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Old 02-25-2008, 12:12 AM   #121
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Quote:
Originally Posted by JohnEyles View Post
Has anyone recently tried to reproduce the interest calculation
for ISM/OSM ?

For ISM for 2007, I show the following per-share dividends
(in reverse order, last one is Jan 07):

$0.09057
$0.09359
$0.09734
$0.10067
$0.09818
$0.09923
$0.09480
$0.08478
$0.09748
$0.07717
$0.07124
$0.08731

I can't seem to massage these numbers into anthing correlating
with the CPI numbers (ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt)
even given the 4-month lag (or whatever it is).
I checked your Jan number and it works.

202.9 - 198.8 / 198.8 + .0205 X 25 = 1.0280925.

1.0280925 X 31/365 = 0.08732. You have a rounding error in your Jan last digit.
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Old 02-25-2008, 12:35 AM   #122
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Never mind. I was not computing the fraction of a year's
interest carefully enough; I thought a day plus-or-minus would
not really matter, but it's actually one-part-in-30, which is
about 0.1% for the numbers we're talking. Oddly, Excel,
(at least the several years old OSX version I'm using) has a
function to compute the difference between two dates as a
fraction of a 360-day year, but not of the actual (non-leap year)
365-day year we all know and love (what's up with that ?).

Anyhow, thanks, and sorry for the chase of the wild goose.

P.S. For the earlier questioner, the numbers I quoted were
simply dividing the interest payments shown in my broker
account by the number of shares held.
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Old 02-25-2008, 07:25 AM   #123
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Quote:
Originally Posted by JohnEyles View Post
Oddly, Excel,
(at least the several years old OSX version I'm using) has a
function to compute the difference between two dates as a
fraction of a 360-day year, but not of the actual (non-leap year)
365-day year we all know and love (what's up with that ?).
Some bonds state they use 12 30 day months, or 360 days... makes the payment the exact same if they pay monthly...
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Old 02-25-2008, 10:18 AM   #124
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Quote:
Originally Posted by JohnEyles View Post
Has anyone recently tried to reproduce the interest calculation
for ISM/OSM ?

For ISM for 2007, I show the following per-share dividends
(in reverse order, last one is Jan 07):

$0.09057
$0.09359
$0.09734
$0.10067
$0.09818
$0.09923
$0.09480
$0.08478
$0.09748
$0.07717
$0.07124
$0.08731

I can't seem to massage these numbers into anthing correlating
with the CPI numbers (ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt)
even given the 4-month lag (or whatever it is).
I was also able to duplicate your numbers from the CPI-U data, except for your December 2007 number, which should be $0.0826. December 2007 was a month in which SLM overpaid, then corrected it in January 2008 (see post #95 by clifp).
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Old 02-25-2008, 12:08 PM   #125
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Thanks folks. Looks like those of us still holding these things
have some extry-big dividends coming up !
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Old 02-25-2008, 12:51 PM   #126
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Quote:
Originally Posted by JohnEyles View Post
Thanks folks. Looks like those of us still holding these things
have some extry-big dividends coming up !
Yeah..... it does look that way. For better or worse, I've decided to not sell at a loss now, while the yields are so attractive, and see what things look like in 3 - 4 months. Of course, that probably means the rest of you should sell immediately at any price since my track record of chosing the wrong fork in the road is well known......... Not a significant portion of my portfilio, however.
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Old 02-25-2008, 05:54 PM   #127
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Good arbitrage (is that the right word) now ! ISM and OSM
are about a dollar apart. Even with bid/ask spreads, a person
ought to be a able to make 50- cents a share or so by
swapping 'em.
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Old 03-04-2008, 03:24 PM   #128
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Another exciting day in the market. Among other events, SLM debt got downgraded one notch by Moody's:

Moody's cuts rating on Sallie Mae by one notch | Markets | Markets News | Reuters

ISM now has a real yield of around 6.6%. Hmm, tempting. But pretty comparable to other near-junk nominal bonds.
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Old 03-04-2008, 05:18 PM   #129
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How does that fit with S and P taking SLM off credit watch? This happened literally minutes after Moody downgraded them.......

