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.

272 thoughts on “Bond Discussion”

  1. *From Bond Buyer”

    Bloomberg Finance LP will pay $5 million to settle charges from the Securities and Exchange Commission that the firm’s pricing service misled investors about its fixed-income bond valuations, the regulator announced Monday.

    Bloomberg agreed to the cease-and-desist order without admitting or denying the findings, which cover several fixed-income asset classes, including municipal bonds, but do not point to any specific securities.

    From 2016 to October 2022, BVAL failed to tell investors that a small number of “thinly-traded fixed income securities” were valued based on a single data point, such as a broker’s quote, the SEC said.

    BVAL has marketed its pricing services as being based on “sophisticated, proprietary, algorithmic methodologies” backed by hundreds of market experts, but in fact the valuations were sometimes based on just the single quote, according to the regulator.

    “Bloomberg has assumed a critical role as a pricing service to participants in the fixed-income markets and it is incumbent on Bloomberg, as well as on other pricing services, to provide accurate information to their customers about their valuation processes,” said Osman Nawaz, the SEC’s chief of the Division of Enforcement’s Complex Financial Instruments Unit, in a statement. “This matter underscores that we will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors.”

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  2. TD Am new issue:
    callable fixed rate note from TD Bank – 13 months, 5.1% ; matures on 2/29/2024
    Pays monthly, rated Aa2/A-1+
    Callable monthly starting 10/31/2023

    Comparing to other offerings: lower rated paying less and/or longer terms.

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          2. I’ve owned RBC bonds for years in my NON IRA account and they never withheld or charged any Canadian taxes. My account is at Schwab.

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  3. Merely passing this along. I always find short term binary bets interesting. This is a convertible bond that will never actually convert because strike is so far OTM. A near 13% YTM that redeems in a year.

    MFA Financial
    CUSIP: 55272XAA0
    Maturity Date: 6/15/2024

    This is a junk bond that has been trading 9-10% under par.

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  4. So far so good on GEO 10.5% bond issued 8/2022. Dividend was paid and price slightly up.

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    1. @Nomadicmist mentioned GEO at the end of 2019. I don’t think he is around anymore. I liked his posts. I bought two of their bonds after due diligence and have made over 10%/yr since. Not risk free and not expecting growth but enough money to keep paying.

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  5. Oh Boy! I had an order fill this AM while I was having coffee. I said I was going to try to share a bit more real discoveries as they happen:
    At the 2.7% coupon I’ll collect about $100 semi-annually until maturity Oct 2028. I have had to HOPE (gods, I hate that word, a sure sign of neurosis!) that the bond MAY be worth something to someone before 2028 IF rates swoon at some point and the characteristics of this bond become a more attractive commodity OR they keep paying and the maturity date begins to merge with par, or they pay at maturity. Otherwise, What could go wrong?! Now I am managing for capital gain…like I said ‘HOPE’.
    Kyndryl is the renamed part of IBM which maintains contracts with the Big Blues. Legacy business relationships. BBB- at last rating.
    12/27/2022 09:46:37 12/29/2022 75.801 7.999

    Two things to share that I have learned:
    – In the United States, ISINs are extended versions of 9-character CUSIP numbers and are formed by adding a two-digit country code at the beginning of the CUSIP number and appending a check digit at its end. IBKR uses these symbols but to go to FINRA this is a key. The middle is the CUSIP.
    – At IBKR I can place and leave open orders which DOES respect my personal time more than wondering whether some mysterious repricing has occurred.
    Yours in hope and mystery, Joel A

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    1. Joel, Ive had an IBKR account for several years, mostly for bonds bc you can put in open & limit orders.

      But I have a handful of complaints with IBKR. My portfolio value is sometimes off by hundreds to thousands of dollars after hours which caused some heart attacks when I first got the account.
      2nd) I had some company go BK years ago, sold the bonds but the ticker and loss have never went away
      3rd) stock name changes or mergers consistentenly jack up average paid price. I bought a preferred at $22. It had a name change and now says I paid $27.xx per share.
      4th) I swear it can’t keep track of paid price for stocks, I’ll sell a half lot, and then the remaining lot says I paid $2-3, etc more per share than I did for the half I didn’t sell.

      Have you had any problems like this?

