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MBINL at 23.31 has a current yield better than the other preferred issues of this serial redeemer. Also, yield to call is close to 10%. I bought some.
Serial redeemer??? Why do you say that? A quick look at QOL says they had two F/F issues that they called instead of allowing them to float and even then they were 3 months late to calling one of them. MBINL is fixed rate… Are there others they have called? Also with first call date on MBINL being 1/1/2030, it’s awfully hard to think YTC is particularly relevant today unless your crystal ball for interest rates 5 years from now is far clearer than others… imho, this is a current yield play only and with its Ba3 credit quality according to Moodys, should 8.22% current yield be considered enough? I did not look into MBIN specifically.
2WR-
“…it’s awfully hard to think YTC is particularly relevant today unless your crystal ball for interest rates 5 years from now is far clearer than others…”
Doesn’t that relate to MBINM the reset p’fd?
thx
I suppose the answer’s subjective but what I was referring to was how relevant a calculated YTC can be for a F/F or reset issue selling at a discount where the first or next float date is 5 years or so out like it is for MBINL. Predicting interest rates years in the future is a fool or economist’s game.
Sorry- but my point was that L is fixed rate, and M is a Reset type – hence my observation that you were mixing the two.
But- I do understand the problem of looking out 5 yrs for the treas rate + 4.34%.
John’s original post was pointing out the YTC on L. That’s why I mentioned it. Also showing how MBIN’s “serial redeemer” status seemed to apply more to their outstanding F/F or reset issues than their fixed rate issues like L, thus also lowering the potential relevance of a yield to call calc 5 years out.
amen
good comment …but one can always dream
MBINN/VCLT pair has seen MBINN outperform from may 2023 to october 2024 from which point it has rolled over.. on a 3yhr horizon its trading near .5 sigma cheap .. I would expected further underperformance both issues
Latest $BW audit shows $26M unrestricted cash left with credit line maxed out. The going concern and if they don’t refinance 2026 notes moves the 160M Axos loan to October 2025 before the notes giving it seniority. $BWSN and $BWNB sold off 3-4% yesterday probably because of this, seems like a bankruptcy is highly likely given the only money they made last year was selling assets.
Just got a fill for a few shs at 25.00 on a BID of 25.02, Ask 25.15 on UMBFP @ Etrade–surprisingly.
You could buy as many shares as you wanted last week at par or slightly under.
I did – plus this at par- only want a few at at time- with crazy mkt swinngs might get some more before it fades away.
FHN-B is selling less than par. Remember this is a bi-annual payer, and the next dividend is just 3 months away, at which time, the security will float. I bought some.
good comment I paid 24.93 (24.55 stripped) for 7.57 ytc 8/1 assuming 25 terminal value.. ytc 7.57 (fidelity calculator) good article on S/A
First Horizon: Q1 Earnings Present An Opportunity (Upgrade)
BuySeeking ProfitsWed, Apr. 09 tks for show
Not sure the Fidelity calculator is right, it pays 2x a year so maybe why? If I put in my spreadsheet I show a YTC of 13.2%. A return of $90 ($83 div + $7 gain) on $2493 investment for 100 days (90/2493/100*365). IRR shows 13.8%. This then assumes it is called (which is what YTC is based on), if not then your calc is the yield for the stub period.
Yes, I’m seeing an IRR of 13.46% using these inputs:
4/23 BOT at 24.95
8/1 CALLED at 25.828
O, and FL, you have it right BUT the Fido calculator did not get it wrong. It was used inaccurately. Fido comes up with 13.373% and quantwolf calculates 13.366% – both for 24.93 and settle 4/24 YTC of 8/1/25
thanks to you and all of the contributors .. I stand corrected .. what are inputs you use for FIDO calculator
They’re really self explanatory, but you do have to pay attention to the details and set each parameter individually… FHN-B is relatively straight forward though.
Calculate – leave it at “yield” – if you change it to “price” then it will calculate the price when you input the yield you want to achieve…
Bond Type – I’ve never toyed with it. I leave it at Corporate. As far as I know any other setting may change the answer somewhat, but I can’t imagine much.
