Investors seem to think there are good bargains in the equity market today–whether there are ‘bargains’ or not we’ll know in a week or two. For myself it is always good to see up moves in equities as it keeps folks from tossing our preferreds and baby bonds out with the ‘baby’ as they head for the sidelines.
Economic news today was not very positive. Consumer inflation expectations came in hot, while consumer sentiment came in as most of us would expect–much lower than last month and lower than expectations. A little better (calmer) news out of Washington would go a long way toward repairing folks beliefs.
Interest rates are a bit higher-up 3 basis points at 4.31%. Regardless I put a small order in for some of the MidCap Financial 8% baby bond (MFICL) with a maturity in 2028. I own this issue now and it went ex dividend a couple days ago so it is trading around $25.26—but the ‘spread’ is wide so not certain I can get it with a limit order at $25.30–we’ll see. This BDC is managed by Apollo—and was previously named Apollo Investment. Earnings can be lumpy–here is there latest press release from February. Note that they hold mostly 1st lien loans–92% of assets–I always want to see 1st lien debt–versus 2nd lien.
Ok–enough for now–sit back and see if I can get a few baby bonds of MidCap. It will no doubt be an interesting afternoon in the markets.
Agree nice to see a bounce. Yesterday I took the cash from closing ECC-D and added to my position in ARLP a coal miner MLP w/11% yield and very low debt leverage. Otherwise nothing today. Have a great weekend all!
Midcap has some risk, they have a 5/1/28 144a bond (CUSIP 59567LAA2) that is rated B1/B+ as a senior unsecured rating. Would Apollo bail them out if they got into trouble?
Coaster, limited to one screen on my phone but I think on Quantum they mentioned Apollo combined 2 other BDC’S with MFIC. They were weaker and not doing well I think. So have yet to see how the combined operation will do.
Coaster—I don’t think that’s a given. I had a bad experience with a private equity company that stranded an acquired sub and let its preferred stock go unpaid when the sub ran into trouble. Perhaps it’s different with Apollo.
Most equity investors are not rational, as per one assumption of the Efficient Market Hypothesis , but quite the opposite. Emotionally driven by fear one moment, and greed the next.
TRINI and TRINZ ex dividend today, trading around $25,10