B.Riley Starts Sound Point Meridian Capital (SPMC) at Buy

B.Riley analyst Matt Howlett initiates coverage on Sound Point Meridian Capital (NYSE: SPMC) with a Buy rating and a price target of $22.50.

The analyst comments: "SPMC is part of a new class of closed-end funds capitalizing on the cash flow arbitrage that exists within CLO equity, which generates mid-teens un-levered returns. SPMC is anchored by a $300M seed portfolio that was un-levered at its June IPO, which we believe should enable the company to scale efficiently, growing earnings as it adds debt to the capital structure. SPMC acquired most of its existing portfolio during the wider spread environment of 2022–2023, making it primed to be a beneficiary of the continued surge in reset/refinance activity in CLOs, in our opinion. Resets typically extend maturities and reduce borrowing costs inside CLOs, in turn increasing equityholder returns. SPMC is externally managed by Sound Point, which is a top-five CLO manager globally and provides the fund with a strategic advantage to the broader market in both research and trading."

For an analyst ratings summary and ratings history on Sound Point Meridian Capital click here. For more ratings news on Sound Point Meridian Capital click here.

Shares of Sound Point Meridian Capital closed at $19.73 yesterday.

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