Of course we have investors of all types on the website, but as I was “shopping” for myself last night I came across an interesting baby bonds that really fits in my wheelhouse.
Ready Capital (NYSE:RC), a mortgage REIT, has a baby bond outstanding which is now in the early redemption period, which started 4/30/2019.
This issue is the Ready Capital Corporation 6.50% Senior Notes. The price of this issue has trended down lately as investors are anticipating a ‘potential’ call. This puts the current price at $25.35. The issue has a maturity date of 4/30/2021.
This particular issue has a 1% bonus payment if called before 4/30/2020–8 months from now so it would be called at 101%–$25.25–so no call risk at this particular time and price.
You may recall that RC just sold a 6.20% baby bond on 7/18/2019 so we have a decent idea of what type of coupon is available to them–we think they need a better coupon to be motivated to call the 6.50% issue–but one never knows.
Whether you believe you want to be involved with Ready Capital securities is an individual matter, but for myself, given the current interest rate situation, I will likely pick up a small position today. Each investor should do their own due diligence and see if this one might work for them.
Summary–RC has decent financials, the issue has no call risk, the coupon is superior to what is generally available right now, the issue has a maturity in less than 2 years.