- CPTA's stock depreciation and discount to NAV reflect deterioration in the company's fundamentals. A substantial percentage of the portfolio is at risk of write-offs and defaults.
- With ample liquidity, cash, and deleveraging plans, CPTA's prospects of bankruptcy are slim, opening a bullish opportunity on the company's baby bonds, which is oversold due to current market disruptions.
- In addition to the 13% portfolio exposure to defaulting loans, 28% of portfolio investments are in companies that received additional cash during the pandemic.
For further details see:
Capitala Finance's Bonds Will Outperform Its Stock