Here we go on a another week which will be driven by news on Covid 19, vaccines and the never ending saga of the next ‘stimulus’ package.
The S&P500 traded in a range of 3594 to 3699 closing the week right at the high of 3699—a gain on the week of around 2%. For the coming week it is likely equity markets remain flat to 2% higher again–only a ‘spike’ in the 10 year treasury above 1% or maybe a ‘problem’ with initial vaccinations in England of the Pfizer Covid vaccine could put a major dent into equities.
The 10 year treasury closed last week at .97%. This was a 9 basis points move higher on the week. Income securities have paid little attention to higher rates thus far—rates don’t matter much until they do and no one knows where the point of ‘mattering’ is at–certainly something over 1%.
The Federal Reserve balance sheet rose by $6 billion last week–simply a stair stepping higher as has virtually been the case all year long. The upward curve on balance sheet assets will really steepen when a new stimulus package is launched.
$25/share preferred stock and baby bonds have been following the lead of common stocks most weeks and last week was no exception as the average share moved higher by 11 cents–almost 1/2%. This move in the face of rising interest rates.
Last week we had 2 new income issues priced.
1st off we had a new baby bond issue sold by United States Cellular (USM) with a coupon of 5.50%. The issue has not traded as of Friday–but I would expect it anytime now.
Then we had Selective Insurance Group (SIGI) sell a 4.60% non-cumulative preferred which has begun trading under OTC temporary ticker SLIG and closed last week at $25.80. This issue has traded strongly since the minute the 1st exchange trade took place.
$25.80 for a 4.6% Ba1 non-cumulative preferred stock? Pass…….
Single B or better….
W/o pulling all symbols here’s on that list. I’m not recommending any just listing….
VNO
OPINL
ESGRP
QVC
UZD
ATH
F
AHL
BMI
AEJC
SCE
Well the day kind of snuck up on me!
So what 25 dollar preferreds are over 4.25 YTC? Am I missing something here??
If you prefer, Not much of a day for me so you didnt miss a lot. The highlight of my day was selling a bunch of GJH at $10.75 today, and then buying them all back on an average cost of $10.51.
Grid – I’m curious, historically speaking does GJH act differently after x-div date because it only pays twice a year??? In other words does it normally recover more slowly? It looks like I sold too early at 25.59 last Wed but had only gotten a small partial buy less than a month ago for 200 at 25.27 so decided just to clean house instead of pay up for more… now wondering how anxiously the mkts been paying up to buy the distribution.
2wr, you might have had a different stock in mind; GJH is a $10 par issue, and has been trading around the $10.30 – $10.60 range for some time.
Inspy – Man I am becoming frighteningly sloppy these days… Dorothy’s scarecrow and I seem to be having more and more in common each day… YES, I was talking about GJH, but by rote, I wrote 25 instead of 10.27 and 10.59. I did manage to buy 200 at 10.27 in 11/10 and sold 200 on 12/2 @ 10.59.
2wr, Glad to see I’m not the only one with sloppy memory syndrome, LOL.
Only reason I caught the discrepancy is because I own GJH and missed the spike that Grid was able to take advantage of.
In my case, I blame it on increasing age and an overly sedentary lifestyle.
COVID lockdown provided the perfect opportunity to forgo daily exercises and chores, and to simply spend much of the day at the computer or TV set.
2WR, Its hard to say. KTBA pays every 6 months. It went exD a couple weeks ago and is now already trading higher than it did right before it went exD.
I know because I own a slug of KTBA.
To be honest I wasnt looking to flip these. But then I saw a higher bid come out of the morning gate at $10.65, so I put out $10.75 and if someone wanted them have at it and they did. Then a couple hours later some dumping occurred as it went to low $10.40s and I was buying up all the ones I sold. I had to pay up into $10.50s to get the final few hundred I needed to fully restock. But whatever, I basically got a double interest payment doing a one day flip and rebuy.