Price – put in your STARTER number. In this example 24.93
Annual Coupon Rate – In this case you put in 6.625
Coupon Frequency – BY DEFAULT it fills in semi-annual, Choices are Annual, Semi-Annual, Quarterly, and Monthly/GSE. Gotta change it to Semi for this example
Maturity Date – Be sure to follow the entry sequence right and double check it – for this one put in the CALL DATE [because that’s the likely “maturity date” and the yield you want to figure. Enter 08/01/2025
Call Date – skip it for this example – we’re entering it on the “maturity date”
Call Price – skip it on this example
Par Value – Defaults to 1000 but you have choice of 1000, 100, 50, and 25. Choose 25.
Quantity – I always enter “1” because what I’m looking for is a calculation of the accrued (but not paid in this case) dividend PER BOND that you are entitled to but the calculator doesn’t account for initially
Settlement Date – Defaults to normal settlement but you can set to whatever is appropriate.
Total Markup – Irrelevant in commission free world but useful for 1k purchases.
Press Calculate – It shows Yield to Maturity = 7.57. HOWEVER, it also shows “Accrued Interest” right above the Yield To Maturity answer. It’s 0.382. The calculator thinks you are not entitled to that accrued but you are when calculating for bonds/preferreds that trade without it. So you must now SUBTRACT 24.93 – .377 = 24.548. RECALCULATE USING 24.548. You come up with Yield To Maturity of 13.373%. That’s your Yield To Call.
BTW, as a double check that you’ve entered everything right, in the upper right hand corner you see “Total Cost.” It now will equal your original price of 24.93.
With these parameters, with a little creativity, you can use the calculator to take into account practically any abnormalities what might come up when a call date or a maturity doesn’t match up to an dividend payment date, etc.
I should swear off doing this….. this has got to be no less than the third time I’ve gone thru this, but there’s always somebody willing to learn so why not help when I can.
I have some FHN-C. An extra year to float for a higher rate is fine with me. In a taxable account for the Qualified dividend. In my nontaxabe trading accounts the short term B might be better.
John Olsen –
“FHN-B is selling less than par. Remember this is a bi-annual payer, and the next dividend is just 3 months away, at which time, the security will float. I bought some.”
Thank you for actually posting an actionable and valid Reader Initiated Alert!
The RIA page is rapidly becoming similar to the comments section on a Seeking Alpha article (where you have to sift through hundreds of useless posts to find one comment that is relevant and potentially actionable).
Can folks PLEASE stop using the RIA page to post their random market thoughts, how you are managing risk, political issues, comments on tax policy, how your portfolio has performed on a daily basis, etc.
We are all well aware now of the users who post far too often on III. If you are trying to make this website less useful, you are doing a masterful job at it.
Perhaps consider joining a Reddit investor group instead? Or maybe just consider doing almost anything besides filling up this invaluable and essential RIA page with drivel.
John – Thanks. I own it and am buying more. I hope you’re right about it floating, but they called FHN-D with a base yield of 3.859% compared to 4.26% for FHN-B, so I think they will call it. Still, 6 months of divs plus a small cap gain in just over 3 months would be a good short-term deal.
goin-
Agree, call of FHN-B likely and -C also in 2026. I’m not interested in the CY of either but would buy -C on a dip for the YTC and quarterly payments.
FHN common hits bottom every financial crisis but the dividend gets paid.
Everyone, just an fyi – when (if) FHN-B floats, it will change from a semi-annual dividend to a quarterly dividend.
From the prospectus:
We will pay dividends on the Series B preferred stock, when, as, and if declared by our board of directors (or a duly authorized committee of our board of directors). Dividends will accumulate and be payable from the date of issuance to, but excluding, August 1, 2025, at a rate of 6.625% per annum, payable semi-annually, in arrears, on February 1 and August 1 of each year, beginning on February 1, 2016. From, and including, August 1, 2025, dividends will accumulate and be payable at a floating rate equal to three-month LIBOR (as defined herein) plus a spread of 426.2 basis points per annum, payable quarterly, in arrears, on February 1, May 1, August 1 and November 1 of each year, beginning on November 1, 2025.
https://www.sec.gov/Archives/edgar/data/933141/000119312515272777/d34688d424b2.htm#suprom34688_7
9:30 4/23
I am distressed.
