Closed end fund RiverNorth Capital and Income Fund (RSF) has completed a rights offering to their common holders. The rights offering has helped to bolster their asset coverage ratio (must be above 200%).
The company has sold 1.047 million shares for $15.84/share.
RSF has had numerous changes of names – 1st RiverNorth Marketplace Lending, then RiverNorth Specialty Lending and most recently RiverNorth Capital and Income Fund. Honestly has not been a well run fund.
RSF has a 5.875% Term Preferred (RMPLP although depending on the broker tickers differ). The preferred has traded quite well and has a final term redemption on 10/31/2024. I hold an overweight position.
Let’s go–let’s get this week underway–I have no idea why I am all fired up to get this week underway. Maybe because the weather here is terribly cold (-12) and I have been very bored–I think I will be looking into a gym membership this week.
Anyway the S&P500 rose a nice 2.5% last week to close at 4071–the highest close in the last 2 months.
The 10 year treasury yield closed at 3.52% on Friday. The yield was in a range of 3.42% to 3.56% for the week–a week with a number of important economic news items. The leading economic indicators came in soft on Monday at -1.0% against a -.7% forecast. On Tuesday the PMI manufacturing index and the PMI services index both came in hotter anticipated. On Thursday the very important jobless claims number came in lower than anticipated, which has been the case week in and week out. The 4th quarter GDP came in slightly above expectations and durable goods orders came in very hot BUT the durable goods number was driven by tranportation–mainly new aircraft, trucks and SUV orders–taking these out durable orders were down. On Friday we had the personal consumer expenditures price index number which came in right on forecast at 4.4%. All in all the economic releases are not showing much distress at all in the economy. Fortunately inflation is seemingly under control for now.
So for the coming week we have the FOMC meeting starting on Tuesday and then at 1 p.m. (central) on Wednesday we have the announcement of the Fed Funds rate hike–1/4% if the consensus is right. Fed chair Powell has his news conference at 1:30 p.m.–probably more important to markets than the rate hike. Powell will likely warn they stand ready for larger rate hikes if inflation flares again.
Of course there will be plenty of news beyond the FOMC meeting–the long list is below.
The Fed balance sheet fell by $17 billion last week–now at $8.47 trillion.
Last week was another great week for $25/share preferreds and baby bonds as the average share rose by 27 cents. Banking issue rose by 26 cents, while investment grade rose just 14 cents and CEF issues rose only 7 cents. mREIT preferreds rose 45 cents.
Equity markets are quiet at this moment, but it is very likely that this will change in an 30 minutes when economic news hits.
The 10 year treasury is up 4-5 basis points to about 3.54.%
At 7:30 a.m. we have the PCE (personal consumption expenditures price index) announced. The Federal Reserve claims this is one of their favorite inflation indicators. The forecast is for a year over year number of 4.4% versus 4.7% last month.
After the market closed yesterday plenty of earnings were released--including one I had been waiting for which was PacWest Bancorp (PACW). Of all the regional/community banker earnings that I have skimmed PACW had the distinction of the poorest earnings as they took a number of write downs for business segments they are exiting–so I will need a lower price on their 7.75% fixed rate reset preferred (PACWP) to consider an investment.
Yesterday continued the ‘green streak’ for preferreds and baby bonds–just barely green, but up just the same. No activity for me–probably won’t be any today either.
There are a number of earnings reports out for the smaller bankers. I have an interest–not sure if others are as interested as me. Here are a couple of them. There are more to come after market close today.