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      1. Smitty”
        Q2 and 3) You can request on a ‘ticket’ to have it removed. It may still have some sort of proceedings where they may want to find you for your settlement of a nickel.
        Q4) Get used to going in and choosing a tax lot for any trade, unless they are all bot at the same time. They DO have a good tracking system. I have had good luck using what thet call “Portal” which is the Windows based program to do all this admin stuff. You CAN access this at the top of Portal by going to drop down menus at top and clicking over to Account Management and Account Window, but it is only for viewing, otherwise log directly on to Portal. Portal is EASIER to roll options and do currency transactions
        I like the black screen TWS Trader Work Station for Watchlists, Accounts Views, Orders, Charts, Making decisions, etc.
        I just play/click around time to learn the new format. It took me about a full 40 hour week, over a year, including phone calls and being insistent on them showing me.
        The benefits suit me, but I do have two accounts at Fido and one at TD and pull them all up depending on what I am doing. We are LUCKY to have all this computing power and tabbed views!
        Onward thru the Fog!

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      1. Greg, Here’s the path to find and research by comp. name:
        FIRNA(>Market Data>(book mar this page)> Bonds>Search by Name (kyndryl)>Agree>click on Maturity to sort by dates or scroll thru pages at bottom>go to 2028>opens to data sheet on this bond. Notice the click over from Price to Yield, use the date, also use History to see recent trades.
        Look over all of this info carefully…really… look it all over carefully.
        CUSIP: 50155QAK6
        Happy hunting! JA

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  6. This morning picked up some Golub Capital BDC bonds, 2.6% coupon maturing 2026 with a YTM of 7.1% at $85.30. Golub seems to be one of the more conservative BDCs, and these bonds are rated BBB-.

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    1. Gum, These coupons are the dregs! They will be responsible for loss of income stream and compounding opportunity.; by the event of the eventual payouts at maturity will be in inflated dollars and fiat paper has achieved it’s insidious coercion.
      If Powell and the Feds are for real rates will ramp up steadily for a long time and not blink. Will they? As Alan Longbon states in his very coherent observations, (paraphrasing), “ordinary citizens all over the globe will be thrown under the bus by the hand of central bankers…”
      I’ve shopped hundreds of issues over the last thirty days, I have open ask on four issues and will just wait and see. Even lower grade issues are being bid on with the old engram of future rates cratering with some recession, read: Greenspan Savior Put. I suppose I have to wait for a panic, that seems to be all that brings a fairer opp.
      Good Luck and Skills in 2023!

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  7. Got some SJI bonds per Grid’s writeup. Is he a registered fiduciary? Just kidding. DYODD, I couldn’t score his price. Mine was $78.95.
    https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C969426&symbol=SJI5156685
    I don’t see my trade on FINRA – that wasn’t my 40K order flipping around.

    Nervous time in the market, which I hope is creating opps. That’s my bet anyway. I’ll get more MFA-B if we continue the crash next week.

    Happy holidays to all on III. Best site on the web. Apolitical and focused on the one common goal that transcends politics: $$.
    Special thanks to Tim for hosting.
    Almost feel like there should be a reunion someday.

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      1. Hi Grid,

        Do you have any financial date on the Infrastructure Investment Fund that’s buying them. From what little I can find, this appears to be their third deal.

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  8. I had purchased some SLM preferred shares. But since I was taking on the the risks associated with a non IG issue, I decided to move up the chain a bit. Sold the preferreds and picked up some SLM bonds at a bit under $76.
    Coupon: 5.85
    Current yield 6.92
    YTM: about 10.75
    Matures: 9/15/29
    Rated: B+
    SLM has a boat load of bond options- if anyone is interested.

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  9. Recent issue from Goldman Sachs on Schwab:
    BBB+/A2, 6.0%, Matures 12/14/2027, $100.00, Callable, 38150AQK4
    Sorry if this is a repeat, but I just saw it today.
    No doubt they will call it if (when) rates drop.

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      1. Wait what?! ETSY5056972 at 0.125% coupon, last price 174.352 and -13.945% yield? Who on earth is paying that?

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        1. I saw some issues that were 3 yrs past their maturity date that still show up on their screener. Why would that happen? I think it was a John Hancock bond.

