Bond Discussion

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.

1,439 thoughts on “Bond Discussion”

  1. Some of my long-dated (maturity and call), IG senior CUSIPs are trading below par with CYs in the high 6s and above. Reviewing.

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    1. I see bonds of financial companies NMFC, OCSL and CGBD that fit the description above. Then again, there are BBs that also fit the exact same description. You don’t need a CUSIP to get the same CY.

      For long-dated yield, why not buy PFFA? In an abnormal market, maybe it’s appropriate to make an abnormal choice.

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  2. Just double’d up by 10Yr TIPS position, 2.43 YTM, wow. At current inflation rate that’s well over the 10Yr Treasury……at the moment anyway.

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    2. pig-
      I fumble around trying to decide what risky dividend stocks to buy based on possible scenarios. My actual portfolio is about 2/3 $1000 IG CUSIPs with maturities and a YOC of ~6%. It’s nice to know you’re going to get your principal back.

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      1. Could you list a few of the best 1000 IG Cusips that you think are a good buy at the price they are trading at.

        I own several Citicorp 1,000 ones (a notch below IG) with some of them classified and pay out as bonds rather than QDI dividends and wish to diversify.

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        1. CoBank 6.45% until 10/1/27, then 5 year T plus 3.487% No maturity date, priced around par, resets every 5 years, Cusip # 19075QAE2, BBB+, qualified distribution

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          1. Thank you W Islander. Does seem like a good bond and issuer.

            IBKR says 19075QAE2 is minimum $250k buy. A bit more than what I had in mind for a single company / bond.

            Any other good ideas?

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            1. mSquare.. cobank has annother issue that has been offered around 98.5, and not subject to the 250k min, at least not on IBKR.

              19075QAC6
              I don’t have the exact details in front of me, here is an estimate based on memory.

              6.25% coupon, it floats in 2026 at LIBOR ~4.6% SOFR adj… meaning it should be called and YTC is close to 7% at 98.5

              Many, many, other safe-ish type names now, all w varying characteristics. Here are a few $25 issues, all based on today’s pricing.

              GL-D
              RNR-F/G
              SREA
              ATCOL
              FGN

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              1. Thanks, Maine – Found it – https://www.cobank.com/documents/7714906/127131833/CoBank-2024-Annual-Report.pdf/31c5b775-d687-17ba-4b26-19d7599b084b?t=1740785879013 p 119 –

                preferred stock at SOFR + 4.66 on 10/1/26 – pays semi-annually until coversion… interestingly, it has the highest PLUS number of all outstanding preferred floaters or resets, increasing likelihood of call…. also looking thru, CoBank seems to have a more active history of calling issues than I realized…

                Fido show 30k being sold by customer today at 97.85 but no signs yet of these being reoffered.

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    1. RT,
      I’m noticing AAA taxable munis trading as high as 6.35% today when I search the universe of bonds. I don’t think FHLB is safer than a bond where the collateral has a HUD / FNMA guarantee. Then there’s the fact FHLB stuff is callable, while the bond has a much less likely call.
      You’re benefiting on the FHLB yield from having sold a rate option which is factored into the yield. The muni has the same thing but in my experience it’as much less likely to be called.
      RT, nothing wrong at all with what youve done; I’m just comparing to alternatives and saying it’s not that surprising it was not called.
      I see a 20 year treasury strip (noncall) at 5.18%. Just a few comparisons that I look at when deciding what to buy.

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      1. lt,

        Got link to that 6.35% muni? Not sure of the buy/sell spread though. I’m retired, so my marginal rate is low and not sure if I’ll benefit from muni. Also wondering how that muni has AAA rating while US debt is AA+ assuming Fitch and S&P ratings are referenced to.

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      2. LT, You are the best on finding these munis! Are you scanning Fidelity, IBKR? I have a call in the morning to discuss muni bonds and I have saved your post to share. Anytime you can link a CUSIP, I appreciate it!

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        1. I’m sorry, I was traveling most of Friday and didn’t see this . I did a scan of taxable munis using IBKR’s scanner. I think there are still some in that range AA to AAA , but I’d rather have 30 year tips +2.70.
          In answer to the previous comment before yours , I believe some of the housing authorities are natural AAA’s on their own, and they can actually get a AAA holding AA+ securities , in the same way I have an annuity with an insurer that has a BBB+ credit rating holding a portfolio of $50 bill corp debt average BBB- rating.That insurer , Sammons Financial, gets an A+ IFSR (insurer financial strength) from Best.

          As a third comment, I’d been saying corporate debt was too cheap prior to the recent widening because the insurers offering me 5.45-6.75% 5 annuities had 5 year parent company corp debt at lower yields than their annuities. This is no longer the case

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          1. lt probably knows this, but in case other’s don’t, one important thing to know about TIPS is that the taxes are not deferred. In addition to paying tax on the small amount of semi-annual interest you receive, you are also required to pay tax annually on inflation adjustment that you will only receive at maturity. As a result, you generally don’t want to hold them in a taxable account.

            Here’s an article about the details: https://tipswatch.com/2021/04/02/frightened-by-a-phantom-tips-are-fine-in-a-taxable-account-until/

            And if you are trying to learn more about TIPS, that site is probably the best resource around.

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    1. I bought some that traded 10$ higher yesterday. weird illiquid markets. There are 5s at par and I got a 4 for 86

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