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BlackRock Kelso Capital Corporation Message Board

  • jadelover888888888 jadelover888888888 Apr 11, 2013 10:38 AM Flag

    Beware of BKCC's downside risk!

    BKCC was traded at around 9.78 today, which equates to an about 10.63% yield, at above 1.05x of their recent NAV. It does appear to be attractive. However, I really do not want to hold it for long term. Short term day trading, YES, long term, NO.

    The main reason is: Virginia Retirement System (who managed the retirement funds of public employees in Virginia)

    I have been worrying about them for a while because they are probably one of the biggest share holder of BKCC (some 22M shares out of about 74M outstanding shares) and a while ago I was worried as more Virginian public employees who are baby boomers start their retirement, VRS will have no choice but to liquidating their holdings such as BKCC.

    It has been steadily selling BKCC into the market monthly but getting worse lately because in this month alone they had sold:
    4/9/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 145,700 9.85 – 9.85 8,460,510 $1.4 M
    4/8/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 52,281 9.81 – 9.81 8,606,210 $512.7 K
    4/5/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 83,200 9.76 – 9.76 8,658,490 $811.9 K
    4/4/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 117,257 9.80 – 9.80 8,741,690 $1.1 M
    4/3/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 5,150 9.81 – 9.81 8,858,950 $50.5 K
    4/2/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 56,178 9.97 – 9.97 8,864,100 $560.3 K
    4/1/13 Virginia Retirement...
    Beneficial Owner of more ... Sale 30,700 9.99 – 9.99 8,920,280 $306.7 K

    That means it will basically kill any upward momentum of BKCC and since BKCC is still selling with a 5% premium, I just do not believe it is a very good long term BDC hold at this time. There are way too many better BDC buys out there right now. Jade

 
BKCC
8.95+0.07(+0.80%)12:06 PMEDT

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