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        2. Just for kicks, I tried to figure out what this ETSY bond is all about because if you look deeper into its recent trading, trades in this 170+ range happen frequently, so I figured this is not a laughable outlier but something that trades at this price for a reason…. Turns out, there is….. Using Fidelity search and the CUSIP 29786AAJ5 that FINRA provides, this is an issue dated 10/1/20 and it is convertible… It doesn’t trade on a YTM basis (obviously) but on the convertibility aspect…. See https://www.sec.gov/Archives/edgar/data/1370637/000119312520228421/d907553dex992.htm

          NOTE – Although the CUSIP matches up to this issue, the stated maturity date does not. I don’t know why the 8k says 10/1/27 but the Fidelity and FINRA descriptions say 10/1/26. I would suspect there may have been a final change to 2026 that may have occurred after this 8k dated 8/24/20 and before 10/1/20 but I didn’t notice it..

          The notes will be general unsecured obligations of Etsy and will accrue interest payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021, at a rate of 0.125% per year. The notes will mature on September 1, 2027, unless earlier converted or repurchased. The initial conversion rate will be 5.0007 shares of Etsy’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $199.97 per share). The initial conversion price of the notes represents a premium of approximately 52.5% over the last reported sale price of Etsy’s common stock on August 19, 2020. The notes will be convertible into cash, shares of Etsy’s common stock or a combination of cash and shares of Etsy’s common stock, at Etsy’s election.

          My work here is done…. ha

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          1. Odd. that bond comes out of nowhere. I thought it was the non-private placement, but it doesn’t appear to be.
            but here is what the issuer data says.

            there are 5 CUSIP’s in two different bond series.
            2019 and 2020
            ones ending in
            AF3
            AH9
            AJ5
            are 2019 bonds that all mature 10/1/2026
            indenture is here
            https://www.sec.gov/Archives/edgar/data/1370637/000119312519252365/d672648dex41.htm
            2020 bonds end in:
            AK2
            AL0

            https://www.sec.gov/ix?doc=/Archives/edgar/data/0001370637/000137063720000219/etsy-20200930.htm

            For the 0.125% Convertible Senior Notes due 2027 (the “2020 Notes”), the Company used the treasury stock method for the three and nine months ended September 30, 2020 when calculating earnings per share, since the Company expects to settle the outstanding principal in cash. For the 0.125% Convertible Senior Notes due 2026 (the “2019 Notes”), the Company used the if-converted method for the three and nine months ended September 30, 2020 and used the treasury stock method for the three and nine months ended September 30, 2019 when calculating earnings per share. For the 0% Convertible Senior Notes due 2023 (the “2018 Notes”), the Company used the if-converted method for the three and nine months ended September 30, 2020 and 2019 when calculating earnings per share.

            here is the indenture for the 2020 bonds
            https://www.sec.gov/Archives/edgar/data/1370637/000119312520228421/d907553dex41.htm

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            1. Good sleuthing, Justin!! You cleared up the confusion I noticed in my sleuth but didn’t clear up by doing further sleuthing…. nicely done…

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              1. I see what went wrong…. Rarely do I see Fidelity make mistakes in their descriptions on bonds but in this case, they have the wrong dated date for the AJ5 issue in their description…. They have dated date of 10/1/20 for AJ5 and I used that dated date to track down the issuance info on EDGAR. So instead of looking in 2019 for the .125% issue due 10/1/26 which was the the actual issuing year, I found the info on the 2027 issue. Both are .125% coupons and both were $650 mil issues…

                All this just for the sleuthing exercise….. I have no interest in the bond at all

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                1. EVERYBODY has the dated date for AJ5 at 10/01, which is unsurprising since most of the industry relies on one vendor, BUT I can’t figure out why that ID was created a year after the other 2. Based on it showing prices, it means that that one is the non-institutional one, but that one HAS to have a prospectus issued for it, and not a confidential offering circular.

