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TAKING RISK WITH SOME SPRINT CORPORATES

July 18, 2016

Sprint has some high risk bonds that offer 9.67% if held to maturity.

Altho they are rated risky it is extremely doubtful that Sprint is going to go broke before 2023 when they mature.  Of course that is our opinion.  In our case we are willing to take the risk for the very high yield.

When buying corporates you have to believe with some certainty that the business will be a going enterprize until maturity.  Sprint is a huge company and is doing quite well.

We suggest buying very few bonds to be held in the “riskier” side of the portfolio.

CUSIP 85207UAF2

Maturity September 2023

Here is some information from SeekingAlpha.com:

Sprint has a $19.9 billion market cap (versus T at $263.6 billion, TMUS at $34.4 billion, and VZ at $227.1 billion) but is backed by Japanese telecommunications giant SoftBank Group Corp. (OTCPK:SFTBY) which has a $68.8 billion market cap. SoftBank bought an 83.4% stake in Sprint via two 2013 transactions. It paid $39.9 billion and is deeply motivated to secure the US carrier’s future success and deeply involved in its operational plans. The decision by SoftBank Chairman and CEO Masayoshi Son to continue running SFTBY indicates future support for Sprint, another factor behind Sprint’s improved stock price.

Please take our ten second POLL 

GO TO Core Portfolio for current holdings===WARNING:  MOST OF OUR POSITIONS ARE INTEREST RATE SENSITIVE.  IF RATES GO UP QUICKLY WE WILL WANT TO START SELLING.

All positions were purchased at specific prices and are on HOLD and should not be purchased now unless otherwise indicated.

Go here to see our suggested financial websites.

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