Monday Morning Kickoff

Here we go on another week, with the 10 year treasury ending last week at around the 2.60% mark. It looks to me like this yield is going to move into the 2.50%’s this week if there is any whiff of economic weakness or movement lower in equities.

The average preferred stock crept higher by a nickel or so last week. It looks like while preferreds are creeping higher they are less inclined to move sharply higher irrespective of the movement in the 10 year treasury. There are 195 preferred issues trading at $25/share or less now as compared to 194 issues last week.

The FED balance sheet grew by $2 billion last week, which is the 1st time in about 5 weeks that the balance sheet grew. For the week ending 2/16 it also had grown by $2 billion.

Last week we had 4 new income issues announced.

Container leasing company Triton International (NYSE:TRTN) priced a new 8.50% perpetual preferred. The issue is trading on the OTC Grey market under ticker TPNRF and last traded around $25/share. The issue is unrated.

Insurer American Financial Group (NYSE:AFG) sold a new baby bond with a coupon of 5.875%. This issue is investment grade. The shares (bonds) will trade under ticker AFGB. The issue is “queued” up in eTrade but no trading has occurred.

Brookfield Property Partners (NASDAQ:BPY) has priced a new issue of perpetual preferred units with a coupon of 6.50%. The units are rated a notch under investment grade. The shares are trading under OTC Grey market ticker BRKPF and last traded at $24.80/share.

Lastly, very late in the week, Merchants Bancorp (NASDAQ:MBIN) , a smaller Indiana banking company, announced they were selling a perpetual issue of fixed-to-floating rate preferreds. Pricing of the shares has not yet been announced.

12 thoughts on “Monday Morning Kickoff”

  1. 1. Our financial life involves endless tradeoffs. We usually have a good idea of what our dollars are buying us. But to be good stewards of our wealth, we should also ponder what we’re giving up.

    2. It takes years to achieve full financial freedom. But we can quickly escape much financial worry—if we live beneath our means, pay off credit card debt and build a cash cushion.
    3. Good savings habits are the greatest of the financial virtues. If we aren’t good savers, it’s all but impossible to grow wealthy. What if we are? We’ll likely prosper, even if we’re mediocre investors.

    4. We should focus relentlessly on what we want from our financial life. That’ll motivate us to save, drive our investment strategy—and help ensure we pursue the goals we care about most.

    5. Retirement may be our final financial goal, but we should always put it first. Why? It’s easily our most expensive goal, so it takes decades of savings and investment gains to amass enough.

    6. We spend too much time fretting over our investments—where there’s limited room to add value—and too little on other financial issues, like taxes, insurance and estate planning.

    7. Paying down debt may not be our best investment, but it’s almost never a bad idea. It reduces our life’s financial risk—and earns us a rate of return equal to the debt’s interest rate.

    8. Very few of us need life insurance for our entire life. That’s why term insurance makes sense and cash-value policies are usually a mistake—despite what insurance agents say.

    9. Investing is best when it is simplest. If we own costly, complicated products, we’re filling Wall Street’s coffers—at our own expense. Don’t understand an investment? Don’t buy it.

    10. Our odds of beating the market averages over a lifetime of investing are so small they’re hardly worth considering. Overconfident investors insist on trying. Rational investors index.

    11. Our goal shouldn’t be more time to relax, but rather more time to pursue our passions. Working hard at things we care deeply about is among life’s greatest pleasures.

    12. Frugality isn’t just the key to financial success. It’s also no great sacrifice, because spending often brings only fleeting happiness—and sometimes even pangs of regret.

    Wishing you profitable investing, Nomad

    1. Nomad, That was quite generous. It’s remarkable how each of those points has come more into focus with time. For me #10 is large. The January 2017 research paper by Bessembinder added undeniable clarity. “Since 1926…less than four percent of common stocks account for all of the stock market gains.” Consistently identifying the 1 out of 25 equities that actually works out? lol.

  2. Not sure if this is the right place to post this, but here goes. I hold some GS preferred B that is currently listed at $27.26 as I write this. Most of my shares have been called but I have a few left. My question is Who would pay 9% over par for something that has already been partially called , indicating the intent of the issuer. I think paying that much is crazy risky or am I missing something?

    1. Tim, I do not have any way to contact you privately on this site, so sent a message via the SA website. Please read it, thanks.

      IB

        1. Hi Larry–I will get something added in the next 10 days for contact me–no I am not on SA often and hadn’t look there for a very long time.

      1. Hi inspbudget–got it. Deleted and will ban the writer (If I can find the right spot to do that). Thanks for you heads up.

  3. I just spoke with my contact at the sole underwriter Sandler O’Neill and he stated that he didn’t see and was unsure if there would be an initial Grey Sheet symbol. If anyone sees a Grey Sheet symbol please post here. Thank you for your help, Nomad

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