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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12/22/2024
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FYI Bonds New Issue
BANK MONTREAL
5.25000% 02/10/2026
CUSIP 06374VCS3
***ALERT***
I just received a ping on a callable new issue JPMorgan 4 year corp with 5% coupon being offered at par next week. I will try to get a CUSIP for you.
*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.”
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.
would you have a customer number?
can’t find it at td ameritrade
thanks
It’s under new issues on the fixed income page. Still there this morning
Bob, the CUSIP is 89114YMM0
Does buying a bond from a Canadian bank like TD or Royal Canada have any tax implications?
https://apps.irs.gov/app/vita/content/globalmedia/4491_foreign_tax_credit.pdf
https://www.irs.gov/instructions/i1116
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.
Another TD Bank Note at TD Am – same terms as in my prior post:
13-month 5.1% note; matures on 3/17/2024; pays monthly
Rated Aa2/A-1+ (Moody’s/S&P) whereas longer term TD Bank notes are A1/A. Higher rating perhaps because the 13-month Notes are not “bail-inable” debt securities (see bottom of page 3 of Prospectus) whereas the longer term notes are (i.e., subject to common shares conversion).
TD Bank is No. 20 in World Safest Banks; 2nd in NA:
https://www.gfmag.com/magazine/november-2022/worlds-safest-banks-2022
Please do your own deep due diligence (borrowing term from AB)
Does the fact it’s Canadian matter for taxes?
A few years back I had a couple of TD Bank Notes and it did not.
Yet another TD Bank note (new offering) at TD Am:
5.4% ; pays monthly; 13 month: matures on 3/31/2024
rated Aa2/A-1+
Callable monthly starting 11/30/2023
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.
So far so good on GEO 10.5% bond issued 8/2022. Dividend was paid and price slightly up.
@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.
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
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?
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!
Joel,
What’s the CUSIP on the bond you purchased?
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
Joel, I talked to a rep from Fido yesterday and that is one thing they don’t allow there is open orders for bonds. Also asked about expired orders so I could do a quick look up and copy and paste he said no. Said the reason they don’t allow open orders is they would pile up with too many in the system.
Another way I found to use the FINRA website is under search only type in the first few letters or part of a name of the company in issuer box. Might give you more pages to go through though. Or another way is once you find the Cusip is note all the CUSIP’s start with the same 3 letters. So you don’t have to have the full CUSIP # to look up
Just type in say KYN in the CUSIP box and all the bonds that start with that come up. May not work for some bonds of companies that were bought out and not assigned new CUSIP under new company.
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-.
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!
Joel, on conspiracy theories. Ever notice on bonds you click on some for the same company and they pop up restricted SEC rule 144a ? and yet others are not.
Jut seems to me its only the higher yield bond maybe higher rated too.
They restrict these to the pro’s, yet others for the same company with lower yields and lower ratings are just available to us retail traders.
Charles, Sometimes a company will sell a public bond offering that will trade, and other times they have it private placed. So they will never be publicly traded. Its just a small glimpse we notice as a lot of debt and preferreds are private placed.
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.
Rick, I guess we will know by 2031 if it was a mistake or not, ha.
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.
My bad. Apparently they have about 20 portfolio companies.
+1 on a F2F (or should I say ‘Fixed’?) gathering.
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.
MarkS
I’m long the bond from Sallie Mae’s partner in crime – Navient and would recommend folks take a look at it as well.
CUSIP 63938CAJ7
Details are on this link.
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C763407
Hi Greg,
Here’s to making (or losing) money together! 🥂
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.
Just for a laugh, go over to FINRA and look at ETSY bonds!
Wait what?! ETSY5056972 at 0.125% coupon, last price 174.352 and -13.945% yield? Who on earth is paying that?
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.
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
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
Good sleuthing, Justin!! You cleared up the confusion I noticed in my sleuth but didn’t clear up by doing further sleuthing…. nicely done…
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
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.
The string above, good Job! Remember the A-team? That’s you! Go ahead and slam a few van doors!
https://www.gettyimages.com/photos/the-a-team-television-show
ticker invalid at FINRA ?
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
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.
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.
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.
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.
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
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.
Grid, Perfect time for a Paternity, Co-signer or Marriage proposal to show up!!
That’s supposed to be a joke!
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.
Oops, CTA-B was under $62, not $60. I wish it was under $60 though.
thanks for the thoughts Grid on where we are possibly going
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.
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.
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.
Gridbird….
Do you have a symbol or CUSIP on this? Is this related to SJIJ?
