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1,576 thoughts on “READER INITIATED ALERTS”

    1. TLDR

      Globe Life

      The short seller in a report said it had uncovered “extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times”, including policies written for dead and fictitious people.

        1. Troy –
          Having worked in the Financial Services Industry 25 years, both is sales and in compliance, I was only aware of two instances of sales reps writing life policies on fictitious persons during that entire 25 year period. Both were dismissed immediately on discovery. Both had only written a handful of policies, definitely less than 10 each, for fictitious persons. Both were quickly discovered, and fired. This was in the 80’s and 90’s and even back then, the underwriter could not only determine the person does not exist, but also had available the applicant’s detailed health history via a health underwriting exchange report of sorts. So on that note, Troy, I put in an order for 10 shares of GL Preferred D at $14.90, because the claims made by the short sellers are extremely dubious to me. It’s quite possible some sales reps were selling fraudulent policies, but I’ve little doubt that this was not condoned or tolerated, if so,

          1. Fictitious people?
            Unless their compliance department is a complete joke, no financial services company could possibly let those go through, because most, if not all of the financial services industry including insurance companies does IRS TIN matching, and the number of rejects is usually fairly small and most are typos or things like name changes due to marriage.
            The year that the IRS employee changed the form where you had to put the SSN of any dependent on the 1040 caused the biggest number of missing children cases in history…./s

            I didn’t read it, was shenanigans like this going on in another country?

          2. Update, so far have only bought 5 shares of GL Pref D at $14.35. If Berkshire completely bailed to a zero position on GL, one needs to be extremely cautious with this falling knife.

  1. Mortgage Rates ~ hit 2024 YTD across-the-board highs today (Mortgage News Daily)

    * 30yr Jumbo ~ 7.55%
    * 30yr Fixed ~ 7.37%
    * 7/6 SOFR ARM ~ 7.25%
    * 15yr Fixed ~ 6.82%
    * 30yr FHA ~ 6.75%
    * 30yR VA ~ 6.75%

  2. GS-K first becomes callable on 5/10 and it appears it has not been called. Trading at $25.40 and it will pay a final fixed divvy of $0.40 on 5/10 and then will start accruing at a floating rate of ~ 9.1% (SOFR +355 +26)

    GS called GS-J last year, which had a only a slightly higher spread of +364, so it’s a little surprising GS-K was not called on first call date and not sure how much longer it will be around.

  3. Just placed an order for a new issue FHLB bond with a 6% coupon…due 4/15/2039 with a 1st call on 4/15/2025…pays semi annual.
    Cusip# 3130B0VQ9 I’ve found FIDO always has new issue agencies available…Vanguard and E-trade more miss than hit

        1. The Bronco is located in a passive investment I own. Location is Pigeon Forge Tennessee. Come visit and stay awhile!

    1. EXTREMELY negatively convex…rate go down you get called rates go up you own it forever (or close to it)

    2. FHLMC 3134H1F81 new at Fido today. 6.5 yield, 4/22/2044 maturity, 7/22/2024 call. Rates are headed back up for now.

    1. Justin, I have been looking at bonds again and spreads still seem tight and not worth it. Seen Dick’s post on PPL
      Haven’t seen any posts in a while on the bond page, have you found anything of interest lately?

  4. Any posters still using Schwab Street Smart trdg site ..
    Seems that thy have stopped providing any quotes on the
    TSYs … 5yr … 10yr … 30yr
    ie … $FVX … $TNX … $TYX
    Realize other sites / firms have active quotes provided.
    Schwab work arounds appreciated .

    1. I found that these symbols are still working in StreetSmart Edge, but not on schwab.com
      Did they formerly work there as well?

    2. Those symbols, including IRX, dead on ThinkorSwim after April 5.

      I’d like to know why.

    3. I can view those symbols (TYX TNX FVX IRX) on ThinkorSwim if I append :CGI to the symbol. I’d guess this is temporary.

  5. Post Hot CPI Print…

    10yr T ~ now 4.5%, intraday high 4.511%
    2yr T ~ now 4.94%, intraday high 4.982%

    1. I bought a bit of the 2 year Treasury with a portion of the cash I had on the sidelines

  6. Historic Block Trade Spurs Treasury Gains

    A record-setting block trade in US short-term interest-rate futures, specifically the Secured Overnight Financing Rate (SOFR) futures, catalyzed notable gains in the Treasury market. This transaction, involving 75,000 December 2024 SOFR futures contracts, occurred shortly after 9 a.m. New York time, marking the largest trade in the product’s history according to CME Group Inc. The trade’s execution led to a rise in prices, indicating a buyer-initiated move, and contributed to a further decline in Treasury yields toward session lows. This event underscores the growing significance of SOFR futures as a primary tool for betting on Federal Reserve interest rate movements, following the retirement of eurodollar futures.

      1. BRM – I’m sure there’s some way to find out who the buyer is, but that’s beyond me. News just says “bond trader” . Correct me if I have it wrong: 75000 symbol SR3Z4 (DEC 2024) bought at $95.32 x 100 futures per contract is a $714,900,000 bet (?) …..purportedly, the largest bet ever placed in one roll on the CME. Today SR3Z4 closed 95.085, up .015 for the day, though it appears the buyer is actually down .235 per, or $1,762,500?

        1. fan59. Thanks for the response. Your calculations look good to me. It may prove interesting to see how this trade turns out. Thanks again.

  7. Monday MMFs & Updates…

    * VMRXX ~ 5.28%
    * VUSXX ~ 5.27%
    * VMFXX ~ 5.27%
    * GABXX ~ 5.26%
    * DTGXX ~ 5.25%
    * SWVXX ~ 5.17%
    * IDSXX ~ 5.16%
    * TSCXX ~ 5.15%
    * PRTXX ~ 5.05%
    * PRRXX ~ 5.05%
    * SNVXX ~ 5.04%
    * SNOXX ~ 5.03%
    * SNSXX ~ 5.02%
    * SPRXX ~ 5.02%

    *10yr T ~ up, intraday high 4.46%, now 4.4%

    *CME Fed Watch Tool ~ down, now 0% probability of rate cut in May & 51% in June.