These types of issues are starting to trade “premium” as they offer above market current yield. I can see it slide back into 10.20 range after exD. This will have limited upside due to the past call anchoring effect, but for this particular issue, and its backside price support, I definitely wont trade these for the new sister 5.5% baby bond coming to market.
There are over 250 of them starting with BIP-A (at $4.26%) which unlike SIGIP happens to be cumulative and investment grade rated.
I only saw like 55 of them. And of course we all filter down from there, eliminating others based on our own internal perimeters. For instance I don’t do shipping bonds!
Maybe my screens are fibbing to me. I’ll go back in and see if I have something running in background. Thanks Derek
There a quite a few, but 80% of them are too risky for me
UZD
ESGRP
INBKZ
TGP-A
OCFCP
UCBIO
TWO-E
ATCO-G
AEL-B
CLNY-G
CIO-A
CMRE-B
AL-A
SAK
AEL-A
AUBAP
OPINL
OFSSZ
F-C
CUBB
NEWTL
SAF
TRTN-A
ARGO-A
QVCD
SCE-K
UMH-C
CAI-A
DCOMP
ECCX
QVCC
TSCBP
OFSSG
INBKL
WFC-V
AJXA
GNL-B
SACC
TRTN-B
TSCAP
DHCNI
CAI-B
TRTN-C
SCE-J
MNR-C
LEVLP
BFS-D
FRGAP
TRTN-D
OXSQZ
JSM
HMLP-A
PRIF-C
SCE-H
MNSBP
RILYO
AHH-A
LMRKO
LMRKN
BFS-E
UMH-D
CLNY-H
PEB-C
RILYN
AGNCN
DRH-A
UBP-K
CUBI-F
RILYP
SCE-L
RILYL
ECCB
PEB-E
UBP-H
PRIF-D
CHMI-A
AFINP
BPYPP
NLY-I
ARR-C
GSLD
CODI-C
SITC-A
CODI-B
CMRE-E
TCBIP
CUBI-D
NREF-A
BPYPO
AGNCO
GSL-B
GLOG-A
MFA-B
BPYUP
SCCB
ATCO-H
PRIF-F
CUBI-E
DX-C
PMT-A
PMT-B
AGNCP
AGNCM
TGP-B
TWO-B
TWO-A
GLP-A
BPYPN
ATCO-I
IVR-C
NYMTO
RCA
NYMTP
CSSEN
NLY-F
SPKEP
NYMTM
NYMTN
CDR-B
IVR-B
CHMI-B
NRZ-A
EFC-A
PRIF-E
CODI-A
NLY-G
ETP-E
NRZ-B
CIM-C
OCCIP
PIHPP
DLNG-A
FTAI-A
MHNC
RILYM
FTAI-B
TWO-C
CIM-B
CIM-A
CLNY-J
MFA-C
CLNY-I
MBNKP
ALIN-B
CIM-D
SHO-E
BML-G
PRIF-A
NRZ-C
PBI-B
SHO-F
DCP-C
INN-E
TNP-E
XAN-C
APO-A
ALIN-E
BML-H
DXB
CNFRL
CSSEP
ALIN-A
DCP-B
ETP-D
NSS
GECCN
MITT-C
GMLPP
ETP-C
NS-C
BHR-D
CDR-C
GLOP-A
SB-C
DLNG-B
MITT-A
SB-D
MITT-B
HT-C
GLOP-C
PEB-D
INN-D
PEB-F
NS-A
DHCNL
NS-B
SOHON
CORR-A
GLOP-B
AHT-I
NGL-C
DS-B
HT-E
AHT-H
AFSIB
AFSIP
AHT-D
AFSIC
AFSIA
AFSIN
WPG-H
SOHOO
DS-C
DS-D
MHLA
WPG-I
UZC
NGL-B
PEI-D
AHT-G
AFSIN
HT-D
PEI-B
MDLQ
MDLX
PEI-C
AFHBL
AHT-F
SOHOB
Derek – Just making sure I understand what you’re answering…. Your list is of $25 preferreds or baby bonds that provide a yield of 4.25% or more to call no matter what the date of the call is???