CMS Energy 5.875% Baby Bonds Now Trading

The new issue of CMS Energy baby bonds with a coupon of 5.875% is now trading under the ticker of CMSD. They are trading in the $25.05-$25.10 area at this time.

This issue has a maturity date in 2079–and the company has another baby bond with maturity in 2078 with a 5.875% coupon trading at $25.50. This indicates that the new issue should trade maybe 35 cents higher than the current price.

SEC details of the new issue are here.

9 thoughts on “CMS Energy 5.875% Baby Bonds Now Trading”

  1. It appears CMSD has optional interest deferral periods of up to 40 quarters apiece and if I am understanding it correctly, deferred interest is included in your annual gross income even though payments have not been received. This seems rather harsh if true. I am new to this, so please enlighten me as to your understanding. Thanks.

    1. Pete, it is only an emergency last gasp thing…Common divies and such would have to be suspended first…Here is an example AES-C which was a long venerable trust preferred baby bond that stayed outstanding for over 15 years before being redeemed at $50 par…Anyways when AES flirted with bankruptcy in early 2000s, AES-C went from $50 all the way down to about $5. It never suspended payment once and eventually recovered and was redeemed about 2 years ago.

  2. Thanks Tim- bought 600 shares. Probably go down some if we have another interest rate hike scare but I like the company.

    1. Will b, Bought an initial position of 200 shares @25.09. I, too, feel comfortable holding this issue even if interest rates increase moderately.

    2. The older issue, CMSA, is presently trading at $24.95, compared with CMSD at $25.20. They have the same yield, but maturity of the older one is 2078, one year earlier. hardly a significant difference, I will NOT be around by that time.

      All things considered, would it not be better to buy the older issue for a little less?

      I own the CMSA, and am happy with it.

      1. CMSA has lower coupon and call date. Will trade lower than the other outstanding securities. True comparison is CMSC.

        1. will, you are correct, my mistake. aarod told me about it, too.
          If CMSD trades below par, I will probably pick up a few, but not at current pricing. Maybe when the underwriters start selling their allocation, that will occur.


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