Category: Portfolio

As I mentioned earlier today I added shares of insurer Athene Holdings LTD 4.875% perpetual preferred (ATH-D) to my holdings. I had this in the portfolio already so this is just an addition.

As most of you know ATH is now owed by Apollo Global (as of 1/2022) and obviously the company is being very well run. The AM Best upgrade yesterday kind of motivated me to buy a little more of this issue.

Current yield is 6.50%–low odds this will be called anytime in the next year or two so yield to maturity is not relevant–BUT my personal guestimate of where interest rates move in the next 3-6 months is relevant as I am looking for a 10% capital gain before the year is out on these new shares. The shares in the portfolio now have a 10% capital gain already.

I paid $18.71 for my shares this morning.

This morning I bought MORE of the SiriusPoint LTD 8% Resettable non cumulative preferred stock (SPNT-B). I have had a position in this issue for a very long time and have added to it 3 times now–that is the end of buying more of this issue–I’m full up. I paid $25.19 for the shares. This issue resides in my ‘sock drawer’

The issue is rated BB+–1 notch below investment grade, but yet a decent quality.

The coupon is 8% until 2/26/2026–at which point it resets to the 5 year treasury plus a fat 7.298%. This means the company will redeem the shares–at least I am 99% sure they will because the coupon will reset at something over 10% (of course no one really knows). Shares are ONLY redeemable on a dividend reset date so if not redeemed on 2/26/2026 (or before) they are stuck with that coupon for 5 years.

Of course there is no expectations for a capital gain–just a solid 8% for near 20 months.

I added a starter position to my bucket just now—not the safe bucket CEF preferred I wanted to buy, but a buy just the same.

I added shares of Priority Income Fund 6% term preferred (PRIF-H)–which has a mandatory redemption in 2026. I paid $23.26 which means that my yield to maturity is around 9%.

Of course Priority Income Fund is an interval fund which owns CLOs – not unlike Eagle Point Credit (ECC) or Oxford Lane (OXLC), but in my opinion a safer option. I am aware that folks dislike the fund because it is managed by Prospect Capital (PSEC) which is NOT a well respected company–irrespective of personal options on Prospect Capital, Priority has performed well and has an asset coverage ratio of over 300%.

As I noted earlier in the day I planned to execute a trade for my ‘high yield, higher risk’ bucket and I did just that.

I bought a starter position in the Annaly Capital 6.95% fixed to floating rate preferred (NLY-F) at $25.30–which includes a month and a half or so of accrued dividends.

This issue is currently redeemable as it is in the floating rate period and floats at a spread of 4.99% plus 3 month SOFR so now has a coupon of around 10.2%. I expect no capital gains (or losses) just simply pay me my 10.2%. The issue may well be redeemed in the next months (or years), but looking to minimize share price movement so this one should trade in a narrow range in the future (say between $24.90 and $25.50).

This is my 1st foray into an mREIT preferred for many years and it gives me some comfort to buy an issue from the giant in the industry.

Of course I will add this to my laundry list of holdings.

I mentioned this morning that I added to a current position in Hennessy Advisors 4.875% baby bonds (HNNAZ) which have a maturity in 2026. I had mentioned last week that shares had fallen 50 cents so I then entered a GTC order–thinking it might well NOT execute.

My good til cancelled order executed yesterday at $23.35. I consider this an addition to my ‘safe’ bucket–in particular with maturity in 2026. At this price my yield to maturity is pretty close to my 8% target.

I will add this to my laundry list of holdings.

It took a few hours but I added to my current position in the Carlyle Credit Income Fund 8.75% term preferred (CCIA) at a buy price of $25.40—it is now trading at $25.29.

This may look like a pure ‘yield chase’, but it part of my plan–lower yielding, safe issues balanced with higher yielding issues. This term preferred issue with a mandatory redemption in 2028 is perfect for me. Folks worry about collaterallized loan obligations (CLOs), but on a historical basis going back to 1994 less than 1% of the loans held has defaulted–the reward pays for the risk in my opinion. This issue is superior to all of the Eagle Point Credit (ECC) term preferreds as well as the Oxford Lane Capital (OXCL) term preferreds. Carlyle is a newer and smaller company, but the sponsor (Carlyle Company) is a giant company and the largest CLO manager in existence (1 list has them at $38 billion while another says around $50 billion)–if they can’t successfully launch a CLO closed end fund I don’t know who can.

NOTE that I expect no capital gain on this issue–simply will collect a nice dividend. Term preferreds with mandatory redemptions will generally move in a fairly tight range over their lifetime–and that is my hope with this issue.

Of course I will add this to my laundry list.

I’ve been looking to buy something with a 8% yield–or yield to maturity of around 8% and the best idea I have for now is to enter an order for the Hennessy Advisors 4.875% Note due 2026 (HNNAZ) at a buy price of $23.30 which would give me about 8% yield to maturity. I entered this order yesterday–shares had hit this price level on Tuesday (of course I had no order in then). I will simply let this order sit for 60 days and see if someone want to give me a deal. The issue matures on 12/31/2026.

Recall I owned lots of these shares previously and sold most of them for $24.37–I kept 94 shares which I still own. I would look for this one to go back over $24 before the year is out at which time I could sell for a nice gain (interest plus a capital gain) or hold to maturity. Details of these transactions are on the ‘laundry list of holdings’ page.

I chose this one to buy (or try to buy) because I have a comfort level with this little money manager–they have enough cash on hand to call of their debt plus with the short maturity the price movements are not huge.

I just took a nibble on the newer Carlyle Credit Income Fund 8.75% term preferred stock—CCIA. This issue was floated 10/18/23. I have been watching the issue and it has been trading above $25 since issued and now is trading at $25.40. A bonus (at least to me) is that the issue is a monthly payer–I always prefer money in my pocket instead of waiting 3 months for a payment.

CCIF is a newer fund (actually a rebrand of another fund) and is relatively small–around $100 million and Eagle Point Credit (ECC) owns a large position in the common shares.

CCIF is an owner of CLO (collateralized loan obligations) – so comparable to the Eagle Point Credit (ECC) issues and the Oxford Lane (OXLC) issues. I bought the Carlyle issue because it is a 8.75% coupon and has a relatively short maturity which is in 2028. This nibble helps to balance the last purchase I made which was the Spire 5.9% perpetual preferred (SR-A) which is a quality utility issue.

Below is an AI generated recap of the Carlyle Credit Income Fund.