    * 30yr Mortgage ~ up, now 7.11% today

    * JPM Dimond speak today:
    WSJ ~ “warns US interest rates could soar to 8% or more in coming years, reflecting the risk that record-high deficit spending and geopolitical stress will complicate the fight against inflation”.

    * US National Debt Update:

    US National Debt ~ $34,636,989,896,766
    US Federal Spending ~ $6,520,232,900,544
    US Federal Tax Revenue ~ $4,717,654,154,861
    US Federal Deficit ~ $1,802,578,745,683
    US Federal Debt Per Taxpayer ~ $266,951
    US Federal Debt Per Citizen ~ $102,939

    1. I see SPAXX is now 4.95%. Interest rates are up and this goes down.
      May have to switch. Don’t be so stingy Fidelity.

      1. KingCash…I left SPAXX off the MMF list as it seemed chronically unable to join the 5% club…may add it back next Monday 🙂

      2. Fidelity doesn’t seem to voluntarily offer alternatives to SPAXX for sweep accounts…. What options are out there other than FDRXX which is also under 5%? I know TDA, aka Schwab, offers MMFs such as SWVXX that act like semi-sweep accounts whereby they’ll automatically take cash out of them to cover purchases but you have to “buy” them when you have funds available (i.e. they don’t automatically fund into them like a true sweep account would). Which funds are similar at Fido? I think asking here will provide more true options than asking them directly.

        1. Hmmmmmmm, going back over my own notes from long ago, I notice I can partially answer my own question – FZDXX seems to be one , now yielding 5.15%.

          1. Also, SPRXX generally runs about 5 basis points above FDRXX. It functions just like the designated cash sweep, i.e. trades exceeding the cash balance will be deducted from that fund without having to enter a sell order.

          2. 2WR – FZDXX is what I use at Fidelity – as you note, yielding 5.15%

            Just two caveats.

            1. it doesn’t fully function as a sweep account. By that I mean funds will be taken out of it to settle new purchases. But funds from a sale of existing securities doesn’t automatically go back into it. I have to manually “trade” proceeds from sales back into FZDXX. No big deal for me but one extra step

            2. I don’t know if it still is the same, but when I started using FZDXX I think it had an initial $100K minimum to open – although once open the balance can go below $100K no issue

            1. Mav, thanks for all your posts. If not mistaken, the initial minimum for FZDXX in an IRA account is $10K; in a taxable account it is $100K.

              1. Green-n-Gold, you are welcome

                Thanks for pointing that out – that would be even better. I was just going by what is on the fund page of FZDXX when you research the fund. But if the minimum balance is only $10,000 for IRAs, all the better

                Thanks

        2. Hi 2WR, AFAIK, TDA nor Schwab will sell out of higher interest MMFs to cover purchases. But perhaps I am missing something. On the other hand, Fidelity will sell from a high interest MMF (if and when necessary) to cover purchase.

          1. I want to emphasize that 2WR was mistaken about this. At Schwab/TDA, if you don’t explicitly sell the MMF, you will incur a margin loan even though you have the funds right there.

            You can also get in trouble if you sell an equity and immediately buy an MMF, due to T+2 vs. T+1 settlement, but of course that is changing next month. (But then I think you will have a new problem with after hours trades.)

            1. You’re right, David… poorly worded (or thought out before writing) on my part. I knew that’s how it worked.

      3. SPAXX has a high expense ratio, higher than say, Vanguard. So Vanguard will always beat it. These MMFs hold essentially the same credits, so the fees are the only variable. You can mitigate the problem by buying a monthly-pay short-term Treasury-type ETF with a much lower expense ratio. Or direct buy T-bills. Or buy a short term CD. Whatever works for you. If you’re using SPAXX as a Fidelity settlement fund, you may need to adjust accordingly.
        JMO. DYODD.

    2. DALLAS, April 9, 2024 /PRNewswire/
      Sunoco LP (NYSE: SUN) (“Sunoco” or “SUN”) and NuStar Energy L.P. (NYSE: NS) (“NuStar” or “NS”) today announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), in connection with Sunoco’s pending acquisition of NuStar.
      The expiration of the waiting period under the HSR Act satisfies an important condition necessary for the completion of the transaction.
      A NuStar unitholder vote is scheduled for May 1, 2024 at 9:00 am Central Time. The details of the NuStar Special Meeting, including the terms of the proposed acquisition, have been outlined in the NuStar Definitive Proxy Statement, filed on April 3, 2024 with the Securities and Exchange Commission (the “SEC”). The transaction is expected to close shortly after unitholder approval.
      NuStar unitholders are anticipated to receive Sunoco’s distributions for the first quarter of 2024 following the closing of the transaction.

      1. PALM BEACH GARDENS, Fla., April 09, 2024 (GLOBE NEWSWIRE)
        Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the commencement of an underwritten public offering of unsecured notes due 2029 (the “Notes”). The Notes are expected to be listed on The Nasdaq Global Market under the trading symbol “GECCI,” and to trade thereon within 30 days from the original issue date. The interest rate and other terms of the Notes will be determined by negotiations between the Company and the underwriters.
        The Company expects to use the net proceeds from the offering for general corporate purposes, including making investments consistent with its investment objectives, and may also elect to (i) redeem a portion of its outstanding $45.6 million aggregate principal amount of 6.75% unsecured notes due 2025, (ii) redeem a portion of its outstanding $57.5 million aggregate principal amount of 5.875% unsecured notes due 2026, (iii) redeem a portion of its outstanding $40.0 million aggregate principal amount of 8.75% unsecured notes due 2028 or (iv) repay all or a portion of any borrowings that may be outstanding under the Loan, Guarantee and Security Agreement, as amended, with City National Bank.
        Ladenburg Thalmann & Co. Inc., InspereX LLC, Janney Montgomery Scott LLC and Piper Sandler & Co. are acting as joint book-running managers for the offering.

        1. If option iii refers to GECCZ(?), first call isn’t until 9/30/25, so how could they redeem until then?

        2. Fabrib, Like seeing Landenberg Thalmann as one of the book runners. Means they are still in the game to make money and pay me for the bonds I am holding.

