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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4/28/2024
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Anyone have any recommendations for recently issued IG corporate or agency bonds? I bought a lot of the State Street 6.7% iand the Citicorp recent issues. Suggestions welcomed.
TD Ameritrade’s list of new issue corporates today includes mostly bonds from big banks with coupons 5.6-5.65% and calls up to 2 years. The exceptions are the BBB-rated bonds from Jeffries with coupons at 6.1%, 6.2% and 6.5%. The latter is 15 years with a call in 2 years.
It’s typical for Jeffries to offer above-market yields on its bonds. The ratings are always IG, and I can’t find anything worrisome about the company. Still, I wonder.
Does anyone have an opinion on Jeffries or these bonds?
i just bought a few bank of America bonds. definitely looking for a 2 year period before they can get called.
my cd’s keep getting called so i figured this would stabilize things a bit
Today I added to my position in a junior subordinated note from Stanley Black & Decker, Inc. (CUSIP 854502AM3) for just under $90.
This issue is a 5 year reset. The next reset date is March 15, 2025. At that point, it will reset at the Five-Year Treasury Rate plus 2.657% or it will be called.
The yield to first call is around 15%.
https://www.sec.gov/Archives/edgar/data/93556/000119312520023095/d859870dfwp.htm
This was purchased by calling the Schwab fixed income (877-906-4670). I called and said I was looking to buy a bond that Schwab does not have in it’s inventory. Then they gave me a group number and I called back in around 30 minutes to find out what type of pricing they were offering.
I call the bond desk at Schwab frequently. You need to have an idea as to the current price (I use finra) because sometimes their quotes are way off the market. It’s kind of hit and miss.
Dick,
With a 4% coupon the yield on cost at $90 is 4.44% until March 2025. If not called then, the new coupon will be the 5yy + 2.657%. If, for example, the 5yy is 3%, the reset coupon will be 5.657% and the YOC 6.29%.
Given that, I’d guess you’re buying for the juicy yield to call. If so, why do you think the bond will be called?
I’m not sure if it will be called or not. However, if it is allowed to reset, I’m assuming the price will trade closer to par since it will be priced closer to a “market” yield after the reset.
With the 5 year currently at 4.1%, it would reset at a rate of 6.7%. I would think a 6.7% issue from Stanley Black & Decker with 5 year call protection would trade around $100. So I guess I’m indifferent to a redemption or the market pricing rising on it’s own.
Another point is that if you look at SWK’s debt issues and current pricing, you see that bonds maturing between 2028-2030 are yielding between 4.9-5.2%.
I own a lot of fixed rate issues that are well below par and are not likely to be called. These are going to be very interest rate sensitive. I see this issue from SWK as a somewhat of a hedge against higher for longer rates and that’s part of why I like it for my portfolio.
Dick, Do you have any other Instl Bond/Pref Fixed to Float (or Reset) that you like?
I like the this Citizens instl pref issue. Citizens has CRE exposure but I believe it’s manageable.
Cusip: 174610bd6
Current Price: $86.5
Current Coupon: 4%
Float date: October 6, 2026
Float Spread: Five-year U.S. Treasury Rate plus 3.215%
https://www.sec.gov/Archives/edgar/data/759944/000119312521182688/d140607dfwp.htm
https://investor.citizensbank.com/~/media/Files/C/CitizensBank-IR/reports-and-presentations/4q23-earnings-presentation.pdf
I’ve also added to Barings BDC via their 11/23/2026 3.3% issue.
It trades at 91.82 (at Fido) for a YTM of 6.65%. Not bad for a little over 2.5 years. Cusip: 06759LAC7
Here are some other live floaters that I own that have been trading around par or slightly below:
69352PAC7 – PPL – floats off the 3 month plus 2.66%
https://www.sec.gov/Archives/edgar/data/922224/000089322007000779/e31666fwfwp.htm
29379VBM4 – EPD – floats off the 3 month plus 2.986%
https://www.sec.gov/Archives/edgar/data/1061219/000119312517250040/d392278dfwp.htm
637432MT9 – National Rural Utilities Cooperative – floats off the 3 month plus 2.91%
https://www.sec.gov/Archives/edgar/data/70502/000119312513161019/d525643dfwp.htm
58551TAA5 – Bank of NY Mellon – floats off the 3 month plus 0.565 but min rate of 4%.
https://www.sec.gov/Archives/edgar/data/1256712/000119312507135470/d424b2.htm
Ty! I think I like the EPD issue the most.
BTW, I assume you know about the Lincoln 2066 floater? It trades at 77.5. I def got the idea from this board.
I should mention that the Bank of NY Mellon issue trades around $85 so the current yield at that price is around 7.3%
I bought this one at $76 and $80 several months ago. Like everything else, it has run up lately.
Just an FYI. the BNY Mellon isn’t a bond, it was converted to a preferred stock in June of 2012, so it will pay qualified dividends and not interest.
https://www.businesswire.com/news/home/20120911006776/en/Fitch-Downgrades-Mellon-Capital-IV-Following-Remarketing-Removes-Rating-Watch-Negative
That’s right Justin. Also should mention that Schwab correctly classified the 2023 divided payments as QDI for me.
Why hasn’t EPD called the +2.986% floater? Coupon for the current quarter is 8.57329%. With a 2077 maturity, perhaps EPD has no plans to call it ever. Labeled the “Non-Call 5 Notes.” What does that mean? Is it a clue? Even if four rate cuts were to bring SOFR down 2%, the yield would still be a respectable 6.57%.
Sorry, it would take eight 25bps cuts to drop SOFR by 2%.
I’m not sure why EPD hasn’t called the floater. Here is the full prospectus for that one: https://www.sec.gov/Archives/edgar/data/1061219/000119312517251526/d392278d424b5.htm
Same question applies for National Rural Utilities Co-op. That issue is rate BBB/A3.
Dick,
Thanks for the EPD prospectus. I don’t like this deferral clause and am surprised to see it in a bond from a solid company. Should I be concerned?
“So long as no Event of Default has occurred and is continuing, we may defer interest payments on each series of the notes on one or more occasions for up to 10 consecutive years as described in this prospectus supplement. Deferred interest payments will accrue additional interest at a rate equal to the interest rate then applicable to such series of notes, to the extent permitted by applicable law.”
It’s my understanding that deferral clauses are applicable to most baby bonds/subordinated debt issues. I don’t think I’ve ever seen one that doesn’t include it.
In my opinion, I view deferrable subordinated notes as a preferred masquerading as a debt for purpose of company retaining the tax break from interest expense instead of buyer receiving the QDI. This doesnt mean I am anti deferrable sub notes though. I own a couple myself.
Since EPD is a master limited partnership, if this issue were a preferred, it wouldn’t be QDI anyways. A preferred from an MLP would get a K-1 as well. I own this issue in a retirement account so the interest payments work just find for me.
If you want more protection, you could buy some of their short term bonds which are yielding sub-5% if that meets your needs better. Personally, I’m plenty happy with the 8.5% coupon on the floating rate bond.
And by golly, the popular junior BB MGR has a deferral clause. And I own it. LOL. I’m going to find something else to worry about.
Rocks, that is a good idea. Its not something to worry about unless a company is in severe stress. Im not saying this is you. But in past when people have discovered their sub note was deferrable they got concerned all while holding preferred stock at same time and being unconcerned at all about that. For some unknown reason “cumulative” is reassuring to a preferred, but “deferrable” is a red flag for a sub note.
Wesco International/Distributions
New issue – does not directly impact WCC-A New Issue appears to be rated Ba3/BB
https://finance.yahoo.com/news/wesco-announces-pricing-private-offering-010600134.html
Wesco Announces Pricing of Private Offering of Senior Notes Due 2029 and Senior Notes Due 2032
Mon, February 26, 2024 at 8:06 PM EST
PITTSBURGH, Feb. 26, 2024 /PRNewswire/ — WESCO International, Inc. (NYSE: WCC) (“Wesco”), a leading provider of business-to-business distribution, logistics services, and supply chain solutions, today announced that its wholly owned subsidiary, WESCO Distribution, Inc. (“Wesco Distribution”), priced its previously announced offering (the “Offering”) to eligible purchasers of $900 million aggregate principal amount of 6.375% senior notes due 2029 (the “5-Year Notes”) and $850 million aggregate principal amount of 6.625% senior notes due 2032 (the “8-Year Notes” and, together with the 5-Year Notes, the “Notes”). The aggregate principal amount of the 5-Year Notes to be issued in the Offering has been increased from the previously announced $750 million to $900 million. The aggregate principal amount of the 8-Year Notes to be issued in the Offering has been increased from the previously announced $750 million to $850 million. The 5-Year Notes will be issued at a price of 100.000 % of the aggregate principal amount thereof. The 8-Year Notes will be issued at a price of 100.000% of the aggregate principal amount thereof. The issuance and sale of the Notes is scheduled to settle on March 7, 2024, subject to customary closing conditions.
