Emergency PRIV Post
WE HAVE FLOWS, I REPEAT, WE HAVE FLOWS!
This is it.
This is why we get out of bed in the morning, people.
The banks have finally started burning through their initial creation shares and someone decided to hand SSGA a further $15MM to spend on (mostly) the AGG with extra steps!
Thus.
For the very first time on this pokey little Substack. I can post a different NAV chart.
That feels nice.
Also. We have some additions and upsizing.
Most of them are very boring and I won’t bother doing any analysis in here because it’s mostly standard corporate bonds or “private” CLO size increases.
HOWEVER
As of this morning though, SSGA purchased another $498597.89 worth of AP FIDES HOLDINGS I LLC 6 11/30/2048.
It looks like they paid a solid bit of a premium for it too.
Stick with me here, the math is pretty simple I think it presents some very interesting potential conclusions.
Let’s break this down.
If we generate the expected change based on the average of the other two marking private assets, we get a tiny number (.00004969 or .004969%).
We can use that number to generate the expected price and daily change (1.236) for the original chunk.
We can then back the daily change out of the MV for today’s update and calculate the price for *just* the new purchase. As you can see, it seems to have been bought at a premium compared to the existing chunk.
Does this mean that AP Fides has gone up much more in value than the previous marks would indicate? Maybe?
Does it mean that SSGA simply had to pay this premium on short notice to get access to this piece to maintain their portfolio balance? Maybe?
Does it indicate a macro trend of private credit being resilient in the face of mounting geopolitical pressures and rate volatility? I mean. Also maybe.
They certainly didn’t adjust the marks of the other two assets though.
There is so much under the hood that I can’t see. We get back to the old problem of me being on the outside looking in.
Yes, I listen to bluegrass.
Meta Stuff:
So. Obviously there’s some interest now. I still have suspicions that this interest is being driven by a single client or small group of clients at an asset manager. The large single share creation event, the continuing relatively lowly overall volume. That’s my opinion, anyway.
I will be back on Monday with another full update but I wanted to get ahead of this and dig into what I think is the most interesting part.
Other Stuff:
Go read these people:
Dave Nadig : Nadig.com
Tony Dong : Linkedin
Jeff Ptak : Substack | Morningstar
Tematica Signals : Substack
Phil Bak : Substack
CovenantLite : Substack
Brent Sullivan : Substack
Leyla Kunimoto : Substack
also anyone I subscribe to on Substack. I actually do read them!
Thanks for reading.
If you want to chat about PRIV/other topics or hire me, please reach out to cmacwilliams@outerbeachc.com, connect with me on LinkedIn, or shoot me a note on Signal at @ ConorMac. 76.
Disclosure: I own one share of PRIV, none of this is investment advice and is presented solely for educational purposes.