On 2/24/09, I sold 2 ACAS Mar09 2.50 Covered Calls for a net deposit of $10.50 in an IRA account.  My basis for these ACAS shares is now 22.12.

ACAS had been a great dividend payer, paying a dividend each quarter since its IPO in 1997, but last November it stopped, at least temporarily, paying a dividend.  Its Investor Relations page of its web site has, in part, the following statement:

“American Capital has paid or declared $29.25 in dividends per share since our IPO in August 1997. As announced on November 10, 2008, American Capital has revised its dividend policy to more proactively manage its capital base in the current market. No further dividends will be paid for the remainder of 2008 and American Capital will evaluate the declaration of its quarterly dividend after financial results are determined each quarter. American Capital intends to declare by June 15, 2009 and pay by September 30, 2009 $300MM of its 2008 remaining rollover taxable income in order to meet its RIC requirement and avoid any income tax liability.”

Thus, the price of the stock is waaay down from where it had been.  There remains hope that the dividends will resume and something will apparently be paid by the end of September, 2009.

In the meantime, I intend to hang onto the stock and collect option premium as I can.  I certainly don’t want it called away though.