  8. The new 8% EICC is trading under the temporary symbol EAGPP. I bought at 24.84. Some brokers charge OTC fee some do not. EICB started to fall but not yet lower than the new one even though it pays less. I dumped it.

    1. EICB is ex-div tomorrow I think. So that is 16 cents one has to consider in the equation. Monthly payer.

    1. 2 year at 4.75% Those 6 rate cuts better start soon
      Amazing how wrong the experts are. I enjoy your comments.
      Like treasuries because no Kansas tax. Living in Kansas is painful enough.

      1. Those experts have been wrong on so many things, feels like there’s more experts here. Still waiting for the recession that just has to hit due to the inverted curve. This economic phase is similar but still much different than anything in the past, IMHO. And I’m no expert. LOL

      2. Russian Roulette ~ $35,000,000,000,000 & growing US debt will matter at some point in time IMHO. Current interest on US debt = US defense budget. Need higher coupons for our investment risk even if the US is the best house in an indebted world neighborhood.

        1. According to my readings and multiple folks on TV it is being said that the national debt is being “increased by $1 Trillion Dollars every 100 days”. I don’t see how thats sustainable as just the interest alone on it is unbelievable. No accountability from those folks whatsoever. And the hundreds of “ear marks” just continue on & on.

      3. – Treasuries are a good choice. If you have money parked in federal-type money market funds, you might want to consider switching to a short-term US Treasury ETF. (There are several flavors.) I haven’t finished my research yet, but because of a quirk, it seems that ST-UST ETF income may be reported as income from US government bonds whereas federal MMF distributions are reported as ordinary income. No difference at the federal level, but at the state level the ETF distributions may be state tax exempt. Since some ST-UST ETF expense ratios are much lower than high-fee MMFs sponsored by brokers, you might end up with higher income and lower tax.

        – If you want to go beyond Treasuries, some government agency bonds are state tax exempt. The ins and outs may vary from state to state. My state has a long list of exempt/non-exempt government agency bonds. I always look before I leap.

        – While I empathize with your pain about living in Kansas, it could be worse. (New Jersey beckons.) Besides, some who leave Kansas abruptly decide to go back, like Dorothy and Toto did back in ’39. “There’s No Place Like Home”

        JMO, DYODD.

        1. Newbie, I will not say they are talking heads who are experts, but when I read articles that mention a so and so investment manager is uneasy I put more weight to that as I expect them to be a fiduciary. Where as I see someone from JPM saying there is still room for this market to run I have less confidence in what they are saying as I feel they have an interest in selling something.

        2. Bear
          Is there a site that provides data and which issues are federal and or state tax free. I’m in a high state tax situation so interested in minimizing taxes but finding it hard to identify which government agency issues are state tax free. If there is anything you can suggest to read up on this issue would value it. TIA SC

          1. PS
            Bear
            I’m sure there are probably other issuers other than FHLB which offer tax advantages but finding a clear review of them has not been simple which is why I posted the above. sc

              1. David
                Thank you for the reference which is helpful. If anyone can suggest any further sources, would value them. SC

          2. I don’t trade bonds anymore so I am not a good source. At CD rollover time, I shop a short list of liquid “federally taxable but state tax exempts” issues which include Treasuries (obviously and regularly) , Farm Credit and Home Loan Banks. Home Loan Mortgage bonds are on my list, but they are not state tax exempt for me. (My state tax department publishes a “federally issued but state tax exempt” list. You might want to visit yours)

            If you are trying to avoid state taxes — or more accurately defer taxes –and are interested in a Treasury type ETF product, you might look at BOXX ETF, mentioned by another poster here. BOXX allows you to time receipt of income and convert it to capital gains taxable at beneficial rate. (Unlike BIL or SGOV or similar, BOXX does not pay a distribution, but essentially accrues it. )

            Both Federal and state tax exempt – a big topic. DYODD.

        3. I don’t understand the point you are making about MMFs. I hold Schwab SNSXX, and the interest is reported on a 1099-INT as “Interest on U.S. Savings Bonds and Treasury Obligations”.

          The obvious advantage of MMFs over ETFs is there is no risk to principal. You have to decide if that is worth a bit of yield.

          1. As an example, I hold VMFXX as an investment and the settlement fund of my broker account. Vanguard helpfully told me the interest in my brokerage account was only 50% or so government obligation derived. While the interest from my personal account was 100%.

            My understanding (I am not an expert on tax matters, but recall reading this somewhere once) is the difference comes from how the fund uses repo. MM funds repo excess cash with the Fed (collateralized with USTs) overnight to earn interest on excess funds which they can’t invest – like daily inflows, settlements and such. Repo derived interest is not tax free for some reason and thus the source of the difference.

            1. But that’s because of the fund’s holdings, not because it’s an MMF as BearNJ posited. Distributions from an MMF and an ETF with the same holdings will have the same tax character.

          2. I don’t follow Schwab funds and I can’t attest to the source linked below, however… you are probably correct on the state tax exempt status of SNSXX. Possibly incorrect on other governmentally-named Schwab MMF funds SNVXX and SNOXX. Note that the latter two MMFs while apparenltly partially state tax exempt in many states may not be state tax exempt in high-tax states. DYODD. YMMV.

            Which Schwab Money Market Fund Is the Best at Your Tax Rates
            https://thefinancebuff.com/best-schwab-money-market-fund-your-tax-rates.html

            “The income earned from these three funds is fully taxable at the federal level. A percentage of the income is exempt from state income tax. That percentage varies from year to year.”

            Schwab Government Money Fund (SNVXX)
            State Tax Exemption in 2023
            24% (0% in CA, NY, CT)

            Schwab Treasury Obligations Money Fund (SNOXX)
            State Tax Exemption in 2023
            11% (0% in CA, NY, CT)

            Schwab U.S. Treasury Money Fund (SNSXX)
            State Tax Exemption in 2023
            100%

            I respect your opinion that there is “no risk” in MMfs, however I do not agree with it.

