I’ve been looking around for something to buy—obviously a term preferred or baby bond with a maturity out a year or so. Certainly there is not much out there and my #1 favorite (XAI Octagon – 6.50% term preferred (XFLT-A)) doesn’t move lower and I already have maybe a 200% of normal position–have to resist going crazy.
Accounts are a tiny bit red today–just a tiny bit though as lower interest rates have helped to balance out macro downward movements. Honestly I have been somewhat surprised that we haven’t had that ‘baby out with the bath water moment’—it could come at any time-one never knows.
The 10 year yield is down sharply–off 10 basis points to 4.21%. No doubt that recession fears are taking hold. Equities just can’t get anything going–they keep trying to move higher–but sellers move right in to drive prices lower.
Well let’s see if we get a wild afternoon–or do we finally get a turn in stocks?
TIM-
ATLCL Sr Note
& FWIW – RCB, RCC — SR notes
TIM; Here’s one for you. ATHS is trading right now at $25.42 & volume is over 30,000. Pretty decent company, coupon of 7.25% & call protection until March 30th, 2029. Feel free to shoot holes in it as Iam always open minded. I do own 4,000 shares bought a few weeks ago a little lower. But I look at the environment, the low yields out there, the 10 year going lower and I feel this is a pretty decent piece of paper. Its not for the flippers but people that buy & hold like myself.
Chuck, Just the basics, It’s a financial services company offering insurance, annuities and retirement products owned by Apollo. It’s a 5yr Treasury reset note due in 2062. We have no Idea what rates are going to be for 5yr treasuries in 4 yrs when it resets, but let’s just say for example it’s 3% by then. with the 2.98% adder you are still close to 7%
Chuck and Charles
Worrisome Westie here
PE companies, especially Apollo, find insurance companies wonderful places to park their specialized assets. They sell the previously held marketable securities and replace them with assets that they have created at values that they represent are valid.
There are entitities – principally union members whose pensions are based on these insurance/annuities – who have expressed strong concerns about such replacement.
Short-term, no problem – until/unless one of the larger assets involved crumbles and a state regulator cries foul.
I avoid entities where I am not comfortable with management’s intentions.
I own aths
Athene is hugely material to APO… I like it anywhere around par or lower and is one of my larger sub note holdings
The reset at a reasonable spread alleviates the risk of a rate shock higher… if rates go lower again the spread is pretty decent for its current quality at least
I picked up some GAM-B today.
Just went ex div Friday. BOT at 24.66 for a CY of 6.03%. Lots of liquidity in this safe issue today
Dan—one I hold and have pondered adding to—they have a open market buy program under $25–should keep the floor pretty tight to $25.
I’m hoping I can get a “ 2020 moment” out of some of these CEF preferreds. Lots of low bids in all my accounts . If I end up needing margin I’ll do a few SPX boxes.
The CEF would have to fall 80 pct or more for this to be a big problem with GAM-b
GAM has not been an active buyer of GAM-B below $25. They only bought a little over 3100 shares in 2023 and 0 shares in 2024. Their insiders do personally buy from time to time at $25 and below with most recent buys on March 6, 7, and 10.
Thanks for that info SN
Also own gam b