Welcome back 2WR
This seems to add a lot to their debt. I wonder where they will put this capitol to work.
Far far away from being back but thanks… trying to stay busy
Not sure if this was covered already but I nibbled on the new 2029 7% Barings BDC issue. I like being able to lock in 7% for 5 years for a relatively safe issue. The ticker for the BDC is BBDC. Fidelity has the bond on offer at 99.6875.
Cusip: 06759LAD5
BAA3
Maturity: 02/15/2029
Callable: 01/15/2029
As most of you know, BDC’s have protection given the leverage limits imposed by ’40 act rules. For those of you that don’t know, BBDC is one of the better run BDC’s, as evidenced by its premium to NAV shown on pg 44 of the first link below.
Don’t let the name fool you. This is not the Nick Gleason Barings. Barings is owned by MassMutual, a mega insurance company structures as a mutual. MassMutual is a large owner and supported of the BBDC.
And for my South Carolina friends, BBDC has a large relationship with the South Carolina Retirement System.
October 2023 BBDC presentation (pg 44+): https://d1io3yog0oux5.cloudfront.net/_cf788deb9ac9fe39514e7038197d6d5a/baringsbdc/db/703/6005/pdf/Barings+BDC+Investor+Day_vFINAL_BBDC+WEBSITE+%281%29.pdf
new issue press Release: https://ir.barings.com/press-releases/detail/452/barings-bdc-inc-prices-public-offering-of-300-million-of
Prospectus: https://www.sec.gov/Archives/edgar/data/1379785/000114036124006720/ny20020484x5_424b2.htm
A couple of other tidbits:
It does have a make whole clause: It may be redeemed in whole or in part at Barings BDC’s option at any time at par plus a “make-whole” premium, if applicable.
The bonds were originally priced at $99. So yes, I still like it here at 7% par, but not getting the same deal as original investors.
Offered at ~99.25 on Fidelity now, or 7.18% YTM.
Bought some @99.34 on Fido. thxs!
Educational podcast on BDCs from barings. It’s less about BBDC, more about history of the BDC space and best practices.
With that said, a couple of tidbits about barings approach:
1) they think we are getting close to the next default cycle, so they are being a little more conservative.
2) they continue to focus on mid-market loans.
3) they focus on documentation, Ie getting the covenants which really protect the credit . I know…they all say this.
https://podcast.barings.com/public/75/Streaming-Income—A-Podcast-from-Barings-6f727a82/d9119bf4
Maine, good point or should I say the point about the next default cycle. When panic happens the good gets thrown out with the bad. May be a chance in the future to catch a better price. Or not.
In today at 99.88 not as good a deal as everyone else. but 7% for 5 yrs. I am good.
Maine, If these were priced at $99 originally will OID kick in? IDK. Understood bonds sold at discount at issuance is OID but defer to those that know.
There was a regulation issued by the IRS that exempts small discount taxable bonds from having OID.
To figure out if it applies to a bond, subtract .25 from 100 for each year of the duration of the bond.
E.g. if a bond is issued in 2024 and matures in 2028, it will have OID if it has an issue price <99, but not if it has an issue price of 99 or above.
100-(.25*4)
If I were to buy an OID issue in the secondary market and then resold for either a gain or loss, would I be impacted? Or do these tax rules only apply to those who bought in at the IPO and therefore I just report a simple capital gain or loss?
Thanks for the bond tip Maine, bought some at 99.23. I also bought Blue Owl (69120VAP6), Main (56035LAH7)and Ares bonds recently. Sorry, don’t have Ares cusip readily available. Purchased a number of IG bonds in Oct-Nov from GS, Wells Fargo, JP Morgan, Bank of America, Williams, ConEd, Enbridge, ET, Duke, TC Energy, Verizon, Berkshire Energy and Oneok. All are 2033-2041 maturities except the BDC bonds, with make whole calls. The GS and Bank of America bonds are monthly payers, some I’ve owned for over a year. I started researching bonds a few years ago as I approached retirement age and initially focused on ETFS until I realized they had all the risk and little of the reward of individual bonds. I love the bond recommendations posted on this page, sorry I haven’t expressed my appreciation sooner! Again, thanks for the tips.
Please share why you believe that bond funds provide all the risk and little of the reward of individual bonds. As I approach retirement, I am trying to educate myself.
Thanks, Nimzo
Barings BDC bond
Tks, Maine
Bot FIDO 99.64 7.07%
For other FIDO bond buyers…
I First Bid at the shown Ask of 99.7 7.05%
FIDO said “too low a price, check amt and price.”
I was correct at the amt and price of the Ask, double checked Depth of Book. Still correct.
Tried again, same response.
Checked Depth of Book again, Ask had dropped to 99.6.
Entered at the new, lower, Ask.
Filled.
Not the first time this has happened.
Keep trying.
Another recent BDC bond issue is NMFC New Mountain
Decent BDC, with sizable assets 3.3b, with high insider ownership
Cusip: 647551AF7
6.875% coupon due 2/29
Moody’s Baa3
Can buy at about a 7.3% YTM at the moment
I bought a little today – FYI
Interesting, I tried to buy this on TDA yesterday and the order just went into bit heaven, never filled. Today seems like same thing, Order has been Pending for a few hours, usually these thing fill in just a few minutes.
Was able to buy on FIDO at 98.28
Yes, my order finally filled at 98.18
Westie I picked up more of the Barings for my wife’s account and the NMFC for both our accounts yesterday.
FWIW, I looked at New Mountain but decided to with stalwarts of BDCs – Main Street Capital. I was able to get a 6.78% YTM (cusip 56035LAH7, BBB-). It matures in March 2029 and has a make whole call. However; this does not kick in until February 2029 (one month earlier) so no real impact to YTM. Perhaps a personal decision as I have more investing history with MAIN.
Proto, I have that one as well.
YIELD CALCULATOR DIFFERENCES –
It’s kind of weird right now but I’m seeing material differences between calculated yields to maturity between the two bond yield calculators I use, https://digital.fidelity.com/prgw/digital/priceyieldcalc/ and https://quantwolf.com/calculators/bondyieldcalc.html. The difference is only materially different on the shortest of yield to maturity calculations as normally they’re pretty close. Example: late Friday night after hours, I bot NI-B at 25.25. 6.50% @ 25.25 due 3/15/24, calculated “dirty” (meaning subtracting the accrued) = YTM with settlement of 2/13/24 of 7.32% @ quantwolf but it’s 6.97% at Fido. NOTE – in this circumstance YTM = YTC. I wonder if the difference is Fido not adjusting for this being a Leap Year? Fido show’s accrued being .262 but quantwolf, which rounds off what it shows, shows accrued as .27. One extra day of accrued would be .0045 approx so would be .2665 if not shown as rounded to .27 at quantwolf, so maybe quantwolf includes an extra day of accrued for Feb 29 and Fido doesn’t, therefore, quantwolf has the more accurately calculated yield right now? See? Isn’t it fun to not sleep at night and waste time on such minutiae instead?
2WR,
Since I have some time to burn tonight, I looked at your yield question. First, using a clean price on both of 24.9882 (25.25 – 0.2618 which is 58 days accrual), I get Fido = 6.97% and Quant = 7.03%. Different, but not significant.
Fixed rate yields are calced on 30/360 basis meaning the leap year isn’t in play. As yield is an iterative calculation, small differences can crop up due to rounding or precision and that is likely what is happening here.
As a check I ran it through my calculator and get 7.06% – clearly those guys are wrong.