            1. So what’s your scenario where a US Treasury MMF will break the buck? I can’t quite picture it.

              1. David,
                Nothing is perfect.

                -Not 100% of earnings from treasury MMFs comes from Treasuries (at Schwab, its something like 99.5%, IIRC. Almost, but not quite. One of those other tiny things could blow up (VERY unlikely, but non-zero). Probably not big enough to tank the fund, but you just never know…

                -The MMF is run by a company, not the treasury. It is possible for a company to foul up enough to cause a loss (also very unlikely, but possible). I could imagine a focused, well planned cyber attack taking enough of schwab down to cause a huge mess. I would hope the regulators would halt trading, roll back, or something, but you just never know. So, possible, but unlikely.

                Personally, I wouldn’t lose any sleep over those risks, but they are greater than zero, so someone might choose to avoid them.

                The future is a hard thing to predict accurately. It is easy to dismiss concerns as being too far “out there” until they aren’t. Who, on Sept 10, 2001, would have thought that someone would fly two airliners into the world trade center? Who, in January, 2008, would have thought Lehman Brothers would go bankrupt in September?

              2. What scenario? The collapse of the financial system.

                Only one that I can think of. The US defaults (either temporarily because of a systems issue) or because the debt ceiling is breached.

              3. Never. This is the gift of owning the reserve currency of the world.

                Everyone around the world is cheering on the dollar by holding it in safety deposit boxes.

            2. Not to start an argument with you Bear, but just to put MMFs in perspectives for the “new folks” on the board.

              MMFs are extremely safe. Since the mid ’90s, only one MMF fund “broke the buck” (had its NAV drop below $1 for even a single day).

              The Reserve Fund owned some Lehman Bro.s paper (something like 1% of their assets, IIRC) and got caught out in Sept. 2008 when Lehman filed BK. I actually owned a tiny amount (I had sold previously, but had received a tiny interest payment that was still in). Investors ultimately got back more than 99 cents on the dollar for their holdings (most of it pretty quickly, and the rest dribbled after that).

              There were significant regulatory changes put in place to strengthen MMFs after 2008, so I consider them to be VERY safe. However, I will concede that they are a tiny bit less safe than full-faith-and-credit US gov. obligations or FDIC insured deposits.

              1. Private, I am not going to dig for the information on the internet but after that ” breaking of the buck” there were some rules put in place that have not been tested yet. No one is sure if the new rules will cause a panic when they kick in or if they will give people time to calm down. Basically the rules say the fund’s manager can close the teller window and not allow withdrawals for a set number of days, then after those set days it can limit the amount withdrawn or even limit the account to say a percentage on the dollar.
                Now I know I don’t have this exactly right so I will not argue the finer details. If someone wants to research and post great. I just know, I need not to panic and I need to wait. If the funds disappear, then things are a lot worse for a lot of people besides myself. It’s a Wonderful Life and don’t panic just read the Hitchhiker’s guide

          3. a LOT of funds are “treasury” funds, where (especially when interest rates were rock-bottom) collected income from repurchase agreements to juice the yield instead of owning Treasuries outright.

            Repo Interest is NOT exempt from state income tax in the majority of states.

  9. Just put an order in for a new issue FHLB bond at 5.9% due 4/10/34 with 1st call on 4/10/25…semi-annual pay Cusip# 3130B0R35

  10. Oil & War ~ (CIA) reporting Iran threatening an imminent retaliatory strike on Israel within 48 hours in response to the attack on their consulate in Syria, expect higher oil prices in the near future. Brent blew through $90/barrel & is currently at $91.01/barrel with WTI up at $86.61/barrel. Dow drops 530 points.

    1. Retaliation need not be tanks rolling over desert borders. The Iranians (or more likely, and more safely, one of their more dispensable proxies) could kill the Israeli consul in an obscure 3d-world country, his security guard and 5 innocent cleaning personnel (who would be declared to be high ranking Mossad agents). That would even up things up for the lost 7 and we could go back to “war as usual.” Oil would drop and the market rally on the news. Long oil, just being realistic.

      On the other hand, this does highlight complacency in the face of the risk of world events suddenly spinning out of control after small unexpected events. Although my bet would have been on a Chinese air force stunt flyer downing a US jet into the Pacific. (“Watch Chinese fighter jets intercept US aircraft over the Pacific.” – headline, October 2023) I always like to be hedged.

    2. Yeah, Isreal agrees to open blockade, futures up on news. Not too long ago oil ran up near $90 and puttered back to $70 in short order and we’ll more than likely repeat or we’ll never see rate cuts, looking for oil to start drawing back down soon, so I would be selling oil stocks right about now.

  11. Wednesday Oil/Gas updates…

    * Brent ~ up, $89.60/barrel closing in on $90 ~ 20% gain since Dec 12 low.
    * WTI ~ up, $85.85/barrel ~5 month high
    * AAA Gas ~ up, national avg. $3.55/g
    * Ukrainian drones damaged Russia’s 3rd largest refinery
    * OPEC+ sticks with production cuts through July 1
    * BOA sees summer oil peak at $95
    * Biden Admin cancels plans to buy 3M barrels of oil for Strategic Petroleum Reserve amid rising prices.

  12. Duke preferred A shares 5.75% hovering just under par.

    MET preferred E shares 5.625% hitting YTD new lows at $24 handle. That’s putting yield nearly @ 5.90%

    1. DUK-A in my opinion is a perfect example of why fixed perpetuals are overpriced. It is sitting at par with 5.75% yield with a 4.3% 10 year treasury. And yet it was issued at same 5.75% when 10 year was around 1.6%. A good example of the very tight credit spreads.

      1. Grid you summarize it so nicely. I bought 60 shares of DUK-A when things were getting crispy last year. I wanted to track it more closely. Yes it did go lower but I never added to the position. Something felt off with what I was paying and what I was getting in return. It just did not really make sense during the whole period of time compared to other options. Today it makes even less sense. We are not even talking about a preferred that is A rated either. BBB- at best. Quantum showing Ba1 for Moodys.

        DUK-A should be yielding a solid 6.35% or more for it to make sense.

