Summary
- Chicken Soup For The Soul Entertainment's baby bond, CSSEN, is trading at a Yield-to-Worst of 10.53%.
- The company is reporting a loss for the past 2 years.
- I compare CSSEN with all other baby bonds that pay a fixed rate and have a maturity of up to 10 years.
- I do much more than just articles at Trade With Beta: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »
Introduction
Currently, there are 189 exchange-traded baby bonds on the New York Stock Exchange. From them, 187 "babies" have an issue of at least $1M notes, as only Scorpio Tankers' (NYSE:STNG) SCCB (0.92M) and Conifer Holdings' (NASDAQ:CNFR) CNFRL (0.88M) have a lower issue. With only 840,000 notes, the newest Baby Bond IPO from Chicken Soup For The Soul Entertainment (CSSE) not only is the 3rd baby bond under a million notes but also the smallest issue of all.
The New Issue
Before we submerge into our brief analysis, here is a link to the 424B1 Filing by Chicken Soup For The Soul Entertainment, Inc. - the prospectus.
Source: SEC.gov
For a total of 840,000 notes issued, the total gross proceeds to the company are $21M. You can find some relevant information about the new baby bond in the table below:
Source: Author's spreadsheet
Chicken Soup for the Soul Entertainment, Inc. 9.50% Notes Due 07/31/2025 (NASDAQ: CSSEN) pays a fixed interest at a rate of 9.50%. The new issue has no Standard & Poor's rating but is expected to be rated "BBB" by the less authoritative Egan-Jones Ratings Company. CSSEN is callable as of 07/31/2022 and is maturing on 07/31/2025. The new IPO is currently trading below PAR, at a price of $24.01, which means it has an 11.73% Yield-to-Call and a 10.53% Yield-to-Maturity. The interest paid by this baby bond is not eligible for the preferential 15% to 20% tax rate. This results in the "qualified equivalent" YTC and YTM sitting around 9.77% and 8.77%, respectively.
Here is the product's Yield-to-Call curve:
Source: Author's spreadsheet
The Company
Chicken Soup for the Soul Entertainment Inc operates video-on-demand ('VOD') networks and is an independent television and film distribution company. The Company operates in one reportable segment, across two operations areas, the distribution and production of video content for sale to others and use on its owned and operated VOD. The Company has interests in Crackle Plus, LLC (Crackle Plus), which owns and operates a range of ad-supported and subscription-based VOD networks including Crackle, Popcornflix, Popcornflix Kids, Truli, Pivotshare, Espanolflix and FrightPix. The Company also acquires and distributes video content through its Screen Media Ventures, LLC (Screen Media) subsidiary and produces long and short-form original content through subsidiaries and outside partnerships. The Company has a presence in over 56 countries and territories worldwide.
Source: Reuters.com | Chicken Soup for the Soul Entertainment
