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Solar Capital Ltd. Message Board

  • thomasturner999 thomasturner999 Jul 24, 2013 11:50 AM Flag

    Doesn't NAV drop reflect portfolio losses?

    In my mind the NAV only drops when the value of an investment decreases - either because it is marked down (to market) or sold at a loss. We were told today that the NAV dropped from $23 to $22.35-$22.40 but the talk is all about these two big and profitable investments. Am I correct in assuming we are not hearing about the losses that took NAV down, and will we ever hear about them in a conf call or 10-Q etc.? Thanks.

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    • There have to be other write downs to get BV reduced by $.70/shr. They are not telling us what went on non-accrual. The very fact that they reduced the dividend 33% is a very stark statement that they have troubles. DWS was paying in PIK so the cash flow should actually be up ex -DWS since they are paying off debt. I think this is the new dividend for quite some time. Unfortunately, the yield is now lower than the senior fund. I think we will trade down to at least a 9% yield or $18 and a 20% discount to NAV. My worry is that NAV will keep declining. At the same time we have treasury yields moving up and the yield spread has already narrowed. I see no upside and 23% downside. Getting the heck out of this today. $22.80 looks good to me.

      Sentiment: Strong Sell

    • Very good point. Today's news seems counter intuitive at best.

      Like you, I think something else, untold, has been going on........

      I guess we will get more info, but as usual, not enough to truly
      see what is happening at SLRC.

      Looks like today there was some lip stick being applied to a pig
      until clear data proves differently.

 
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