          1. New, relative to market it probably will always be “over priced” in this environment. Its reaching call status soon, so that could be more of a possible helpful anchor.

          2. I bought my 60 shares a touch higher then your cost basis when everything was sinking. I would not sweat it. You could obviously sell it for a tidy profit today and boost your overall gain. I was hoping to make it a long term position but it never really went down a ton like other opportunities. I wanted to see shares at 21-22. It barely broke through 23 and that was only for a matter of days. During that small time frame EVERYTHING was a good price including other utility preferred with a higher rating. Or even crazier deals if you wanted the same credit rating but a different sector.

            1. Fc, its even possible this gets redeemed even if rates head higher. This was a one off preferred from hold co, and dont know what if any purpose it served for company to begin with. One can get higher rated albeit OTC utes at 6.2% now. Is that a good entry point? I dunno…..

              1. Duke also has a 5 yr reset $1,000 preferred (CUSIP: 26441CBG9). It looks like $1B of it was issued.

                It’s going to reset or be called on 9/16/24. If it resets. it’ll be the 5 year plus 3.388%. It’ll be interesting to see what they do with this one. If it reset at today’s rates, the reset rate would be around 7.8%.

                I own a very small position in this 5 yr reset.

                https://www.sec.gov/Archives/edgar/data/1326160/000104746919005110/a2239645z424b5.htm

                1. I tried to snag yesterday the ute Southern Ca Edison that is a live floater around 9.6% with about a 4.5% adjustment and is going exD in a couple days making purchase under par. But Vanguard wont allow buying of adjustable “bond” issues anymore, and TD has no brains to even figure out what planet to find it on. So I gave up.

                  1. Bummer! I guess every broker has warts. Reminds me of how Fidelity won’t let me buy TVC or TVE without calling in to talk to their army of degenerates working for their fixed income team.

                    On the other hand, I’ve been able to build positions in SLMNP and CKNQP through Fidelity so it’s not all bad.

                    1. Maverick, as Ken cited its. CUSIP: 842400FU2. They got a kick out of the “FU2” part of the cusip. Its actually been callable for several years. Was just too lazy to chase it down when I had a chance before Vanguards new nanny state policy came in. Right now Im just barbelling floaters, and CDs/treasuries with the fixed perps as the handle connecting the ends.

                    2. Thanks Grid

                      Alas Fidelity is not currently offering it. Not sure I want to commit the minimum amount they now want for call ins when they don’t offer it. Actually I know I don’t

                      Oh well, I can be patient waiting for something else worthwhile to present itself

                  2. I picked up a little bit of the Southern Ca Edison floater through the Schwab bond desk this morning. It traded with “accrued interest”

                    1. Dick, you crack me up. So last night I was pondering on babysitter Vanguard and pop gun without a cork TD bond desks being useless as teets on a boar trying to purchase this. I forgot I have one account at Schwab waiting for the rest to transfer to them, so I wrote a note to call them. I saw your post and it reminded me to do this. So I just completed my transaction, and I own the Series E myself now. We will see how long the gawdy near 10% lasts. First dealings with Schwab and I was certainly pleased. I really wanted this in a taxable, but it wasnt meant to be.

                    2. Dick, I was just thinking. Although he didnt mention it, I paid “accrued” also. Which is normal experience for my dealings so that is no big deal. However, the “Record Date” is tomorrow which typically means exD was yesterday. Did they mention anything about this to you?

                    3. Dick, All I have at Schwab is an HSA, it only has a bit less than $150k in it, so I have to wait until May when my tax free and taxable move over to look much there. And see some of my CDs mature in next couple months.

                    4. My experience has been you’ll get the full dividend. All of the preferred/subordinated debt issues I’ve bought have traded with “accrued interest”

                      I spent a lot of time putting together a list of these back in June 2023 and have been buying and selling them since that time. In general, I think the opportunities offered in the institutional variable rate issues are as good as anything out there that trades with a ticker symbol.

                    5. Funny enough, I got an email today from Fidelity today talking about high yield income opportunties. They mention variable rate preferreds that are trading below par:
                      —————————————————————————————-
                      Opportunities to do more with less are not secrets, but not all investment managers focus their attention on finding them. “Every manager’s looking at stocks and investment-grade bonds,” says Kramer. “Not as many are doing the work on other securities, but if we do the research, we can find opportunities.”

                      One opportunity may exist in fixed-to-floating preferred stocks. Despite their name, preferred stocks are actually hybrid securities that in some ways resemble bonds but also represent equity shares in the companies that issue them.

                      Kramer likes preferred stocks of investment-grade US utility companies, master limited partnerships (MLPs), and big US banks, particularly those whose interest rates are either rising now or are scheduled to do so in 2024. “I think that those may be great ways to earn high, single-digit yields now while you wait for their prices to rise. Right now, you can buy them for less than their face value and their issuers can choose to buy them back from you for face value. If they don’t choose to do that, the interest rates that they pay may increase and you could earn a higher return that way. If you’re looking for income, you’d probably rather collect an 8% or 9% current yield on these fixed-to-floating preferreds than a 3% dividend yield from the stocks of these same companies.”

                      https://www.fidelity.com/learning-center/trading-investing/income-investing-outlook?ccsource=email_weekly_0404_1037578_89_0_CV2

                    6. Dick, this is the first time I have purchased presumably “after exD” but before “record date” on a $1000 preferred. These distribute money differently than a bond, as it still has a record date and presumably an exD date also. In theory we shouldnt be getting any dividend or paying any accrued because yesterday was exD. I hope they didnt screw this up.

                    7. I just added to the Stanley Black & Decker bond (854502AM3) today. They said the yield to first call was 18.3%.

                    8. Dick, Do you happen to know if the Stanley Black and Decker dividend is qualified? And the same question goes for the Southern CA Edison floater?

                    9. MFZ, the prospectus shows the Black and Decker issue to be a debenture which is subordinated debt. So that will always be interest payment so no QDI. The So Cal Edison issue is a preferred, a cumulative preferred, which is capital stock and will be QDI dividend.

