OXLCP - OXLCM: CEF Securities About To Mature Looking For A High-Yielding Replacement

2024-05-29 20:59:26 ET

Summary

• The 6.75% Series 2024 Term Preferred Shares from Oxford Lane Capital Corporation are set to mature at the end of June.
• CLO equity funds have become popular among institutional investors, leading to increased capital in the sector.
• The CEF may issue new debt or run a lower leverage ratio instead of replacing the maturing preferred shares, but any new security will have a longer duration profile.
• The article presents several alternatives for investors to consider when they receive their principal back from OXLCM.

Thesis

The 6.75% Series 2024 Term Preferred Shares ( OXLCM ) are exchange traded term preferred shares from the Oxford Lane Capital Corporation ( OXLC ) closed end fund. We covered these securities last year here , where we assigned them a 'Buy' rating based on their short tenor, reduced risk and high yield. The securities have delivered a steady stream of income since, outperforming treasury funds. With the term redemption date for the securities shortly coming up at the end of June, investors need to start outlining what replacement securities they will enter into once they get the full principal for the notes in their accounts....

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