BNN, Business Day: Rates & Risks: Bond market in focus
Geoff Castle, Portfolio Manager of the Pender Corporate Bond Fund was interviewed as a guest on BNN’s Business Day program and discussed interest rates, risks and some current holdings..
“Where we tend to operate is in higher yield, shorter duration corp credit which actually is insulated from movements at the long end of the curve.”
“What you need to do is to be able to understand what the collateral value of a business is….We have a position in Twitter…Here’s a bond with three years to maturity. The company has $1.4 billion in debt and $3.6 billion in cash, so it’s very difficult to go bankrupt when you have $2.2 billion dollars net cash. And then below you, you have about a $16 billion dollar market capitalization. So from the point of view of collateral value, when you think about it…in the case of Twitter we have enormous stores of value if something goes wrong.”
Watch video clip (starts at 50 second time stamp)