                    10. Hi Dick,
                      I am not a huge bond trader, so I need some education. I am obviously missing something.

                      I took a peek at the 854502AM3 black and decker. I see that yield to first call is almost 20%, but yield to maturity/worst is about 4.76%.

                      Doesn’t the 20% include them paying divi’s for a year and paying the full redemption price at first call in March 2025, (if I am reading correctly)? why do you think the yield will be closer will be closer to 20% than to 4.7%?

                    11. Private – The Stanley Black & Decker issue is a 5 year reset. Currently it has a 4% coupon but that will reset on 3/15/2025 to the 5 year plus 2.657% or the issue will be called on that date. I’m not sure how anyone would predict the yield to maturity with any degree of accuracy on an issue that doesn’t mature until 3/15/2060 and resets every 5 years.

                      If the issue were to reset based on the current 5 year rate, it would have a coupon of of 7% (4.354 5 year + 2.657 yield spread). If the issue gets called on 3/15/2025 and it is purchased for $88 today, it would have a “yield to first call” of around 18%
                      —————————————————————————————
                      (i) 4.000% per annum, accruing from and including February 10, 2020 to, but excluding, March 15, 2025; and (ii) at a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Interest Determination Date, plus 2.657%, to be reset on each Reset Date, from and including March 15, 2025 to, but excluding March 15, 2060

                      https://www.sec.gov/Archives/edgar/data/93556/000119312520023095/d859870dfwp.htm

            2. Private – Re: 854502AM3 – Don’t you think you’re answering your own question? “Doesn’t the 20% include them paying divi’s for a year and paying the full redemption price at first call in March 2025, (if I am reading correctly)? why do you think the yield will be closer will be closer to 20% than to 4.7%?” The annualized yield to maturity is approx 20% because it does include the appreciation to par in less than 12 months if called…. the yield to maturity includes that same amount of appreciation but over almost 36 years instead of just 11 1/2 months…

      2. Could be the infamous “already baked in” nonsense that common stocks do. If you price in 3 rate cuts on the short-term yields that will lower the price on the 10-year yield. To what? Who knows.

        1. SteveA – That’s exactly what this price action in the last month is telling us. I think *fixed* preferreds keep going higher from here and at some point when rate cuts are more imminent, I’ll be looking to trim some allocations of my positions that are a specific % basis over par i.e. good rule of thumb is if a preferred is trading at a premium effectively equivalent to 9-12+ months of distributions, it’s out of here.

      3. Grid – I know it seems that window of opportunity for upper 6%+ yields on top tier quality (JPM, PSA, MET, etc.) perpetuals was now so long ago and so short lived.

        This price disconnect is everywhere. Even looking at corp bonds at any duration really. Anything in 6-7% range is quite junky these days hence paying too big of a premium.

        I have some funds that I have to put to work in my preferred bucket allocations so I added both of those perpetuals to existing positions which have lower cost basis. Even at $24 now, the METs are pretty decent @ just under 5.9% but I have a couple other adds on these METs from last fall in the 6.5%+ range. And this morning hard to believe those Duke preferreds trading up nearly 50bps and back over par again.

        1. Theta its tough out in fixed perp ville I know! I buy a few and then they pop a couple bucks and I sell and I am right back at square one. That being trying to get up to 25% fixed perps. I have only been slowly collecting utes and flipping other stuff. I was able to snag a few over 6.2% with divi coming quickly past couple weeks. But that has gotten harder. I threw in towel and lowered my standards to plus 6.1% snagging a few hundred of CNLTP at $36 today since they were easy bags. Even then Im still just over 20%, but Im in no rush. This SCE floater took some temptation off the table, and pretty comfortable holding a relative buttload of NSS as a junk rated high yield money market fund waiting for something better to spill.

      4. good comment.. duk.pra/pff pair has seen duk.pra outperform since april 2019 issuance ..its currently trading near 2 sigma cheap (3yr horizon)…was 2 sigma rich in may 2023 ..on 5yr horizon trading near fair.. was sigma cheap in december 2021..PFF SEC yield 6.67

  13. Looks like TECTP will go with SOFR +6.72% ( from Libor) on may 15th . Unless they call it . I like this one and hold it for a long time now / 2023, 10K just came out
    Risks Related to an Investment in the Series B Preferred Stock:
    ●The Series B preferred stock is subordinate to our existing and future indebtedness, which could adversely impact our ability to pay dividends on the Series B preferred stock.
    ●The Series B preferred stock may be junior in rights and preferences to our future preferred stock. Additional issuances of preferred stock or securities convertible into preferred stock may dilute existing holders.
    ●Dividends on the Series B preferred stock are discretionary and non-cumulative, and our future ability to pay dividends is subject to restrictions.
    ●The replacement of the London Inter-bank Offered Rate (“LIBOR”) on our Series B preferred stock with the Secured Overnight Financing Rate (“SOFR”) could increase our interest payments and may adversely affect the value of the Series B preferred stock. Dividends on the Series B preferred stock will vary beginning on May 15, 2024 and any dividends declared may be less than the initial fixed annual rate in effect prior to May 15, 2024.
    ●The Series B preferred stock may be redeemed at our option, and you may not be able to reinvest the redemption price you receive in a similar security.
    ● Investors should not expect us to redeem the Series B preferred stock on or any time after the date it becomes redeemable.
    ●Holders of the Series B preferred stock have limited voting rights.
    ●A liquid market for the Series B preferred stock may not be sustained, which may impair your ability to sell your shares.
    ● The market price of the Series B preferred stock may become subject to substantial fluctuations.
    ●Securities analysts may not continue coverage on us.
    ●The Series B preferred stock is not rated.
    ●Subject to regulatory requirements and the terms of the Series B preferred stock, the Company may, and currently intends to, pay dividends on its common stock and any such payment reduces the capital of the Company available to the Series B preferred stock.
    ●Our management and board of directors have significant control over our business.
    ●We are a “controlled company” within the meaning of the rules of NASDAQ, and as such, we qualify for exemptions from certain corporate governance requirements. As a result, you may not have the same protections afforded to shareholders of companies that are subject to such requirements.
    ●The interests of our controlling shareholders may not coincide with yours and with whose decisions you may disagree.
    ●Our corporate organizational documents and provisions of federal and state law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition that you may favor or an attempted replacement of our board of directors or management.
    ●We are an “emerging growth company,” and the reduced reporting requirements applicable to emerging growth companies may make the Series B preferred stock less attractive to investors.
    ●An investment in the Series B preferred stock is not an insured deposit and is subject to risk of loss.