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  10. Been yacking about it for some time, so I finally toed in a small 12 share purchase of the 5.03% 2031 South Jersey subordinate at 8.67% today. Will wait until merger to see if it spikes higher for one last buy. The corp structure is presented as SJI remaining an independent subsidiary within the corporate structure with its two subsidiaries remaining IG. So its not a PSB fiasco set up. Of course state regulators arent cool with their utes being levered out of IG status, so that was pretty much a given in the negotiations.
    People who have discussed this issue with me before probably dont know the genesis of this issue. Its the old SJIU equity unit issue that was remarketed at maturity in 2021 to a 2031 maturing subordinated debt. The terms are in the SJIU prospectus under the below section.
    Description of the Remarketable Junior Subordinated Notes
    https://www.sec.gov/Archives/edgar/data/91928/000114036118019141/s002194x4_424b5.htm#tDOR

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    1. Funny Grid, I dragged my feet until today and bought 15 of them. I don’t care if they go over to 144a the dark side. The whole point was to get the income and start a bond ladder. I also bought 2 issues of below investment grade Global Partners today. 2027 and 2029 dated issues Lower payout then the preferred, but I’ll trade that to be higher up in the stack. Must be a lot of interest in them as the price changed as I was looking at them. Kinda sucked I had to go through the bond desk at T Rowe and took 30 min. to finish the transaction and higher cost than Fidelity.
      I made a point with the buyer I was watching the Fidelity screen after one price he quoted seemed a little high. He refreshed his screen and it improved slightly, but prices were moving up.

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      1. Yes, Charles it bounced around today on Vanguard. On TD it stayed a rip off 8.42% or so. Vanguard had it early at 8.75% then I fiddled around and it was then 8.4% ish range before moving back to 8.67% so I bought.
        I dont know what your yield requirement is but I also bought some more of the 5.75% 2033 PECO Energy (Philadelphia area regulated utility) at a 6.14% YTM. Issued in 2003 and is noncallable. I have a lot of this one and their 2028 debt issue. I also have KTH which is also the PECO2028 debt issue inside a trust wrapper.

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        1. Lot has changed in the last month. As Tim said preferreds are up an average 5% and the bond market is up too. Looks like you have to move farther out in maturity to get a slightly better yield which I am not sure it’s worth it.
          Couldn’t resist ribbing my wife that her COST stock was down 35.00 a share today if she still had it. Instead, her account was slightly up today.

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          1. Yes, I rung the bell on some of a 2039 ute I own today. Bought at 6.7% little over a month ago and sold under 5.7%. May sell more. 5.7% for 17 year duration doesnt give me warm fuzzies. Im not reaching out credit quality though with bonds. What I am willing to do there is bought on the exchange not bond desk, for liquidity.

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            1. Couple things Grid, Not knowing where the market or economy is going.
              The PECO has a nice grouping of A and the BBB- The duration on most is out a ways, which doesn’t bother me but I would like a mix of shorter and longer term. The rate bothers me though. Knowing rates are still going up and long term inflation is still going to be with us, I can’t see why I shouldn’t be able to get a mix of 6% IG and 8% on non IG.
              I know ute’s are your playground and I would love to get back to flipping to add a little money, but right now I am focusing on getting that core position (cushion ) like you have.
              I have my wife’s account up to 6,000.00 income a qtr. but its not consistent per month. I still am working on at least doubling that.
              Her account losses for the year are down from 23% to 19% with the increasing value of the account in the last 2 months. See what I can do with one month left.
              I worry the market is moving higher and I want to lock in more investments but I worry about getting too rushed and having a event like what happened in March 2020.
              Glad in a way I have that pesky job. Slows me down and keeps me from spending too much time on the market

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              1. Admitting nobody knows nuttin including me, I try to not let “perfect be the enemy of good”. Look at the chart of the 2033 PECO issue below. You will see its pretty much around the 20 year lows (outside 08-09 credit blowouts of everything) with a shorter duration to boot. 6% pissent plus is a good core base for a ring fenced subsidiary ute debt that will pay.
                https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C166697&symbol=EXC.IZ
                But I am buying this while holding 11% plus issues going forward in several preferreds, and a couple 9% plusers too. And I also yield grabbed on the SJI 2031 8% plus debt also. ….I have the 7.38% 2028 PECO bond too, so yes, I like PECO debt. In fact add the 2028 and 2033 PECO debt in with KTH I own (which is also in essence the 2028 debt in a wrapper) and its by far my personal biggest hold. I take the higher yielding subordinate debt that Moodys respects so much to call it A3. So Im taking the yield grab as the risk is minimal being a T&D, ring fenced, and IG requirements of company.
                But as you correctly noted I have a ute bias. I also own debt from DPL, IPALCO, Pugent, PPL, Empire District Electric, and Arizona Public Service too.