It appears that remarks made in a closed presentation by the US Treasurer “Chinese tariffs will be lower than 145%” and a Presidential social media posting “I will not fire Jay Powell” are viewed as tremendously positive for the stock and bond markets.
How does one make reasonable investment decisions in this environment?
Add me to the list of those sitting on the sidelines waiting for the economic reality of the past month’s decisions to become known.
If we followed the law, which requires tariffs to be approved by Congress, we would not have this chaos. Trying to use presidential emergency authority for a problem that took 50+ years to develop is what Congress seems willing to allow to happen.
Correct, the environment is very difficult to invest in with the government unwilling to use the checks and balances that our laws call for.
Same. Buying short term Munis and Preferreds kicking the can down the road 6 months – 2 years.
Selling equities on the bumps reducing exposure.
Westie – Sorry you are struggling to manage risk and your investments but this is not a reader initiated alert.
dick
Actually thought it was a market oriented post
As in: don’t trust this up market
Expressed more subtly
Here’s Tim’s description of the Reader Initiated Alerts at the top of the page:
“Below readers can post in the comments section items they believe are important to seen right away by all other readers.
For instance if we are not at our computer and a reader spots a new issue being issued they can post it below where others can come for ‘breaking news’ from other readers.
We want to keep this page ‘fresh’ so we will slick it off every 50 days so the items below remain only newer items.
We only ask that comments beyond the breaking news be kept to other pages or this page will be ‘out of control’ and not fulfilling what I hope is a handy alert page.”
Do you really think what you posted is important to be “seen right away”? Again, sorry you’re emotional today and struggling to manage your investments.
The stock market right now works like the Protect Our Senior Citizen Homeowners Real Estate Tax Relief Program in my home state. First they take away all your money. Then they give you part of it back 6 months later as a “rebate” and you feel really good about it. Maybe even skip the cold cereal, go out to the Pancake House and buy yourself a three-egg Western omelet $$$ and a coffee $$. Note: CALM, SFD, BROS – no positions.
In any event I am not fighting the ticker – just wondering if I should “buy the dip” with the young YOLO crowd at WSB or “sell the rally” with the grizzled old veterans here. JMO. DYODD.
I think a good question is, “In the age of Reg FD, what the hell is Bessent doing giving out market-moving info to a small group, that clearly had their trading desks buying before this info became public?”
Maybe I’m misunderstanding what happened.
The group here might be interested to know my securities lawyer, who was formerly in SEC Enforcement, always told me the opinion of an analyst was considered inside information. Consequently “trading ahead” on upgrades and downgrades was considered illegal. That never made sense to me because they analysts should not be getting info b4 everyone else so SEC
was taking the posture that an opinion was inside info!
Cornerstone Fund doing a rights offering…
Anybody want to opine on why a fund does a rights offering to raise cash versus other methods?
https://www.sec.gov/Archives/edgar/data/33934/000139834425007378/fp0093088-1_424b3ixbrl.htm
Went through a rights offering about 3 years ago. The first lesson I learned from the experience was to sell ASAP any time a CEF did a rights offering. They are not doing it for your benefit. The second lesson was to not invest in CEFs, which negated the first lesson. I’m sure that many others have had positive experiences, but I’ve never looked at another CEF, although I do own preferreds of CEFs.
I paid 24.20 for ATCOL 7.125 10/31/2027 for 8.55 YTM (fidelity calculator) ..the atcol /sjnk pair trading near 1 sigma cheap (1yr horizon)
Thanks…. FWIW, I get 8.75% IRR (Spreadsheet calc)….. Another option…. Shorter duration with tighter Bid/Ask spread – but similar YTM – ATLCL (11/30/26) 8.74YTM (IRR calc).
Bought FGSN subordinated BB 7.3% due 2065 @22.40, CY 8.15% BB S&P rating.
MUB is DOWN .4% on an up day for fixed income.
thoughts?
Maybe something is happening on this front?
https://www.jdsupra.com/legalnews/the-possible-repeal-of-the-tax-2159891/
Excerpts:
“You may have heard recently about proposals for Congress to remove the exclusion from gross income of interest on state and local bonds, usually referred to as “repealing the tax exemption on municipal bonds.” This issue arose as a result of the leaking of a 51-page list of items to increase revenue or reduce expenses of the federal government being considered by the House Ways and Means Committee. ”
and
“About the only thing anyone knows for sure right now is that no legislation to repeal the tax exemption has been introduced in either the U.S. House of Representatives or the Senate. The absence of legislation does not mean that there is no threat. It just means that the nature of the threat is unknown.”