CUSIP
838518AA6
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C969426&symbol=SJI5156685
Rick, that is for the 2033 SJI bond. It had nothing to do with SJIJ. It actually was from an earlier equity units issuance that was redeemed and converted in 2021. Its ticker came from SJIU but its just a 2033 5.03% par subordinate debt
Issue now.
Thank you!!
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
Great idea.
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.
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
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.
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…
There was an article in the WSJ yesterday about the Japanese backing away from the US Treasury market.
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.
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.
Thanks 2WR !
Looks interesting, I will investigate.
Cheers
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
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.
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.
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.
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
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!
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.
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.
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.
Taking any PG&E short term? Maybe one which matures before the next fire season? The 2028/7.25 YTM look like bad history.
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.
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
HSBC Holdings, 08/18/2025
Rated BBB/Baa1 Stable
Yield 5.3%
CUSIP 404280AU3
REYNOLDS AMERN INC, 06/12/2025
Rated BBB+/Baa2
Yield 5.2%
CUSIP 761713BG0
BLACKSTONE PRIVATE C, 11/22/2024
Rated BBB-/Baa3 Stable
Yield 6.2%
CUSIP 09261HAH0
Duke Energy Corp, 06/15/2041
Rated BBB/Baa2
Yield 5.6%
CUSIP 26441CBM6
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
Public Storage, 09/15/2027
Rated A/A2
Yield 4.16%
CUSIP 74460DAC3
——————————–
Oracle Corp, 11/15/2027
Rated BBB/Baa2
Yield 5.02%
CUSIP 68389XBN4
——————————
Hess Corp, 07/15/2024
Rated BBB-/Baa3
Yield 4.62%
CUSIP 42809HAF4
—————————–
Kinder Morgan Energy, 09/01/2024
Rated BBB/Baa2
Yield 4.55%
CUSIP 494550BV7
—————————–
Brookfield Asset Management, 01/15/2025
Rated A-/Baa1
Yield 4.54%
CUSIP 112585AH7
Theta you made me think, and not related to any of your quotes, but its good to have a couple of books to choose bond pricing. I have one spotted Im planning to buy Monday, and Vanguard is selling it at almost 100 bps higher than TD. TD can be absolute bond theives. I only own a few there just because it was only a few bps lower than Vanguard. So I buy most of what I am buying through Vanguard. TD bascially sucks on bond pricing on issues I am interested in anyways.
Gridbird – 100%. Thanks for mentioning. Definitely not all brokers created equal when it comes to bond trading. The best bond trading platform hands down I have gotten is from an IB portfolio margin account. 5 star service and you even have the ability to place your own limit order price either on buy/sell side and get hit frequently. You are not stuck just at the offer/bid price as their bond platform is dynamic routing as opposed to more static topologies as all other retail brokers.
I also hear great feedback on Schwab as well from some of my comrades who are heavy bond investors.
Theta, I have heard IB is a very good book to work with. I have also heard like you said about Schwab being good. Which is so ironic because they acquired TD and they are the worst!
I realize Finra quotes can be dealer to dealer pricing which skews actual pricing for retail buyers a bit at times. But at least Vanguard acts interested in being in same pricing ball park as those D-D trades. With TD many times you have to do a double take to see if you are even on the right bond because the pricing is so much higher.
Grid, I will take the opposite from Theta on IB’s service. I will not go into the details, but I rate them 0 to 1 star on some support issues. Their goal is to be all things to all customers. This greatly complicates customer support, since you might have a problem trading Nepalese sheep futures denominated in Japanese Yen, for example that the support person attempts to solve.
They added a ton of customers in the Covid period and like other brokerages got caught flat footed. They have attempted to staff up the support partly by adding people in India.
Bottom line is that IB is like other brokerages. None are perfect and all have quirks. It just depends on what you are trying to do. I do have a strong recommendation that “average” investors should NOT use IB Pro with their trading platform, “Trader Work Station.” What makes it great for pros makes it high risk for casual investors. It is far easier to fat finger a trade compared to other brokerage platforms. We have the tire tracks on our back to prove this. . .
Tex, I was just refering to the fact that there you can actually make bids, and they have on inventory many $1000 preferreds you can bid on. Its such a PIA to buy those where I am at and the take it leave it pricing is such a turnoff.
I have heard others agree with your compliants on service. I was just posting in terms of jealously in how you can buy. I dont buy enough to warrant changing as I love TDs stock service. Its always a tradeoff as you stated that is certain.
