Rough Banking Seas Ahead?

[DTB]

Thought this might be thread in which to pose the question...anyone investing in CEFs or BDCs? I have small positions in a few and am looking to learn from others who may be more versant in these.

 

[The Bob]

I've been in CION (BDC) for a while now. Pays a little over 11% div.

 

[DTB]

I've been in CION (BDC) for a while now. Pays a little over 11% div.

Thanks! I've been holding MAIN, HTGC and ARCC at good prices and may be selling a property and looking at additional parking opportunities to spread the risk.

 

[Non Sequitur]

"Extend and pretend" (otherwise known as "survive 'til 25" and "delay & pray") is accelating among regional U.S. banks. Matteo Crosignani presented his excellent new FRB-NY study on this topic at this past week's Boca Finance and Real Estate conference, which was held on the Campus of Florida Atlantic University and sponsored by the FAU College of Business. Much thanks to Dean Daniel Gropper for sponsoring the conference, which had numerous academic sessions and panels related to commercial real estate. You can find the conference program and more at:
https://lnkd.in/ewexZNst

https://finance.yahoo.com/news/office-property-meltdown-starting-surface-184728438.html?soc_src=social-sh&soc_trk=linkedin&guccounter=1&guce_referrer=aHR0cHM6Ly93d3cubGlua2VkaW4uY29tLw&guce_referrer_sig=AQAAAN0N8k7cFBNj-vYw7GGitdLfBdbBXB1rhigKys2g_aBSCK89ANTYQMB4ZObmYil_hHG_3oTTAWxIrIC2aW4MNltKpF2sqH0-t8lz7nqzyFCFYNcKyFJ1X7XnGSDspOb49iCHGv0OmEYQz30i1m_9xieCPfA16xTzlKN9hcr5XJ8E

 

[Non Sequitur]

Another interesting perspective form LinkedIn:

"Billions in Silence: The Real Office Distress No One’s Talking About.

It's not where the distressed loan and asset sales are. It's where they are not.

Asset sales at deep discounts are a signal of a healthy functioning banking market, imho. The banks had a troubled asset, it wasn't worth keeping, and they had enough reserves that they could take a hit and keep on trucking. And, there was a buyer.

What has me worried is where sales are not occurring. Either because the bank doesn’t have liquidity to take a write down or because the assets have no value whatsoever.

It's the vacant office building with a $100m loan and no bidders. It's too expensive to convert (office conversions don’t work well in markets where residential values are less than $1,000 psf) and there is no tenant demand. It has no value (or negative). There is no bidder.

Or, it's an over-levered bank that can't take a hit and sell distressed assets today so it gets worse tomorrow.

Lehman didn’t fail because it sold assets, it failed because it couldn’t."