The Contrarian Investor Podcast
Nathaniel E. Baker
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Convertible Bonds Offer Protection Against Stagflation, Other Ills Facing Markets: Daniel Partlow (Szn 4, Ep23)
This podcast episode was released to premium subscribers on Sept. 1, 2022 without ads or announcements. To become a premium subscriber and take advantage of a host of other benefits including the Daily Contrarian briefing, visit our Substack or Supercast. Prices start around $9/month. Daniel Partlow, chief risk officer at Advent Capital Management, joins the podcast to discuss convertible bonds. Partlow is a specialist in these securities, having written a book on the subject titled 'Convertible Securities: A Complete Guide to Investment and Corporate Financing Strategies.' Content Highlights First, the basics: What are convertible bonds and how do they work? The asset class has actually been around for more than three centuries... (3:29); Some of the characteristics of converts include a maturity of about four to five years but with low interest rate sensitivity of much shorter duration bonds (6:42); A typical balanced convert will provide downside protection (via the bond floor) and upside potential through the equity participation (9:18); Converts have done well in inflationary environments, with less volatility than stocks (11:44); The default rate for converts is a fraction of high yield and leveraged loans (20:38); Background on the guest (24:59); The specter of stagflation and how converts can protect against that (27:50); Where might there be particular opportunities in the converts market right now? (33:07); Examples of individual securities that may be of interest (37:52). More Background on the Guest Website and link to the book mentioned in the introduction. Additional Information The following slides were supplied by Advent Capitaol Management.
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