The new Oxford Lane Capital 6.75% note (OXLCL) has begun to trade and last crossed at $25.
Thanks to Gary and wedgehead for making note of the trade.
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4/22/2024
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Stuck my toe in the water for for a small purchase of OXLCL at $24.92. Thanks for the heads up.
Lets see this is debt of a fund that invests exclusively in the equity and subordinated tranches of highly leveraged CLOs of non investment grade loans. What does this remind you of? CDO square anyone? It won’t take much for the house of cards to come tumbling down and in my opinion you are not getting paid for it .
Quite different- the underlying are not the junky bundles as CDOs were- however, the debt CLOs are safer, being higher up in the pay structure (EIC). These are loan obligations, not crap mortgages of 2006+ or so.
Steven Bavaria has written quite a bit on them at S.A., and notes the CLO funds have not defaulted in the past (of course). Nothing is bullet-proof.
These are CLO funds but their asset coverage has to be pretty well covered for the baby bonds. They can always destroy the common to cover these bonds suitably.
i bought a small position at 24.87
Thanks Tim, Gary and wedgehead. Tim has made me a believer of the ancient 200% or at least 100% coverage on closed end fund baby bonds. I quickly unloaded XOMAP; I do not understand why they drag their feet on the first dividend payment after 90 days from issuance. I also unloaded my small position of BX, the other private equity common. Apparently it was downgraded because it has reached its target price. Place some order on the sold proceeds for OXLCL. This one is almost as good as TDS-U, despite the speculative stock performance history of the common, something which Rida Morwa would urge his follows to pig out and get killed depending on the skill and TIMING of buy point. Schwab sent info last night discouraging people to go for eREIT. Again, it depends on the Timing. Luckily I bought MPW right before the divvies (draw down huge on the ex day) recovered on the ex day (probably lots of newbies). One thing I have learned from Rida, never believe market action before 12 noon NYT. The big boys and gals never trade until they got nice coffee and did some thinking BEFORE trade. It is now $24.93 with small volume. I will set an alarm clock to up my bid if it stays. Could trade lower the next day or the one after depending on volume. Got close to 3 million inventory. Bob, my pending order is $24.87.