This is a page where bonds can be discussed. I am thinking primarily $1,000 issues which are of interest to folks.
Like the other discussion pages posts will stay intact for a number of months.
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3/25/2025
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Jefferies Fin 6.5% call 3/31/2026.
https://www.sec.gov/Archives/edgar/data/96223/000114036125008939/ef20045588_424b2.htm
DYODD
Retired-
I bought some of this new issue at Schwab today and was going to post the details, so thank you for doing that.
Jeffries 47233WJK6 6.5% 2045 senior semiannual
A video devoted to this bond.
https://www.youtube.com/watch?v=s3mypJdy7Jk
Rocks, thanks for posting that.
New Issue T Bill just landed (1 year back over 4%)
CUSIP = 912797PV3
YTM = 4.06%
Maturity 3/19/2026
Back at the tax free window as I am aggressively looking for tax free bond deals: Broward County, Florida Housing Finance Authority Multi Family Revenue 5% due 10/1/2038 DTD 9/1/2023 Moody’s rated AAA FNMA backed CUSIP 115027RB2 @102.478 to YTW 4.75% YTM 4.75%. Please note this is a Section 8 housing bond and can be called at whole or part anytime and without notice, the bond is tax free but pays monthly.
I own multiple properties in Broward County and call the area my primary home base in Florida. I am very familiar with the Section 8 properties that are underlying this tax free bond and own properties that are near these properties. This bond fits my tax free bond portfolio ladder and may not be appropriate for your portfolio or risk level.
In Latin we say, Quaeso ne me sequere sicut librarium meum nonnisi reus esse possum et eos qui me conducunt monere
Azure
Cheese has that effect on people.
Azure,
I see very attractive tax free rates across the spectrum.
You are not at all concerned about the possible loss of the muni tax exemption?
I know you gave a lengthy history of the exemption and the law at one point, but I do think the 1988 SCOTUS decision in S Carolina v Baker obviated reliance on that history.
https://mercer.openrepository.com/bitstream/handle/10898/7641/60_40MercerLRev1455(1988-1989).pdf?sequence=1
I’d love to have someone reassure me, for whatever that is worth at least it’s a salve to my worry.
It, I truly have ZERO concern and continue to build my tax free muni ladder and have no plans to change that. I have an extensive portfolio of bonds/equities/precious metals/Bitcoin/private businesses and have been using the vast majority of my cash flow to buy raw land primarily in KY, GA, AL and NC to grow trees
. I am over 2000 acres and have a goal of 3000+ acres by year end. If we get a real estate recession, I will ramp up my land buying if I can get great deals. I’ll leave you with a thought; look at the after tax yields and risks of each of your income securities. I just bought a AAA 4.75% 13 year monthly paying tax free bond; I just looked on Vanguard and I cannot get ANY 4.75% Treasury of any maturity year. Wishing you all the very best, Azure
Azure,
I guess I’m too heavily weighted in munis
If they completely removed tax exemption even from the outstanding munis (which is unlikely but theoretically possible as has been discussed) everyone holding these bonds for tax exempt income would rush to sell them and there would likely be a huge drop in prices especially for longer dated munis, easily 10% but quite conceivably as much as 20%. Fully taxable munis, even AA/AAA quality should prob trade at T+100 or something like that? So one should size the muni allocation in ones portfolio accordingly from risk management point of view…
byg,
It’s hard to size a position in munis once you’ve bought them. I think I’ve read somewhere 97% of munis are held till maturity. I’d bet a large portion of the trading is muni bond funds.
Deleting the exemption also changes the credit profile of most issuers.
If you favor extension of the present tax rates, you may find yourself paying higher property taxes, sewer fees, etc
Blackstone Private Credit Bond…6+yr call protection, 7yr maturity
* 09261HBX4, 6% Coupon, Senior, IG, Semi-Annual payer, 99.33 @ Schwab
* YTC ~ 6.12% on 11/29/31
* YTM ~ 6.12% on 1/29/32
Today, I bought NRUC, 5.25% bond until 4/20/26, then 3 month sofr +26 + 363 basis points. $98.751 = 6.56% yield to call. Cusip # 637432NK7 A3/BBB
Looks like a great one Whidbey.
NRUC 637432NK7 is subordinated, not senior, just like 637432MT9.
https://contracts.justia.com/companies/national-rural-utilities-cooperative-finance-corp-6858/contract/381505/
The CY is 5.32% at 98.751. My spreadsheet calculator says YTC at 98.751 is 6.34%. I didn’t verify.
R2S—I own MT9 also. It currently resets (and pays) every 3 every months. Regarding NK7, I calculated the YTC again at 6.56%.
Whidbey-
yield = (divs rcvd + cap gain or loss) / total cost
YTC = yield * (365/days held)
There are 3 payments at 26.25 = 78.75 divs rcvd
The interest per day = 52.50/360 = 0.1458
Days of accrued interest = 149 to settlement
Accrued interest = 149 * 0.1458 = 21.72
Total cost = 987.51 + 21.72 = 1009.23
Cap gains = 1000 – 1009.23 = -9.23
yield = (78.75 + (-9.23)) / 1009.23 = 6.888%
days held = days to call = 399
YTC = 6.888 * (365/399) = 6.3%
2WR—did you find any reset issues with a 300 basis points (or more) margin when they reset? If so, would you share them? Thanks. The laborious process you mention is somewhat off putting. Not sure I could even manage to do it.