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                1. Grid, Perfect time for a Paternity, Co-signer or Marriage proposal to show up!!
                  That’s supposed to be a joke!

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              2. Added thought…Charles you have to be mindful of the fact that increased rate hikes do not necessarily correlate to increased yield on the long end. In fact its been working the opposite recently. One has to be mindful of the fact people could start chasing the higher yielding short end so much, they have nothing to roll into when that rolls over as the long end long ago may have left the party.
                This was the trap most people fell into in the early 1980s. So its hard to know, that is why I locked in some longer duration and am chasing the short end with the high yielding live floaters, knowing I will have to exit the party there at some point. In fact as painful as it was I actually bought 500 shares of SOCGM when it dipped under $26 and a rare seller was out, and also a couple hundred shares of CTA-B under $60 as that is pretty much near its 20 year lows too, despite the pitiful 5.7% QDI yield.

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        2. Grid and Chas: Here are the details from my trade on IBKR. Thought it may be a comparative view. Notice time was 7:46 AM in pre-market.
          JA Tax US BOT $10K SJI CORP 5.02 Apr15’31 838518AA6 78.2500 USD SMART NOV 28 07:46:12 8.71393 8.73378 10.00
          $10 was the commission, $1/bond.
          There has been real value in following a larger conversation here and then doing my own research. SJI was a good example. Looks like this Holiday Season is accelerating for us, but I hope to have some time to share some ideas after NYears that may have some value to others too. Here’s a bond idea that others can look up on FINRA, Suburban Propane Partners with a big front end divy on the partnership (common) units. Good coverage and basically inflation impervious.

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          1. Went back to look:
            SPH propane 864486AK1 03-27 BB- lg com div 5.87/6.83**
            Here’s the detail off of my own primitive doc sheet, yes, it is just a list to refer to. Have not bot, out of cash!!
            I’ve been focusing on bonds, approx five year duration, that can possibly jump in price if the prayed-for short term interest rates drop at some point before now and end 2024. If not…hold to mat. Win-win. These instruments will be short(er) duration bonds by then making them sensitive and more valuable to buyers. I’ve seen about half of the bonds like this that I have bot over the last 3 months already pop and it is easy to shave and prune down the quantities.
            Obviously, SJI is looking like a hold until mat/death ala the SEC gods.

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      2. Set IBKR limit order for SJIU. Hope to buy in IRA. Rollover to Roth when delisted. Set the limit order low enough it will be worth the darkness. Now just to stay alive for maturity.

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  11. Just a shout out regarding the discussions about BONDS, those that are bought as bonds and can be looked up on FINRA or founds as new issues:
    Seems we are all mixing up the fixed income categories and stuff is everywhere. I think it would be a good idea for all of us to put bond info here??
    Just a suggestion. I will post some actual ideas too.
    THX JA

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  12. I’m not a buyer of anything here. Just watching the behaviors of buyers and the 10% jump in bond prices, along with declining rates, over the last two weeks. The narrative of a Fed pivot to lower rates is being slurped down by those well trained to whoop it up during these wonderful, god-ordained interest rate declines. Buying seems to be across the curve where there is no reward. The actual print rates are marking to the theory, but moving with the herd is speculation. It may happen, but hold to maturity can be a long dark night of poor sleep. The bond markets turn on a dime. Is everyone a genius?
    Edging in during fear is my style. I wait, sell off the weakest into this sort of minor strength and build up some cash. I think this includes getting rid of 50% of equity on their strengths too.
    Is it too late? We’ll see how the other side, selling, emerges over the next four months… if it does.

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  13. Rates on short duration investment grade corporates are moving up, per Fido:

    New offerings:

    Citigroup Global, 10/31/2024
    Rated A
    Yield 5.6%
    CUSIP 17330YBC3

    Goldman Sachs, 10/31/2025
    Rated BBB+/A2 Stable
    Yield 6.0%
    CUSIP 38150APT6

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    1. The longer bonds are WAAAAYY too low. The curve is crammed with the Fed playing both ends of the barbell and all the money stuffed into the near term creating another bubble there. Free market my asterisk. The question seems to be who will buy our bonds? WE WILL…IF they would quit being a control buyer of ?last? resort. What would YOU take a 10, 15 or 30 year US Treasury at? 7? 9? 10% or more? The bond market needs to normalize and rates could be a lot higher over the next few years as foreign buyers say “Stuff it!” Let Americans be free to choose. Could THIS scenario happen? I’m tired of the fear in the windshield and driving by looking in the rear view mirror.

