OXLCN: Moving To Hold After The Rally (Rating Downgrade)
Oxford Lane Capital's 7.125% term preferred stock (OXLCN) has rallied to near par value, offering a 7.28% current yield and 7.8% yield to maturity. Due to its reduced yield spread and less attractive entry point, the rating on OXLCN is being downgraded to 'Hold'. The analysis favors buying OXLCN only near $24 per share, as newer preferred shares from the company offer higher coupons and better risk resilience. This shift reflects changing relative value within Oxford Lane’s capital structure.
- ▪OXLCN is currently trading near par with a 7.28% current yield and 7.8% yield to maturity.
- ▪The downgrade to 'Hold' reflects a less attractive valuation following the recent price rally.
- ▪Newer Oxford Lane preferred shares offer higher coupon rates compared to OXLCN.
- ▪The analyst maintains a long position in OXLCN through stock, options, or derivatives.
- ▪Preferred share redemptions and new issuances are part of Oxford Lane Capital’s active liability management strategy.
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