I actually a couple of these issues so here is the info:
C 7% is a 10 year reset (currently $103.3) based on 10 year T plus 2.76%
State Street 6.7%–5 year reset ($101.8) based on 5 year T plus 2.613%
Another one I am following (not on your list) is the C 6.75%—5 year reset ($98.63) based on the 5 year T plus 2.572%
WI
Do you have the CUSIP number for this one please?
Thx
172967PR6
The Citi 4%prfd resets to the 5 yr +3.579 (or maybe it’s 3.597 , doing this from memory)
Preferred, likely call this year, a little over 6.2 to the call.
I’m wearing a nice bit already and bid for more
Check the Citi preferreds investor website
BP Cap
BAC 6.125%
Both BNY Mellon
Cap One
Dominion
Lincoln
Metlife
Northern Tr
PNC 6.25%
Charles Schwab
Transcanada
Wells Fargo 7.625%
For those interested is doing some research in identifying institutional F/F rate or RESET rate issues, I’m posting the barest amount of info on 25 issues for your researching pleasure. I took the lazy person’s route to participating in this space by hiring an advisor instead of doing it myself so I can keep my focus on baby bonds issues….. So these are what I was put into…. I’m surprised how the focus seemed to end up on issues that do not reset or float in the near term, so my impression is these are a bit more duration sensitive than I would have wished…… Also most seem to be perpetuals
CUSIP # ISSUER NAME PRESENT DAY COUPON
025816CH0 American Express Co 3.55%
05565QDW5 BP Capital Markets plc 6.45
06055HAB9 Bank of America Corp 6.13
064058AF7 Bank of NY Mellon Co 4.625
064058AJ9 Bank of NY Mellon Co 3.70
14040HCF0 Capital One Financial 3.95
172967PK1 Citigroup Inc 7.15
172967PM7 Citigroup Inc 7.00
25746UDM8 Dominion Energy 4.35
38141GA79 Goldman Sachs Group 7.50
38141GB52 Goldman Sachs Group 6.125
48128BAN1 JPMorgan Chase & Co 3.65
48128BAQ4 JPMorgan Chase & Co 6.88
534187BR9 Lincoln National Corp 9.25
59156RCA4 METLIFE INC 3.85
665859AQ7 Northern Trust Corp 4.60
693475BF1 PNC Financial Service Group 6.20
693475BP9 PNC Financial Service Group 6.25
808513BK0 Charles Schwab Corp 4.00
857477CM3 State Street Corp 6.70
89356BAC2 Transcanada Trust 5.30
89832QAD1 Truist Financial Corp 6.625
902973BC9 US Bancorp 3.70
95002YAA1 Wells Fargo & Co 7.625
95002YAC7 Wells Fargo & Co 6.85
Apologies in advance for any typos
So 2WR if the feds come out with 100 year bonds you will be in line to buy some? or might as well but a perpetual.
That’s a complete non sequitur, Charles……….. Each one of these are either F/F or 5 year resets (one is actually 7 year), so they will never act like a 100 year bond nor would I ever consider one. I still own ALL-B and CUBI-F for examples, both of which I believe are officially perpetuals, but they will never have the duration risk of a 100 year issue under any recognizable circumstances…. What I authorized was a managed fund dedicated to F/F and resets… Never would a 100 year fixed issue qualify for the account. I made sure of that.
I like the list. Thanks.
I like fixed rate reset issues (5 years preferable over 10 years)
Certainly heavily weighted toward financials. I’m guessing the marketplace of non -fixed perps is so weighted?
I did read your comment further down,
but I guess I’m taking the opposite position way too often with too many long -term fixed bonds. It was merely a function of the income I desired to produce
My LT stuff is mostly munis with an after-tax yield over 7 and AAA us govt- backed collateral , save for KTBA. Too much call risk in my portfolio. Too much risk of losing the muni exemption.
I do have a thought that there is a lot more credit risk in FTF if rates zoom a lot higher. I’m not sure how much people consider that .
Lt, Rates are a two edged sword. I use the BDC sector as an example, probably could use MReits too. When rates went up the BDC’s loan margins went up then as rates stayed elevated stress started to show up with the borrowers as non accruals and defaults went up. We had a small downturn in rates and BDC’s profits started to go down. This will continue until money is rolled over into new loans and deals stabilize.
These are short term loans compared to long term bonds. How changes in rates will affect the bonds I don’t know. With your experience you can probably judge better what can happen and do options to cover yourself better than most of us.
Charles,
I buy bonds to set it and forget it, just like I buy CD’s . I don’t think about rate risk in a 5 year CD or annuity from an A++ insurer.
Now, I’m forced to consider political risk too!
Lt, Same here. That was why I finally started buying bonds, not to trade but to hold. I felt pretty comfortable buying a few of the lower grade ones when Grid was around. I didn’t worry about 5 to 7 yrs out.
Been getting antsy for the last couple months watching as prices went up and yield went down so it was pushing me to look farther out. But I couldn’t pull the trigger.
Now like you say, another risk has entered the equation.
2WR—how does one find the reset terms for each issue? Neither Schwab nor finra provides the info. thanks.
Neither did my advisor when I asked…. So here’s what I did – it’s time consuming but doable – but I could not find 4 of them..
First, I use Fidelity, not Schwab, but I assume you can do this @ Schwab as well:
From the description you see when you bring it up, LOOK FOR THE DATED DATE of the issue
Second, using the dated date as an approximation, go to https://www.sec.gov/search-filings. Search for the CORPORATE NAME, then narrow down your search to search only for filings that are within plus or minus 30 days of the dated date…. Sometimes narrowing the time spread even more is very helpful.
