Update: Distressed Bonds

Complete review of open positions and open limit orders in the fixed income space.

music selection:  “The End Of The Innocence” — Don Henley

One of the greatest wealth building techniques is to buy distressed bonds that are mispriced by the market.  When bonds lose their investment grade rating, most institutional investors become legally obligated to sell.  Thus results in severe price dislocations allowing retail investors to scoop up assets far below their intrinsic value.  Good deals are hard to find right now while times are good.  But soon, the credit cycle will turn and there will be billions of dollars of badly mispriced assets on the market.  Raise cash now to take advantage.  The following are my open positions and open limit orders in individual bonds.

032359AE1 – AmTrust Financial

This 6.125 coupon bond matures on 15AUG2023.  I originally purchased at 95 cents on the dollar.  I sold all but one of my bonds when the price was at 99.15 cents on the dollar.  This bond is a buy whenever it falls below 95 and a sell at prices above 99.  I expect many opportunities to churn this bond for some easy and low risk income.  I have a limit order open for 7 additional bonds at 05 cents.

075896AB6 – Bed Bath & Beyond

This 4.915 coupon bond matures 01AUG2034.  I hold 9 units, purchased 21MAY2019 for 76 cents on the dollar.  The bond is a buy up to 76 cents and is currently priced at 72.5125 (in buy range!)  I currently have a 313.88 unrealized capital loss and am down 92.74 after coupons.  I am targeting an early exit at prices above 95 cents.

12505JAA1 – CBL Associates

This 5.250 coupon bond matures 01DEC2023.  I hold 8 units, purchased 19OCT2018 for 83.7 cents on the dollar.  The bond is a buy up to 85 cents and is well in buy range at 72.0000 this afternoon.  I am down 936 in unrealized capital gains or 516 after coupons.  Like most of the bonds I buy at a discount, I plan to exit early at prices above 95 cents.

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