That 51 page list is a DOOZY…
If anything close to even half of it gets enacted into law, it would be the biggest change in tax law since 1954….
And the one thing I can guarantee. That if it becomes law, it will be done in the middle of the night, because the lobbyists would descend on DC like locusts to make sure their constituency’s tax preference is spared the ax.
https://www.cato.org/blog/reviewing-house-budget-committee-tax-options
Available from brokers this am, new issue, short term muni subj to AMT.
WASHINGTON ST HSG FI REV 3.95% 12/01/2025 Subject AMT @ Market, AAA
that’s an indication of the price, not a guarantee. If you are in the 24% bracket I believe that’s around 5.1; 32% bracket with 3.8 NIIT, TEY is 6.15% if I calculated it right.
OFC, subject to state tax of which I have none
I’ll leave a few mill for you guys
SCE-M +3.6% today on good volume but EIX down.
rocks2stocks,
Yep, I noticed that too as I have a few shares myself. Kind of a nothing day otherwise, my IRA account ended up down $13.20, one less Big Mac and fries maybe ?
The only fly in the SCE / EIX ointment is if they are proven to have any culpability in regards to the Altadena fire, hopefully not and it goes to $25.00 fast.
Bill,
you said: “my IRA account ended up down $13.20”
That is NOT possible.
Your IRA either ended UP or it ended DOWN, but it could not end “UP DOWN”
in the same way the market cannot open “up down”
Dear Miss Manners,
Your first sentence was a grammatical travesty, and darned if there isn’t a missing period at the end. I stand with Bill; “ended up” means finished.
Yours truly,
rocks
MissManners
I was thinking of saying “at the end of the day my IRA account incurred a loss of $13.20”. However, when I hear somebody use the phrase “at the end of the day” my first instinct is to find my baseball bat, so I ended up saying “ended up”. Capiche ?
Eagle Point Credit Company Inc. (ECC) announced it has increased the continuous public offering of its 7.00% Series AA Convertible Perpetual Preferred Stock and 7.00% Series AB Convertible Perpetual Preferred Stock…
https://seekingalpha.com/pr/20073724-eagle-point-credit-company-inc-increases-offering-amount-of-7_00-percent-convertible
good comment…SCE-M/VCLT pair has gone from all time low early april to .5 sigma rich today..
SCE-M/VCLT pair has gone from all time low and near 2 sigma cheap (horizon going back to inception december 2023) to near .5 sigma rich .. low coupon preferreds as a group are outperforming VCLT today but not by this magnitude
WFC Recently Issued…
* 95001DK74, 6%, Senior, A1/BBB+
* Semi-Annual Payments
* 4-Year Call Protection
* YTC 6% 4/28/29….YTM 6% 4/28/45
dyodd
Upcoming US Treasury Auctions…
* 13wk Bills…$76B…4/21
* 26wk Bills…$68B…4/22
* 6wk Bills…$70B…4/22
* 2yr Notes…$69B…4/22
* 2yr Floating Rate Notes (FRN)…$30B…4/23
* 5yr Notes…$70B…4/23
* 7yr Notes…$44B…4/24
For those interested in shipping, Lori Ann LaRocco published an article titled “Trade war fallout: Cancellations of Chinese freight ships begin as bookings plummet” on Apr 16, 2025 on CNBC. Sorry, can’t copy the link.
Worth a read if you are interested in container box shipping from China or Vietnam. Taking the wise advice of the seasoned III posters, I previously sold my shipping preferreds. Thanks to everyone for the heads up.
goin2cali that entered into my concern with one of my REIT’s. have to decide which way the Moon and Stars align.
Also Cali I think a bubble developed in the LG market. There was an over building of export facilities and ships.
Apparently the fallout will now extend to ports, and by association municipal bonds issued by ports.
