Guess that blows my thinking about why PHK's NAV dropped like a rock.
What your reasoning states is that the valuation of PHK's bond portfolio just got socked real hard.
Thanks to everyone on this thread for insight on PHK's NAV.
I looks like they have 40% in short term bonds of 1 year or less. This is a good position to be in under these succumstances. I guess these bonds are selling at par right now. I looks like lowing the dividend substantually is out of the question. I guess they will lower the dividend by no more then 10%. Thank you for the heads up.
How much cash can this fund have, I think they are required to be fully invested. They most own some treasuries but not nearly as much as they need to redeem millions in arps. Something is missing doesn't add up.
arps market is froozen.
the junk market is froozen.
limited cash on hand.
I don't get it someone must be buying these securities such as a private or public fund.
Incorrect, when you use cash (part of the total assets) to reduce the preferred debt, it has no effect on the NAV.
NAV = Total - Debt
For paying off debt with an amount X of cash,
NAV = (Total-X) - (Debt-X)
which leaves the NAV unchanged for any X.
It will reduce investible assets, but it will not impact the NAV, since published NAV reflects the common shares only. It would only impact NAV if they let something go in a fire sale below where the market was when the last NAV was calculated.........Dave
Selling assets to raise cash should have NO effect on the NAV. The reason is that the NAV is calculated every day using market prices for most of the assets. So when some of those assets are sold, it should be at very close to the same price used for the NAV calculation.