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Strategies & Market Trends : Dividend investing for retirement
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To: JimisJim who wrote (24123)12/26/2015 9:02:04 PM
From: Elroy  Read Replies (1) of 34328
 
they achieve their 2X leverage by buying lots and lots of sr. unsecured debt

That's interesting. I can't say I understand it one bit.

How would buying unsecured debt achieve 2x leverage on a specific BDC?

For example, perhaps PSEC has some unsecured debt they've issued. Are you saying BDCL will buy that unsecured PSEC debt in the bond market and, therefore achieve 2x leverage on their PSEC equity position?

That doesn't make any sense to me. Does it make sense to you?

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As for the actual performance of BDCL over the years that I've owned it, it has done about as expected. The BDC stocks in general have declines, as has BDCL, and the payout of BDCL has been 18%-24% depending on where the BDCL share price is on a given day.

So it has basically worked in a declining BDC share price environment. If it failed in a rising environment, that would suck!
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