The NAV was down $1.80 the latest quarter. About a third of that was due to changed assumptions in the CLO that may or may not prove accurate.

I am valuing this for take out purposes at .7 x NAV or $4.75. So down here at $2.60 over the next few months it seems like there is about $2 in upside. What is a reasonable downside projection? At .4x of book the value would be $2.75.

Let's assume another 10% downside to asset value over the next four quarters (i.e., about $10 million in depreciation) and debt reduction of $10 million from repayments and net interest income. The reduced asset values and reduced balance on the revolver about net out (conveniently for my back of the envelope calculations).

That leaves us with $6.50 to $7 and change for NAV a year from now in what should be a bottoming credit environment.

With all this said I have a hard time letting go of shares for $2.60. My basis is $2.70 so I am prohibited by my rules of engagement (I don't average down) from buying more.

Any thoughts out there?