I get what you’re saying, Zarley, but what you’ve done is agreed with Fido as to what the correct amount of accrued ought to be and then put that number of 24.9882 into Quant as well. .. So the question boils down to why do the two come up with different amounts of accrued right now???? There’s something different in the assumptions behind these 2 particular calculators and that hasn’t happened before… Why is that and which one is more right??? For some reason or other, I suspect the Quant calculator is assuming one more day of accrued than what Fido and you are coming up. I wonder why?
BTW, I’m sure you know the 360 day calendar calculation doesn’t always mean the same thing to each company because despite the calculated amount based on that assumption, some pay out each quarter based on the actual number of days in that particular quarter.. I’ve seen that before. In fact I think I know I’ve seen where two companies with the same coupon paid on the same day as each other every quarter pay out slightly different amounts from each other quarter after….. With a little bit of research, if I haven’t deleted my notes or emails, I can probably dig out that example. Nevertheless even though that happens every now and then, the calculators wouldn’t/couldn’t make that differentiation on a case by case basis.
2WR,
I used clean price as the accrual was off between the two calculators, so it seems I missed the basis of your question. Looking at the accrued calc, I can get Fidelity’s number at 58 days/ 360 basis. Quant’s number is a mystery to me.
Taking $25 million purchase, to get more accuracy, Quant shows $267,979 of accrued. Moving settle date +/- 1 day gives a constant change of 4,466.33 and dividing that into the 267,979 value gives exactly 60 days accrued. This implies a basis of 363.83.
Doing the same exercise for a monthly payment on Quant, produces a daily change of 4,368.28, exactly 29 days accrued. Switching settle day to May 13 and payment to June 15 produces 4,415.76 daily accrual change, 59 days accrued for quarterly payments. This makes no sense to me, why does the daily accrual amount change so dramatically between scenarios for a fixed rate instrument? At this point I gave up! BTW, Fidelity calced constant daily changes for accrued int on monthly and quarterly payments – as I would expect.
To me Quant is “wrong” with that word in quotes as they likely are doing something entirely correct in for example Treasuries, where i have almost no experience. What bothers me is the changing daily accrual values as this is a simple calc, producing a static number for each day.
Maybe if I have more time soon I will dig into this more. Reverse engineering these calculators is fun and aggravating so it may be a puzzle to pick up later. If you find anything out – please let us know.
Ain’t it fun to be considered anal retentive? I bet you and I could bore the h**l out of just about everyone trying to figure this out publicly, right? LOL
At least we agree that we have no clue why Quant apparently differs from Fido on amount of accrued and, therefore yield to maturity/call.
Just for laughs, I moved up the tentative settlement and maturity dates by exactly three months to see if getting February out of the equation might get the two closer to agreeing on yield…. Didn’t help. Now if we only knew for sure which one is “right.”
One final thought, Z – If you do the same thing as you did in your first calculation but assumed accrued is 59 days instead of 58 and. therefore put in 24.98368 instead of 24.9882, you’ll still come up with approx the same slight differential between Fido and Quant on yield…. That seems to be telling me that Quant’s assuming one more day of accrued than Fido is…
NewtekOne, Inc., 5.75% Notes Due 8/1/2024 $55MM issue
Ticker Symbol: NEWTL CUSIP: 652526609
Current price $24.80 YTM 7.932% 💪🏻
hate to say it , AB, but this NEWT baby bond merely falls in line with the other 2 NEWT babies, because with x-div coming up next week on one of the other baby bonds, NEWTI, the current coupon 8% issue due 9/1/28, I has a YTM of 8.27% and Z 5.50% due 2/1/26 is 8.15% YTM. All seem cheap imho in comparison to other similar issues but my bias is well documented here… lol
2WR we have been talking all week about small banks and being higher risk. NEWT is really small since it converted to a bank holding company or is it more of a BDC in sheeps wool.
Runnnnnnnn; In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks. Living with fear stops us taking risks, and if you don’t go out on the branch, you’re never going to get the best fruit. Each of us need to do our OWN DEEP DUE DILIGENCE, because we alone know what are our own true risk level is and what rewards we are look for. Everyone, have an incredible and memorable weekend ✌🏻
AZ, All of our very best financial, real estate, or alternative-investment acquisitions over the years have been during times when the markets were upset with the markets or recent performance of otherwise excellent assets.
It’s for this reason, we’ll wait years if necessary for the right opportunities to come along, and buy endlessly when they’re laying there for the taking.
Alpha, I just hope I am smart enough to not get suckered into something I think is great opportunity but winds up being a cash incinerator! Im actually getting more conservative. I got enough now for my GF and I to make it to the hole in the ground finish line while maintaining our present lifestyle. Scoring on a windfall investment decision wouldnt really change that. But screwing up and losing a bunch would change that….For the worse! Soooo no MPW WPG bonds, and 2X levered notes for me. Sorry Rita Moron and PennYlessY we wont be “collecting great income together” on that stuff, ha.
Grid, We talked more about credit spreads a few years ago – when a reasonable semblance of that structure still existed. I’ve been dusting those notes off recently and can find no solace in opting for a 7%/8% with a variable capital position v. a risk-free/near risk-free 6%/7% overall, and have zero-interest in rolling the dice on something which may or may not be solvent in a week.
All our preferred/ETD positions are deeply averaged-down in the black and we’ve added nothing since end of November/early December. Been adding on the equity side particularily in recently price-improved A-rated REIT issues. Increasingly hedging the index holdings, sacrificing higher upside for more certain base gain.
Like you, am otherwise seeing boring as good, though am ready to pillage the garage sales when the next event occurs.
I know the feeling Grid. I had mentioned I had or was going to have a bunch of cash from various securities being called – and it has been tough to find anything worthwhile to buy. And then I got another slug of cash in today as ET-D was redeemed
Well, I decided to put some of that cash to work this week – in basically all illiquids (but one). 4 illiquid utes and more CTA-B on the dump today. Not break the bank yields – between 6% and 6.55% but should be safe and boring. Only preferred I added that was outside those was a new one for me – BC-B. Just a minor position but some diversity of industries and a 6.8% yield based on my purchase price
Kind of rough with a number of issues being called and not much worthwhile new coming to market. These should keep my hands idle and keep me from reaching for something that could be trouble
AB I asked you once about NYCB and that was enough. Several asked you multiple times and you responded with you would be back in town by the end of the month. And DYODD. I like that you are in a silent period that corporations do prior to a announcement.
I have flipped the NYCB U multiple times and held as much as 2,000 shares at a time. We still have next week ahead of us, but I said if it made it to the weekend it would allow a cooling off period. It recovered enough in one day today to set up for traders to play it like a Yo Yo in the coming week.
My opinion only, if the feds don’t close it down it will be a long slow recovery over the next quarter. They should of done like ASB and taken a hit last quarter before being forced to.
Charles, I’m certain many of the astute and adroit analysts here know better
NYCB shares bounce as top executives disclose stakes
https://www.msn.com/en-us/money/markets/nycb-shares-bounce-as-top-executives-disclose-stakes/ar-BB1i2zcN?ocid=finance-verthp-feeds
I guess here in Italy they say Forza e coraggio che la vita è un passaggio
I am Azure
You know Ab what directors buying shares means to me. There are two times when directors buy shares and they have two different meanings. One, when you find out a company is ready to make an important announcement like a biotech announcing sales of a new drug are doing better than projected. 2, when they want to show their money is where their words are that the company is going to do better than it currently is.
One is a sure bet, the other is hope they are right.
Azure-
Here in America we say What a long strange trip it’s been.
Rocks, just enjoy the ride then https://www.youtube.com/watch?v=3vEEh0GF_C8 Most people in crisis don’t realize they are already in one and sadly will not take the challenges to be truly successful and convivial…
WALSTIB
August West can certainly appreciate a Grateful Dead reference 😉
What NEWT is officially now is a small bank, however, since it just became one a year ago by acquiring tiny National Bank of New York City for $20 mil, it has not been a bank long enough to have all the warts associated with today’s whoa minders contentions on small banks…. Last report they only had about 16% uninsured deposits, I don’t think Bank of NYC had any major CRE loans and NEWT’s leverage is nowhere near what a traditional small or regional bank would have [yet].. So I suppose you could call them still somewhat of a hybrid “bank” at this stage… What they do have in the way of leverage is a substantial niche in SBA loans which I think tends to hide some reported leverage, but I wouldn’t swear to that accounting. It’s something to keep in mind, though…. And of course, as a new bank, it is transitioning relatively quickly into bankdom so it’s possible these levels from last quarter could substantially change once they report on March 5.