S&P takes Sallie Mae rating off credit watch; outlook stable
4:49 PM EST March 4, 2008
SAN FRANCISCO (MarketWatch) -- Standard & Poor's Ratings Services said late Tuesday it took its BBB-/A-3 counterparty credit rating on SLM Corp. off a negative credit watch, and assigned the rating a stable outlook. The company, better known as Sallie Mae, was placed on CreditWatch Negative by S&P on Feb. 8. S&P said they would remove Sallie Mae from the negative watch when the company completed $31.3 billion in asset-backed commercial paper financing.
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Old 03-04-2008, 05:20 PM   #130
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Originally Posted by twaddle View Post
Another exciting day in the market. Among other events, SLM debt got downgraded one notch by Moody's:

Moody's cuts rating on Sallie Mae by one notch | Markets | Markets News | Reuters

ISM now has a real yield of around 6.6%. Hmm, tempting. But pretty comparable to other near-junk nominal bonds.
How'd ya calculate that 6.6% twaddle?
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Old 03-04-2008, 05:25 PM   #131
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Isn't S&P's BBB- pretty much the same as Moody's Baa3? So, I guess Moody's is just catching up. Fitch also gives SLM a stable outlook at BBB, which is equivalent to Baa2, I think.

I calculated 6.6% based on a price of $16.80:

Bond Yield Calculator
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Old 03-05-2008, 01:09 PM   #132
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Ratings are compared here:

Bond Ratings
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Old 03-13-2008, 01:48 PM   #133
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Looking nice at under $16 for ISM/OSM. nominal yield to maturity around 12% at this price level... Looks like tons of volume on the OSM so far today.
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Old 03-13-2008, 02:17 PM   #134
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Looking nice at under $16 for ISM/OSM. nominal yield to maturity around 12% at this price level... Looks like tons of volume on the OSM so far today.
The volume level of OSM seems out of line with over 70k traded. ISM less than 3k. Can anyone think of an explanation?
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Old 03-13-2008, 02:44 PM   #135
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I'm showing 188,700 shares traded of OSM as of 3:40 today (last traded at 3:22 pm). Probably big institutional holder selling out their position. I guess folks are paying attention and arbitraging ISM down, too. I don't see any news yet as to why they would both be down so much. Swiss Re is the only listed (as of 12/31/07) major holder of OSM with 400,000 shares. So it must be them getting out or someone else who recently acquired a large position.
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Old 03-13-2008, 02:49 PM   #136
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Maybe Albert Lord was seen swinging from a rope attached to the SLM building, bandanna on his head and a patch on one eye screaming "Arrrr....step into me metal detectors!"

I saw some class action lawsuits get filed a week or two ago on behalf of the stockholders, alleging fraud. Perhaps one of those got the initial go-ahead in the last day or so and the news just hasnt hit the wire yet.
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Intersting Action in All Sallie Securities Today
Old 03-28-2008, 12:40 PM   #137
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Intersting Action in All Sallie Securities Today

ISM, OSM, JSM, etc. up today on pretty good volume and wide spreads; common (SLM) off by 7% or so.

Bernanke engineered buy-out in the works?

I bought ISM and OSM this AM. But not as much as prior to the earlier fiasco!

Ha
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Old 03-28-2008, 10:45 PM   #138
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Wasn't that something? It looked like a single buyer (or maybe two). They put in a limit order for 100,000 shares each of ISM, OSM, and JSM. Over $5 million.

Somebody either knows something or they *really* like the yield on those bonds. The CDS market seems to view SLM's default risk to be pretty high:

Bloomberg.com: Worldwide

SLM's borrowing costs are high due to their rating. So, the equity is in trouble due to lousy forward earnings, but the bonds may do OK since SLM will have to be focused on improving their credit rating.
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Old 04-01-2008, 03:44 PM   #139
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Mr. Deep Pockets was buying ISM and OSM again today. He pushed the price up to the highest it's been in 6 months. What does this guy know that nobody else seems to know?

Today I sold him some of the shares I got for $15-16 recently, but he seems to have a big appetite and keeps increasing the bid, so these issues could easily go higher.

Kinda interesting that he's doing large limit orders instead of block trades. Probably no other institutional holders to trade with. I guess we'll find out who the buyer is after the funds publish their next quarterly reports.
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Old 04-01-2008, 04:12 PM   #140
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Twaddle,

I don't think there are any other large institutional owners left, except for the newly minted Mr. deep pockets. The last big instl owner got out all at once a few weeks back. Unless there is a big holder that has structured their ownership such that it isn't publicly disclosed.

The recent rise is making me want to reset my limit sell orders higher on my ISM/OSM.

I kind of wonder if a deep pockets private equity buyer (maybe mr. buffet?) is buying up the debt at 30-40% off par prices and planning on taking over the company... nothing to substantiate this - just interesting if someone were clever enough to buy highly rated junk bonds at a discount and then purchase the issuer...
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