Hybrid Vigor: Vol 1 Issue 30 "Pre-Solstice Chill"

Dear Friends,

Last week was a lot of things. It wasn’t boring.

The volatile selloff created a fair amount of turnover in the HOCS 20, with five new names on the list, so be sure to see our review. Still, the bonds on the list did what they were supposed to do.

Plant, Page and company told us about the feeling they’d get when they’d look to the west. This week we turn east, with a piece from George Lynch on Qihoo 360 and a non-dollar venture from Roman Terekhin on Kingsoft’s convertibles.  We hope you find both articles, along with the rest of this week’s contents, of interest.

On a personal level, I was very gratified by all the kind words my colleague John Anderson and I received for Hybrid Vigor at the holiday party hosted by Tracy Maitland and Advent. Props to Tracy and everyone involved with a terrific event, and thanks to everyone who approached us with praise and thanks.

Now for a mea culpa. We made an error of omission last week.

I’ve been involved with mandatories since they hit the market over 20 years ago.  While I like true convertibles better—I think most of us do—we blew it last week by choosing not to talk about the two large mandatory issues. They were a big part of the market’s activity, and as Hybrid Vigor takes its place as the voice of the convertible market, it has an obligation to comment on new focus deals as much as possible.  As we’ve written before in this space, mandatories are a bit like tuna sandwiches—it’s hard to make a really good or really bad one, because the long and short embedded calls largely offset.  That said, deals like T-Mobile and Fiat Chrysler get our asset class in the news, and we have an obligation here to acknowledge that and contribute whatever value we can.

We’ll do better next time. Meanwhile, remember how they used to say “never trust anyone over 30?” Well, with this, our 30th issue of Hybrid Vigor, we give you our word that we’ll continue to be an independent voice for our quirky asset class.

We remind readers that the era of complimentary issues of Hybrid Vigor is coming to an end.  We’ve been signing up subscribers—to make sure you keep getting this letter in 2015, please contact John Anderson at janderson@hillsideadvisors.com or (646) 665-4025 to discuss options. 

Bill

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