I'd really like to see us up our borrowings. We keep issuing stock at basically 12% cost and we are clearing 13-14% currently. Thats like being in the grocery store business. Borrowing at 5% and earning 13% is much better.
this was good news today on this issue and helps on the NAV and income basis. but it was not my main concern on this stock, my concern is that they lost NAV last quarter and this wasn't part of it, while increasing business and had reduced income while doing more business without bad loans. The huge amount of new stock was diluting the retained earnings that were mine when I was a stockholder. The question in my mind was what was it going to take to get them to be more profitable and be able to improve distributions if a huge amount of new business was taking it the other direction. I could not come up with a favorable answer, I am a capital appreciation investor and not a bond investor and this is a high interest bond. I decided that the yield was not enough for the capital appreciation I could get with say COP which has a 4% dividend. It is a situation of what I feel will give me the best overall return and whether PSEC can continue to keep this dividend long term.