In what has been on ongoing trend interest rates have ticked a bit higher today to 2.97% on the 10 year treasury while the DJIA tumbles–this isn’t the norm (historically), but what is normal about these markets? They have been manipulated so long that what used to be up is down and what was down is up. Of course with the Fed balance sheet runoff and global central banks continuing to do a little QE why should anything be normal now.
1 new issue which began trading yesterday is the new 6.6875% baby bond from Eagle Point Credit Company (NYSE:ECC). This issue (NYSE:ECCX) doesn’t mature until 2028. Because of this particular maturity date it does have some level of interest rate risk in it and right now as can be seen it is trading kind of weak. The coupon coupled with the 2028 maturity date seems to push the limits of what kind of terms conservative investors like me are willing to accept in a rising rate environment. We have no interest now, but that doesn’t mean that we won’t have in the future.
A quick look across preferreds and baby bonds doesn’t show more than the normal + or – 1% moves.
We do have a new investment we will be making in by the end of the week, but we want to write a complete article on it–let’s say it is ‘innovative’.