Looks like the expense waiver expires in early 2016, I have the impact as .12 cents per Sharon Net investment Income, so unless there is something I am missing the yield will decline from $1.16 to $1.04 annually, thus the yield would be 8.0%. I wonder if there is anything that would offset this. Anyone have any clues?
I think that makes sense, Also, ECAS foreign Currency should not be a hit this quarter and I believe ACAS's SFRL's are higher quality than ACSF's as well. However, the nly other unknown is the CLO quality in ACAS's structured products, those a re a black box, but presumably we will not know much for several quarters for the individual issues t shake out and pass thru/up. I do not thin anyone can tell on the impact of those at this point. Lots of plusses to offset any market impact this quarter so I see Q4 as being slightly better than last quarter any market hits offset the ECAS Forex loss but write-ups for realized gains and hopefully opportunistic addl. buys f new SFRL's the company had low levels of commitments at qtr end. and had new realizations and a new credit line to use ot purchase more.
I hope that is because they were able to take advantage of the recent market volatility, vs increased risk. What do you expect to happen when the expense waivers run out - reduced dividend or increased risk? I would like to see someway for them to increase asset size -maybe a preferred offering? issuing shares at a discount to NAV is out, so not sure what their options are but would like to see some efficiencies of scale. I have seen other CEF's give the dividends in the form of stock when the Share price is below NAV - they purchase the shares on the open market for the same cash amount as the dividends and it is accretive to the company and or shareholder - forgot how it works, but that would be a good idea, probably not allowed to as a BDC but would be good for ACSF - increased volume
NMB (and bgforvlaue), yes I know I am being impatient - frustration with the stock price action to be honest - management has worked towards the plan they outlined. I had thought it would have paid off by now. Not so much that I expected it to happen this year but that more progress would be made and the market would value ACAS in my view more "appropriately." There are a few things management could have accomplished faster, but all in all if the ship is moving in the right direction and not terribly slow - I would give management somewhere between a C and a B for speed of execution and urgency. Some things they can not move fast on without hurting shareholders - like selling good companies quickly and getting a reasonable price. but reducing headcount - probably some should have been done earlier and more details of the plan could have been communicated earlier. The spin-offs still have portfolio companies, so most of the recent transaction probably did not have to happen before details were drafted. Anyway, if the stock price had stayed above $15 - I would not have ranted - and I have posted how most of the recent decline was market/BDC industry driven. But alas I get frustrated when Mr. Market goes against me, sorry for any typos
Thanks Spok, have you done a risk comparison of BLW, EVV to ACSF? Other than a cursory review of general holdings by class e.g. % B vs. BB, vs. BBB vs. CLO v. CLO equity, (and leverage of course) I find it hard to come up with an apples to apples comparison. ACSF notably is so small that once the expense waivers expire the dividend will probably go down by 1%.
Yes, I think the issue is there is no more equity (or little) therefore even tho NOI will increase, the lack of a dividend and little upside left via equity why buy until after the spin-off? management's costs savings activities will not kick in till next year. Message to management - please hurry! and on your conference call you said you would move as fast possible - no activity in 6 weeks that is worthy of a press release? Are you taking off all this time between Q3 release and January?? Hello! Hello! anyone home at ACAS?? Please issue a press release update so we know you are alive and well.
I agree with you! I am looking for a rebound next year - hopefully by end of Q1 = providing that NOI and NAV increase in Q4 - hard to tell what the fall-out will be but seems to be low impact. Seems like the forex has stabilized, so there should be no markdown this quarter or very little. There should be a reduction I the ECAS discount do to F&B sale. Hopefully the yield on SFRL Assets increased - due to opportunistic buys during he last week or so. for the record I called today's "capitulation" spot on! don't count on it being right from here on out tho!
I am going to go out on a limb and post on the record I think capitulation is kicking in for ACAS. Anyone that was hoping for a blast off after the spin-off announcement are gone and anyone that was hoping for a bounce off the fed are now cooked. year end tax loss selling could continue through the new years. An announcement on a key item for the spin-off could be a catalyst before January but if not by Friday then I do not think it will happen till mid January and the share price will continue to decline as there is no impetus for new buyers to come in.
NMB, I guess we dis-agree - let's they started in Q3 and the sin-off happens by the end f Q2 next year. So what I proposes is they spend $50m per Qtr on buybacks vs. SFRL and spin-off $2.8B vs. $3.0. The buyback would be accretive to NAV and with their ability t leverage their balance sheet they still could take advantage (hopefully) of the current market to help offset the temporary price reduction in the SFRL's they already own. The whole point of buying SFRL's was their highly liquid nature and safety - n the Q1 conference call they likened it to parking cash, so available cash is really not an issue and the $ amount is insignificant barring no juicy opportunity investment opportunities, which does not appear to be the case. I think at these levels (which it was even lower in Q3) It is a great use of cash for ACAS (not sure if I would feel this way if the stock was $15.50 tho). NAV is now @ $20.54 vs. $18.97 as well with much more liquid debt than when they announced the re-org, so do not see how capital is really an issue.
Well said. most of this is short term noise for high quality SFRL's and temporary (I believe) except for any oil and gas industry issues. Only major drag I see is how much of the CLO investments are not investment grade or are equity tranches in the Structured products portfolio. Anyone have any idea on the embedded risk for these? I think ACAS has roughly $417M of these if my recollection is correct.
I agree on continuing the stock buybacks - at some level anyway. Modern investors are not so patient (unfortunately). Especially since this is a BDC that does not pay dividends. One unknown is any re-structuring charges and timing. I think they could have allocated $50M per qtr or some minimal amount and that might have helped the share price this year. I see no reason why it should trade lower than last year.
If the company could release a statement saying out investments have very limited exposure to oil and gas drillers and our SFRL's investments are in high quality Investment grade companies, that would be great! Anyone have any idea on the assets in the CLO's form structured products - how much exposure there is in those investments? seems like they are diversified pools but not sure how risky they are from an asset perspective.
I must admit, I did not think we would see this low again. After Q3 results were really good considering the foreign currency translation of ECAS and with the F&B sale at a terrific Rate of Return, I really had high hopes the share price was going to stay in the $15 range ( actually I had hoped $16-$17 after the earnings and restructuring announcement). I bought a few more shares on Friday at close to the low and I am contemplating buying more but wondering if waiting until January for the split. Seems like the stock price will not move until the split actually occurs and given the current environment maybe not until the Q4 earnings announcement. Patience does not seem to be my virtue today. Good luck to all.
quick add-on the SFRL's on ACASs books were very high quality as well, I think most of the Oil and Gas industry SFRL were pipeline, not exploration or drilling.
I hope they announce it this week for a vote sometime in January. Not sure how many details need to be finalized for that meeting. it would be good to have some filing or announcement of some sort, might provide a positive note to help move the stock
I think it will be a bounceback rally will happen as soon as the sell off is over - hopefully today is the end of it but who knows I am just your average investor