And whether or not it’s in name only and NEWT has found a way around it, as a holdover from their BDC days, both NEWTZ and L (but not I directly) continue to have the added asset coverage ratio language of the 1940 Act providing noteholders with that added protection of asset coverage having to exceed 150%…. NEWT has been EXCEPTIONALLY evasive on all efforts throughout 2023 to get them to explain exactly what that means as they have not updated their current asset coverage ratio since 12/31/22 and will only say when asked, “We are in compliance,” while purposely not defining what that means under their circumstances.. So by all means, to quote AB, “Each of us need to do our OWN DEEP DUE DILIGENCE,” especially on NEWT.
2WR in 2021 I flipped NEWT from about a high 34 to around about 27 for 6 months from about June to December and haven’t been back since.
From a risk/return perspective.. easy swap from NYCB-A to the November 6, 2028 subordinated bond which pays SOFR + 304.16 bps.
The bond trades at ~85 and the pref trades at ~$20, or the equivalent of 80 for a bond.
The bond floats now and the pref may float in the future.
And stating the obvious, the bond is more senior and has a stated maturity.
Sorry, forgot details. This was mentioned previously by jerrymac.
649445AC7
11/06/2028
SOFR + 304.16 bps
Current coupon: 8.434
Next Coupon (effective 2/6/24): 8.33207
Is the subordinated debt really better than the trust preferred (NYCB-U)?
If the bank doesn’t implode in the next year or so it seems just as likely it will survive long-term as it does to make it to 2028.
Definitely easier to trade the preferred. Lets you lock in a pretty high yield and seems to have the same rating as the subordinated debt.
Dave, keep in mind NYCB-U is subordinated debt. Its held inside the trust. If a bank blew up, my base assumption would be not expecting anything with any stack for sale to public due to the inherent leverage banks naturally operate at.
Grid,
Both the 2028 NYCB debt as well as the 2030 Flagstar Bank debt (both available on IBKR) are subordinated and fixed to float, although the NYCB 2028 is already floating. Those and the trust preferred seem to be rated Baa3. Since it is likelier than not rates will drop I like the trust preferred the most of the 3. Unfortunately it keeps dropping and I have too much already, although current yield is approaching 9%.
Dave, Im not suggesting what is a better buy. I was just making sure you were aware it is subordinated debt. I have not checked what stack the others are, as there are layers of subordinated debt used by various companies. Subordinated debt often gets lumped into “preferred” category because its basically a preferred masquerading as debt being how low its in the cap stack. Fitch downgraded the sub debt to BB+, and Moodys had NYCB under review for possible junk downgrade. I dont think the review process is complete. Keep in mind I am not implying either way on its investment suitability or potential.
You say things so nicely grid. Let me take a shot.
If the bank blows up like FRC you will get squat. Subordinated bond or preferred. Most likely a big zero. The protection you are getting in a practical sense if the bank runs into serious problems and survives you will get paid. The preferred will have to wait for better days.
Also the banks will wait for the FDIC to get involved and make a deal there it seems. A really sweet deal to buy it.
Dave- I think the pref is now more favorable than the bond, with the bond sitting at 75 and the pref at 14.xx. What a ride!
Not like I am bragging, as I am down $ on the bond.
If you read the prospectus the preferred of the subsidiary is actually senior to the subordinated debt of the parent. I really don’t think it makes a difference as the parent has one big asset. I’m just pointing out what I thought was unusual.
I’m finding 5.4 five year CD to be superior to just about aby other 5 year instrument I can find
Losing, that basically is standard form, especially in one trick ponies as you alluded to. That is why I like subsidiary preferreds of utilities. As preferreds of the subsidiaries are in effect higher in cap stack than any debt of the shell hold co.
If you can find me a 5.4% noncallable CD, I am all ears! I got some 5%+ non callable 5 year ones a year ago, but all I can find in brokerage accounts are in the 4.4% ish range.
I’ve been looking at a simple interest annuity for my wife whose approaching retirement age and needs to take some 401K money and turn it into income. The best rate I’ve seen pays the annuitant 6% simple interest for a 5 year term. Not recommended for folks still accumulating but pretty good for folks looking for a safe reliable income stream. The plan would be to hold the simple interest annuity in a qualified account and pay taxes annually on the interest income.
You can join Advancial Credit Union by becoming a member ofthe US Dog Agility Association or asking Advancial to add employees of your business ( If you have an LLC I’d write a letter to the board) assuming you do not otherwise fit into the geographic / family member restrictions .
If you are not already familiar with increasing the insurance coverage above 250k by adding “payable on death” beneficiaries the process is really simple.
I am showing a 9.2% YTM for NYCB-U vs 11.4% for the bond.
This assumes an average coupon of 7.5% for the bond and a price of 86.
So yes, its a very easy decision for me: better protection and YTM.
It varies per issue, but I place a much higher value on bonds (vs prefs) for banks. Many examples where the acquirer assumed the bond and wiped the prefs/AT1.
https://digital.fidelity.com/prgw/digital/priceyieldcalc/
Fantastic read about the shitshow of NYC rent stabilized apartments.
Massive losses for the investors.
Stuff like this makes me keep my NYCB exposure moderate.
Why NYC Apartment Buildings Are on Sale Now for 50% Off
https://www.bloomberg.com/news/features/2024-02-05/nyc-apartments-go-on-sale-for-50-off-due-to-tougher-rent-control
Avoiding issues with large exposure to NY Chicago and the West Coast. Looks grim but if it’s just political bias that’s a bad way to invest.
Adding to my municipal bond ladder:
PENNSYLVANIA HSG FIN AGY SINGLE FAMILY MTG REV Due 10/1/42
CUSIP 70879QRY1 4.15% coupon @ $99.45 YTW/YTM 4.185%, YTC @ $100 4/1/32 4.215% YTS 4/1/38 @ $100 4.192% Rated AA1/AA+ ALL Housing Bonds are callable anytime at par $100. Kindly, do your own deep due diligence as this bond fits my trusts portfolio and may not be appropriate for your investment situation.
The secret of happiness is freedom, the secret of freedom is courage. The life of the just always have the courage to stand up in the face of adversity.
I am Azure
LUMN Bonds. Someone asked the question regarding the impact of the TSA on the bonds. I have a small amount of the 2025, currently with a nice gain but I watch closely. Following might be of interest:
https://know.creditsights.com/lumen-updated-views-on-tsa/
Follow up to those interested in Lumen today:
Moody’s Investors Service (Moody’s) says the proposed debt exchanges by Lumen Technologies, Inc. (Lumen) will likely be viewed as distressed exchanges.
Fitch still opines the 2025 bonds are likely to be paid.
I watch closely (have a profit presently) if the bonds decline to my break even, I will sell.
MAIN Street Capital 3% 07/14/2026 is currently being offered for ~92.3 or 6.44% YTM on platforms such as Fidelity or IBKR. I am hard pressed to find a better safe-ish short term bond. Cusip: 56035LAE4
It also could be interesting if you like the 6.9% new MAIN issue, but either a) want shorter maturity or b) don’t want to wait for it to becomes available and risk buying at a marked up value.
CUSIP 69120VAM3 Blue Owl 3.125% due 9/23/26 – It’s essentially a wash but is being offered at 10+ basis cheaper…. Baa3/NR vs Main NR/BBB-
The spread would have the be 25 bps higher for me to purchase blue owl over Main.
EP-C isn’t shabby but 2 years longer.
I had talked today about my experience using the new and improved (not) FINRA website. One of the points new users made was seeing the S&P ratings for bonds on the site. I take the ratings with a grain of salt.
What new users don’t know and I really miss from the old site, is it displayed a lot more information. For example, say a bond has a date of first call and the issuer doesn’t call it in whole but does a partial call. I could look at a BBB or say a B2 rated bond and if I saw the issuer was continually calling the bond and it had been issued say for a 100 million, but now there was only 25 million left outstanding and it had 5yrs left and was priced at say 85 I might take the chance especially if I recognized a well known company.
