Hamlin specializes in the management of nonrated, tax-exempt high-yield fixed income securities. These municipal bonds finance essential services across the country and include correctional facilities, charter schools and senior living facilities. We believe these projects offer solutions to pressing national challenges such as increasing incarceration rates, an inadequate national education system, and the aging of Baby Boomers.
In our opinion “nonrated” does not imply credit unworthiness. In many cases these projects are too small to be rated and may not be able to bear the significant fees nor the obligatory six-months time period to engage a rating agency. Additionally, the Hamlin Fixed Income Team conducts its own research and does not feel the need to rely on a credit rating report. Our research and due diligence process involves thorough local market supply/demand analysis, leverage and coverage analysis, extensive legal due diligence, regular tours of facilities, conference calls with management and continuous operational and financial review.
We seek to purchase a controlling stake in these projects, structuring transactions with provisions that are favorable to our clients. Our bonds are backed by first mortgages on property, plant, and equipment and are further secured by pledges of gross revenue, restrictive covenants, and other attractive provisions. Furthermore, we work alongside the facility managers and obligors to help de-leverage their balance sheets and improve their creditworthiness.
Hamlin’s track record reflects our rigorous credit analysis, innovative risk mitigation strategies and active portfolio management. We do not predict interest rates nor do we use leverage. Our bonds typically yield 2.5% above AAA municipal bonds, allowing client portfolios to compound at higher rates of interest. The tax-exempt status enables interest to compound free of federal income tax.