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Calamos Convertible Opportuniti Message Board

  • jamollamaman jamollamaman Dec 13, 2012 10:48 AM Flag

    managed payout is nice but mostly a ROC in 2012

    --doesn't seem sustainable.....where's the professional mngmt 'team'??? With leverage rates this low they should be earning the payout......I see ROC at nearly half the monthly payment. Anyone ??

    Sentiment: Hold

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    • For the FYE 10/31/12, the company had sufficient income and capital gains to meet the distributions and did not return any capital. For the FYE 10/31/11, distributions did include a partial ROC funded from proceeds recieved from a secondary. While the coverage ratio doesn't always look the best, the Calamos funds are well managed by an experienced group that has been around for decades. They did have a hickup in late 2008 when their source of funding, Auction Rate Securities, dried up. At the same time and as everyone knows, the credit markets essentially froze up, and resultingly, distributions were cut. They quickly responded and were able to refinance the debt in relatively short order and the bond markets began to recover. I would consider the freeze up of the credit markets an extraordinary event. Since then, managment has continued to diversify their lending group with several large well known names. With markets in a trading range for many years now, the Calamos and other CEFs have served me well with steady income generation and great yields. They can work especially well for those accounts that provide an automatic (and free) reinvestment of dividends feature (i.e. the magic of compounding). In closing, CHi is a good holding for the income allocation of one's portfolio, but be a little patient with your entry point.

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