I could be wrong on this but I really don’t think what a broker has “in inventory” really much matters nowadays… Someone more up to date on today’s mechanics can confirm what I believe, but I think people like Fidelity are giving you their bond data as it comes from consolidated aggregators of bond offerings throughout the street, not just what they have in inventory. So you’re seeing a much wider spanse of offerings than just a single firm’s inventory. You can still seemlessly bid on any issue shown although you might possibly be able to get a slightly better price on an item that just happens to really be in inventory. I think the process does not even identify what is in inventory and what is not.
2WR, What I mean in inventory is what I am able to buy online through the brokerage. And of course we are talking about different brokerages being I dont have Fidelity. Several bonds I have contacted Vanguard about to buy they had to go to a third party to get a quote. So I am assuming they werent in their inventory if they had to do that. But I dont have any expertise in bond trading or even in correct terminologies. And of course not being able to bid stinks. They would get the quote and tell me the bid and ask spread. They would fire the order in, and typically a little under ask, but not a lot. And certainly nowhere near bid, ha. So these things are like a marriage when I buy.
2WR, you are correct that bonds showing on brokerages are typically NOT from their own inventory. There are a few “Alternate Trading Systems” for bonds. They are like stock exchanges in that they aggregate bids/asks from many different dealers into a single book. Brokerages show these bids/asks from one or more ATS’s on their system. Some brokerages add their markup/commission/concession to the prices they display, others do not. This is why you see different prices on the same bond at different brokerages. Unlike stocks with their NBBO system, there is NO equivalent for bonds.
Brokerages do not want to disclose which ATS’s they route orders to for some reason. One of the brokerages we are talking about here uses four ATS’s. One of the largest ATS’s is TradeWeb which is also referred to as Bonddesk which they bought out many years ago. Some brokerages block data from specific dealers they have an issue with. Other brokerages block listings they do NOT want you to buy. I have commented many times that Fidelity, for example, will not let you buy a Puerto Rico bond rated A2/AA even if someone has them listed to sell.
Bottom line is unlike stocks where ALL brokerages in theory show the same bid/ask prices/volumes, that is NOT true for bonds. It is very common to see different inventory and/or prices at different brokerages for the same bond. Makes it harder to trade bonds.
All of these comments pertain to CDs/corporates/munis and are NOT as applicable to US Treasuries which do seem to be more consistent from brokerage to brokerage.
Link to TradeWeb as an example of an ATS:
https://www.tradeweb.com/our-markets/tradeweb-direct-middle-markets–retail/
Tex – Sorry to hear about that. I think my experience with IB might be more unique due to the size of my account. I have excess of $7M with them so I have a dedicated rep on call during market hours if I need it etc. I cant’ say enough about their platform and the amount of leverage they have given me over the years. In 2010, I was getting 10-1 leverage @cost under 100BPS and markets were still not in the clear yet.
But regardless of this; the key distinction for me with IB on bonds is that, say anyone has 25 pieces of a corp bond that they want to sell but maybe the spread is not ideal. Say bid is $98 and ask is $100. If I’m with any other brokers, I have no recourse but to sell at $98. However with IB, I can place a limit order to sell at $99. And the cool thing is, say Grid is searching inventory with any other broker, that lot is going to be populating everywhere and for him at $99. Essentially you can become a bond trading desk if you have best offer price and I trade allot of junky stuff so this is a big deal when dealing with larger spreads.
Grid – I will say this on AMTD. I absolutely concur with you electronically speaking. However – if you actually call and speak to the bond traders, I think you will be surprised. I knew someone in a major pinch who needed to unload a large lot of junky bonds that were heading downwards. It was not liquid at all either. The AMTD guy worked the bid nearly whole day and came back with an absolutely incredible bid beyond anything imaginable. My buddy had another smaller lot at another broker who offered 50 cents on the dollar after working it as well but AMTD was at 73 cents on the dollar. Disclaimer I have been drinking allot of vodka today as the in-laws made a surprise visit, so for now, the end.
Thanks for sharing, Theta. I would have never known. I just seen their bad online pricing compared to Vanguard so I would just always call Vanguard. Im sure you have known this for a long time, but its interesting to me to see how the bond yields can move around a fair amount in a days time. Several times it changed before the trade would transact and it would get cancelled.
Theta – With one exception, which I have complained about incessantly, you can do the same thing at Fidelity regarding setting your offer or your bid as the best one out there. The exception is that if you have 25k to sell (or buy) but you’re willing to accept a partial fill less than 25, you can’t do that….. You can see where other offerers out there have, for example 100 to sell and then in parenthesis a minimum amount less than that they’ll accept.. Fidelity doesn’t let you do that… No reason ever given for such a petty thing..
