Campbell Systematic Macro EQUINOR Bond

EBSIX Fund  USD 9.69  0.02  0.21%   
Campbell Systematic's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Campbell Systematic's financial risk is the risk to Campbell Systematic stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
  
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Given the importance of Campbell Systematic's capital structure, the first step in the capital decision process is for the management of Campbell Systematic to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Campbell Systematic Macro to issue bonds at a reasonable cost.
Popular NameCampbell Systematic EQUINOR ASA 3625
SpecializationLarge Blend
Equity ISIN CodeUS29446A8190
Bond Issue ISIN CodeUS29446MAB81
S&P Rating
Others
Maturity DateOthers
Issuance DateOthers
Coupon3.625 %
View All Campbell Systematic Outstanding Bonds

Campbell Systematic Macro Outstanding Bond Obligations

US29444UBK16US29444UBK16Details
US29444UBL98US29444UBL98Details
US29444UBM71US29444UBM71Details
US29444UBQ85US29444UBQ85Details
EQUINIX INCUS29444UBS42Details
EQIX 2 15 MAY 28US29444UBR68Details
EQIX 34 15 FEB 52US29444UBT25Details
EQIX 39 15 APR 32US29444UBU97Details
Dana 575 percentUS235822AB96Details
Volcan Compania MineraUSP98047AC08Details
US29444UBD72US29444UBD72Details
EQUINIX INCUS29444UBC99Details
EQUINIX INCUS29444UBE55Details
US29444UBF21US29444UBF21Details
US29444UBG04US29444UBG04Details
EQUINIX INCUS29444UBH86Details
US29444UBJ43US29444UBJ43Details
EQH 13 12 JUL 26US29449W7M32Details
EQUINOR ASAUS29446MAK80Details
EQUINOR ASAUS29446MAC64Details
EQUINOR ASA 3625US29446MAB81Details
EQUINOR ASAUS29446MAD48Details
EQUINOR ASAUS29446MAH51Details
EQUINOR ASAUS29446MAF95Details
EQUINOR ASAUS29446MAJ18Details
HSBC Holdings PLCUS404280DR76Details
EQUIFAX INC 7US294429AG04Details
EQUIFAX INC 69US294429AC99Details
MPLX LP 4875US55336VAG59Details
EQUITABLE INC 7US29444GAJ67Details
MPLX LP 4125US55336VAK61Details
MPLX LP 52US55336VAL45Details
US29449WAB37US29449WAB37Details
US29449WAA53US29449WAA53Details
EQH 18 08 MAR 28US29449WAF41Details
EQH 1 09 JAN 26US29449WAE75Details
International Game TechnologyUS460599AD57Details
EQH 17 12 NOV 26US29449WAL19Details
EFX 51 15 DEC 27US294429AV70Details
EFX 235 15 SEP 31US294429AT25Details
US294429AS42US294429AS42Details
US294429AR68US294429AR68Details
US294429AQ85US294429AQ85Details
EQUIFAX INC 325US294429AL98Details
BNP Paribas FRNUSF1R15XK367Details
MGM Resorts InternationalUS552953CD18Details
Valero Energy PartnersUS91914JAA07Details
AerCap Global AviationUS00773HAA59Details

Understaning Campbell Systematic Use of Financial Leverage

Understanding the structure of Campbell Systematic's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Campbell Systematic's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
The fund pursues its investment objective by investing its assets pursuant to the Campbell Systematic Macro Program allocating up to 25 percent of its total assets in its wholly-owned subsidiary, Campbell Systematic Macro Offshore Limited , which is organized under the acts of the Cayman Islands and employs the Advisers Campbell Systematic Macro Program, and allocating the remainder of its assets directly in a portfolio of investment grade securities for cash management purposes. It is non-diversified.
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Other Information on Investing in Campbell Mutual Fund

Campbell Systematic financial ratios help investors to determine whether Campbell Mutual Fund is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Campbell with respect to the benefits of owning Campbell Systematic security.
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What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.