Closed end fund Carlyle Credit Income Fund (CCIF), an owner of CLOs (primarily the equity tranche has a 8.75% term preferred (CCIA) outstanding which has a maturity of 10/31/2028–BUT an optional 1st call date starting 10/31/2025.
This is a monthly payer at 18 cents month on the last day of the month and at this moment is trading at $25.53.
On 1/31/2025 CCIF was able to sell an issue of 7.50% convertible preferred in a private transaction.
We don’t know what interest rates will do between now and October, but if they fall there is a real chance that the CCIA issue will be redeemed on 10/31/2025—or at a minimum fall back to near $25 simply on the potential for a call. In my opinion if shares rise into the high $25’s one should consider selling.
This is an issue that I bought a number of times in 2024, but exited (at $26.67) on the giant silly spike back January. I will potentially re-enter if shares fall down to the $25.20 area (I have a few token shares in the account yet).
Interesting SA article today on the CCIF call.
According to the K-8, the proceeds from the private sale were $18.6M
(20,000 x $930.00). Schwab shows 2.08M outstanding of CCIA, so a total call would cost $52M. So that’s a $33.4M shortfall for a full call. Partial – maybe, hard to believe they haven’t found a use for the $18.6M since January. We’ll see.
Crimson–what I am saying is that if rates go lower (not looking good for that) they can probably ‘refi’ the 8.75% issue with a new issue. As rates go higher and higher the odds of a call are reduced.
Tim, thank you.
Typo on the 2nd line – the 8.75% term preferred is CCIA, (not CCIF).
Closed end fund Carlyle Credit Income Fund (CCIF), an owner of CLOs (primarily the equity tranche has a 8.75% term preferred (CCIF) outstanding which has a maturity of 10/31/2028–BUT an optional 1st call date starting 10/31/2025.
Thanks mbg