DISH – Maneuvers to outmaneuver:
As if bondholders don’t have enough to watch in order to protect their interests, this seems to smack of the issuing company purposely maneuvering around their bondholders:
https://www.bloomberg.com/news/articles/2024-01-13/dish-parent-echostar-offers-debt-exchange-after-asset-transfer
Dish Launches Debt Swap After Controversial Asset Transfer
Company seeks to swap convertible debt for new 10% notes
New bonds would be backed by spectrum worth around $9 billion
By Shannon D Harrington and Reshmi Basu
January 12, 2024 at 9:58 PM EST
Updated on January 12, 2024 at 10:53 PM EST
The parent of Dish Network Corp. launched an offer to exchange about $4.9 billion of convertible debt for new bonds two days after freeing up some of its most valuable assets in a controversial maneuver that has angered many of its bondholders. [https://www.sec.gov/Archives/edgar/data/1001082/000110465924003089/tm243082d1_ex99-1.htm]
The offer, announced in a statement late Friday, would allow holders of the convertible debt to swap their notes for new secured securities paying interest of 10% and backed by wireless spectrum that the company estimates is worth about $9 billion.
The deal would help the company tame a $20 billion debt load that has hindered co-founder Charlie Ergen’s plan to transition Dish away from its dwindling pay-TV business and toward wireless services.
Representatives for Dish didn’t immediately respond to a request for comment after normal business hours.
Holders of many of the company’s other bonds, however, have been nursing losses this week after the company announced it had transferred a handful of wireless spectrum licenses away from them and into a new legal entity under EchoStar. Dish also freed a new unit holding 3 million television subscribers from debt covenants.
Such maneuvers are often made to position a company to issue new debt from an entity that falls outside the reach of the company’s existing bondholders. The new bonds Dish is offering in the exchange would be backed by at least some of the transferred wireless spectrum.
As part of the exchange offer, the company — which recently reunited with its satellite network EchoStar in a merger — is asking holders of the convertible securities to agree to eliminate nearly all investor protections in the existing notes. The old debt would then be swapped for the new notes at a value of between 51 cents and 61 cents on the dollar.
The earlier transfer announcement prompted Dish’s bondholders to huddle with lawyers this week and explore legal options including whether they can make the case that the company is in default for moving the prized assets, Bloomberg reported Friday.
Dish’s bonds have plummeted for two straight days, and about $16.6 billion of its $20 billion of debt now trades at distressed prices, according to data compiled by Bloomberg. That compares with $9.3 billion before the announcement of the asset transfer.
Charlie is a financial whiz. I never said he is investible. One would think the original bond covenants would prevent these asset transfers. I plan to remain far away while cheering him on.
Interesting thesis, I am suspicious. Has anyone followed this strategy? And if so, were the results satisfactory?
https://www.advisorperspectives.com/articles/2023/12/27/turning-bond-fund-income-into-long-term-capital-gain
This is not a new concept, but it happens so rarely an investor could go a decade without being able to take advantage of it..
It is similar to taking advantage of a NAV discount.
On a related note, have always been intrigued by the tax avoidance available via QDI.
In 2024 for example, a married couple, using only the standard deduction, whose taxable accounts were 100% QDI and assuming their ability to limit or defer taxable income to $0 from any other source, could realize an income of $123,250 and owe exactly $0 in Fed tax. $126,350 if both are 65 or over.
2024
Max 0% Cap Gains Tax: $94,050
Standard Deduction: $29,200 (over 65 add $1,550 per qualifying filer)
To follow-up on Charlie and Echo/DISH:
https://www.bloomberg.com/news/articles/2024-01-16/dish-parent-echostar-kicks-off-another-distressed-debt-swap?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTcwNTc2ODA3MiwiZXhwIjoxNzA2MzcyODcyLCJhcnRpY2xlSWQiOiJTN0NYUUJUMEcxS1cwMCIsImJjb25uZWN0SWQiOiJESU5NVldFNE81R1BPMDRCSFFGTUtKS0pUMUlMTklIRiJ9.oj0OYqg1kfM7wnzNuTamTw6rIPpSq3s-UuIfdQlg0oc
I bet the counter party for the credit defaults are smiling.
Also – https://www.moodys.com/research/Moodys-says-the-proposed-debt-exchanges-by-Dish-Network-and-Announcement–PR_484640
“Moody’s says the proposed debt exchanges by Dish Network and Dish DBS will likely be viewed as distressed exchanges”
U be at Thompson-Boling for the big game today?
Game was great! If not so close to the stadium I would not have attended. We southerners are not accustomed to ice and single digits!
I haven’t been able to get out of my driveway or the house for that matter in the last 4 days now… Glad it was on the tube…. and glad Vol Nation showed up as we knew they would! Great team b-ball!
US Steel – https://www.moodys.com/research/Moodys-places-U-S-Steels-ratings-under-review-for-upgrade-Rating-Action–PR_483849
“New York, December 19, 2023 — Moody’s Investors Service (Moody’s) placed United States Steel Corporation’s (“U. S. Steel”) ratings under review for upgrade including its Ba3 corporate family rating, Ba3-PD probability of default rating, and its B1 senior unsecured debt rating. At the same time, Moody’s also placed Big River Steel LLC’s (“Big River Steel”) Ba2 secured debt rating under review for upgrade. Previously, the outlook for both U. S. Steel and Big River Steel was stable.
This action follows a definitive agreement reached by U. S. Steel to be acquired by NIPPON STEEL CORPORATION (Nippon, Baa2 stable) in an all-cash transaction at $55.00 per share, representing an equity value of approximately $14.1 billion plus the assumption of debt, for a total enterprise value of $14.9 billion. The transaction is expected to close in the second or third quarter of 2024, subject to customary closing conditions and regulatory approvals….”
I sold my US Steel 6.875 due ’29 today despite this – I think I chose the wrong vehicle to play this X auction because this one has an unusual call that seems to allow them to call this using a make whole call prior to its first call at a premium of 103.438 on 3/1/24. Although highly unlikely in the face of the close of the acquisition, assuming this deal passes muster with the Feds, I chose to move on… should have bot their 6.65% due ’37 instead which look like they have a make whole provision call only. I’m not sure if the 6.65% issue has a Change of Control provision to consider… DYODD.
X closed down today @ 48.38, down $1.31 and 12% below the Nippon cash bid at $55 as tons of political types weighed in on how they won’t let this deal happen due to national security concerns..
GEO bond 36162JAC0 paying 10.5% matures in 2028. Pays semi-annually. They have paid down 5% of their debt this year and plan to reduce debt further in 2024. Their stock is down for the year. They have been making payments on the bond.
Anyone interested should check their 3rd Q results. Their conference call is here: https://www.fool.com/earnings/call-transcripts/2023/11/07/geo-group-geo-q3-2023-earnings-call-transcript/
Politics put pressure on them but not as bad as many expected. We’ll see what next year brings.
I do own the bond.
I have had good efforts with FINRA after alot of work and a long learning curve.
I have NOT had any results whatsoever after full focus and banging my head on EDGAR’s site for the last three hours. Worked with two proxy searches: ALL CUSIP 020002BB6 and LNC CUSIP 534187BR9. Nada.
Anyone have any click by click guides? Spent time on How to Use This Site. Used Ticker, CUSIP and CIK #. Used name of bond filing by title. ????
Seems there is a magic method for yanking these up as I witness here and then copying the link. ????
Signed, Frustrated Under The Arch. JA
Joel, Google must not be your friend. This took just a few seconds for the LNC
https://www.quantumonline.com/search.cfm?tickersymbol=TEMP16&sopt=symbol
https://www.sec.gov/Archives/edgar/data/59558/000119312522285879/d419126dfwp.htm
Its not a bond its a preferred. Im too lazy to the do the other, time for someone else to step it up!
https://www.sec.gov/Archives/edgar/data/899051/000104746913008132/a2215532z424b5.htm
I found the dated date by CUSIP search on Fido, then looked for 424B5 filing from the same date (actually the day after) on EDGAR.
Ha, Grid! I will try to contribute.
Joel, I didn’t have any issues finding these on FINRA. All I did was login to my watchlist. I then entered the cusip in the search box below “My Bond Watchlist.” Give it a second and the cusip appears below for you to click.