Third, when you’ve narrowed down the search. EXAMINE the FWP files (only that type – it’ll save you time) that should come up for each one. If there are multiple FWPs within your chosen date ranges, start by looking at the ones that are closest to the dated date… That’ll give you the info you need.
Some issuers, such as Goldman Sachs issue so many FWPs within short periods of time you have to have greater patience than I did to find the right FWP….. I gave up, but I’m quite sure they’re actually there somewhere… I failed on the Truist issue and the USBancorp issue as well.
Good luck
I just thought of this. When unable to find the FWPs on sec.gov, we may be able to find the terms for a preferred/bond on the company’s site. For example, GS:
https://www.goldmansachs.com/investor-relations/creditor-information/preferred-stock
In general, any company’s (not just GS) IR Dept may be able to provide terms of their specific resetting debt/preferreds.
By the way, I also found this on the GS site – the CUSIP for each of their floating or set-to-float bonds/pfds. I know they’re floaters, not resets, but throwing this in here, anyway. In case someone finds it useful.
good point mbg… If you’re lucky it could be a timesaver but it’s also very hit or miss on either website or waiting on IR… it does work sometimes, though…
Truist CAN be found on Edgar, but it was published by BB&T long before they became Truist, so the CUSIP was different.
Truist prospectuses can be found here
https://ir.truist.com/preferred-stock
Thnx for tracking this down, Justin…… your list shows the same CUSIP, so I assume you’re saying it was originally a different CUSIP now changed to this…
also, one trick in searching the SEC site for CUSIP’s, try the ISIN instead or put a space between the 6th and 7th characters of the CUSIP to search for the pricing sheet.
Use this link, and just replace the US Bank CUSIP that starts with 902 with whatever CUSIP you are searching for.
https://www.sec.gov/edgar/search/#/q=902973BC9&dateRange=all&category=form-cat5
so for the US Bank CUSIP, this is the only filing that comes back.
https://www.sec.gov/Archives/edgar/data/36104/000110465921127632/tm2130103d2_fwp.htm
Whoah! What a timesaver of a trick, Justin…. Love it! Never thought of trying this search by entering CUSIP # in the Document word or phrase box…. A great tip! Thanks.
Continuing to find better offerings in the 1,000 market compared to $25.
This BBB- Sempra Sub Note FtR is offered slightly below par. 6.875% fixed until 2029 reset of 5 yr plus 2.79%.
https://www.sec.gov/Archives/edgar/data/1032208/000119312524064997/d761690dfwp.htm
You are an ace at finding them.
Nice issue. I limit myself to 1% of my net worth for any utility. I already own SREA but I will buy this (2% in Sempra) and divest SREA at the appropriate time. Worth the swap. Just sharing my thinking for other holders of SREA.
Added AES FTF 6.95 call protect til ’30 5yr plus 289. Below investment grade but a “utility”…fwiw cusip 00130HCL7
I decided to pass. I am almost exclusively using these issues when the company is not in the retail market. Like the extra yield but the retail market is more liquid. Wll stick with that
Jerrymac- that looks v interesting, thanks! Here is the FWP for those interested: https://www.sec.gov/Archives/edgar/data/874761/000119312524270794/d889595dfwp.htm
Steve- I just have a lot of time on my hands, and seeing the bid/ask in IBKR is a great feature.
I have not looked at the prospectus for this bond yet, but I was looking at the Moody’s report on AES on the Fidelity website and I ran across the statement:
…”AES will take additional steps to improve both its financial metrics and balance sheet in 2025 over and above the incremental issuance of junior subordinated notes that will also receive 50% equity credit….”
Anybody want to comment about the issuance of Junior subordinated notes that receive 50% equity credit? I am ignorant on this subject…
voner
Take a shot at it
In regulated industries (mine was banking) regulators will often posit capital ratios when reviewing rate increases (utilities) or overall required minimum capital ratios (banking)
Sounds like the regulators for AES are allowing 50% of the value of the jr sub notes to be counted as the equivalent of equity in calculating AES’ required capital.
Is it really dictated by the regulators? I hadn’t thought about it that way…. I had thought the premise of assigning 50% equity to issuance of sub debt or non-cum preferreds came from satisfying accountants and/or the rating agencies, but I could easily be wrong….. also if it comes from regulators, then would this process of assigning 50% equity status only apply to issues done by regulated issuers… Is that the case? It’s an open question on my part, not one where I think I know the answer…..
Many of these have the unusual provisional calls included in their language talking about an ability to call under circumstances where a “rating agency occurrence” happen which many think simply think it’s a change in rating when in reality it has to do with a potential reinterpretation of the rules that allow the 50% equity application… That would seem to imply that it’s more a function of what the agencies demand, doesn’t it?
Actually what I was thinking about is called a “tax event” in an AES prospectus chosen randomly, not rating agency thing….. See p S-23 of https://www.sec.gov/Archives/edgar/data/1027127/0001005150-99-000858.txt …. not sure if this actually proves or disproves anything as to where the initial motivation and ability to consider it 50% equity stems from…..
Maine,
I agree on seeing the bid/ask. I’ve noticed I can sometimes get filled outside the bid/ask by leaving in orders away from the market. Some participants aren’t seeing the entire market, and many of the quotes are for a minimum number of bonds. IB shows the min number at each quote if you look at the way they present the order “book”
LT, yeah.. nothing better than getting a lowball bid accepted.. I’ve been a bit lazy lately.. and have been hitting the ask.
