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Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: good time to get rid of some stuff & TLT/SHV||Date: 1/16/2013 10:36 PM|
|Author: altstrat91||Number: 34693 of 35367|
its been a crazy week. fortunately had a few days to get out and blow off some steam on the snow. i did some pretty aggressive snow boarding while i was gone, so that should be a step in the right direction.i hear you on the exercising daily bit. its something that i really need to get back to. sad thing is i have everything i need right here in the house. just have to make it down a couple flights of stairs. i am just too obsessive when it comes to my time with corps and new trading methodologies.
i have a couple different ones i am testing out right now; one being automated, so it sucks up allot of time. i find myself saying, OK i want to sit down and go over some of these parameters and what not just for an hour or so. next thing you know, its 4AM.
ironic, you mentioned in your latest post to me importance of systems, edges while matching personalities, etc.
so here is the deal. i am going to go in overweight on these Genco Ameren bonds. when all is said and done looking to put together a total position of 250 - 300 depending on price action. i have not seen an opportunity like this since 2009.
these notes are trading now way under conservative recover ratings of 2 from both fitch & S&P. Genco on their own, will still do $1B++ in annual revs. they have $25MM in cash. and they still get to dip into the non-reg money of Ameren parent along with a guaranteed $100MM put option. they have no debt obligations for over 5 years. and any other expenses can be funded through internal sources/means. it is also unclear whether or not the split between Ameren is Genco is going forward or how it relates to the old debt.
i was looking through the detailed fitch and s&p reports to find some way to quantify why the crazy trading the last couple days. the 18's are in the $60's while the 20's and 32's have been mirroring each other in the mid $54's. it looks like it was a liquidity problem. the notes shot up well over 15% from recent trading range beginning trading this year. the bid all of a sudden vanished, meanwhile someone came in looking to sell some inventory.
the bonds fell through recent support and now trading in low $60's as the order flow went in the other direction. none of their 3 debt floats ever made top 10 most actively traded, so the volume is not crazy here. plus i carefully looked at order flow; mostly retail size. allot in the 50-100 range. some decent 5000 & 1000 block buys. today there were a few large sell blocks late in the afternoon. but by no means are there whale type blocks going through under the bid on an hourly basis like you would see in a state of total panic, and again, volume is not out of hand.
i am going to post the fitch summary here. anyone can see this text link off of reuters. this reflects the most recent developments with the proposed split of Ameren and Genco along with all the implications.
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