NAPERVILLE, Ill., Oct. 7 /PRNewswire-FirstCall/ -- Calamos Investments, the convertible security pioneer that introduced investors to the asset class in 1977, today announced the reopening of all share classes of its Calamos Convertible Fund (A shares: CCVIX; B shares: CALBX; C shares: CCVCX; I shares: CICVX). Select institutional convertible strategies will also be reopened.
"We've had many requests over the years to re-open the Convertible Fund," said John P. Calamos, Sr., Co-CIO of Calamos Investments, "and our response has always been 'not until we identify a significant opportunity that may be advantageous for both new and existing investors.' Well, we think we have found one." The 23-year old Convertible Fund has been closed to new investors since April 30, 2003.
John Calamos added, "Calamos' deep experience combined with the recent market dislocation makes us optimistic about the current opportunity. Existing higher-quality issues appear undervalued, and the overall risk/return profile appears quite attractive for investors who can look beyond the current crisis."
Comments on the Current Environment
"According to our research, we believe the global convertible market is significantly undervalued today," said Nick P. Calamos, Co-CIO of Calamos Investments. "Based on our proprietary valuation models, we are finding individual issues where the level of undervaluation has reached 5-10% and perhaps even more in some circumstances."
Nick Calamos noted, "The general de-leveraging of the capital markets has created immense pressure on convertible valuations. Forced selling by prime brokers going out of business and convertible arbitrage hedge funds has caused prices to fall across the entire convertible market. Some of the selling appears to be coming at any price, as participants make a desperate attempt to get out of positions. While hedge fund participation has arguably made the convertible market more efficient, hedge funds can also increase the short- term inefficiencies of the market as they may be forced to sell for non- fundamental reasons.
"Other factors contributing to convertibles' near-term underperformance include heightened equity sensitivity (to the convertible's underlying stock), widening credit spreads and the overall impact of the credit crisis in the financial sector," Nick Calamos added.
Convertible Fund and Institutional Strategies likely open for a limited time
The reopening may be temporary, however, based on a number of variables. The Calamos' investment team will continue to analyze liquidity conditions, new issuance and their proprietary valuation screens to determine whether opportunities continue to exist in the sector. Calamos will continue to carefully monitor assets in the Fund and its other Convertible strategies, and will move quickly to close the Fund or other strategies if it has concern that additional assets could impact the investment strategies.
Online Resource Center Available
To assist investors and their financial advisors in deciding if this opportunity is appropriate for them, Calamos has created a web-based resource center at http://www.calamos.com/reopen. It features a host of educational materials, excerpts from John P. Calamos, Sr.'s book: Convertible Securities: The Latest Instruments, Portfolio Strategies, and Valuation Analysis, and in- depth product information.
About Calamos
Calamos Investments is a diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies. For more information, visit http://www.calamos.com/.
Important Notes About Performance and Risk
In addition to market risk, there are certain other risks associated with an investment in a convertible bond, such as default risk, the risk that the company issuing debt securities will be unable to repay principal and interest, and interest rate risk, the risk that the security may decrease in value if interest rates increase.
You should also know that the Fund may invest up to 25% of its assets in the securities of foreign issuers. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities, including fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining information.
Before investing, carefully consider the fund's investment objectives, risks, charges and expenses. Please see the prospectus containing this and other information or call 800.582.6959. Read it carefully.
Past performance is no guarantee of future results. As with other investments, market price will fluctuate with the market and upon sale, your shares may have a market price that is above or below net asset value and may be worth more or less than your original investment.
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Calamos Financial Services LLC, Distributor