Your post about the quotes only showing up on certain venues rings true. FI is still the Wild West.. I really wish the other brokerages would step up their FI trading game.. no reason their systems can’t feed through marketAxess or tradeweb in this day and age. I also hate how IBKR restricts low float ( think it’s < $50m) issues, as they can offer the most compelling value. I mean, I can buy a crap penny stock or crypto via IBKR but not a safe fixed income bond w only $40m outstanding?!!
I just figured out how to see market depth on IBKR TWS. I’ve also tried a RFQ, or request for offer, a couple of times to no avail.. I’m not even sure it will work. I only tried about 10 times over 2 days…
https://www.interactivebrokers.com/campus/trading-lessons/ibkrs-request-for-quote-rfq-for-bonds/
BTW, thanks for the link on Reg S..
AES sub note rated BB/Ba1. Sounds normal for a junior, right?
Has anyone spent time on Land O Lakes?
They have a couple of BB rated (Fitch) 1,000 par prefs including an 8% which trades at ~$96 and a 7% which trades at ~$86.
I read the fitch report and poked around on their financials.. I imagine anything farm related is under some selling pressure now given the uncertainty regarding global trade.
https://www.fitchratings.com/research/corporate-finance/fitch-affirms-land-o-lakes-inc-at-bbb-outlook-stable-06-02-2025
https://www.landolakesinc.com/our-impact/investors/
Funny thing you mention it Maine. Grid talked about Land o lakes along with the Ocean Spray that a few of us owned until they were called. He said the Land O Lakes preferred he was never able to get because no one was selling any. I would also have to assume they are restricted also to the expert market.
maine-
FINRA says the 8% bond last traded in 2024. The 7% bond is trading but the Schwab bond finder doesn’t recognize the CUSIP 514666AM8.
Rocks,
Have you ever tried this trick. Pull up the one bond you can find on the FINRA bond screener. Once you have it, it should show both the cusip and the Trace #
At the top of the page check the agree box and type in the first 4 digits of the trace #
The first 4 seem to be assigned to the issuing company and that will bring up all the bonds under that company.
Thanks for the tip. I’m still learning about using FINRA, so thought I’d try this. Indeed, adding a filter for “Symbol” “Starts with” “LDOL” indeed gives 10 results. Symbol LDOL4479373 turns out to be CUSIP 514666AM8, which traded last week at 8.53%. Both the 7% ones traded today at about the same yield.
I’m not actually looking to buy now, but if you were trying to research one of these further, where would you typically go from here to find the prospectus or exact terms?
Nat, maybe 2WR will chime in. I can only tell you I have a Fidelity account and when I plug in the CUSIP it will give me the basics for the terms.
It is a 144A issue and basically impossible to trade.
Justin, They have at least 2 Reg S issues, including the 8% and 7% prefs, both of which have activity today and are available to trade on IBKR. I love it when these 144a issues provide an alternative Reg S cusip.
https://www.finra.org/finra-data/fixed-income/bond?symbol=LDOL4267694&bondType=CA
Uh, you know that the Reg S issues are illegal to own by US investors, right?
No, I didn’t know this. Can you elaborate? Also wondering why IBKR would permit it for US accounts.
Maine, here you go. It’s not illegal for you to buy or hold these securities .
https://www.clearygottlieb.com/-/media/organize-archive/cgsh/files/publication-pdfs/regulation-s-selling-transfer-restrictions-a-basic-users-guide.pdf#:~:text=If%20an%20offering%20falls%20within%20Category%202%2C,and%20the%20prohibition%20on%20directed%20selling%20efforts.&text=If%20an%20offering%20falls%20within%20Category%203%2C,certification%20requirements%20for%20equity%20securities%20described%20below).
MetLife out with a 6.35% FtR sub note with a lowly spread of 2.078%. The Nextera issues are the most attractive of the new issues; well worth paying $1-2 more for the reset floor.
https://www.sec.gov/Archives/edgar/data/1099219/000119312525052061/d915943dfwp.htm
Maine, seems like each one of these that is mentioned on III has a lower and lower reset number. We about to see sub 2% next?
Seems like the reset rate is based upon the quality of the credit rating. BAA1/BBB (Moody’s/SP) is one of the strongest ratings from the major credit bureaus.
I think 2White pointed out that the reset spread is a function of the spread of the fixed rate at issuance. So assuming a fixed rate of 6.35, the 5 year must have been at 4.27 for a spread of 2.078. 2white- please correct me if I have a detail wrong here.
SteveA- No disagreements with your point. And while I generally fall into the category of “a spread is a spread,” I am concerned of a scenario with a very low 5 year treasury rate, say 1%, and the market demands a higher spread for long duration floaters(reset). This is why I prefer the NextEra issues with the reset floors, plus I would generally prefer a Ute over and Insurance co with the same ratings.
Yes, I agree, financials should trade at a significant rate premium to “Industrials” or whatever name we choose for non -financials. I used to think it didn’t matter, then came the GFC
That has been the convention but not a rule, yes, Maine, but this one seems to have squeezed it. Underwriters are not dumb most of the time so if they think the market will allow them to squeeze convention to the benefit of the issuers, they are not averse to doing it… In fact, I forget the name but yesterday somebody pointed out one issuer who was issuing 2 reset bonds simultaneously both 5 year resets with 2 different reset rates differentiated by stated maturities alone if I read it right and I thought both were squeezing convention on the reset rates because they thought they could….
This is not unprecedented… Consider how many bonds are being issued these days with shorter than normal call features, or the relatively longer term trend which is now essentially convention to be issuing what’s considered “covenant light,” now…. All done because Mr. Market is willing to accept the changes due to demand for yield, all done to the benefit of the issuer, detrimental to the buying public….
