The average $25/share preferred or baby bond is off about 1/2% today thus far–the last couple weeks have been painful as the average issue is now just about 2% above the 2022 low on 10/17/2022.
Almost without doubt we can’t get traction to the upside with interest rates moving higher and higher–up 10 basis points today again (the 3rd time in the last 6 trading days) to 3.85%. On the other hand we have had opportunities to search for ‘bargains’ again and again.
I haven’t done anything today–like most days recently. I have a little nibbling money available and have looked at the Bank OZK 4.625% perpetual (OZKAP) which is trading at $15.89 today for a current yield of 7.28% and of course a huge yield to 1st call of about 17% (not that this will be called very soon if ever). This is a solid $26 billion in assets regional/community bank that someone mentioned in comments last week (can’t remember who) that checks most of my boxes–we’ll see. If I nibble this one it will be my last banking issue as I will have 4 issues. Just a note that OZK has had some write downs, like most all the banks and insurance company’s have had, as their available for sale securities have gotten smacked down.
I am going to move onto the BDC baby bonds soon and see what I can find there (if anything)—of course I have a huge concern that the business development company’s are going to have massive write downs if we see a weakening economy from here. I don’t think thus far the BDCs have been severely ‘tested’–it is yet to come I think.