Hybrid Vigor: Vol 1 Issue 14 "Introducing HOCS: The Hillside Overall Convertible Score"

Dear Friends,

Welcome to the first full week of unofficial fall. This is a big week for us at Hillside and Hybrid Vigor. Not only are we back on our regular twice-a-week publishing schedule, but we’re introducing our comprehensive rating system, the Hillside Overall Convertible Score (HOCS). With HOCS we build on what we started with Hillside Adjusted Risk Points (HARP), developing new measures of risk and opportunity in the convertible market.

We’ve been thrilled with the market’s acceptance of HARP as a means of identifying precarious bonds, but with HOCS we’ve embarked on a more ambitious project—a single number to rate a convertible’s attractiveness. Risk, reward, relative performance, liquidity, market biases—we’ve tried to build them all, and more, into this number. As such, we expect to be refining the measure over time. We look forward to doing it with your help.  Inside we provide HOCS ratings for last week’s new issues and several other bonds.

You’ll also find our regular Monday HARP Ugly 20 list, which contains a surprising development. In addition, Kent Bailey discusses the prospects of on one of last week’s new deals, and Jeff Alton updates his June thesis on a convertible with an attractive entry point.

Meanwhile, our September 18 New York cocktail event approaches. Please advise us as soon as you can if you’ll be attending or would like to attend.  The party’s designed to break up shortly after 8pm, just in time for Thursday night football.  We look forward to seeing you next week!

Bill

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