Category: End of Day

So in spite of the Jay Powell accelerated taper talk equities took off today with the S&P500 closing at 4577–up 1.42%. Guess we’ve decided that the Omicron variant is no big deal.

In spite of stocks taking off the 10 year treasury rose by just 1 basis point to 1.45%. On the other hand the short end of the curve rose considerable–the 2 year up 7 basis points–yikes the curve is flattening quickly. It will be interesting to see this all play out–is a recession coming?

Today the average $25/share baby bond and preferred stock moved a nickel higher. Lots of stable pricing in these issues.

Since yesterday OFS Credit Company (OCCI) got their new term preferred priced at 5.25%. They are selling 1.22 million shares plus another 180,000 available for over-allotment. The OTC ticker will be OCCEV.

Canadian company Skylight Health (SLHG) sold a small $25 preferred issue with a coupon of 9.25%–shares hit the market at $21 and closed near $20.

There continues to be discussion in the Sandbox on the Tellurian (TELL) who sold a 8.25% baby bond last month–good discussion is always encouraged.

mbg noted that the most recent baby bond from DTE Energy (DTE)–a 4.375% issue is now trading with ticker DTG. Trading around $25.20.

Franklin posited a question on the newer (6/21) preferred from Atlanticus–7.625% issue (ATLCP) (which has traded relatively weakly since day 1). If anyone has some input on that one pop into the Sandbox and give your thoughts.

TOMORROW IS JOBS FRIDAY. This is a potentially important number.

Wow–what a crazy day it was in equities–up 600 and then down 400 or so–over a 1000 point range, ending down 462 Dow points. Guess chairman Powell didn’t back off the potential for a quicker taper today so we had to have a little tantrum–oh well–get over it.

The 10 year treasury started moving higher early today–up 4-5 basis points until the equity markets started to have a tantrum–then rates reversed to end up down 1 basis point at 1.43%.

The average $25/share preferred and baby bond rose by 5 cents today to $25.65—exactly to the penny where they closed last Friday.

B Riley (RILY) priced their new baby bond with a coupon of 5.00%–detail is here.

Ken mentioned that Prospect Capital was calling the PBC 6.875% baby bonds on 12/30/2021. The announcement is here.

af and EarlyBird posted the new upcoming term preferred offering from OFS Credit Company. Further detail can be found here.

EarlyBird posted on a follow on issuance of Greenidge Generating baby bonds–initial offering was in October and can be seen here. Seems like some of these companies are trying to ‘get while the getting is good’ (at least if an 8.50% coupon is good).

nhcoast posted on Egan Jones ratings (in sarcasm)–readers need to be very cautious when comparing Moody’s, S&P and Fitch ratings to Egan – Jones. Egan Jones is untested in my book–their ratings seem very lenient compared to the major ratings agencies and investors that compare their ratings to Moody’s, S&P and Fitch may well be very disappointed down the road.

Someone posted on Sotherly Hotels (SOHO) selling a property. In general does this mean they are close to resume cumulative dividends? All 3 SOHO preferred were up nicely today.

Chophouse posted on the newer 8.875% preferred from Cadiz (CDZI) that the shares had moved from $25 to $20.50.

We have had a plethora of very low quality issues come out lately and these are always prone to being hammered when folks understand the very low quality. Another one of these is the Comsovereign 9.25% perpetual which traded at $24 before it started to get hammered and now trades at $15.50. I see the common shares trade at 98 cents—what could go wrong?

If you are buying new issues with coupons of 8.875% or 9.25% in this low interest rate environment you know you are playing with fire.

Well the dove morphed into a hawk today and equity investors didn’t care for that transformation. While I thought the Fed should have started tapering a year ago I am not a fan of Powell changing his tone – a faster taper – not sure that will happen – so much can happen week to week and month to month – why ponder a change when the original taper only started in November. We’ll see what happens. I hear the talking heads giving all sorts of opinions on what happens next–mostly I just laugh–who the heck knows what happens next.

In spite of the faster taper hinted at by Powell the 10 year treasury sank by almost 9 basis points to close around 1.44%. Like the moves on Friday and Monday I would think this will once again reverse tomorrow or Thursday and head back into the 1.50’s%.

The average $25/share baby bond and preferred stock fell by 11 cents today reversing yesterdays gains plus a little. The change is simply some price weakness brought on by the common equity tumble.

Today Landlord Investor posted an article titled “Quantifying the risk of bonds with S&P credit ratings’. The article deals with global credits and defaults and while the article was published in 2017 it remains good information. The article can be found here.

Gary mentioned At&T (T) was off today with no news–I see it finished off 4.44% now sporting a current yield of 8.71%–talk about a ‘hated’ stock.

Gary and RetiredBroker noted that KTBA—a 7% structured product debenture from BellSouth originally fell to $27.56 today. This issue traded as high as $31 or so recently. It has a maturity in 2095 with no early redemption feature. Brokers are ‘protecting’ most of us by not allowing opening transactions in this issue—thanks Fido (for nothing).

Landlord Investor published an article on Seeking Alpha on Tellurian (TELL) which recently issued a 8.25% baby bond (TELZ). Here is a link to the article. The article helps to dissect the company–saves time for us that are lazy and we like others to do the work. Thanks LI.

Tex the 2nd mentioned the preferred stock from Willamette Valley Vineyards. He labels this one ‘high up on the strangeness list’. Here is the prospectus. I glanced at it – strange issue.

And of course Gridbird and others always have plenty of chat about the Illiquids of the market on the ‘Illiquid Securities’ page. Being winter time these folks must be bored as they are now playing a game of ‘Stump the Chumps’ to keep busy.

All markets took a good step toward turning around last Fridays move–a move that seemingly was just using a new covid variant as a reason to sell stocks and buy safety/bonds.

The 10 year treasury yield moved 6 basis points higher to 1.53% from 1.48% last Friday. Further news on the covid variant may well determine where rates go from here.

The average $25/share preferred and baby bond rose by 6 cents today – 1/4 of 1%. Not a giant move, but I don’t really care to see giant moves up or down – no use ‘spooking’ folks with giant moves.

B Riley (RILY) announced a new issue of baby bonds–the preliminary prospectus is here.

Ken mentioned today that Newtek Business Services (NEWT) put out a partial call on their 5.75% baby bonds due 2024 (NEWTL). They will redeem 1.6 million shares (bonds) out of 3.14 million outstanding on 12/29/2021. Recall that NEWT is a business development company (BDC) looking to turn themselves into a bank holding company early next year. The filing announcing the redemption is here.

Gary made note that the new Granite Point Mortgage (GPMT) 7.00% fixed to floating rate preferred (with a 7.00% floor once it hits the floating period) is now trading under GPMTP–a change from last weeks GPMTV.

mbg pointed out that if B Riley (RILY) follows through on the call on their RILYO 6.75% baby bonds as pointed out in their new prospectus they will have to pay the bonus rate of $25.50 (plus accrued interest) if redeemed before 5/30/2022. The rate after that date and until 5/31/2023 will be $25.25. Afterwards it is $25.