2WR, IB has a similar problem. Say you have a buy order for 25 corporates that has a trading minimum of 1 bond, you can and do get fills of 1 bond. It happens all of the time when you bid under the showing ask price/quantity, so it is not a rare occurrence. So you cannot set your own minimum quantity. And you never know exactly what the commission aka concession will be until you get the trade confirmation. It can be as high as $8 for 1 bond, as opposed to $1 at Fido.
Same for selling. Most corporates have trading minimums of 1 or 2 bonds, but sometimes the ATS will set a higher minimum, typically 100 or 250. Most munis have a 5 piece minimum, but the same problem exists with them.
Once again, every brokerage has quirks and it just depends on what is most important to each investor.
Tex – I see the similarity but at Fido, your order is essentially always an AON order. If you say you want to buy (or sell) 25, you cannot end up buying 1. You can see a 24 bond trade occur at a cheaper price without you getting any.. Also, for the record, I think Fido has a $5 minimum charge, or at least they used to… If you buy 1, you’re charged $5… Sometimes on a low volume trading name, I’ll try showing identical bids for 15 and 10 as a way of attempting to get a fill just for flexibility’s sake. Sometimes it helps but still, if an offer shows up for 13 bonds with no flexibility on a minimum they’ll allow, you still won’t get execution on either bid.
Tex, thanks for the post. Might be ironic in vein of gallows humor but I needed a little this morning.
Following this thread as we just moved my wife’s 401k to an IRA with the same company T.Rowe. parked mostly in short term and ultra short term treasury bond funds. Not ready yet, but I want to start layering her investments for income with the help of a financial advisor.
Any experience with this company on bond purchases ?
There’s got to be mention of Fidelity when it comes to brokers with good to excellent bond desks….IMHO, they’re the closest to giving you all you need to tread bond buying as you do stock buying although I’ve never tried IB…. They give you the ability to bid what you want (I think it has to be within 5% of the asked and it can only be for a bond where an offering is already shown). They show you the actual bid and asked that’s in the marketbplace and a depth of field showing all bids and askeds (similar to Level II) so you can tell when a specific bid or asked stands out from the field. They show you past trades in a format that allows you to identify dealer to dealer trades, dealer to retail trades, etc.. So you can trace a block to see the original available offering price and whether or not it’s ultimately been bot by some sap thru the likes of a TDA or other brokers who act as principal and mark up price viciously but doesn’t charge a commission vs those who act as agent such as Fidelity who works for $1 per bond with both a minimum and maximum total price. That way you know whether or not a last trade is merely an outlier either cheap or high based on markups of markdowns given to underinformed retail. I’m not sure whether or not you can buy an issue that’s not rated, but you can buy junk rated bonds as well as IG. I’ve not tried to see if you can buy 1k preferreds that trade via CUSIP in any other way other than calling in to the desk., but most all is available thru their Active Trader Pro platform… I’m not even sure if any bond buying is allowed on ThinkorSwim… I’m also not sure how much Fidelity’s bond desk limits the buying of floaters.. They also give you a full description of the bond including showing latest credit reports from S&P (maybe it’s Moody’s) and latest current news or events impacting the bond in question although that area is not always as up to date as I would hope. Hard to fault Fidelity”s bond efforts imho….
Totally agree with 2WR post. Fidelity is my go to for bond trading, although I admittedly don’t trade bonds very much.
2whiteroses: Great info on Fidelity. Thanks! I tried out their platform over a decade ago or probably longer than that and it seemed 30% of the time or more, I couldn’t buy the equities I wanted to directly online, it forced me to have to call them and it was a bit of a hassle. But for bond trading definitely sounds better than allot of others out there. Cheers.
IBM, 05/15/2026
Rated A-/A3
Yield 4.45%
CUSIP 459200JZ5
——————
The Goldman Sachs Gr, 04/28/2028
Rated BBB+/A2
Yield 5.13%
CUSIP 38150AFH3
Theta, thanks for pointing out these issues.
Why are you posting these particular issues: you’ve just bought them? they fit some other set of criteria? Just curious.
Bur Davis. Correct I am very recently buying all of these and just putting some alternative choices out there for folks to realize. I’m looking for exposure with a hedge so to speak vs. just 100% continual buying of perpetual preferreds. That way in 2,3 8 etc. years into the future, I have proceeds looping back to me that I can redeploy just in case this interest rate cycle turns out to be some kind of whacky more problematic medium term cycle.
I think back to folks who dumped money into equities in 1999 and early 2000. Sure you can always DCA from there and have future monies being deployed but bottom line is, if you lump summed in or had a large investment, it took you a decade just to break even on that. People who went through the 80s just know how long and potentially dangerous interest rate cycles can be if you are on the debt side or have no available money to invest.
