Recall that earlier in 2016, we swapped most of our Chesapeake (NYSE:CHK) stock at approximately $4 per share for the company’s bonds at $48 per $100 par value, believing the bonds offered similar upside and less downside while capturing a tax loss. Last quarter we reported that the bonds had rallied to $85 per $100 par value, and the stock was trading at $4.28. Given the relative performance of the bonds to the stock and our comfort with the improved liquidity position of the company, we elected to swap back into the stock. Today our position in Chesapeake is exclusively in the form of equity.
From Bill Nygren (Trades, Portfolio)'s Oakmark Select Fund third quarter 2016 commentary.
