mREIT Chimera Investment Selling New Fixed-to-Floating

Finally we get someone stepping forward to sell a new issue of preferred stock-it is almost a month since we have seen a new issue.

mREIT Chimera Investment Corp (NYSE:CIM) is selling a new $25 issue of fixed to floating preferred.

Of course no details are out yet on the new issue but the company has 2 fixed to floating rate issues outstanding already plus 1 outstanding fixed rate issue.  The 2 fixed-to-floating rate issues have initial coupons of 7.75% and 8% while the fixed rate issue has a coupon of 8%.  You can see the current issues on the mREIT preferred page here.

Seems logical that the new issue will price at 7.875% or 8%.

Preliminary details of the new issue can be seen here.

4 thoughts on “mREIT Chimera Investment Selling New Fixed-to-Floating”

  1. Tim, this isn’t about Chimera, but I have a question. Since I have found your site and am learning more about preferreds, I have been thinking about asset allocation. I have read quite a bit about allocations for retirees focusing on income from places like target date funds, Morningstar, brokerage houses, etc. Most often there is no mention of preferred stocks and a simple conservative allocation might be something like: stocks 35%, bonds 35%, TIPS 20%, REITS 5%, cash 5%. For an investor like myself who is more interested in capital preservation than growth, it seems like a significant portion of the stock allocation could be in preferreds. Same for REITS. I was wondering what your take was on this. Thanks

    1. Hi Alan–I don’t think there is anything that is written that will be appropriate for any given person.

      For me I am about 50%-70% in preferreds and baby bonds–10%-20% in miscellaneaous (which could be REITs, target funds or MLPs). Then I might have 10% to 30% in cash (money market) depending on recent buys/sells etc.

      I always have a real modest return goal–7%. So for me anything that will get me to the goal is in play–the safer the better. That being said if I can get 5-6% from reasonably safe preferreds or baby bonds that is where the majority of my funds go–then a little on the higher risk preferreds (8-9% stuff) to get me toward my 7% goal. Along the way a few successful ‘flips’ etc and I am there.

      I have little appetite to any common stocks (to hold anyway)–I do fiddle around with quick low risk short term gains when they seem plausible.

      So if your goal is little/none capital growth you are right there with me–and on a long term basis (5-10 years) you can do well with well chosen preferreds and baby bonds.

      Here is a portfolio like I outline and which kind of mirrors what I do. It has a 27% gain in 4 years with reasonable risk. It is on my old site at dividendinvestor.com

      https://www.dividendinvestor.com/shortmoderation-duration-income-portfolio/

      1. I had similar goals to yours but I learned that staying invested most of time times has costs in terms of missed opportunities. That’s why I think I’ll keep from now on around 70% in cash. Ready to enter the market when opportunities arise. The big issue for me is volatility in forex is low and same with gold. I used to generate “coupons” by selling OTM options but now returns for this strategy are really small.

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