BTW, I was able to snag some of the LNC Floaters mentioned here last week. I like it! Assuming current price of 66.. and current SOFR rates of 5.3%, current yield is 12%. SOFR has to drop to 2% to get the yield down to 7%. I am adding the SOFR adj of 26 bps to get this.
Thanks to ALL! Got the FINRA site down. They USED to include a summary of the security, but do not do that any longer. Hacking on EDGER now. I’ll get it!!
Maine – I gave up on FINRA so long ago that I’m not even sure which site or page it is you would be logging into……. What’s your starting page to login?
I can’t seem to duplicate using https://finra-markets.morningstar.com/MarketData/Default.jsp or https://www.finra.org/#/
I relied but it may have been captured by Tim’s security.
remove the spaces
https://ews.finra. org/auth/flow
The FINRA Gateway site?
Yes.
Let’s see if this works.
https://ews.finra.org/auth/flow
Sort of………. I got to login but after logging into to my existing account it’s telling me “You are now successfully logged in. However, your destination application URL is unknown. If you know the destination application URL you may now proceed to accessing it directly.”
I’ll play around with it now to see what I can learn…. thnx
Reply sent after conversation with FINRA. They are very civilized and active in the Consumer arena. Called EDGAR Senior Consumer Help, but they only allowed a detailed message to be left. Maybe a call back??
This dog will be digging. JA
FINRA Market Information
8:40 AM (5 hours ago)
Hi.
Thank you for your e-mail.
Unfortunately, we do not have this available at this point in time. We are working on adding prospectuses (hopefully in the near future).
Regards, FINRA
Anyone have news on the new notes CCI plans on offering?
https://www.sec.gov/Archives/edgar/data/1051470/000119312523288025/d611330d424b5.htm
I was poking around to find names I like which haven’t rallied too much.
The newly issued Citigroup instl pref can be had on IBKR now for 100.25. Not bad…
7.625% Fixed Rate Reset Noncumulative Preferred Stock, Series AA
Citigroup will pay cash dividends on the Preferred Stock, only when, as, and if declared by the board of directors of Citigroup, or a duly authorized committee of the board, out of funds legally available to pay dividends, on the 15th of each February, May, August and November (each, a “dividend payment date”) (i) from, and including, the date of issuance of the Preferred Stock to, but excluding, November 15, 2028, at an annual rate of 7.625% on the liquidation preference amount of $25,000 per share of Preferred Stock (equivalent to $76.25 per depositary share per year), quarterly in arrears, beginning on February 15, 2024, and (ii) from, and including, November 15, 2028, for each reset period, at an annual rate equal to the five-year treasury rate as of the most recent reset dividend determination date (as described in “Description of the Preferred Stock — Dividends” below) plus 3.211% on the liquidation preference amount of $25,000 per share of Preferred Stock, quarterly in arrears, beginning on February 15, 2029. Payment of dividends on the Preferred Stock is subject to certain legal, regulatory and other restrictions as described elsewhere in this prospectus supplement. Dividends on the Preferred Stock will not be cumulative.
https://www.citigroup.com/rcs/citigpa/storage/public/CitiSept092123PreferredStockSeriesAA.pdf
Maine—-I bought this issue at $100.035 ($1,000.35) and I’m thinking about buying some more. The problem is the institutional dealer spread can be wide. I have to call the Schwab bond desk and ask them to get some quotes. It’s sort of a hit or miss situation and you can only do it about once or twice a week. At least, that’s my experience.
Yeah, the process for buying with Schwab and fidelity is frustrating. With interactive brokers, no call is required. They are plugged into the electronic bond trading platforms and simply pass along the bid / ask on their platform. A few clicks and you are done.
I called fidelity today to try to buy the enbridge bond issued a couple months ago. It was like pulling teeth. First off, they said they would only contact their bond desk for orders $50k or greater. And second, they said they would call me back.. but never did. Meanwhile, the bond was sitting on offer at interactive brokers the whole time.
My sense is that fidelity will eventually step up their bond game, but it may take a while.
BTW, the bid / ask on interactive brokers is 100.13 / 100.184 right now. Not too shabby.
Some of these bond traders are either lazy or greedy. They are all tapped into the same electronic networks.
Is there a CUSIP for this issue? or symbol ?
172967PE5
You can also find it on this link w/ all citi prefs.
https://www.citigroup.com/global/investors/fixed-income-investor-relations/capital-securities
Thank you, Mine.
‘Til Death Us Do Part?
534187BN8, LNC, 8.432 coup, May 66, BBB-, callable. DYODD.
Current yield = 12.6%, selling in smaller lots at 65.67 today, 50%+ if called.
I’ll keep digging and posting. Beats perp prefs. Know exactly what you are looking for. Me? Income for a few more turns around the Sun.
To plug a few holes. This is a subordinated note that floats (dont know when it starts floating). It is a Libor (SOFR by now I assume) plus 2.36%. LNC stated to hedge the variability of the payment, they purchased interest rate swaps with a 5% fixed rate yield for remaining term of the subordinated note.
Issued 2021, floats beginning August 2026. Fairly standard 5 year deferrable clause note feature being its a subordinated debt.
Grid, Help me out with my research. Where are you going to retieve bond data? My reference points are scattered all over. Do you have a definitive site? Going to the company’s website is usually no help. Maybe I need to focus right now on MY OWN due diligence. I had mentally jumbled the details of this with the previously release preferred which was exchange listed, ctreating a mistake.
Anyway, any references to a good, reliable source would be great.
TIA, JA
Edgar has a lot of them.
Here is this one.
https://www.sec.gov/Archives/edgar/data/59558/000119312521239292/d49809d424b3.htm
Thanks Justin, That’s why I like this site. JA
Joel, It seems convoluted but it is easy with practice. When I am serious I only use OSM (original source material). As a person I learned from stated…Anything less than OSM invites error creep into ones investing decisions which leads to sub optimal performance.
This is what I do. I took your info to find a cusip to actually make sure what the name of the bond was. Then I went to annual regulatory filings of LNC, and went immediately to their “debt section” to find the 2066 bond. There I found out under it that LNC has taken a 5% fixed swap for duration of debt. So this tells me the bond could pay 100% interest and they would not redeem because they mitigated the risk with the 5% swap until 2066. So there really is no incentive for them to redeem. But things happen who knows.
Anyways after finding that tidbit, I just scroll down to “exhibits” which have all the hyperlinks. And there on page 192, bottom, 4.26 is the link to the 2066 note.
https://www.sec.gov/ix?doc=/Archives/edgar/data/59558/000005955823000009/lnc-20221231x10k.htm
After you hit that link, you get the goods as linked below.
https://www.sec.gov/Archives/edgar/data/59558/000119312521244862/d171104dex46.htm
Its not as daunting as it seems after just a bit of practice. It took me less than 5 minutes from cradle to grave to know what it all was about through OSM.
Typically dont need to do it much because I keep what I own and trade pretty tight and already know what I need to know. But like this example, it comes in handy to know how to do it. As every now and then I will let a new member into my select own/trade club, ha.
Thanks for the reply. Holiday Love over the Miles!! JA
PS: Some minds are not as ‘voluminous’. Somebody said that, I don’t remember who it was.
I have some preferreds with LNC and they have been very reliable and stable at least so far. This bond is interesting and speculative. W/o checking the prospectus, here’s what eTrade said about details: Callable 08/26@100 – Floating/Variable Coupon – Quarterly Reset,3M LIBOR + 235.75BP until 08/17/2023 then 1DAY SOFR + 261.911BP – Conditional Calls – so at the next reset, probably will yield just under 8% if SOFR stays at 5.32 like it is today?
How about a challenge? How about bringing a fresh idea, even if you have not participated (owned) a suggested specific security before? We need fresh, actionable ideas! Please list pertinent details like CUSIP.
Here’s an open order I have out there, so don’t bump my price!
ATMOS ENERGY CORP
Symbol:ATO.GA CUSIP:049560AA3 Bond Type:CORP
Coupon Rate
6.75%
Maturity Date
7/15/2028
Last Trade Price
$103.96
Last Trade Yield
5.79%
Last Trade Date
9/26/2023
Callable
N
Next Call Date
N/A
Price/Yield Chart
Credit Rating
Moody’s® rating
A1
Non-Investment Grade Investment Grade
Standard & Poor’s rating
A-
Non-Investment Grade Investment Grade
Joel you must be using Internet broker as discussed here, they are the only one letting you do GTC on Bonds.
