4/6/2025
Our site runs on donations to keep it running for free. Please consider donating if you enjoy your experience here!
CLO CEF Oxford Lane Capital has priced a relatively large issue of baby bonds with 6.6 million shares (bonds) being sold. Additionally there are 990,000 shares available for over allotment.
The shares price at 7.95% and have a maturity date of 2/29/2032.
The company has numerous other term preferreds and baby bonds outstanding that should be reviewed and compared to this new issue before buying decisions are made.
The pricing term sheet can be seen here.
CLO CEF Oxford Lane Capital Corp. has announced they will be issuing a new $25 baby bond.
Of course Oxford Lane (OXLC) is a serial issues of baby bonds and term preferreds and they have numerous issues already outstanding which can be seen here. Investors should always compare new issues with those already outstanding as the newest isn’t necessarily the best.
As is normal J pointed this one out a few hours ago on the Reader Alert Page.
With current interest rates I have found it difficult to be buying much outside of the safe 4.3% CDs – being a total return investor I don’t want to take capital losses in perpetuals if interest rates start to move higher once again. Because of this fear (maybe too strong of a word) I have relegated my buys to short duration term preferreds and baby bonds–and even these I have been very cautious.
Last week I noted that the XAI Octagon 6.50% term preferred (XFLT-A) was trading around $25.00-25.05–an issue which I already hold an overweight position in. Even with the overweight I did buy a few shares–I rounded my position up –I bought all of 45 shares.
In addition I bought
Additionally I bought some more of the Wintrust Financial 6.875% fixed rate reset perpetual (WTFCP)–specifically expecting the issue to be called on 7/15/2025. I paid $25.19 so I gain a little advantage over holding CDs etc–but not a huge long time advantage unless they don’t call it in which case the advantage would be huge for how ever long it is outstanding. The reset is likely to be over 10% so I can’t imagine them not calling it—but stranger things have happened.
So what is next for me? I have CDs maturing pretty much continually in one account or another so I have to make a decision on a non-stop basis. I am pretty sure that I will be looking at the Gabelli CEF preferred–one those with a current yield of 6% with opportunities for substantial capital gains–i.e. they are trading at $20 or so. Obviously I would like to be pretty confident in interest rates moving lower–of course who can predicted that with confidence? Other CEF preferreds will also be considered.
I will get my new purchases posted to the laundry list of holdings page later today.
I am away from my desktop computer until t0morrow night and will not be able to publish ‘headlines’ on Tuesday and Wednesday.
Here we go again—it could be a relatively quiet week, although we do have FOMC minutes being released on Wednesday and this can always set off fireworks-one never knows.
The S&P500 moved higher last week by 3/4% and now just a tiny amount below a record level. This week is starting off looking some higher, but the future market gains can evaporate quickly.
The 10 year Treasury closed last week at 4.47% (down 2 basis points from the previous Friday). At this moment (5:30 central) the 10 year is at 4.52%–up 5 basis points. As noted the economic news is somewhat light this week, but we don’t know what kind of curve balls that the new administration will throw at the market. My thoughts are that the 10 year will continue in the relatively modest range until we get to next week when we have the PCE being released–we’ll see which way rates get pushed.
The Fed balance sheet grew by $3 billion last week–a rare increase which will be offset by falls in the weeks ahead no doubt. The chart of the balance sheet levels is an interesting chart–falling back front the highs quite dramatically.
The average $25 preferred and baby bond rose by 7 cents. Investment grade issues moved 15 cents higher with banks up a dime, mREIT issues up 6 cents and shippers continue to hover around the $25 area and down 3 cents.
