Sorting Preferred Stocks by Largest Share Price Loss

We have added a new preferred stock listing – listed by largest share price loss.

The list is all $25 regular (or traditional) preferred stocks issues which in this case includes term preferreds–we have also included a few convertibles.

We do not include trust preferreds

This list is sorted each time it is loaded—the quote providers claim real time or near real time but it is safer to say quotes may be delayed up to 15 minutes.

We believe this list provides a real time (or nearly so) opportunity to snag issues that may have a large share ‘dump’ occurring for a quick profit.  We believe many readers can find a use for this listing.

The list can be found here-it may take an extra 1/2 second to load as it sorts with each load and contains over 430 issues.

Additionally we have included a link on the preferred stock page here.

Rate Hike as Expected

As expected the Fed has announced a 1/4% hike in the Fed Funds rate which was totally baked into all stock and bond markets.

While we don’t fixate on the Fed Funds rate we certainly make note of it—and actually we are happier with higher rates.  With our money market likely to toss off a current yield of near 2.2% we are at least earning a measurable return in our brokerage accounts which always seem to have too much cash.

The most important item will be the press conference to be held shortly with Fed Chair Powell.  Do they think wages are going to shoot higher?  Do they thing tariffs are going to stoke up prices?  Is the outlook still for another rate hike in December and 3 next year?

We have to leave the office so won’t be able to watch the press conference–but in the end it probably won’t matter much at all–and even if markets react it would be rare for us to do one darned thing based on this 2 hour window.

Adding More Spreadsheets

As we always note we are working continually on the site–you may not notice it too much because it is sometimes ‘behind the scenes”.

We have had a readers let us know when we are missing issues from the $25 Master List in particular but also other lists.

The $25 Master List continues to grow and contains around 600 issues which are preferreds stocks (including some convertibles being added slowly), baby bonds, and trust preferreds.  This sheet will open in a separate page which readers can copy if they desire.

Any time you see a link on a ticker symbol it will take you to the chart page with further detail and a link to the prospectus (although we continue to be adding detail–so some is a bit incomplete.

What we are adding now is ‘real time’ sorting.  We are adding the links on the ‘Preferred Stock‘ page.

The 1st new page we have added is the ‘Preferred Stocks of REITs’ page – sorted BY YIELD.  When you click the link you will immediately get the data sorted by current yield.  This page might take an extra 1/10th of a second to load as it has to sort and then display.

We will be slowly adding more info that we hope is helpful to folks.

Monday Morning Kickoff

The DJIA traded in a range of about 26,030 to 26,770 last week which obviously is in record high territory and closed the week near the highs at 26,743. The 10 year treasury traded in a ranger of 2.99% to 3.1% and at this moment is trading at 3.07%

Last week we had all kinds of housing numbers being released and they were about as expected except for housing starts which were stronger than anticipated–although builders cut back on applications for building permits to a 15 month low. The Leading Economic Indicators (LEI) which were released came in +.4% which indicates continued expansion ahead and helps validate both higher  long term rates as well as bolstering Fed rate hikes for this coming week.

For the coming week we have Consumer Confidence being released on Tuesday and while the markets give this little attention it is the basis for all things economically speaking in the U.S. as the consumer drives the economy.  The Fed meetings starts on Tuesday and ends Wednesday with no doubt a 1/4% rate hike in the Fed Funds rate.  Thursday will see a number of announcements with Durable Goods, Pending home sales and another revision of the 2nd quarter GDP.  Friday brings Consumer Consumption and Consumer Sentiment.  Let’s face it all eyes are on the Fed for the week–not for the ‘baked in’ rate hike, but for the press conference with Powell on Wednesday.

The Fed Balance Sheet fell last week by a couple of Billion $–that is 2 weeks with little movement so we should see a big runoff this week or next which will be supportive of higher interest rates.

For last week we had the issuance of a number of new issues kicking off on Tuesday with JP Morgan Chase (NYSE:JPM) selling a fixed rate preferred issue with a coupon of 5.75%.  Additionally tiny insurer Conifer Holdings (NASDAQ:CNFR) announced a baby bond issue with a 6.75% coupon.   BDC Hercules Capital (NASDAQ:HTGC) announced a 6.25% baby bond.  Associated Banc-Corp (NYSE:ASB) announced a fixed rate preferred with a coupon of 5.875%.  BDC New Mountain Finance (NYSE:NMFC) announced a baby bond with a coupon of 5.75% with a shorter dated maturity in 2023.  CMS Energy (NYSE:CMS) announced a baby bond with a coupon of 5.875%.  You can find additional short ‘blurbs’ on all of these below with lots of comments by readers.

We personally have little interest in the offering from last week, but at slightly lower prices (higher yield) the New Mountain Finance might be a decent long term hold.  Normally we would have like the Hercules Capital baby bond, but the maturity is out in 2033 which is somewhat longer than we would like–at least at this coupon and current yield.

We saw the average $25 preferred fall by 14 cents last week as the high quality issues ‘took it in the shorts’ so to speak.  It was actually worse mid week, but you saw a bit of a pricing bounce back later in the week as investors decided that the selloff was overdone.  We now have 192 $25 preferred selling for $25 or below.  This is 22 issues more than last week and certainly gives investors a bit of a higher current yield.

 

BDC New Mountain Finance Prices New Baby Bonds

Business development company New Mountain Finance (NYSE:NMFC) has priced their new baby bonds at 5.75%.  We note that the company has recently voted to reduce their asset coverage ratio to 150% from 200% as now allowed by law.

The issue will trade under the permanent ticker of NMFX when it begins to trade in the next week or two.  There will not be OTC Grey market trading.

