Innovative Income Investor | Innovative Income Investor

Bought a Few Bonds of Franklin Resources

I just bought some corporate bonds of giant asset manager Franklin Resources (BEN) ($1.4 trillion under management).

They are rate A2/A by Moodys and S&P. Maturity is 3/30/2025.

Yield to maturity is around 5.4%.

Cusip is –

354613AK7/ US354613AK71

I found these particular bonds on eTrade.

Huntington Bancshares Selling New Preferred Issue

Banker Huntington Bancshares (HBAN) has announced a new fixed-rate reset preferred issuance.

Dividends will be non-cumulative, but qualified for tax purposes.

The issue will have a 1st optional redemption date starting 4/15/2028 which is also the time the coupon will begin to be reset–to the 5 year treasury plus a yet to be announced fixed ‘spread’. The coupon will be reset every 5 years.

The preliminary prospectus can be read here.

Huntington has other issues outstanding which can be seen here.

J was right on top of this one.

Monday Morning Kickoff

Last week the S&P500 moved lower by a hefty 2.6% as market participants began to realize that the Fed would be moving interest rates ‘higher for longer’.

The 10 year treasury yield moved higher by 12 basis points to 3.95%, but the yield was knocking on the door of 4% as it hit 3.98% a couple of the days last week. Most economic data is coming in ‘hotter’ than expected and inflation was shown to heat up during January as shown by the personal consumption expenditures index (PCE)

This week we have have plenty of economic data being released, but we do not have inflation and employment data being released this week which are key items that markets and the Fed focus on. As usual we have plenty of Fed yakkers sharing their ‘wisdom’.

The Federal Reserve balance sheet showed that assets fell by a measly $2.5 billion.

The average $25/share preferred stock or baby bond fell in price by 16 cents. Investment grade issues moved lower by 17 cents, banks lower by 14 cents, mREIT issues fell 14 cents. The only sector blipping higher was shipping which moved up 3 cents.

Last week we had no new income issues priced.

Waiting on PCE and Fed Yakkers

We are waiting on the Personal Consumption Expenditures (PCE) inflation data–this could be a huge market mover today–either up or down.

Then after PCE we have at least 5 Fed yakkers who could pile on to the data in a hawkish way–most of their speak lately has been hawkish so we will see if the PCE data gives them reason to ‘pile on’. Actually ‘hawk’ Loretta Mester already was interviewed on CNBC this morning and she reiterated her hawkish views–but also claims she is data dependent.

It’s boring–but I continue to watch. I guess boring is preferred to doing something stupid which I have the ability to do. Honestly given my outlook on interest rates I can see doing darned little for the next month. The next FOMC meeting doesn’t occur until March 20/21 and with lots of data between now and then, but we will have a fair idea of the rate hike for March based on CPI, PCE and employment data that we see in the next 3-4 weeks.

Buckle up–with equities down about 1/2% this morning we’ll see if the data reverses the move lower OR if the data sends stocks much lower. The 10 year is at 3.92% and strong PCE data will send the rate over 4%.