HYB: Time To Say Goodbye To This CEF (Rating Downgrade)
Portfolio Pulse from
HYB is converting to an ETF in February 2025, eliminating leverage and the discount to NAV, which removes the arbitrage opportunity. With credit spreads at historic lows, the current 5.7% yield is unattractive, increasing downside risk. Structural changes will involve asset sales to repay borrowings, potentially altering the portfolio significantly post-conversion.
December 14, 2024 | 6:00 pm
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NEGATIVE IMPACT
HYB is converting to an ETF in 2025, eliminating leverage and the discount to NAV, removing arbitrage opportunities. With low credit spreads, the 5.7% yield is unattractive, increasing downside risk. Asset sales may significantly alter the portfolio.
The conversion to an ETF will remove leverage and the discount to NAV, eliminating arbitrage opportunities. With credit spreads at historic lows, the yield is less attractive, increasing downside risk. Asset sales to repay borrowings may significantly alter the portfolio, impacting future performance.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100