Not sure if these were already mentioned..
Two BBB NextEra Fixed to Reset Junior Subordinated Debentures issued a week or so ago, both with reset floors equal to the fixed coupon.
Series S (65339KDE7) offered at 100.9 on IBKR
Series S Junior Subordinated Debentures: (i) from and including the date of original issuance to but excluding August 15, 2030 (“Series S Junior Subordinated Debentures First Interest Reset Date”) at an annual rate of 6.375% and (ii) from and including the Series S Junior Subordinated Debentures First Interest Reset Date during each Interest Reset Period at an annual rate equal to the Five-Year Treasury Rate as of the most recent Reset Interest Determination Date plus 2.053%; provided, that the interest rate during any Interest Reset Period for the Series S Junior Subordinated Debentures will not reset below 6.375% (which equals the initial interest rate on the Series S Junior Subordinated Debentures).
Series T (65339KDF4) offered at 101.79 on IBKR
Series T Junior Subordinated Debentures: (i) from and including the date of original issuance to but excluding August 15, 2035 (“Series T Junior Subordinated Debentures First Interest Reset Date”) at an annual rate of 6.500% and (ii) from and including the Series T Junior Subordinated Debentures First Interest Reset Date during each Interest Reset Period at an annual rate equal to the
https://www.sec.gov/Archives/edgar/data/753308/000119312525020141/d792933dfwp.htm
https://www.investor.nexteraenergy.com/fixed-income-investors/financial-strength
Oops, here is the full description for Series T:
Series T Junior Subordinated Debentures: (i) from and including the date of original issuance to but excluding August 15, 2035 (“Series T Junior Subordinated Debentures First Interest Reset Date”) at an annual rate of 6.500% and (ii) from and including the Series T Junior Subordinated Debentures First Interest Reset Date during each Interest Reset Period at an annual rate equal to the Five-Year Treasury Rate as of the most recent Reset Interest Determination Date plus 1.979%; provided, that the interest rate during any Interest Reset Period for the Series T Junior Subordinated Debentures will not reset below 6.500% (which equals the initial interest rate on the Series T Junior Subordinated Debentures)
Thanks for posting. This is something, I can get used to. 6.5% minimum coupon for a higher rated Investment grade issue in the energy/utility space. Corporate guarantee of Debt by Nextera Energy. If inflation hits and rises too high, it will float at 5YR+1.979%. Long duration at a decent interest rate with inflation protection.
Fixed rate reset with a minimum floor. Hope we see more of these issues in the market.
Another difference between the 6.3% and the 6.5% is when the issue will reset. The 6.5% issue resets in 10 years not 5 years
SteveA – here is another BBB option you may like, this time State Street Instl pref. I’m showing a YTC of 6.2% at its current offer price of $102. reset spread is healthier at 2.63% and its a pref so good for taxable accounts.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000093751/4ed35da7-4365-40d5-9025-316d745d0df1.pdf
Thanks. Very good issue.
I already own this one.
New Issue 6% Jefferies Bond…5 year Call Protection
* 47233WJE0, 6% coupon, 6% YTM & 6% YTC
* Semi-Annual Payer, Senior
* 5-year call protection (YTC 6% 3/18/30)
* Matures 3/18/45, DYODD
Real question: Would you rather have the Jeffries senior 6% with 5-year call protection or the TC Energy junior 7% with first reset in 5 years?
My view (I Purchased TEC Junior at 7%). The Jefferies at 6% can go until 2045. That is a lot of interest rate risk that goes away because the TC Junior resets.
What do you guys think about Intel 5.9% bond with 2062 call. YTM is hovering around 6.3% ?
https://www.finra.org/finra-data/fixed-income/bond?cusip=458140CK4&bondType=CA
My thoughts and DYODD: Default/bankruptcy is possible but I think is still a low probability. If Intel is consumed or merged with another company, the bond principal will be save. Intel has about $50B total debt and about $19B due within 5 years. This bond has about 37 years left to maturity which is a very long time.
I’ve bought some last year with YTM at 6.3%. Thoughts?
PS. I was thinking this morning to add some more but decided to wait and see.
Kind of interesting. We did a non professional analysis and figured book value of INTC would be in the high teens so it is trading close to that. I personally don’t see them going bankrupt. Yield is almost at 6.4% now… gonna watch this one.
NEW ISSUE AGENCY BONDS
3130B5HG6 FHLB 6.00 3/12/55 w 6 month call
3133ER6H9 FEDERAL FARM CR BKS BOND
5.62500% 03/12/2040 w 6 month call
2WR, I believe the FHLB is a 3 month call (6/12/25 first call possibility). At least according to Schwab.
You’re right…. Fido briefly had up another one either FHLB or FFRB with something like a 5.40+% coupon that did have a 6 month call and that’s what I was thinking of when saying this was 6 mo without double checking …. Sorry ’bout that…. I knew it was 3 mo
BTW, I own 3133ERQG9 FEDERAL FARM CR BKS BOND 5.84000% 08/26/2038 @ 100 (5.84%ytm) CA 2/26/25 [current call = 3/12] that’s still outstanding and I see an occasional trade happening at very slight premiums but an attempt by Fido to find any out there went bust… didn’t feel like they tried very hard and told me had to do 50k minimum to get them to pick up the phone to make calls
2WR, no worries
Also have an FHLB (6.04%, 3130B0C72) eligible for call on Mar 7. Haven’t received word yet. Fully expected a call on this one, but maybe not since they are still submitting new 6% bonds.
