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MVCD - Sleep Like A Baby: Buy These Baby Bonds Yields Up To 9.6%
MVC Capital Inc. 6.25% Senior Notes due 2022
Co-produced with Preferred Stock Trader
Introduction
The thesis of this article is that there are high yielding baby bonds in the market that are underpriced due to safety fears that are overdone. The baby bonds we are speaking of are one’s issued by BDCs. BDCs are legally required to keep leverage below certain limits for the exact purpose of keeping them out of financial trouble. This makes default on these baby bonds highly unlikely and thus makes them undervalued at their currently generous yields-to-maturity (YTM).
The market for fixed-income securities (baby bonds and preferred stocks)