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Added a Taste of This mREIT Baby Bond

I already owned a chunk of the Pennymac Mortgage Investment Trust (PMT) 8.50% baby bond issue (PMTU), but decided to go ahead and up my position at a price of $25.55.

The bond has a maturity out in 2028 so premium I paid at this time is fairly inconsequential.

This continues a slow push to heading toward 70% invested in preferreds and baby bonds–with obviously a drop in CDs, treasuries and money market funds. I am assuming a cut by the FOMC in September of 25 basis points as I am making this move.

12 thoughts on “Added a Taste of This mREIT Baby Bond”

  1. Their rates are a little below average among their peers. I’m not convinced they are much better than average. Holding a small amount of PMT-C just to stay in the game. Waiting to see how the A/B float lawsuit plays out.

    1. Martin, just so everyone here knows what you are referencing https://www.bermantabacco.com/case/pennymac-preferred-shares-libor-litigation/
      https://finance.yahoo.com/news/pennymac-mortgage-investment-trust-announces-203000036.html?fr=sycsrp_catchall

      https://seekingalpha.com/article/4700081-pennymac-mortgage-investment-trust-c-series-preferred-offers-8-8-percent-yield
      Full disclosure: I am long both the PMT Preferred A and B

      If a businessman makes a mistake,
      he suffers the consequences. If a bureaucrat makes a mistake, YOU suffer the consequences http://www.usdebtclock.org
      I am Azure

      1. AB – I don’t see a date on the bermantabacky article…. Is this a newly filed suit? They won’t win…. purely my opinion but they won’t…..

          1. Thanks… I suppose one way to look at a suit like this is to consider it similar to an Appeals Court and if it’s approached that way then maybe there’s a chance they win – meaning I think the general premise of most who believe PMT did them wrong is that they simply decided to do what was best for the common shareholders to the detriment of preferred holders. I doubt that premise strongly….. They most likely did solely what their own highly paid attorneys told them they were required to do based on their interpretation of the language in the documents….. So, I suppose, similar to an appeals court, that one attorney’s opinion could be overruled by another VERY high end law firm, but that I would think to be the only possible avenue for success….. Any attempt to find malice I doubt has a chance. I have absolutely no law background other than being the son of a admiralty attorney and grandson of an intellectual property attorney… I’m sure that makes me quite qualified to opine…. lol

          2. Thanks Azure,
            Can I ask you a question if you feel like answering. Are you holding any of the NYCB preferred?

            1. Charles M, I truly am an open book and you can ask me anything; as long as I’m legally allowed to answer your question(s). I am long NYCB/U, these are the New York Community Capital Trust V, BONUSES Units due 11/1/2051 CUSIP: 64944P307 and they will go EX today. In Latin we say Est voluntas mea fiet ut adiuvet te usquam possum…
              Hoping you and your family are well, A

              1. Thanks for the response Ab, I have traded in and out for several years and currently hold a small position in my wife’s account. Learned about them from Gridbird as being one of the few cumulative bank preferred left.

              2. NYCB has a FTF with hard maturity in ’28. Current float coupon 8.37 trading ~91. Rode this pony down to 77 last year but managed to hang on..FWIW! 649445AC7

                  1. Gary, it’s a 1000.00 bond Fido doesn’t show it in their inventory so you have to call in to see if you can buy it.

  2. Tim, I’m sure you looked at this, but there’s a call date in 09/2025, so if it’s exercised, your net yield at the buy price will be a little over 6%. Not too bad but reason to keep an eye on it.

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