JFR - JFR: Moving This Leveraged Loan Fund To Hold On The Back Of Tight Spreads (Rating Downgrade)
2024-05-27 22:52:48 ET
Summary
- Nuveen Floating Rate Income Fund invests in leveraged loans. We rated JFR as "Buy" previously.
- JFR has delivered a total return of over 19% since its merger with other Nuveen leveraged loan CEFs.
- The fund is overweight in single-B credits and has a low allocation to riskier CCC-s.
- Corporate credit spreads are currently very tight, indicating that it may not be an attractive entry point, but the fund's high dividend yield makes it a hold.
- The CEF has an 11.6% dividend yield, a 37% leverage ratio, and a 6.7% standard deviation as measured on a 3-year look-back.
Thesis
Ten months ago, we wrote an article on the Nuveen Floating Rate Income Fund ( JFR ) and its absorption of other Nuveen leveraged loan CEFs. Our article talked about the benefits for the Nuveen platform achieved via this corporate action, and JFR's forward as the marquee CEF from Nuveen in the leveraged loan space. We covered the name with a 'Buy' rating, and the fund has delivered:
Prior Rating (Author)