    1. That reset won’t help the share price. I don’t think it increases the odds of a call either.

    1. I’ve been adding to CHSCM today at $25.15 and lower. I sold about half of my position when it went above $25.80 a week and a half ago. I think I’ve bought back pretty much all of what I sold recently.

    2. sold over 15,000 shares last month at high prices as it started its climb to the sky. Nice to start buying it back at a much lower price and get more issues ~ 7%

  14. Monday Morning MMFs…

    VUSXX…5.29%
    VMRXX…5.29%
    VMFXX…5.28%
    DTGXX…5.27%
    GABXX…5.26%
    SWVXX…5.17%
    IDSXX….5.16%
    TSCXX…5.14%
    PRTXX…5.08%
    PRRXX…5.06%
    SPRXX…5.04%
    SNSXX…5.02%
    SNOXX…5.02%
    SPAXX….4.97%

    Other ~ 10yr T jumping today, now 4.32%, up 12bp.

    1. I bought a good slug on TRINZ. Odd that TRINL trades at 7% and TRINZ at 7.8%. What’s up with that?

      1. Fryman—TRINL is near maturity so is going to hang around the $25 area since it matures soon–now will be a decent 7%–very little less or little more (max of 25 plus accrued interest)

    1. There goes another of my hidey holes.

      I loaded up on this when it was well under par.

      Pretty much all of the stuff I bought thinking it would be called has been called. Just a couple left.

      1. Agreed Scott. I loved this issue. Started loading up around $24 a few months ago; others got in even cheaper.

  15. A new purchase… FHLB bond @ 5.7% due 4/9/32 with a 1st call on 4/9/25 pays semi-annual Cusip# 3130B0P45

    1. I’ve been purchasing 10 – 20 year agency bonds when I can get
      over 6%. I don’t pay much attention to the duration since I think it likely these issues will be called well ahead of maturity. If not called early then SETI other beneficiaries will deal with it (lol).

  16. Announcement today Home Depot is buying SRS distribution of Tx. With About 470 commercial distribution yards in 46 states. HD is offering a little over 18 billion. Birkshire and it’s partner Leonard Green are selling.
    Birkshire cashing out. This company and it’s subsidiaries one of my customers.

  17. Here’s another interesting divergence: BC-A, 6.5% maturing 2048 and BC-B, 6.63% maturing 2049.
    BC-A currently has a bid/ask of 25.38/25.48 and traded as high as 25.89 at yesterday’s close. BC-B has a bid/ask of 24.85/24.92. Makes no sense. I traded all my A for B several months ago when there was a similar disparity otherwise I would do it again.

  18. TFSA story- A few III’ers noticed the dramatic run up in prices on TFSA today, so I thought I should go through what likely caused it. It is a cautionary tale for newer preferreds/baby bond investors, not so much for old timers.

    • A few background facts:

    • 671 of the $25 par issues I track traded today 3/27/24. 28 issues (4.2%) did NOT trade today, so 95.8% of the issues DID trade.

    • If an issue does NOT trade every day, you can immediately label it an “illiquid”

    • TFSA did trade today, but its last trade before today was last Friday 3/22, so it did NOT trade on 3/25 or 3/26, which is another indication of it being an illiquid

    • TFSA traded on 18 out of the last 30 days, which is proof positive it is an illiquid.

    • The 90 day average trading volume is 888 shares, which is miniscule

    • Without knowing anything about the company, their business, their earnings, etc. you MUST know going in to use limit orders when buying or selling, because it is do illiquid

    • It appears that a buyer today placed a “market” buy order at 2:36PM Eastern time for ~ 1,100 shares

    • The “depth of book” on the ask side was minimal and the buy order “blew through” it. Stated differently there were very few standing sell orders close to the 3/22 closing price of 23.70. The price peaked at 27.5799 in less than 30 seconds.

    • Some of the sell orders were hidden and either “dark pool” or “internalizer”, which means that they did NOT show their ask price before being filled. (I have covered this before.)

    • The 27.58 price was 3.88 above the previous close price. The next largest spread for the other 670 issues was 1.90 on VIASP. The median for all 671 issues was 12 cents, so the 3.88 spread was something like 5-6 sigma outside of normal

    • TFSA closed today @ 25.00 which is 1.30 above the previous close, but well down from the 27.58 high for the day

    BOTTOM LINE: IMO the TFSA trading today had nothing to do with fundamentals other than one buyer deciding to buy 1,100 shares. I would NOT read into the price action as reflecting on the business.

    1. We are in agreement that TFSA has nothing to do with fundamentals. However, both securities exhibit low trading volumes. TPTA’s trading volume is so small hat it is considered illiquid on Fidelity’s platform. While TFSA also has limited trading activity, its performance has diverged from TPTA since the end of February. Specifically, TFSA’s closing price in February was approximately $24, and it has since appreciated to $24.50 today. In contrast, TPTA’s value has declined, closing February at around $17 and falling nearly 30% and trading at $12 (down 10% just for today). This trend suggests a significant disparity beyond mere trading volume differences between the two securities.

  19. For those concerned with the TPTA/TFSA price divergence, considering they are the same credit with maturities only three months apart, today takes the cake! I’m seeing 24.60 x 27.58 with a 27.599 print for TPTA while TFSA is printing 13.15 with 13.05 x 13.25. It boggles the mind! Or am I going full retard? Someone please help me to make sense of this. SMH

      1. You’re right about me switching TFSA and TPTA in the quotes, and thanks. Sorry. Should be “I’m seeing 24.60 x 27.58 with a 27.599 print for TFSA while TPTA is printing 13.15 with 13.05 x 13.25.” But Holy Cow!

