCL) term preferreds. Carlyle is a newer and smaller company, but the sponsor (Carlyle Company) is a giant company and the largest CLO manager in existence (1 list has them at $38 billion while another says around $50 billion)–if they can’t successfully launch a CLO closed end fund I don’t know who can.

NOTE that I expect no capital gain on this issue–simply will collect a nice dividend. Term preferreds with mandatory redemptions will generally move in a fairly tight range over their lifetime–and that is my hope with this issue.

Of course I will add this to my laundry list.

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