It was a lousy week last week if you held common stocks with the DJIA moving in a range of 25,252 to 25,877 before closing the week out at 25,450.
The 10 year treasury moved from an opening high last Monday of 2.75% to a weekly low of 2.61% before closing the week near the low of 2.613%.
The average preferred stock moved 5 cents higher on the week and there are now 194 issues trading at $25 or below–still a long way off from the previous 70ish issues trading at these levels.
The FED balance sheet showed a $5 billion dollar runoff for last week as quantitative tightening continues at a rather normal pace. The FED may be done with interest rate hikes for now, but obviously the runoff continues which in a small way creates similar conditions as interest rate hikes.
Last week we had 4 new income issues announced or priced.
Digital Realty Trust announced a new investment grade perpetual preferred with a fixed rate coupon of 5.85%. The issue is trading OTC Grey market under the ticker DLRPO and last changed hands at $24.72.
Arlington Asset Investment announced a F-t-F perpetual preferred with an initial coupon of 8.25% which floats starting in 2024 at 3 month Libor plus a spread of 5.664%. The issue is trading OTC Grey market and closed the week at $24.10 under the ticker AISVP. This is a pretty junky issue and should have been priced higher than 8.25%.
NextEra Energy announced a new baby bond with a coupon of 5.65%. The issue is not yet trading. This is nicely investment grade and we may take a small long term position in the issue.
Lastly giant insurer American International Group has sold a preferred issue with a fixed coupon of 5.85%. The issue is investment grade. The issue is trading on the OTC Grey market under the temporary ticker of AIGGZ and last traded at $25.10