Commentaries

Highlights The Fund added to event-driven holdings, most notably the 5.75% 2026 notes issued by PDC Energy Inc. (Nasdaq: PDCE) which is in the process of being acquired by Chevron Corp. (NYSE:CVX). New issue activity picked up and we participated in several transactions, most notably Northland Power Inc.’s (TSX: NPI) inaugural hybrid issue which priced […]

Highlights Positive contributors were shorter-dated, higher-quality lines as well as the Fund’s exposure to credit through the Pender Corporate Bond Fund. With high-yield spreads remaining at approximately 4% at quarter-end and with indicators skewed to the likelihood of recession, the Fund’s exposure to credit remains towards the lowest since the Fund’s inception. --- For the […]

Highlights Positive contributors included: Paratek Pharmaceuticals, Inc. to be acquired leading to a gain of more than 10% in that position; OPKO Health Inc. on the FDA’s approval of the company’s NGENLA growth hormone therapy; Carriage Services Inc. rallied over 5% on a takeover bid from a trade buyer; and Fannie Mae preferred shares also […]

Highlights In response to the hostile regulatory environment for merger deals this year and particularly in May, spreads for mergers have widened considerably. Merger arbitrage spreads now offer increasingly appealing returns with average merger arbitrage spreads in North America increasing to double digits from last year[1]. As the SPAC sector shrinks, so has the SPAC […]

Highlights Overall, a choppy month from a combination of wider credit spreads, higher sovereign rates and uncertainty surrounding the U.S. debt ceiling. Positive contributors were Cineworld Group PLC, Paratek Pharmaceuticals Inc, and Emergent BioSolutions Inc as catalysts emerged for these severely discounted bonds. Canadian rate-reset preferreds are at levels last seen in 2016. History suggests […]

Highlights With improved valuations, the Fund added to long credit positions, while also topping up short positions in equity index ETFs. We believe that the divergence between credit and equities, which has been widening since March, will eventually mean revert, as credit conditions are typically a leading indicator of economic activity and asset prices. The […]

Highlights April saw a return to a more normalized merger arbitrage market following a volatile March fraught with regulatory pushback and increased uncertainty due to the regional banking crisis. A benefit of the elevated volatility and regulatory risk was a widening of arbitrage spreads. We continue to see favourable conditions for deal activity in the […]

Highlights The strongest contributors to the Fund were Paratek Pharmaceuticals Inc., Emergent BioSolutions Inc., Esperion Therapeutics Inc., and Bausch Health. Decliners in the Fund included McDermott International Inc., PHI Group Inc., and American Tire Distributors Inc. In April, the Fund added a new position in DISH Network Corporation which is building out an ambitious 5G […]

Highlights At the end of the quarter, small caps were trading at a valuation of 14.5x forward P/E in the S&P 600 Index compared to 19.0x for the S&P 500 Index – a 4.5x discount. This is a far cry from the wide premium that small caps traded at for the decade prior to 2020. […]