Theta, I learned the “small availability” lesson today. I wanted 20 of a 6/2024 Arizona Public Service A3/BBB+ with a 4.8% YTM but only 8 were available, so I bought them. The next lot available at any price was 4.02%. Uhm no thanks.
Also, whats available one day may not the next. A short duration New Mexico ute bond with 5.2% yield was available at close Friday. Not only was none available at that price today, none were available period…zilch. And it hadnt traded either. I should have bought when I had the chance.
Here is one that shows up in the same screen as Grid’s Ipalco/AES 24
Vistra Operations LLC
7/15/24 3.55% fixed
Baa3/BBB-
Ask yield= 5.63%
CUSIP= U9226VAC1
ISIN= USU9226VAC10
Vistra claims to be the largest producer of electricity in the US, plus some operations in Europe. I think it picked up TXU (Texas Utilities) after it went BK several years ago. That was the deal where Warren Buffet owned $2 Billion of bonds that went kaput, but that is for a different thread. I have not done a deep dive and hence do not understand where these are in the cap stack. Parent, sub, LLC of a sub? Somebody is offering up 288K for sale. 500K traded last Friday 9/16, and none today 9/19.
We do not own it in any account and do NOT vouch for its credit worthiness, so you absolutely positively need more diligence before buying it. There are a few PCG bonds that show up in the same screen but I CANNOT in good conscience remotely recommend them to any III’er. Waiting for the BK trifecta with them.
Gridbird – I didn’t realize you were in the munis universe. I’ll be sure to post good ones in real-time that I find but definitely, they are the wild wild west in terms of spreads vs yield vs opportunities coming knocking. I’m always on the look out for those smaller lot sizes that jump way ahead of the best seller with wildly better yields.
Before the last FOMC, I noticed this trend with many medium duration corps. I picked up few awesome ones. They go quickly too as many times I’ll refresh my search results and that lot is gone.
On that New Mexico offering; just don’t hesitate. If the yield is good relative to all being equal other yield just take it and assume it won’t be around much longer never mind next trading day.
Liquidity is what is driving allot of this yield action. I’m seeing lot sizes in offering, meaning smaller, with superior yields as they are trying to fish out buyers quickly. Some of best finds are between 9-9:20. I’ll keep you posted.
Theta, Im really just poking around in the utility bond world. Be it holding company or subsidiary debt (not the power producers, just regulated or triple vertical regulated). I really havent looked at munis. Buying most in tax free account so Im trying to pluck more bps and yet still not really not be concerned with getting my principal back. Mostly sticking with preferreds long duration and bonds shorter duration.
Is 9-9:20 central standard time? Yes, that was a lesson learned. There were plenty at market close, Friday and it didnt trade today at all. And neither brokerage showed even 1 share for sale, and they both did Friday.
Grid, a lot of the corporate bids/asks you see are on autopilot, as opposed to some small seller. You typically see 250k to 500k on both bid and ask. The dealer uses his OMS (Order Management System) to price them to say the 2 year UST plus a spread. The same dealer may have both the inside bid and the inside ask, you don’t know. As the benchmark changes during the day, the OMS automatically changes the bid/ask price without human intervention.
If you do see a smaller bid/ask size, the price is less likely to be on autopilot, plus you have better odds that a human will look at it and lower the ask to get a fill.
I agree with Theta that when/if you see a good deal, pounce quickly, because there are probably many other sets of eyes looking. The only risk is if somebody else, the seller in this case, has better/faster info than you do. Maybe a lawsuit, a bad earnings report, an Enron BK filing, stuff happens. I have made a few of those mistakes.
Obviously these are general observations and not guaranteed for the literally tens of thousands of bond offerings. . .
Gridbird – Eastern time. I have similar methodology to your preferred/longer + bonds/shorter durations. However in some instances, if I really have been wanting a preferred that hasn’t been under par for years but has relative corps; say Duke Energy is a great example -> I will fill at least half of that desired position with their 5.6% yielding 19 year bonds.
Motorola Solutions, 05/23/2029
Rated BBB-/Baa3
Yield 5.4%
CUSIP: 620076BN8
PRUDENTIAL PLC yielding 5.11% with 2030 maturity.
Rated A/A2.
CUSIP: 74435KAA3
Just picked up the 3% coupon bonds of BDC Main Street Capital maturing in 2026 at $86.5, yield to maturity of 7.1%.
Gumfighter, I cannot locate the CUSIP. Might you please post? Thanks
56035LAE4 = Main 3% ’26