After a down day on Monday in preferreds and baby bonds we saw a nice bounce back on Tuesday and today–for the week we are now up a bit.
The 10 year treasury closed today at about 2.05% after hitting a high of 2.06%.
The Fed minutes from the January meeting were released this afternoon and were taken as somewhat dovish because of a lack of discussion on a 50 basis point rate hike in March. With the minutes equity prices turned around, after being down in the early part of the day, to end flattish (more or less).
For those that need some reading material to fill their evening (and put you to sleep) you can find the FOMC minutes here.
In the next 72 hours I will complete and publish my part 2 of watchlist securities which have potential for a 7% current yield.
For a while we were getting approx 1-2 new preferred or BBs on a weekly basis. Now we are getting next to nothing. Could we be in a drought stage for many months now? Anyone who wanted to borrow had almost 2 years to get it done. So much has changed pricing wise for pref/BBs yet we have nothing new to compare it to. Not sure what to think. Seems like if a new IG preferred came out it would be priced a touch below or at 5%.
Some unexpected price movements today . Sold all CIM-B to buy more CIM-A and all NRZ-B for more NRZ-D, my two largest positions. Bought a little TCBIO STAR-G VIASP MITT-B MBINN. Sold yesterday’s NYMTZ and then bought it back.
M G-
What’s with the far past call dates on the STAR series. Are the ‘broken’?
thx
Probably because they can’t get a much lower rate on a new issue. Not worth it to save half a percent. They have been pinned to par. The predictable range makes them a candidate for stacking nickels trades.
Don’t think that’s the case at all, Martin…. D is an exception in of itself is has a glitch in it that makes it a bit more difficult to call – it has voting rights and also must be called using cash specifically from anbother preferred refinancing as I remember…. They left I an G outstanding back in October 2017 when they called the ever so slightly high E and F’s and that was at a time when they were considered a more dicey credit than they are now…. So they could easily refinance now economically… It’s been a theory that the costs of paying these 2 are so minor to them that they have left them outstanding just because… Right now, the upcoming transaction to sell their Net Lease Assets will most likely improve their credit standings and will free up a lot of cash while at the same time removing a lot of secured debt, so who knows if that might make I and G history, possibly D too…. But the ability to economically do so is not in question at all imho.
Thanks for the clarification. How do you explain STAR-G slipping below stripped par yesterday if the divvy is too high?
M – u be the expert on taking advantage of just that kind of situation on value differentiations, aren’t you??? You are in my eyes anyway. lol…. It’s just a temporary pheenom. For the record, I don’t even own any of the preferreds… I should but I gave up a ton of yield to get into IStar’s bonds instead a few years ago and never switched back, but in the dark dirty depths of The Great Recession I bot into them in the low single digits and had great fun doing your kind of thing switching in and out of any of the then 5 outstanding preferreds on the way up when the opportunities arose.. It was fun… why I never returned to that is a mystery to me…….
Yes numbers are my thing though I’m less adept at knowing what’s going on with the company. I bought a small amount yesterday because I haven’t been following STAR prefs until recently so I’m starting slow. Shjould’ve bought a lot more. Already sold half of it today for 1% gain.
Martin, they have been very solid small ball flippers for me past couple years. Easy 50 cent swings. Hadnt been in past few weeks but only picked up a few hundred today at $25.38 of G series this morning. I dont think there were many available this morning then when I bought anyways.
I did get back into PLYM-A today bigger though today at $25.74. Some controlled selling there. Been in this one several times over the years. Management has barked its aware of call date, but it also has a redeemable convertible paying 12% that may be cleaned up first. But it appears stock price is past conversion strike already. So dont know about the details of owners converting verses redeeming or forced conversion. Its all in annual filings, but I forget over time the details. I mostly bought for its approaching call and 2024 increase if it didnt as protection. While waiting for a price to flip as its prone to nutty spikes at times.
Today reminded finally of the good old days. When stocks would tank hard and preferreds were not dragged under for the ride.
I own a slug of G and I and have been buying more in the last few days. Next divi coming up at the end of the month. Seems like an easy 8%, maybe too easy?? Hopefully they don’t call any time soon.
Fryman, They just declared dividend yesterday for all series of preferreds. Moodys also stated yesterday they are reviewing IStars credit rating for a possible upgrade including the preferred stock following their recent transactions.
Well, dang, Grid – I’ve been looking for that announcement ever since STAR announced their proposed sale of their lease assets to Carlyle on 2/2…. Don’t know how I missed it so thanks.
https://www.moodys.com/research/Moodys-places-iStars-corporate-family-and-senior-unsecured-ratings-on–PR_462585
Rating Action: Moody’s places iStar’s corporate family and senior unsecured ratings on review for upgrade
18 Feb 2022
New York, February 18, 2022 — Moody’s Investors Service has placed iStar Inc.’s (‘iStar’ or ‘the REIT’) Ba3 corporate family and senior unsecured ratings on review for upgrade based on expected improvement in its liquidity and secured leverage when the pending sale of the net lease portfolio is completed. The REIT’s B2 preferred stock and Ba2 senior secured credit facility ratings have also been placed on review. The Speculative Grade Liquidity Rating remains unchanged at SGL-2.
The review will focus on the utilization of the sale proceeds and the post-transaction portfolio strategy.
The following ratings were placed on review for upgrade:
Issuer: iStar Inc.
Corporate family rating currently Ba3, placed on review for upgrade
Senior Secured Bank Credit Facility currently Ba2, placed on review for upgrade
Senior Unsecured Rating currently Ba3, placed on review for upgrade
Senior Unsecured shelf currently (P)Ba3, placed on review for upgrade
Preferred stock currently B2, placed on review for upgrade
Subordinate shelf currently (P)B2, placed on review for upgrade
Preferred shelf currently (P)B2, placed on review for upgrade
Preferred shelf Non-cumulative shelf currently (P)B2, placed on review for upgrade
Issuer: iStar Inc.
Outlook, Changed To Rating Under Review From Stable ….
Dont be impressed with my sleuthing skills here, 2WR. I use yahoo finance plug and play spreadsheet for my preferred portfolio. And any related news to any of my issues is routed directly under the spreadsheet.
Thanks for the heads up Grid. That’s good news. I will buy more if it dips close to stripped par again.
You better hurry, if we have another day like today they won’t be 7% anymore.