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      1. Isn’t it a true statement that foreign buyers do not have a better choice currently for the yield versus the risk? Seems like US bonds are one of the best deals out there right now when comparing to others. Swiss? German? Japan? England? China? If you want that kind of safety I cannot imagine there are many other better choices…

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        1. There was an article in the WSJ yesterday about the Japanese backing away from the US Treasury market.

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  14. I wanted to share this recommendation from Downtown Investment Advisory over on Seeking Alpha. Many of us know Salo A. He has forgotten more about Bonds / Fixed Income than most of us ever knew. I bought 25 of these today in place of a Preferred issue I was considering.

    Kinder Morgan (KMI), 7.0% of 10/15/2028, offered at about 102.8, yield-to-maturity of 6.4% (CUSIP 880451AV1, rated BBB/Baa2; note that these bonds may be listed under the original issuing entity which was later acquired by Kinder Morgan, called Tennessee Gas Pipeline Co.). Kinder Morgan is one of the largest natural gas pipeline companies with a $38 billion market cap.

    KMI has essentially zero chance of BK by 10/15/28. I don’t mind paying a slight premium to get the 7% cash flow with a 6.4% YTM / Worst.

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    1. Gary – Do you know EP-C? El Paso Energy Capital Trust I, 4 3/4% Trust Convertible Preferred Securities due 3/31/28. It’s guaranteed by Kinder as well but is one tick lower at Baa3/BB+… $50 par last trade @ 44.60. You won’t get your current yield of 6.80% but instead of 6.40% YTM on your Kinder 2028 bond (shown as Tennessee Gas Pipe Line Co at Fidelity as you thought possible}, you get a 7.23% YTM… Same essentially zero chance of BK by 3/31/2028.

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    2. I’m a bonds newbie — total investing acolyte till i came across Tim’s yield hunter postings some years ago. i am intrigued by what seem to be super attractive mid-term (3-5 year) bond yields. for instance – and i forget how i came across this – couple of BBB- bonds from REIT Office Properties due ’26 and ’27 are selling at c 70-73, yielding roughly 11-12%. Commons are at historic lows – is this a firm heading for BK, or a golden opportunity to lock in returns above T-bills and I-bonds while global economies and rates return to some level of stability? thanks

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      1. If my memory serves me right and take some of this with a grain of salt… I think OPI is like a subsidiary of The RMR Group. The ticker for OPI was GOV, and they screwed a lot of ppl back in 2017/2018, I think I held like 25-100 shares or something, and The RMR Group did some crap deal to suck more money out of GOV, so I woke up and the damn thing was down like 25-40% b/c there was going to be a tender and conversion of shares that favored RMR Group. I honestly, can’t remember the details, but I remember being a bit pissed about it. The RMR Group bonds are also yielding higher than the average bond of similar rating. If it’s too good to be true, well, it probably is, but you could always roll the dice.

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        1. Thanks Smitty, I’ll look elsewhere but I will keep looking and figure it out. Just think Joel is right when he says medium duration bonds are too low.

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  15. The bond market is coming back to life? A year ago, yields are those we would have sought in much lower tranches and credit rating. I try to set myself up for win-win-win scenarios:
    Prices are below par. Whoopie! The coupons while waiting for maturity are still meager and coupons usually trickle in semi-annually. Eventually you WILL get paid, but at maturity. BUT the trade off is worth it for the big portfolio upgrade.
    What the solution for income?:
    1)There are many subtleties, complexities, in managing a pool of bonds and also balancing between Tax, Roth and IRA. We will be planning for strategically taking cash for retirement cash flow (spending) from ALL these accounts as prudent, not just the Taxable anymore. There are advantages.
    Seems the 3-5 year is the sweet spot, BUT moving out just one or two more years, or quarters, MAY set one up for seeing them come into their four or five year range AND if interest rates are down, they could have a nice cap gain potential. This would require active management. The longer the term, even a year or two, the more leveraged the gain. Will good bonds go back to triple digit prices? Good bet, BUT you are not required to sell, just hold it you want to, ride to maturity and sleep on the pillow of high IG. If you take the capital gain, the tax rate may be lower, not adding to taxable income, especially if small stipends are pulled from IRA and added back into ordinary income as well. One may reduce their eventual RMDs too.
    2) Idea: Use the ideas above and just let it work/breathe. Prudently use a HELOC line of credit (lowest borrowing rates) to smooth the flow, paying it back as payments are received.
    Managing the terms are important here. We are seeing that doing this type of slow movement is appropriate for us at our age and amount of gross capital (all accounts combined)
    We are finding some good values as is the rest of the Market. This will slowly, magnetically slurp funds away from equities soon.
    This is a large view of the life-stadium, from a high seat, in the top row. I don’t have a second chance to wait it out.