Mind if I ask what it is your looking for in a bond? Investment grade, below par, current yield, YTM, and what is your time frame your comfortable with?
Thought I would get the party started with these questions just for those just looking at bonds. Also everyone has different needs and risk appetite.
I think as an example FC looks at higher risk but short term to call
Joel, Have you noticed FINRA seems to have tweaked the search tool? Maybe all the people complaining helped. I know when I tried talking to a junior bond broker at Pershing he was lost as he had to ask me for the CUSIP # I had found on FIDO
https://www.finra.org/finra-data/fixed-income/corp-and-agency
Chas: I have managed to have good functionality with FINRA site. The info I posted about APO was a direct copy /paste from their info page , AFTER it had been entered on the Watchlist and directed to that security’s specifics. Of course, I had to only use backspace strokes to get rid of the open spaces and consolidate the content, but it is all navigable and decent after the workthrough over there. Appreciate the interest. ..HAha
keeping it simple, like this issue I posted. Ans whatever you are interested in watching, just bot or has an enticing future from your perspective!
Take your pick, Joel. Either bonds are overpriced relative to treasuries, or the bond jockeys are front running an upcoming heading lower period.
US investment-grade corporate bond spreads have breached a level not seen since 2022 as investors bet the Federal Reserve has reached the end of its rate hiking cycle.
https://www.bloomberg.com/news/articles/2023-11-24/credit-markets-signal-optimism-as-us-spreads-reach-year-lows#xj4y7vzkg
Joel, not sure how this will paste. I was just playing with the revised tool. What appealed to me was current yield and its on the outer edges of my hold to maturity. Note, it recently traded last week. Doesn’t always trade.
I feel safe in thinking that Abbvie will be around in 11yrs
CUSIP 00287YAR0
4.5%
Maturity Date
5/14/2035
Last Trade Price
$92.88
Last Trade Yield
5.33%
Last Trade Date
11/22/2023
Callable
Y
Next Call Date
11/14/2034
Rated A-
New bond issue at Fido. I am trying to buy a few today.
Toronto Dominion Bank
CUSIP: 89114XCJ0
Matures 11/30/2033
6%
Callable 11/30/2028
A/A1 rated
I like the 5 year call protection.
Has anyone seen any additional information on Lumen’s (and their subsidiaries) debt “restructure”/extension since the Nov 2 Bloomberg article?
The article stated, “According to the current agreement, certain Lumen term loan holders can receive cash and the ability to swap their debt for a new higher-ranking term loan, at the discretion of the “majority consenting parties.” The company plans to transfer 49% of assets of its business Qwest Corp. to subsidiaries that will guarantee the debt to improve the collateral tied to the loan. ” Wondering where that leaves outstanding Qwest debt ($1000 and baby) bonds?
I try to follow as I have Lumen 2025 debt. The restructure has been challenged and I do not know what the negotiations will result in. I think Bloomberg Law has the latest on this but I don’t subscribe.
Has anyone been interested in the long Enbridge Subordinated Notes issued to help pay for the Dominion acquisition? Baa3/BBB- 8.25% Ser A and 8.50% Ser B both due 1/15/2084. CUSIP on the B ser = 29250NBT1 and prospectus – https://www.sec.gov/Archives/edgar/data/895728/000110465923102319/tm2325426d12_424b5.htm
Both are resets based on the US Treas 5 year, with A first resetting in 2029 and B in 2034…… These are subordinated, so really not that much different than the preferreds credit wise but theoretically one notch up on the stack…. I see Fidelity not offering B ser but does show them being offered at a discount… Neither are bonds I’d be interested in due to the long maturity and par-ish type price but for IG quality, they seem attractive, don’t they? I’ll stick with the 3 USD preferreds I own with varying reset dates earlier than these and much greater discounts to liquidation preference prices
TDA pulled the long end corporate offerings, bummer. I guess the party’s over.
Here are some recent improvements to the FINRA Site that I was notified of: SAVING DATA COLUMNS in ‘your account’. And Watchlist Views. All the clicking around has been drastically reduced. I have been using the tool and find it better. Real time Last Trades seem to be accurate too, but at whatever volume. I have developed a working system in coord with IBKR TWS.
I am on the path of creating a personally managed annuity and now Normalization of Interest Rates Operations (NIRO, my own contribution to FinTalk…get the analogy? haha) has allowed me to work toward that.
Hi Joel,
I wanted to let you know that we released some new features that may make working with bond data easier for you. When you login to the bond watchlist: (This takes you to the Logon Page / Create Account)
https://ews.finra.org/auth/logon?realm=ews&goto=https%3A//gateway.finra.org/app/data%3FrcpRedirNum%3D1
you will have an option access Templates.
From there, you open and customize bond data you by choosing columns and applying filters and sorts. Then, you can SAVE those settings. Once you save a view, you have an option to share it. Go to My Reports tab and click the share icon as highlighted to get a link you can share to your customized view of the data.
I hope these features are helpful to you. If you’d like to discuss or have any feedback on the product, please let me know.
Sarah Rose (she/her)
Enterprise Data Platforms
FINRA
Joel
Thanks for pro-actively interacting with FINRA.
I am really having an opp to play with this site now and encourge anyone with indiv bond investing to go in and PLAY with this and click around uhtil it becomes familiar. On occation use the mouse rather than ENTER-key.
If anyone has tech skills to add, I keep getting a “clear cache and reopen on new browser” message which takes me out and re-sign in. Using Chrome, but can use alt if I need to download for this site??
Ditto Greg’s thanks, not only for engaging with them (I sent my feedback after the update debacle, heard an ineffectual ‘we’re sorry’ from them, and pessimistically assumed they’d make no change), but also for reporting back detail.
I see they also have added a ‘Submit Idea’ button since I last looked, which is better than nothing and could bode well. Here’s hoping they have a proactive product manager and empowered engineers to continue the updates…
Does anyone here have experience with the Senior Secured bonds issued by certain utility companies? What are these companies using to Secure the bonds, and what would a bankruptcy event look like? In particular, from an individual investor’s prospective.
Seems like the added protection of Senior and Secured would be a benefit on these longer duration bonds.
Here is an example bond CUSIP: 744448BZ3
I’m a long-time reader here, but first time posting. Thank you all for your insights!
Sorry, I just saw this new guy. Senior secured of course means the bonds would be backed by the physical assets of the company. It is also the top of the cap stack. Of course in bankruptcy one is counting on the physical assets to make whole the bond holder in liquidation. These arent really any safer in getting paid the interest. Just safer in terms of being first in line to get your capital back in a bankruptcy. Of course the price you pay for this place in line is lower yield in compared to the other debt stacks the company offers.
Shorter Duration:
ArcelorMittal S.A. 3.6%
Matures 07/16/2024
CUSIP = 03938LBB9
BBB-/Baa3
YTM = 6.15%
CITIGROUP INC 4%
Matures 08/05/2024
CUSIP = 172967HV6
BBB/Baa2
YTM =6.03%
Delta Air Lines, Inc 2.9%
Matures 10/28/2024
CUSIP = 247361ZU5
BB+/Baa3
YTM = 7.10%
MPLX LP 4.875%
Matures 12/01/2024
CUSIP = 55336VAG5
BBB/Baa2
YTM = 6.06%
American Tower Corp 2.95%
Matures 01/15/2025
CUSIP = 03027XAV2
BBB-/Baa3
YTM = 6.10%
Bank of America Corp 4%
Matures 01/22/2025
CUSIP = 06051GFM6
BBB+/A3
YTM = 6.20%
Goldman Sachs InterN 3.5%
Matures 01/23/2025
CUSIP = 38148LAC0
BBB+/A2
YTM = 6.17%
ARES CAP CORP 4.25%
Matures 03/01/2025
CUSIP = 04010LAV5
BBB-
YTM = 7.08%
The Boeing Co 2.5%
Matures 03/01/2025
CUSIP = 097023BJ3
BBB-/Baa2
YTM = 6.03%
The Charles Schwab C 3%
Matures 03/10/2025
CUSIP = 808513AL9
A-/A2
YTM = 6.20%
ONEOK Partners, L.P. 4.9%
Matures 03/15/2025
CUSIP = 68268NAP8
BBB/Baa2
YTM = 6.10%
US STEEL 6 7/8% 3/1/29 CUSIP # 912909AU2 Ca 3/1/24
Prospectus @ https://www.sec.gov/Archives/edgar/data/1163302/000110465921017073/tm214549-8_424b5.htm {B1/BB-]
With not very strong conviction I opened a small position in this bond at 98.23 as a possible play on an acquisition of X by another company. I’d be interested in other’s opinions. X has been in play now for a couple of months with at least 4 potential bidders, Cleveland Cliffs [CLF] considered to be the front runner. The bond has quite a complex Change of Control provision spelled out beginning on p S-49 which seems to provide strong protection should any Change of Control result in a downgrade by any rating agency as a result of an acquisition, Bottom line, it seems that a Change of Control, at the very least, will most likely result in this bond being called at a price of 101 or higher depending on the circumstances. Its first optional call date outside of a change of control is 3/1/24 @ 103.348 and there’s also a make whole call provision of some sort spelled out as well….
