2024-07-21 10:40:00 ET
Summary
- Investing in CLO Equity can be risky, but offers high returns.
- Oxford Lane Capital's balance sheet shows reasonable leverage and strong coverage ratios for debt and preferred equity securities.
- The 7.125% 2029 term preferred stock from Oxford Lane Capital offers an 8.1% yield to maturity, including the potential capital gains.
Introduction
In the past few years, I started to like CLO-related investments, and although I still prefer to have exposure to the debt tranches of CLOs, I sometimes dabble into the higher risk equity tranches as well. That being said, I usually prefer to stick with the additional layer of safety provided by (term) preferred shares or baby bonds issued by CEFs focusing on CLO investments. I have already discussed Eagle Point Income ( EIC ) and Eagle Point Credit ( ECC ) in previous articles here on Seeking Alpha, but the recent issue of a baby bond by Oxford Lane Capital ( OXLC ) caught my attention. Fellow author ADS Analytics discussed ( OXLCI ) in this article , but I wanted to highlight another interesting security in Oxford Lane’s capital stack, as the 2029 term preferred share caught my attention....
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For further details see:
Oxford Lane Capital: Locking In An 8%+ Yield With Preferred Shares