Our new reporter, F. Barry Nelson, is a recently retired renowned specialist in convertible stocks and bonds. He has a buy from Canada of an airline running cargo flights to Bermuda, Cargojet (CJT.TSX). It's C$4 5/8% which matures the last day of 2021, are convertible into 17.0503 common shares of the CJT which reports on its Q4 on Mar. 9. CJT hints that its peak season volumes will exceed prior years. But it is in the red.
F. Barry Nelson writes: “It struck a chord with me because I've seen their planes in Bermuda for years, old 727s with nice paint jobs. The CJT website says it has new planes as well. The company may be on a roll. Through Q3 its cashflow has been advancing while capex has been retreating. The company may become cash-flow positive.”
He adds that the convertible bond is at a modest premium of 107% of par with a convervsion premium below 40% and a 125% soft call protection. This bond has less downside risk than the common. Yield to maturity is 3%. Total outstanding is C$125 mn.”
I have never bought a bond denominated in foreign currency (our Canadians are in US$ as are out other bonds from Europe). I will be trying to buy it alongside you later today or tomorrow in retail quantities. The cusip is 14179VAE70.
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