Monday Morning Kickoff

The S&P500 closed last week up around 2% on the week. In spite of significant continuing inflation and a threat from the federal reserve Chair that there may be a need to significantly accelerate the tapering of QE (quantitative easing) in the months ahead. Money continues sloshing around everywhere in the world.

In spite of continuing inflation the 10 year treasury remains tame, although the yield was up by 14 basis points on the week. With the FOMC meeting there is no telling where rates may go this week. All in all these rates moves have been favorable to income security holders—not making capital gains, but not losing capital either.

The Fed balance sheet grew by $14 billion last week–watching to make sure the Fed follows through on tapering.

Last week the average $25/share preferred and baby bond moved up by 2 cents in price. Investment grade issues were the biggest winners with a share price increase of 7 cents. Banks were up by 4 cents with mREIT preferreds off a nickel.

There were 4 new income issues priced this past week.

BDC (business development company) SURO Capital (SSSS) sold a new note issue with a coupon of 6.00%. This issue is not yet trading, but we should see trading in a week or so.

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Babcock & Wilcox (BW) sold a note issue with a coupon of 6.50%. The issue will trade under ticker BWNB. This issue has not yet traded, but should within a couple of days.

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mREIT Ellington Financial (EFC) sold a 6.25% fixed rate reset preferred. The issue trades with a fixed rate of 6.25% until 1/30/2027 at which point it will be reset to the 5 year treasury plus a fixed spread of 4.99%. Coupon will be reset every 5 years there after. I have seen no OTC symbol announced for this issue.

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Brookfield BRP (BEP) sold a perpetual note issue which will trade under ticker BEPI. I see the issue ‘qued’ up for trading at eTrade, but have seen no trading. This is the only investment grade issue sold this week.

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