Update Distressed Bond QUAD

I sold CUSIP: 747301AC3.

On 9MAR2020, I bought the 7.000 coupon Quad Graphics bond with 01MAY2022 maturity for 88.5000 cents on the dollar.  I paid 7 dollars in commissions and fees as well as 176.94 in accrued interest for seven bonds (6,378.94 total cash outlay).  I knew the bond was safe and thought management’s plans for the future indicated a likelihood the bond would trade a par in the near future.  COVID-19 derailed those plans.  The bond traded sideways and I decided to put in a good till canceled sell order at 90.0000 cents on the dollar.  That filled yesterday.

On 3DEC2020 I sold CUSIP: 747301AC3 for 90 cents on the dollar.  I paid 14.75 in fees and commissions and collected 49 dollars in accrued interest.  I also collected 490 in coupons over the holding period.  Total cash in was 6,824.25.  I made 445.31 over 269 days which is good for 6.98% or 9.47% annualized.  That is a fair return for a low risk investment.

I will continue looking for more opportunities to deploy capital in distressed bonds.  The high yield to Treasury spread is kind of tight right now so good opportunities are hard to come buy.

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