2WR Fido told me the same thing about needing a 50,000 minimum to even bother looking for a bond not in their corral. I could do it, but the way I feel I would rather hold 2 bonds all in at 25,000 if I would be holding for 20 years or more. I have gotten into the habit since I started dipping my toes into bonds to just assume I will be holding until maturity
Bank Semi-Annual Payers…3/5/25
Citigroup & Bank of America Bonds…all Senior, all Semi-Annual payers, all 3yr Call Protected, all Mature 2045….DYODD
All listed Bank/ CUSIP/ Coupon/ YTM/ YTC/ Yr Call Protection
* Citi/ 17290AKU3/ 5.8%/ 5.804%/ 5.804%/ 3Yr Call Protection
* Citi/ 17290ADQ0/ 6%/ 5.948%/ 5.777%/ 3Yr Call Protected
* BAC/ 06055JJT7/ 5.75%/ 5.758%/ 5.758%/ 3Yr Call Protected
JPM Bonds ~ 3/4/25…all senior, all annual payors (which nobody loves) , all multi-year call protection…available at Schwab if so inclined, DYODD
Listed as cusip/ coupon/ YTM/ YTC/ Yrs of call protection…now after post-tariff downdraft in yields…
* 48130CZD0/ 5.8%/ 5.845%/ 5.83%/ 3YR call protection
* 48130CYW9/ 6%/ 5.969%/ 5.801%/ 2YR call protection
* 48130CWR2/ 5.5%/ 5.608%/ 5.068%/ 5YR call protection
* 48130CZM0/ 6%/ 5.84%/ 5.56%/ 5YR call protection
48130CRW2 YTC should read YTC 5.608%…
And one for a retirement account…
8.75%….
https://www.sec.gov/Archives/edgar/data/19617/000121390025018430/ea0232524-01_424b2.htm
Justin, that’s wild. Have you done the math for the equivalent compounded rate?
…compounded rate discounted for inflation.
I never even considered a zero. Is it like a t-bill…no payments until maturity?
I think I’ll stick with ZROZ.
(1 + x)^15 = 2.3125
1 + x = (2.3125)^(.0666666)
x = .05748 annual return
Or 5.63% compounded quarterly
Picked up some of this today:
Nat’l Bank of Canada 6%
63305MDB4
02/28/2045
A+/Aa2
2Yr Call Protection
Drawback is it’s an Annual payer
PP ~ JPM 6% with 5 years of protection, also annual…48130CXQ3
Thanks Newbie, I do seem to have my fill of JPM, but 5 yrs is unheard of from the bank bonds on offer lately.
Newbie-
Makes you wonder what JPM foresees in the rate environment if they’re willing to give 6% for 5 years.
R2S…Agree, maybe Jamie is seeing that brewing storm cloud getting closer that he always talks about
Out of curiosity, I am wondering how you would rate the risk of this 5 yr non-call, compared with a AA or A+ CEF preferred with the same yield, trading at or below par. The few I’m thinking of, BCV-A and GAM-B (below par if you account for the accrued dividend) have the added advantage of a lower tax rate.
My opinion is the preferred is less risky, but then again, JPM senior unsecured debt may have 0 risk if the government considers it TBTF>
I’m sorta looking for someone to stop me from loading up on GAM-b
This one has the same negative feature as most of their recent issues. It pays annually. I recently bought at issue, a Bank of America 5.7% 2045 bond with call protection until 2035. It pays semi-annually. I like getting paid.
Richard…if you could be happy with MONTHLY payments for 5 years, there’s a BAC 5.55% monthly payor with subpar pricing & YTC & YTM of 5.6+ with 5 years of protection…06055JHJ1
Newbie-
None available from Schwab. The market likes monthly payers.
IBKR does not let you buy it! Says ‘No opening trades: Bond with low original issuance amount’
Does show $99.731 bid, $100.799 ask
Edison International bonds have gained in price, now yielding 6.1 to 6.3%
MUC, Blackrock’s California Munis yields 5.9% tax free and trades @ 10% discount.
Depending on your tax bracket, this is much higher than most securities in III.
If you assume rates are not going to rise significantly while you hold MUC, isn’t this too good to be true for CA investors? Even better, if rates begin to drop, then MUC will start to raise in value too.
Besides the interest rate risk and the risk of Blackrock going bankrupt, what are the risks here?
If you are in CA, why would it be wrong to say “just put your $ in MUC and forget about prefereds”?
(reposted in the Sandbox)
Just a heads up I’ve seen a few decent Muni Offerings the last week. FC, I think we were chatting about these a few months ago.
More specifically, I run a screen on Fidelity for 4.1%+ AA YTW issues. I’ve bought 3 issues, all with similar characteristics:
Massachusetts GO Consolidated
YTC ~4.25%
YTM ~4.6%
7+ years call protection
~2050 maturity
My assumption is that they will all get called… and if they are not called, I can live w the YTM.
When I run this screen (for NJ), all of the interesting YTM bonds have very low coupons (around 2%) and are selling at very steep discounts to par value.
I believe the discount element will be taxable as a capital gain.