The issue is nice in that it has a shorter dated maturity in 2023 with early optional redemption starting in 2020.

The pricing term sheet can be found here.

We are not very familiar with NMFC, although some readers have made positive comments on the company on our site.  For now we pass, but will consider a purchase once we are able to do due diligence and have some investable cash available.

 

 

CMS Energy Prices Baby Bonds

Michigan electric and natural gas company CMS Energy (NYSE:CMS) has priced their new baby bonds with a coupon of 5.875%.

The issue will have normal terms for a utility which means quarter payments and long maturities (2078)–there will be an early redemption available to the company beginning in 2023.   The interest payments are not qualified for preferential tax treatment.

The pricing term sheet can be found here.

High Quality Preferreds Being Slammed

As the more seasoned preferred stock investors know when interest rates rise the preferred that are knocked down the most are the high quality, low coupon, perpetual issues.

We always watch the Public Storage (NYSE:PSA) preferred for hints at direction movement and the size of those moves in quality issues.  PSA has 13 preferreds outstanding with coupons ranging from a low of 4.90% to 6.375%.

Here is a chart of the PSA-D issue which carries a 4.95% coupon showing a 5 day loss of 3%.  This is exactly why many investors stay away from these low coupon issues at this stage of the interest rate cycle.




Associated Banc-Corp Prices Preferred

Associated Banc-Corp has priced 4 million new shares (plus 1.242 million shares for overallotment) of a fixed rate, perpetual preferred with a coupon of 5.875%.

Of course the shares are non cumulative, being a banking company.  Dividends are qualified for tax purposes.

The issue is marginally investment grade–Baa3 from Moodys and BB from S&P.

The pricing term sheet can be read here.

Shares are trading on the OTC Grey market under the temporary ticker of ABCCL.  I see them last trading at $24.60.

CMS Energy to Sell Baby Bonds

In what has become a virtual rush to sell debt and preferreds electric and natural gas company CMS Energy (NYSE:CMS) has announced they will be selling a new baby bond issue.

Details have not been announced as of yet but the preliminary paperwork can be seen here.

The issue will have the ability to have deferred interest payments for up to 40 consecutive quarters without a default being declared.  This is fairly typical in baby bond issues from utility companies.

CMS has 1 other 5.625% baby bond outstanding (NYSE:CMSA) which is trading at $24.37 for a current yield of 5.77%.

BDC New Mountain Finance to Offer Baby Bonds

New Mountain Finance (NYSE:NMFC) has announced their intention to sell an issue of baby bonds with a maturity date in 2023.  The permanent ticker symbol will be NMFX when trading begins in a week or two.

No details have been released yet, but the preliminary prospectus can be read here.

New Mountain had previously voted to reduced their asset coverage ratio needs from 200% to 150%.

 

 

BDC Hercules Capital Prices Baby Bonds

BDC Hercules Capital has priced their new baby bonds with a coupon of 6.25%.  This is a full percentage point above the last issue the company sold.

Please note that the maturity date is substantially longer than issues Hercules has sold in the past–it is 2033.  They are paying a premium coupon based, at least partially, based upon the longer dated maturity.

The company has stated that they may call the balance of their 6.25% issue which is due in 2024 (NASDAQ:HTGX).  This issue is now trading at $25.26 so their is virtually no call risk in holding them.  They had previously partially called this issue.

Additionally the company has a 5.25% issue outstanding (NASDAQ:NCXZ) which is due in 2025 and is trading at $24.84.

The pricing document on the new issue is here.  The new issue will trade with the permanent ticker of HCXY when it trades in the next week or so.  There will not be any OTC Grey market on the issue.

Associated Banc-Corp Announces New Preferred

Wisconsin regional banker Associated Banc-Corp (NYSE:ASB) has announced the sale of a new issue of fixed rate preferred stock.

No details of the new issue have been announced as of yet.

The company has 2 issues of fixed rate preferreds currently outstanding–they are marginally investment grade.

 

The preliminary prospectus can be found here.

Monroe Capital and QVC Baby Bonds Trading

We have gotten notes from readers that the Monroe Capital 5.75% baby bonds (NASDAQ:MRCCL) and the QVC 6.375% baby bonds (NYSE:QVCD) are now trading.

The issues are trading about where I thought they would trade.  MRCCL is a shorter maturity baby bond and last traded at $24.90, while the long dated issue from QVC is trading weakly at $24.25.

We are unlikely at this time to have an interest in these bonds as the QVC bonds are too long in maturity for us and the MRCCL bonds are slightly light in coupon (although at a lower price we would have an interest because of the 2023 maturity date).

 

JPMorgan Chase Prices Preferred Issue

JPMorgan Chase has priced their new fixed rate perpetual preferred right where it was expected–5.75%.

The issue is a fairly massive issue with 59 millions shares being issued with another 8.85 million available for overallotments.

The issue is normal in all respects–qualified dividends, non cumulative (since it is a bank) and optionally redeemable about 5 years after issuance.

Shares will trade on the OTC Grey market under the temporary ticker of JPMLL.

The pricing term sheet can be seen here.

BDC Hercules Capital to Sell Baby Bonds

Business development company Hercules Capital  (NASDAQ:HTGC) has announced the issuance of new baby bonds.  The issue has not yet been priced.

The new issue will have the normal terms, but the maturity is a bit further out than we prefer as it is in 2033.

The new issue will trade with a permanent ticker of HCXY when it begins trading in the next couple of weeks.

The company had last issued baby bonds on 4/23/2018 at a coupon of 5.25%–those bonds are now trading at $24.85.

The company has announced that they may use the proceeds to redeem the 6.25% 2024 issue which had partially been redeemed on 2 previous dates.

The preliminary prospectus can be read here.