Monday Morning Kickoff

Another week of strong gains by the S&P500 which opened the week at around 2890 and closed the week at around 2950. With the FED essentially putting a “put” under the market what other way is there to go other than up.

The 10 year treasury touched as low as 1.975% last week before bouncing a bit to close at around 2.07%. This is obviously destined to move below 2% in the next 30 days. This would seem to be supportive to preferreds and baby bonds which is good–on the other hand we will see some redemptions from the stronger issuer’s as they will be able to issue shares at crazy low coupons.

The FED balance sheet fell by $5 billion last week resuming the downward move in assets. What a great time for the FED to let assets run off. Since everyone in the world seems to want our treasuries we don’t need the FED’s demand.

The average $25/share preferred stock and baby bond moved up 8 cents last week, as one might expect, with the falling 10 year treasury. This leaves us with 184 issues which are trading at $25 or below–this is 20 less issues than last week and shows the relative strength in income issues.

Last week we had 4 new income issues offered.

Triton International (NASDAQ:TRTN) offered a 8% preferred issue. The issue is trading on the OTC Grey market under TTONF right now and last traded at $25.30.

Triton International final prospectus

Bank of American (NYSE:BAC) offered a huge offering of preferreds 5.375% preferred which is trading on the OTC right now under ticker BAMKL and last traded at $24.98.  This is an offering of more than 60 million shares.

Bank of America final prospectus

mREIT Annaly Capital Management (NYSE:NLY) priced a fixed-to-floating rate preferred with an initial coupon of 6.75% which becomes floating in 2024 at 3 month Libor plus a spread of 4.989%.  They will redeem a 7.625% coupon issue (NLY-C).  The issue is trading on the OTC now, with ticker ACAXP, and last traded at $24.73.

Annaly Capital final prospectus

Specialty finance REIT Sachem Capital (AMEX:SACH) is selling a new baby bond with a coupon of 7.125%. This is a little company that is capitalized at just $88 million at this time so caution is warranted.  We need to look closer at this company as we simply are not familiar with them–but we can’t imagine having any interest.  This issue will trade under ticker SCCB when it begins to trade in the next week or so (no OTC trading).  This issue matures in 2024.

Sachem Capital final prospectus

3 thoughts on “Monday Morning Kickoff”

  1. Great Elm’s latest offering appears to be trading on Fideilty this morning. Symbol GECCN

  2. WASHINGTON (Reuters) – U.S. President Donald Trump again criticized the Federal Reserve on Monday for not cutting interest rates, keeping up his pressure on the central bank to change its policies.
    “Despite a Federal Reserve that doesn’t know what it is doing – raised rates far to fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in U.S. history,” he wrote on Twitter.
    “Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4’s or even 5’s. Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!”

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