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  16. 3.25 years, 7.5% on a Credit Suisse?:

    4.400 01-29-2026 Fixed CREDIT SUISSE AG LONDON BRANCH
    Callable, Next Call/MATURITY 01-29-2024 @ 100.000
    CUSIP: 22553QCD7
    A2/—
    Financial 90.753 7.594 7.594 50/10 Buy
    91.110 7.464 7.464 30/10
    92.077 7.114 7.114 40/5

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    1. Also: Anybody else have issues with finra site? Do I need to add to “Always allow cookies” or “Trusted Site” list? Work best on a particular browser?
      Most of the bond tools aren’t working for me.
      Thanks out there!

      Reply

    2. At peak of their CDS trading over 500, the 2 year bonds were yielding 8%+. I would take the 2026 MAIN bonds @7.2% yield all day over those CS ones, This is a classic case where a mere 100 or 200BPS bump in yield totally not worth the risk.

      Reply

  17. Grid recommended Ipalco/AES utility bond CUSIP 462613AM2, 3.7% coupon, matures 9/1/24, is showing close to the highest ask yield 5.76% of all utilities rated Baa3 or higher, maturing by 12/24. It is currently showing 95.061/96.305. About 414 aka $414k bonds showing close to that ask. The price has been going down/yield up since this was first mentioned.

    Its yield to maturity is currently HIGHER than some of the PCG bonds that we consider higher risk. Have not had any recent raging forest fires in Indiana to my knowledge, in contrast to PCG’s service area in California.

    Reply

    1. Tex, I wish I had waited, lol. But with bonds I will get my signed on agreement at purchase and will live with it. The real risk here is “concentration risk”. Being its only one small geographic area utility with the holding company solely dependent on IPL to fund its debt. And IPALCOs leverage is a bit higher, thus its barely IG status which has basically been that way for years.
      On a useless side note, I last week I bought the 2028 PECO subordinated debt off bond market. I have never seen them trade on my two brokerages before and I have watched for several years. Its the bond that is mostly held inside KTH. There were only 10 available so I bought them. Nothing special though buying close to 6% YTM.

      Reply

      1. Taking any PG&E short term? Maybe one which matures before the next fire season? The 2028/7.25 YTM look like bad history.

        Reply

        1. Nope, Joel, they have been very good to me, and luck has helped too. Not touching it until they are cleared from this current investigation.

          Reply

  18. Prospect Capital Man, 01/22/2026
    Rated BBB-/Baa3 Stable
    Yield 7.8%
    CUSIP 74348TAU6
    ————————————
    ArcelorMittal, 03/11/2026
    Rated BBB-/Baa3 Stable
    Yield 5.4%
    CUSIP 03938LBA1
    ———————————–
    Main Street Capital, 05/01/2024
    Rated BBB-/NR
    Yield 5.5%
    CUSIP 56035LAD6

    Reply

  23. Tex- I completely concur with you on PCG. I looked at Vistra awhile back and have a Fitch link I can share for anyone who wants a little DD. I do believe the big driving factor of that outlier yield relative to other bonds with same credit rating has been sky rocketing price of natural gas. This is a big negative for this kind of structure as it drives up collateral for hedges etc.

    Are you nibbling on any other junkier investment grade 2-5 year floats? I was debating on some of those Blackrock private issues. I’m going to be doing some new scans shortly.

    https://www.fitchratings.com/research/corporate-finance/fitch-rates-vistra-operations-senior-secured-notes-bbb-rr1-10-05-2022

    Reply

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