NEW 6% coupons Selling @ PAR:
Jefferies Finl Group 6.50%
47233WHY8
02/18/2045
BBB/Baa2
call protection 1 Year
JPMorgan Chase & Co. 6.05%
48130CYY5
02/27/2045
A/A1
call protection 2 Years
Deutsche Bank Aktien 6.00%
25161FM47
02/18/2035
A/A1
call protection 1 Year
Ntnl Bank of Canada 6.00%
63305MCH2
02/24/2040
A+/Aa2
call protection 6 months
The Goldman Sachs Gr 6.00%
38151FEM1
02/14/2045
BBB+/A2
call protection 3 Years
Bank of America Corp 6.00%
06055JJY6
02/27/2045
A-/A1
call protection 1 Year
I like the new JPM preferred over these. Higher coupon for 5 years and then it resets off 5 yr treasury. At some point the national debt will drive rates much higher. I worry about getting stuck in these and them not being called because the rates are too low. Sure, reset rate on JPM is too low but better that then just fixed rate. Thanks for posting JPM preferred. I own C also with reset rate.
JPM-C has a reset rate? I am not finding that.
No, I was referring to Citibank specifically Series CC .
The JPM 6.5% coupon that resets in 5 years at 5YR CMT + 215.2BP is cusip 48128AAJ2. It is a preferred issuance.
How does one reliably find if the distributions are potentially qualified dividends (if held proper 121 days) or Interest?
eg. Citi 7.625% Coupon cusip 172967 PE5 or Citi 7.125% Coupon seriese CC cusip 172967 PK1 I bought last year turned out to be BOND INTEREST and not dividends!
According to my Schwab history, 172967PK1 from Citi is a qualified dividend. This is posted on my 11/15/2024 transaction when I received payment. You should challenge your broker classifying it as bond interest.
I use a general rule of thumb. Baby bonds (junior subordinated debt) almost always have an expiration date. They are NOT dividends – they are interest on bonds.
Preferred issues rarely have an expiration date unless they are a “term date preferred” which is a small part of the preferred market.
This is why when people post that the date on baby bonds is too far in the future, I occasionally answer that it is shorter than preferreds which never expire. Both are generally callable and I see no history (open to seeing it…if somebody has data) suggesting preferreds are called more frequently that baby bonds.
Each investor has to make their own decisions to make.
MSquare, I noticed Interactive has this listed as bond interest paid when I bought it. Who is the broker?
This is a qualified dividend without a doubt!!
Yes, it is Interactive Brokers that has it marked as interest for 172967PM7 & 172967PE5
Anyone have these two as Dividends ?
Citi prospectus at
https://www.citigroup.com/global/investors/fixed-income-investor-relations/capital-securities
Here we go again.
I have posted in the past about how these 1000 denominated non-bonds give some back office platforms fits because they don’t understand that they are not debt.
But DO NOT COMPLAIN to your broker unless you are a non-US investor and your withholding tax is wrong.
Complain when you get your 1099 and it is wrong on there, because most brokers fix them after the last payment of the year and when the 1099 go out. Believe me, they are VERY aware of them.
Most will correct this on the 1099 pretty quickly.
Yes, it is seems to be treated as debt and also marked as Interest on the 1099-INT and the Dividend report as ‘Not Qualified’ that IBKR provides to US tax payer accounts.
What to provide as ‘proof’ to IBKR to get it corrected?
Send the prospectus link to IBKR if you got an incorrect 1099. Either from Edgar or the Citi link.
Edgar link can be found by going to this page and searching for each CUSIP by putting a space between the 7 and the P characters in the CUSIP.
https://www.sec.gov/edgar/search/
(though I thought IBKR was one of the better ones that gets this stuff correct)
Get it while it’s hot!
I did something I’m not exactly proud of, but I’m known to do some new issue yield hogging. I (over)paid for the new JPM series OO pref. The coupon is v attractive but the reset is piss poor. Paid 101.36
6.500% until 4/1/2030; then 5Y CMT +2.152%
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/jpm-prospectus-supplement-dated-january-28-2025.pdf
I like other issues better, from a rel val perspective, that I already hold. This includes the Citi Series EE offered at 100.24 as I type. 6.75% coupon w a 2.572% 5 year reset.
172967PR6
https://www.citigroup.com/rcs/citigpa/storage/public/Series-EE-Final-Prospectus-Supplement.pdf
I also hold this Sempra junior sub issue, offered at 100.36.
https://investor.sempra.com/static-files/cf01567f-1d67-4e8e-96b6-69c15116341f
BTW, there continues to be a disconnect w the $1000 and $25 markets.
High fixed coupons are overbid for the $25 issues. See SOJF as an example. My guess is the Citi and Sempra issues would be well over par.
Low coupons are underbid on the $25 market. This includes fixed or fixed to reset/float. My assumption is that retail is more focused on current yield, not YTC or YTM. Sorry guys and gals, no offense! I am retail as well!
bought a starter position in the EE; hope it pays like EE bonds
that CITI one looks good but I think when I called they wanted 200k minimum. the new SS one is 213bps T5 and the one last year is 262T5, which makes me think two things – that’s not great, and the other more attractive ones will get called (??) if the market will price it at 213 now.
jbosch, who said $200k min? I haven’t come across that for the C prefs? Was it Fido? I stopped using them to purchase bonds not in inventory, v disappointed w their service.
BTW, C is out with ANOTHER new pref, just bot some at 100.3.
Series FF, 6.95%, reset 2.73% on 5 yr 17327CAV5
https://www.sec.gov/Archives/edgar/data/831001/000119312525021394/d926066dfwp.htm
I did. I’m not sure it’s 250k but it’s more than the 50k I entered, which drew a message it would not execute against the order I was trying to fill against and indeed did not. That was the case at Interactive with quite a few of the C
preferred offers.
