Wow – it is just occasionally we get quality issues absolutely hammered, but today is the day. We have quite a few issues down 4%, including baby bonds and preferreds from DTE Energy (DTE) and CMS Energy (CMS)–the saving grace for me is small position sizes for these types of issues.
Additionally we are seeing the same type of losses in some of the community and regional banker issues. CNB Financial (CCNE) preferred (CCNEP) is off almost 5%.
I’m certainly not selling into this fall–but of course I am not buying either. As boring as it is to do nothing for now it is the right thing to do. My portfolios are off .3 or .4% but the world won’t end with those losses–but it certainly hurts.
I guess the best way to look at this pain is that it is preparing us all for future true bargain hunting.
Well the October panic might be setting in. We didn’t get a government shutdown but maybe the delay for 45 days will give them the opportunity to try it again. Kevin McCarthy is out as leader of the House. He is probably relieved he actually lost the job. Once reality settles in I can’t imagine anyone wanting the job.
I expect panic sells with large swings in daily prices. Some maybe able to snag a deal and flip it same day.
Unfortunately outside some GTC low-ball bids tying up capital I can’t watch screens to achieve that. I appreciate real time posts here of people sharing when there is enough to go around. I am past the days of having 3 screens set up on my desk. My blood pressure can’t take it anymore LoL
I was a barghain hunter today. AQNA below par looked reasonably safe. Added to NLY-I not adequately priced for its upcoming float. Nibbled on few other REIT preferreds after big drops though they kept falling a little more. Volatile PMT swaps have worked since their fiasco but not enough to keep up with the price drops for now.
I dipped back into AQNA late in day also. Its not a great long term cap gain play but a nice placeholder for time being. Took some smaller losses to flip and buy ones more roached out. But I am very limited in what I can do being I have so much money tied up in CDs, IBonds, and shorter treasuries. Maybe that is a good problem to have for time being.
Has AQN officially said they’re going to SOFR on AQNA? Last they had said to me was that they had yet to appoint a calculation agent and that was on 9/19. 2 days later they said “As per our public disclosures, our intent is to call in 2023, but no date has been communicated at this time.” So now, there’s no way for them to call without at least paying in part what should be a floating rate rate before the call date, but they have still not said for sure what they’re doing… IMHO, they would not be thinking of calling if they did not believe they were going to SOFR from LIBOR base, but it sure would be nice to have them on record. .
Do you know which public disclosure they’re referring to? Also curious if AQNB was mentioned.
Someone showed an older link to a comment by them. But that was many months ago. That link showed B hanging around and A being redeemed….But MH said they were redeeming MH-A in a few months and that was 2017. Instead they got a divi suspension and eventual cram down in 2022 converted into common shares. No one never knows especially since rates have changed. And any IR info? I personally dont trust them except for basic Mickey Mouse info. But below par now it is what it is for me.
“I direct you to our publicly disclosed statement which is included in footnote 2 in the below table. This is a snippet from our Q2 MD&A (pg. 39).”
“The statement in the footnote is the Company’s intent to call the 2078 instrument in 2023, and the notice will be given in accordance with the requirements of the Redemption Rights section in the Prospectus (attached).”
On AQNB the footnote mentions anticipation of calling in 2029, NOT in 2024
2WR, how is this for a bold prediction. Their yieldco is going to bring crap in a sell as yieldcos have got pummeled recently. So they either wont be able to sell it near term or will keep debt outstanding for a while because of this problem.
I was thinking the same thing, Grid – their plan to call in ’23 may be out the window because they won’t be able to get squat for their renewables.. That makes it even more important to know for sure that they’re locked into A floating and don’t plan to PMT the issue…
Thank you! Here is the link for anyone else interested:
https://s25.q4cdn.com/253745149/files/doc_financials/2023/q2/2022-AQN-AR_Q2-8_10d.pdf
See page 41
To me, at current pricing levels, I think AQNB looks better than AQNA. AQNB is the one I hold currently and will plan to hold unless it goes way over $25.
Depends on your expectations and goals I think. Before July Fed could turtle short end drops and long end stays high and the curve normalizes. Or not. I prefer AQNA because I wont be in it come July at B’s reset so it should hold its price better near term.
Was looking into AQNA and saw it is being called Nov 6. Sold for over 25 all during Sept.
because of accrued interest or mis-priced?
Because of accrued interest. Was slightly under 25 when Call was announced, then popped over 25 for the short term money.
Maybe I ought to just buy a bunch of that 20 year at over 5% and go home.
5.12%….Would be a helluva cap gain trade if it went back to 3%. But my assumption would be perpetuals would also provide that opportunity in that same scenario.
So tempting to do just that, lock in a decent yield and call it a day. The 30yr was above 10% from 1980-85, hitting 15% in Sept 1981. Why could/couldn’t it go there again? I used to think that if I had the chance to lock in 6-7% for 30 years I’d do it and never work again. But, with Americans itching to use the feds new QE nukes at the first sign of economic pain, I think the focus now has to be on preserving buying power over time. TIPS maybe? Or maybe we should all be researching and stocking up on inflation-prone non perishables.
Private were you not buying TLT a month ago and feeling pain then?
10yr T ~ just cracked 4.8%
MIDDAY DATA…
10y ~ 4.785% up
20y ~ 5.122% up
30y ~ 4.926% up
TLT ~ $85.26 down
30Y Mortgage ~ 7.72% up
US Job Openings ~ higher, now 9.6M up from 8.8M
VIX ~ 11.41% up
USD ~ $107.05 up
2/10 Spread ~ (-.35)
Preferred ETFs…
PFF ~ down 1.91%
PFFD ~ down 2.08%
PFXF ~ down 2.08%
Windyducat’s, base case is starting to play out:
https://innovativeincomeinvestor.com/interest-rates-poised-to-move/#comment-98651
Hate the paper capital losses but also excited to start sorting the sheet for IG low yielders to buy for the sock drawer.
Long bonds rising fast. 20 yr over 5%, 30 yr, close to 5%. 10 yr closing in fast on that 5% number. When do people start to liquidate their bond fund holdings? Bond fund liquidations will spike yields.
Uncle Sugar set to issue massive amounts of debt. Perfect storm for higher rates.