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Bought a Small Taste of This Baby Bond

This afternoon I am walking on the wild side–that is relative to my normal ultra conservative investing style.

I bought a small position in the newer PennyMac 8.50% Senior Notes due 2028. I paid $24.98/share for my ‘taste’.

Honestly I have been trying to force myself to buy some high yield securities–up to this point I have stuck to BDC baby bonds. On a historical basis I have shied away from anything that is residential mREIT related and I suppose over the years I have given up some potential income. Not certain I want their perpetual preferreds–but a DATE CERTAIN short maturity bond should work ok–we’ll see.

Of course I added this to my ‘laundry list’ of holdings.

5 thoughts on “Bought a Small Taste of This Baby Bond”

  1. This is a good purchase Tim as it’s a win-win for everyone. Investors get a high yield and quite frankly, I’m surprised the coupon is only 8.5% as this note was just issued during the bonds crash and yield peak. From the vantage point of PennyMac, this cost to carry is a win for them. We’ve seen less junkier issues come out with 9.5% paper.

  2. i think if interest rates don’t spike up again, the mreits should do fine.
    if the 10 year goes back to 5 percent then it’s an all new ballgame again

  3. bought some Tims!! GAM.PRB at 24.56 nice 6.05% yield, better than a bond! lol. a Timmo fav. Thanx again Tim for all you do. B

  4. Tim. I like it. Their book is a bit more diversified having both agency and MSRs. It also goes ex Div soon.

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