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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7/26/2024
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Two new fixed-to-float Sr. Notes from COF.
https://www.sec.gov/Archives/edgar/data/927628/000119312524183921/d824155dfwp.htm
https://www.sec.gov/Archives/edgar/data/927628/000119312524184824/d824155d424b2.htm#srom824155_4
“We will issue the notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. There is no sinking fund for the notes. The notes are a new issue of securities with no established trading market. The notes will not be listed on any securities exchange.”
Another note that is not listed on any exchange. Not sure, why a company does this. Does anybody have insight as to why?
that is just boilerplate where it means you have to buy from the bond desk. I would not read anything into it.
Am I reading these right? Neither one of these starts floating until 1 year prior to maturity? Why bother?
They had to add that to sell them, would be my guess.
Good a guess as any I suppose, J, but what buyer would tell the underwriter that I’m not buying unless you add a float rate for the last year before maturity? It just seems unusual..
Does anyone know if the $1000 Toronto Dominion 7.25% issue is subject to Canadian withholding tax or is it exempt? Thanks.
ticker? CUSIP?
Justin—CUSIP: 89116CKP1
oh boy.
These are the Canadian equivalent of COCO notes.
they pay regular interest, but they are NOT your standard bonds.
https://www.sec.gov/Archives/edgar/data/947263/000119312524167409/d775140dfwp.htm
Citi has a new 1,000 pref in the market, Series DD. I can’t access that but it’s caused the older Series CC pref to be down slightly in price, and offered at my brokerage – IBKR. The new pref is better because of the longer call, but I’ll take what I can get.
Series CC (offered at 100.19 on Interactive Brokers)
172967PK1
7.125% Fixed Rate Reset Noncumulative Preferred Stock, Series CC
resets to the five-year treasury rate plus 2.693% , quarterly in arrears,
beginning on November 15, 2029
https://www.citigroup.com/rcs/citigpa/storage/public/Series-CC-Final-Prospectus-Supplement.pdf
New Pref, Series DD
172967PM7
7.000% FIXED RATE RESET NONCUMULATIVE PREFERRED STOCK, SERIES DD, resets to the ten-year treasury rate as of the most recent reset dividend determination date plus 2.757% quarterly in arrears, beginning on November 15, 2034.
https://www.sec.gov/Archives/edgar/data/831001/000119312524183351/d819670dfwp.htm
All Citi prefs – https://www.citigroup.com/global/investors/fixed-income-investor-relations/capital-securities
The Series DD is trading ~102. Makes me feel better about my purchase of CC at ~100.
https://www.finra.org/finra-data/fixed-income/trade-history?symbol=C5856465&bondType=CA
I actually snagged some of the Citi Series DD today at $101 via Schwab.
I like the 10 year no call and it also resets to the 10 year, so some diversification from a duration perspective.
Good call Maine. I actually see a reason to own both. I have some of the CC, but looking to maybe get into this one too.
I own the CC. Thanks for pointing it out though. I picked up some more today. Not as nice as when I originally bought, but it gave me a place to put some dividends I had sitting in the account.
I need to move some more money over from Fidelity to IBKR.
Yeah, I have Fidelity, Schwab and Interactive brokers. Fidelity has been the worst lately. Min 50k, and most of the time they come back with no offer or a bad one. I need to set up an eTrade account.
Maine- is the C-DD a qualified distribution? As a preferred stock, I would think so. I bought some today (Thursday) at $101.04 Thanks.
Yes, I believe they are qualified. Both are traditional Preferreds.
Ref PRE-J looks like PFFF no longer holds. It’s in the Pink sheets. It fell to 14.51 b4 bids showed up
These junior subordinated bonds were issued somewhat recently by American Electric Power. I was curious if anyone here had an opinion on these. The 6.950% issue looks like it has 10 years call protection and then the rate resets off the 5 year. I think Dominion had similar issues recently. I wonder if these will be a new trend.
FWP
https://www.sec.gov/Archives/edgar/data/4904/000000490424000058/a06-2024aepfwp.htm
Prospectus
https://www.sec.gov/Archives/edgar/data/4904/000000490424000062/a06-2024aep424b2jsds.htm
ETR’s recent issue had a 10-year deferral also. I thought it may be what the holding companies are doing.
Any care to define capital stock? Also, note if they defer my read is that all the subsidiaries must also defer. That to me makes deferral a real last resort. Anybody else have opinions?
During a Series A Optional Deferral Period or a Series B Optional Deferral Period, we will not, and will cause our majority-owned subsidiaries not to, do any of the following (with limited exceptions):
•declare or pay any dividend or distribution on American Electric Power Company, Inc.’s capital stock;
•redeem, purchase, acquire or make a liquidation payment with respect to any of American Electric Power Company, Inc.’s capital stock;
•pay any principal, interest or premium on, or repay, purchase or redeem any of our debt securities that are equal or junior in right of payment with the Debentures; or
•make any payments with respect to any guarantee by us of debt securities if such guarantee is equal or junior in right of payment to the Debentures.
Found on the web. “The capital stock on the balance sheet is a broader term that includes all kinds of stocks issued to raise capital to finance the business operations. It will consist of both common and preferred shares.”
So is this saying that AEP and all its subsidiaries cannot pay dividends on their BB, preferred stock and common stock if they defer? This is how I read this.
I brought an AEP $1,000 issue for several reasons.
1- They have no recent history of offering retail preferreds or baby bonds, as a holding company including their subsidiaries.
2-Investment grade rated by both Moodys and SP.
3-It is a 5-year fixed rate reset which helps mitigate interest rate risks.
4-My strategy is to own 20 different utility HOLDING companies each about 1% of net worth. That is my risk mitigation for the environmental risk and the possibility of interest/dividends being deferred.
So I have a different risk mitigation than most posters on this board. I contemplated the ETR 1,000 bond issue but stayed with my Entergy retail holding. My preference is for RETAIL issues. I will also pass on the new 1,000 Wells Fargo issue.
Everybody is positioning for a rate cut, including myself, having recently purchased WRB-E and RNR-F. My positioning for 2025 and beyond is 10-year rates in the 3%-4% range going BACK up. Washinton DC spending and tax policy as the reason. I don’t see the 10-year yield dropping below 3% for every long (if at all). Our government not properly functioning will not last forever.
Here’s an oddball new senior AA- issue at Schwab
Local Initiatives Support Corporation (non-profit)
53961LBK4 5.2% 7/15/2027, call 7/15/2025
pays quarterly, first settlement 7/25/2024
When I invest in corporate issues, I look for some premium over CDs, TBILLs, or Agency issues. It’s hard to see a good risk reward for corporate bonds at little to no increase over the instruments that have been historically the safest.
I’m sure people will buy it. It has a great credit rating. At the interest rate offered, I’ll stick with them.
For me, it’s really about duration. The agency issues all (or most?) can be called within a year and then at short intervals after that. I will take a corporate bond at the same rate as a CD or other instrument if that rate is locked in longer, as in some bonds that are listed as continously callable can’t be called until several years from now or even a few months before the term. I ‘ll take that IG income guaranteed for X years over a different instrument with a much shorter time frame to a possible call.
I bought some as a gesture. They funded my program for a while. LISC is an interesting organization and invests in my city.