BDC Newtek Business Services (NASDAQ:NEWT) has announced a new baby bond with a maturity date in 2024.
The company states that the “use of proceeds” is to call the 2022 7.50% baby bonds (NEWTZ). These baby bonds were trading as high as $28.00 in recent days. Investors were totally asleep at the wheel on this one–although we know a number of readers were on this one and sold at high prices and got out. We had seen a few exchanges of comments on this one.
The chart on the NEWTZ issue is here and you will be able to see a $1/share drop when folks wake up.
The preliminary prospectus for the new issues can be read here.
7 thoughts on “Newtek Business Services to Sell New Baby Bond”
I’ll be curious as to the coupon rate on this new issue. It should give us a feel for current rates on BDC debt and how many additional redemptions may be coming. Newtek is a fairly well-run and diversified BDC, as I understand it. and should get a good coupon.
Max–in general NEWT has been a pretty great company thus far–I would think they will get a great rate, as you mention, and it will represent the direction of rates for the best of the BDC’s, but some of the dicier BDC’s will continue to offer attractive rates for investors–ASSUMING the economy remains strong.
Thanks Tim. I hope the new coupon is not any lower than 5.5% but we’ll see. I’d like to be a buyer if I can get a decent rate.
Thank you, Tim. As a business BDC, NEWT has been agile, the commons have enjoyed substantial premium to NAV.
I bought some common and paid too high when I was a subscriber to Rida Morwa et. al. I did manage to ESCAPE with no net loss. At today’s NEWT price, it seems to be still speculative for the common. BDC Buzz has published an article on two risky small BDC’s, where the author engaged in debate vs. Rida’s collaborator, Trapping Value. I FOOLISHLY re entered PFLT at the worst of the time, right before its debtors resulted in 4 non accruals. Nonetheless, PFLT is better than Rida’s PNNT, pumped by the vicious PendyDragon, the worst of Rida’s loudspeaker. BDC BUZZ and Scott Kennedy appear to be the two credible BDC experts IMHO. Depending on the coupon interest rate and the IPO price action, the note should be safe. Its NEWTI 6.25% has the last price of $25.77. I have been buying HT-D or E, same coupon whichever is cheaper and MNR-C and UTG. UTG apparently does not work, despite its 6% monthly consisting of utility commons and preferreds including NI-B and names we love. HT, Hersha hospitality is not a great hotel as INN, then Hersha has been around for a long time with decent debt to equity unlikely to fold IMHO.
BDC Buzz compares BDC vs CLF, which seems a good way to look at BDC’s.
John, there is one guy who posts and busts those Morons good. TV made a response in comments about making a “cursory look” at something, and then Ralph chimes in…”Cursory, that word is the problem with your analysis and articles”. Of course it got deleted. They no nothing. It appears to me they pick a yield of the day and then try to cut and paste a thesis to invest in it. All without understanding it….Got deadlines to meet. That is why they are on the team to crank out the articles. So the only thing the tubby little leader has to do is oversee the boiler plate operation.
Grird, I saw the posts at SiliconInvestors. Rida with his PendyDragon, the worst of his hidden teams are shameful. Then there are some other ones in SA copying Rida selling membership plus attempting to trash your holdings because they are short sellers. Michael Boyd in cohorts with someone is one of them IMHO. I like Richard Hills, who makes lots of efforts and his TDE was an excellent hidden gem. CODI-A (I prefer CODI-B cumulative longer call protection and higher coupon) not so shabby. I do agree with you that his NS (NuStar) is way too risky for the preferreds. Another new SA writer, Justin Wierdeman, CPA with engineering background attempting to open the hood to look inside appears to me not so shabby. I have just let my premium membership in Morningstar elapse, since you can get the abbreviated version in Schwab.com. Sometimes MStar does not seem to get it, giving COST (Costco wholesale) 1 or 2 Star. With COST aiming to sell membership and willing almost not to be profitable on goods sold, parking lot so jammed, is one of the best retailers not hurt by Amazon.
I still have lots of preferreds from CLNY, including the “original” G. Apparently some activist is attempting to take over from the bad CEO in a new SA article. Justin Wierdeman also wrote a positive article on same plus CTL. If it ramps up following the common, I will sell all my shares as I have learned my lesson from AmTrust financial.
On the other hand, this announcement seems to me is another self interest CEO of CLNY. CRC is an orphan from a mid tier big oil as I recall. So, we do need the Activist to make CLNY whole.
Bad for CLNY and all CLNY preferreds. No wonder why CLNY continue to pay uncovered huge dividends to the commons and through their subsidiary mortgage company with ridiculous balance sheet.
CRC has been on life support for a long time. I got rid of my spin off legacy shares years ago.