        1. You can thank me, I bought TPTA. Seems my luck for stocks to hit the crapper for no explainable reason 😉 But seriously, don’t know what’s up with these two. I guess it’s a hold until maturity and collect the big payout at redemption. In mean time it’s 10% yield (and growing unfortunately).

    1. @blkrahn TPTA TFSA
      I picked up some additional shares of TPTA today in low 13’s. I have been averaging in as it hit 17/16/15….etc

      I looked at the TFSA and TPTA prospectus again. The TPTA had a blurb…

      https://www.sec.gov/Archives/edgar/data/1674356/000110465921077040/tm2112955-11_424b1.htm#tSTOT

      https://www.sec.gov/Archives/edgar/data/1577134/000110465921012259/tm212707-9_424b1.htm

      “We agree that for the period of time during which the notes are outstanding,

      we will not pay any dividends or make any distributions in excess of 90% of our taxable income,

      incur any indebtedness (as defined in the indenture) or purchase any shares of our outstanding capital stock, unless, in every such case, at the time of the incurrence of such indebtedness or at the time of any such dividend, distribution or purchase, we have an asset coverage (as defined in the indenture) of at least 150% after giving effect to the incurrence of such indebtedness and the application of the net proceeds therefrom or after deducting the amount of such purchase price, as the case may be.”

      I am no legal expert, but here is my question on the 150%.

      TFSA was a hybrid of a BDC/REIT. BDC organization and REIT for FIT purposes.

      Is this that type of legaleez in the 150% for TPTA the same as the usual BDC coverage? I thought TPTA was just a plain ol’ REIT?

      I will also say that Western Asset/Mortgage now owned by Franklin was supposed to buy TPTA, but it fell through.

      Look at this III wayback machine post 6.5.21….by Qniform

      Qniform says:
      06/05/2021 at 7:34 am
      “No traded equity apparently. Some background stuff on Terra. Looks like the notes support a roll-up of several private partnerships to facilitate the sale of the manager by Bruce Batkin, former CEO. https://www.linkedin.com/in/bruce-batkin-2a698b8/

      https://innovativeincomeinvestor.com/terra-property-trust-prices-baby-bonds/

      That’s all i can remember off the top of the old noggin’

      1. @blkrahn TPT

        Ok, per the 10k I guess MITT gave a better offer to Western. TPT got $3 million as a result.

        I wonder if at some time the management thought that TPT was going to be regulated like a BDC, so they kept the terms or TPTA and TFSA similar? So what I am getting at is that maybe TPTA could’ve been merged into TFSA? I am just speculating here.

        After looking at the 10k again, I don’t see a burning building. Mostly seems like a crap load of Legos that forms into TPT eventually. They have assets and cash flow and sufficient liquidity per recent 10k.

        Yes they don’t have a lot of properties, but they also do other things such as;
        JV
        Participations
        Invest in securities
        Equity investments

    2. Hi, I’m a new member here. Just want to say the credit ratings lag reality. Look at their 10-k that came out on 3/15 for the real facts. The adopted CECL for 2023 and provisioned much more than 2022 for credit losses. They closed out a property with the bank using deed-in-lieu of foreclosure. I’m just a novice at this but looking at the cash and what they pay out in interest and that the majority of properties are office makes this a pass for me.

      1. @A1 TPT

        My post literally said I got the info from the 10K.

        Yes, they are using a new method to estimate losses. That has no effect on cash which is used to pay interest and principal. It is literally a non-cash accounting entry needed for compliance.

        In reality, estimates are estimates and may never materialize quite as one may try to predict.

        Page F-22 does show 31.7% office. They picked up 8 industrial properties in Texas, so maybe no more office in pipeline.

        I did see the deed-in-lieu. Sometimes you may need to jingle mail a deal. Not the best way maybe to handle, but there have been a handful of big hitters that have already done this. Sometimes it’s best to throw in the towel so to speak?

        On page F-39 it talks about TFSA & TPTA and here is what it says,

        “The Company’s unsecured notes payable contain certain financial covenants. As of December 31, 2023, the Company was in compliance with such covenants.”

        I have personally received all my interest payments from when I bought it first, which was right before the rate hikes started.

        is there risk here? Sure there is, but I think I am getting paid to take it (for now).

        YMMV

        1. Sorry I think I was reading, thinking and writing when you posted so I missed it. Thanks for your response. Sure it’s an estimate but it is forecasted for the life of asset now. I have a lower risk tolerance. Good Luck.

    3. TPTA down again, $12.85, down 2.5%. Someone seems to know something or know nothing. LOL I took another slice of that, time will tell if it’s lean or fat.

      1. TPTA down >13%. Sorry folks, I think she’s gone RADIOACTIVE! Someone must be pricing in the possibility of BK. Anyhow, I’m tapped out here, but hanging on for now. GLTA

        1. Looking at the trading volume on TPTA, I think someone decided to liquidate their position and wasn’t patient. They do have $15 million dollar loan due at month end (which was extended last year and likely could be again), but I have a hard time believing that could push the company into bankruptcy. At this point, I am willing to bet that even if the company is forced to default and liquidate, its bonds are going to be worth more than 50 cents on the dollar. I don’t think I have ever seen an issuer with such a wide spread on its bonds that mature in the same year.

          1. @JMeek TPTA/TFSA

            My tape reading foo is not so good. Thanks for the insight. 🙂

            Hmmm….when I put your findings with T2, the plot thickens.

            Yes sloppy a** trades, this has been going on for weeks now. TPTA would open each morning with at least a dollar wide spread or more. Coulda drove a truck through it. I was put in orders at various prices at the open and could NEVER get them filled until the big guy dumps his shares.

            Then somebody pushes the tape. You see some shares move around and then not much action the rest of the day. It was doing this for quite a few days on end about for 16-18 a share.

            I mentioned this in prior discussions. Then it went Barfasorus Rex today.

            So when it went to happy meal prices, I thought it was a bit much IMHO.

            This also happens a lot with the 7% perp from Priority (k). Some numnuts will sell 1k of shares when there is no action and push the shares a buck or two.

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