$250 has been the min on a lot of bonds offers. There was a higher offer against which I executed that did not have the minimum
Hmm, I’ve bought 3 different C pref issues in 10k slugs that last couple weeks on IBKR, so my advice is to keep an eye out and you should be able to trade lower than $50k. Sometimes the offer has a min, but then I just wait until a lower offer is displayed. the $5M offers are often fake.. or they are the market maker who can decide whether to accept or not. I don’t know the exact details as this info is from a friend who trades instl FI. He tells me about all the games they play w the electronic networks to get the price in their favor.
There are 3 size issue constraints I’ve run into:
1) Min issue size displayed in the prospectus. For instance, the latest Cobank issue only permits a min of $200K (or was it $250k?), same w a recent TD AT1 issue.
2) Min offer size required by the seller – e.g. $100k or greater
3) broker restraints such as min $50k face value for bonds not in inventory traded via Fidelity bond desk
I missed this one. This is a preferred offering. CUSIP is 48128AAJ2.
FWP: https://www.sec.gov/Archives/edgar/data/19617/000119312525015003/d838508dfwp.htm
I am not sure if it is still available. Have Schwab bond desk looking. This never showed up on my Etrade screen for baby bonds or preferred stocks for sale.
SteveA, any success with this one?
yes see reader alert
Today, I bought the Enstar 5.5% (BBB-) at $97.028. Yield to 1/15/27 call is 7.12%. 5-year T reset plus 4.006% 1/15/42 maturity cusip # 27360AAB6
HY Bonds. Thus far I have done well with these bonds. FYI, I get great insight with Bloomberg Legal subscription. I read two weeks ago MPW was close to refinancing its short term debt. I immediately bought the bonds. Now they are being redeemed at par. I put those funds into the long term MPW bonds. The bonds are not collateralized as the new debt refinancing got first liens. I will be watching the MPW news. It now has a few years to improve without debt. I did the exact same on NFE and received par at a great profit. Took that money and put it into NFE long term and have a good gain on that. I have made a great return on Bloomberg Legal. subscription cost. If one intends to play in high yield, I find it a great resource.
TNTowanda, which brokerage are you using to buy HY bonds? My accounts are with Fidelity, and they have a limited number of issues available to trade in the HY market.
Any experience with other brokerages with a larger HY market available?
Coupon, I use IBKR for bonds only. I can leave limit orders at the price I want. Also see the bid/ask. I don’t think it is intuitive to use though. I also bought their stock and it has been a winner!
Schwab remains my “go to” as I love their customer service. My advisor knows I pulled some of my portfolio over to IBKR due to their superior bond service. Hopefully, the other brokerage firms will one day compete with IBKR on bonds.
I just started delving into bonds (usually I buy new treasuries). When i purchased a Corporate bond I had to pay the accrued interest. My question is when I import from Fidelity to Turbo Tax will it take care of the interest paid by me or will I have to hunt down where to enter the accrued interest into TT?
Lib,
I know a blogger who insults people over questions like this by saying,” If only there were a way to get the answer to that…..” and then he posts this:
https://letmegooglethat.com/
But, I’m not him.
I think it does add up accrued interest and puts it under a line item called “accrued interest paid” or some similar title. I’ve got plenty of individual bonds I’ve bought and I download Fidelity and Schwab, and I’ve never had to calculate the accrued.
Best, LT
I did google it but I could not get a definitive answer. I figured a lot of people here by bonds and pay accrued interest and use TT. I don’t think it was an unreasonable question.
I found out the hard way last year it doesn’t import to TurboTax automatically. It is a line item on the 1099 for accrued interest paid, but then you have to manually find the special situations checkbox in TurboTax to enter it. At least I did last year.
IIRC, the H&R Block software handled it correctly last year. There is less handholding with that software though so it can have a learning curve, at least that was my impression when I switched over to it years ago.
Curiously, Fidelity gave me free TurboTax last year so I tried it just to compare results and this go around it seemed less intuitive so maybe it is all in what you are used to using.
Didn’t mean to insult you; I was just pointing out something funny a blogger does.
I use TT to get an idea where I’ll end up…go through and download what I can…prob spend too much time on it…then give it to a CPA in Chicago who has been handling traders and trading firms for years because my trading is mark-to-market and allows me to deduct expenses and net losses, while also maintaining investment accounts treated like regular retail accounts.
Now that I reconsider, Irish is correct . There’s a line item for accrued interest paid but I didn’t realize it was a special situation.
I spend way too much time on TT
No problem.
LT, I am asking for my information only. How does mark to market help you? My pennies have mostly been made by buying distressed firms, then selling. Putting those gains into a great compounding mega stock. If I had to mark to market, I would be paying more taxes.
TNT,
MTM allows you to deduct net losses, if any. It does end up reclassifying gains as ordinary that might be treated as capital gains, but the point of MTM was for a trading account. It was a lot more important when I traded full -time and used lots of leverage.
I keep investment accounts like Fidelity and Schwab and use one account at IB as MTM. I set up another there for investments too.
I knew a trader who had a $3 mill gain on which he paid ordinary income tax one year. His trading firm changed accounting methods the next and reported stuff as short and long term cap gains. He proceeded to lose $3 million but could not carry that back against the gains. oops. No idea where he is today but he was mostly gambling long with the firm’s leverage
Mark-to-market mostly helps now with deducting expenses. I get a small home office deduction I could care less about.
So, I end up with my trading profits on a form 4797. and expenses on schedule C. The schedule C never has income on it . That’s actually the correct way. I’ve had plenty of CPA’s tell me that’s not correct, but they have never read the IRS instructions for MTM traders.
Same CPA for 20 years, handles trading firms and traders. The bill is high .