It is difficult to definitively conclude what could happen to this bond should X be taken over, particularly by CLF but looking at price trend on the bond itself, there does not appear to have been any impact to its market price as of yet based on the acquisition talks . Also of note, a bid by CLF has been sanctioned by the United Steel Workers so an acquistion by CLF has importantly been pre-blessed by labor.
There are of course plenty of risks involved in this play, but at this stage it seems almost certain that something is going to happen with X. Some bidders have intentions of either breaking it up or only bidding for parts of it and I don’t know what would happen to the bond in that circumstance. Also there’s regulatory risk due to the sensitive national interest concerns involving the steel industry, and of course, recessionary risks as well. However, Morgan Stanley just came out with an upgrade on X to overweight and a raised price target of $40 so that’s a plus. Also of note is the overall credit trend for X as a credit on its own has been up based on multiple upgrades by the rating agencies historically, so it has that going for it too…
2WR, I hold a small position in this as well, actually having bought it prior to these acquisition talks. I can’t add anything more information on the situation, but I’m glad I’m in good company! Thanks.
Muni bonds
Anyone else nibbling?
I’ve been able to get ~4.5% locked up GO munis from my state. That’s over 8% tax equivalent for corp debt for a much better credit.
And yes, 5+ year call protected and purchased near par.
Blue Horseshoe loves Canadian Bonds!!! Couldn’t help myself and jumped on the new issue from Bank of Montreal, CUSIP 06375MCE3, A+ rated, 10Yr, 6.5%.
TD Bank has one CUSIP 89114XBW2, 5Yr, A rated, 6.4% (paid Quarterly) that I’m looking at also.
Pig Pile,
Can you help me understand this one?
BB+ Baa3 Ally Finl Inc. 6.7% 02/14/2033 Callable
Cusip 02005NBS8 coupon: 6.700
Matures 02/14/2033 callable starting in 2032
Price 87.24800
Yield 8.718 YTW 8.718
I didn’t think Ally was in trouble, but ratings make it look like it (?).
Private you know more about the world of banking than a lot of people. It’s also been proven ratings have been lagging and not keeping up with current financial status of a company. Whether its true or not I recently read Ally financial has over 60% of it’s business in auto loans.
I apologize Private, You asked Pig pile for his opinion not me.
Charles, that was its total genesis. Remember Ally was GMAC Bank (GMAC). It was General Motors financing arm for cars. It has tried to branch away after it became a public company, but cars have been its historic bread and butter.
Hi Private,
Just my very humble opinion, but yes auto loans have been Ally’s thing, hence the danger associated with possible recession. I bought the common in the throes of the pandemic but I just don’t think I’d jump into it today. To be fair though, I have been reading about Ally’s ultimate demise for years now, and here they are still kicking.
FYI- Ally is beginning headcount reductions
https://x.com/GuyDealership/status/1707869653848952864?s=20
Just to share my experience today with my wife’s broker. A few people here may have 401k’s with their employer that is managed by T Rowe Price. If your close to retirement and considering staying with them and doing a rollover IRA and you might be interested in bond purchases or sales, you might consider looking at other brokerages to roll over to.
I placed an order for some bonds today with Fidelity and they showed active bid and offer. I went to my wife’s account and logged into T Rowe’s bond screener that I had to sign an agreement to use a while back. I still have to call in to place an order. All of T Rowe’s business goes through Pershing.
I set parameters and I assumed out of the 200 plus bonds showing that I was looking at their inventory of available bonds. After calling in, the person helping me couldn’t find 2 of the bonds I was looking at. I asked if there was someone else we could talk to so he called Pershing to see if they could find them. They could not. After opening my account with Fidelity and looking up a bond and drilling down I had an active Trace report showing in real time last sale at 10:59 today. Keeping the salesman on the phone we looked more at T Rowe’s bond screen and concluded the bonds showing had last sales from Friday and Thursday.
Conclusion. Their bond search tool was not active and only showed sales from the prior 24 hours. The salesman wasn’t even aware of this. Gasp!
I asked the person what was the use of a static bond search tool?
Oh, by the way he couldn’t look up the bonds I was talking about on their search tool without me having to give him the CUSIP
I gotta tell you – if you have a 401K (or similar), it might be worth spending a little time digging down to find out what exactly you are being charged for the privilege. The management companies are REALLY good at hiding how they get paid.
I had a 401K from a big computer company that I left in place after we were spun out. A couple of my financial analysis buddies dug down and figured out that the company was charging the investment manager a fee to manage our 401 plan (pay to play), and the charges were passed on to the participants in some really sneaky ways (I can’t remember exactly – it wasn’t a stand alone charge. It was something like charging a small hidden markup on things). So, the company was using the 401 plan as a profit center. Slimy. Rolled my 401 the next day.
Funny thing was that I told the story to an acquaintance several years later and he said his big employer would never do that – but when he dug in, they were doing exactly the same thing.
I think that specific action was eventually banned, but there are a lot of ways to get screwed by an employer who writes the 401 plan without anyone “on the other side of the table” to protect the employees.
I am not saying all employers are screwing their employees, but it might be worth a look at your plan to see exactly what you are paying for what you are getting.
Private, Fido with their active TRACE posted my buy in real time today. I would say T Rowe and Pershing are going to be yesterday’s leftovers.
’28 and ’29 SNV bonds looking pretty good with BBB.
DYODD (if you have figured out FINRA for which I have developed a roundabout and cumbersome manner).
Signed, Tranche Climber
No Joel,
I was trying out different guesses as to the first 3 anagrams of a cuisp but it was like throwing darts in the dark
Scroll down to look at my post of 8-6-23 on this page. It gives a basic outline/ordering on how to wade thru FINRA site. Use company name spelled out. Use cursor not Enter too.
Good Luck since they never did follow thru (twice) with my Zoom contact and “personal sharing”, even though I was logged in and ready.
BooHoo.
Ps: Thanks to the sharing and comradery on this site as I have been able to turn the ship over the last few years and REALLY retire! From Denver, rainy and cool.
Joel I purchased this today 233293AQ2 Dayton Power and Light due 4/152029
YTM 7.66
The individual investor is not the only one losing out with the new FINRA site. I tried again last Thurs (9-21) to place an order with a T Rowe bond rep.
I don’t know what they pay these people but it’s too much for not being able to do their job.
I already know their bond screener isn’t active. This time I wasn’t frustrated when I had the rep tell me give him the CUSIP then tell me to look at the screening tool give him the CUSIP only to tell me the bond wasn’t available.
I asked him why should I be doing his job? he’s the one who should be able to look up the bond.
Final outcome, he started saying hello, hello? I can’t hear you are you there? I kept saying I hear you, can you hear me? after about 20 seconds I heard nothing than a click and one last are you there? after I said yes I am still holding one final click and we were disconnected. Was there a bad connection? or was the sales rep the one who was frustrated this time?
Front line support is a hard job. What you have to realize is on their side they have KPI (Key performance indicators) for all their operations.
If you can’t get them to issue an order within 5min of the call interaction or transferring you to bond desk where speed is not measured. Give up and call again. Also they get points removed for all calls they can not immediately resolve themselves.
At the end of the day they are just rats on a wheel trying to keep getting their cheese.