I read last week a number of “secondary”ports could lose most of their business with this:
https://ustr.gov/about/policy-offices/press-office/press-releases/2025/april/ustr-section-301-action-chinas-targeting-maritime-logistics-and-shipbuilding-sectors-dominance
good comment … relative to VCLT starting on 4/3 TRTN-C has dropped 5% relative to VCLT 3.1% so why it has underperformed the magnitude does not represent an abandonment of the sector… in fact DLNG-A (lng carrier) is about where it was on 4/3 outperforming VCLT.. appears to me that the narrative is not supported by the facts
The new US port fees / shipping rates (taxes, docking fees, whatever) are out. The fees are effective in October, They are complicated. (40+ pages of complicated.) You can find them on line. This is how see it:
— Rates are less than the large per-stop, flat fees originally proposed. (~1.5 to 2.5 million per stop). There are carve outs that should benefit US grain exporters like CHS.
— Rates are calculated per ton or or per container. Ships that are both Chinese owned and Chinese built are targeted with the highest rates. Non-Chinese owned but Chinese-built ships are taxed at a lower rate, 32% of the Chinese rate. The rates will increase each year for the next 3 years.
— Even ships taxed at the lower rate could pay big dollars. (News item – “a ship loaded with 15,000 containers would be charged $1.8m”.)
— Of interest, there is a $150 fee on each car, wherever built, carried on an affected ship. This is on top of tariffs.
— Fees are expected on LNG carriers, effective in 3 years. TBA.
JMO. DYODD.
I liquidated LANDO near 20 (7.5% cy) as the LANDO/VCLT pair which has gone from over 2 sigma cheap in december 2023 to near 1.5 sigma rich in november (3yr horizon) and rolled over trading near fair value…now 1 sigma rich,, an expecting further underperformance
I paid 22.11 for ECCC 6.5 5/30/31 for 9.48 ytm.. the ECCC/HYG pair is trading near 3 sigma cheap (was over 2 sigma rich last week) . on horizon going back to inception march 2023 is over 2 sigma cheap ..just trade at 21.88..good article on S/A by HUNTING ALPHA titled EAGLE POINT CREDIT: WHY I AM BUYING NOTES AND PREFERRED
due 6/30/31, not 5/30 and is monthly pay… as per usual disagree on YTM… with 4/30 dividend most likely x-div now, YTM looks to me to be 8.95% approx
righton. I think ex div is like the 12th of each month. I have the eagle income side of the house. I prefer clo debt vs the equity side.
good comment.. EICB and EICC vs SJNK are trading near 2 sigma rich (1yr horizon)
I may be wrong, but what I think you actually did was quote the “annual equivalent rate” using your original assumptions instead of the line above it which is labeled “Yield To Maturity.” The difference between the two is described here – https://www.investopedia.com/terms/a/aer.asp. Actually there’s probably nothing wrong with knowing that yield given it’s different assumptions, however, the AER yield quoted will not be consistent with what is used when comparing quoted yields for other bonds/term preferreds/baby bonds, etc.
thank you I was wondering what the difference was
EIXX operates in a different risk category than ECXX, which is why it didn’t experience the same 5%+ decline seen in other assets. Risk profiles vary, especially in these crazy market conditions. Not sure i would call that “rich.” Just because it didnt fall like many other fixed investments, doesnt mean it is rich/overvalued in my vocab. Now if they went well above par…
Your strategy of finding value compared to a specific fund is one such approach, but must be carefully balanced against your personal investment risk tolerance. Should you compare against 1 fund? Compare against many funds with an average of several? The key is keeping a risk-adjusted perspective otherwise chasing a falling knife can be the outcome.
I stand corrected.. my source on ytm is https://quantwolf.com/calculators/bondyieldcalc.html”
and when i changed maturity and quarterly to monthly pay it came up with 9%
Sizable seller of HNNAZ at 24.25. I get about a 6.8%ytm IRR
Thanks Irish–giving folks an opportunity if 6.8% meets their hurdle rate. I am pretty full up on this one so probably won’t add more.
Somebody posted recently about the ENB 5 year reset preferreds, the ones that are denominated in USD. I recently bought EBRGF, an CA dollar issue that trades on the OTC. The EBRGF reset spread is not as good as EBBGF, but EBRGF is only $12.50 US.
I believe EBBGF pay qualified dividend, whereas EBRGF does not.
Why would you think that?
All are considered Preferred stock, and all would be considered qualified under 26 USC 11(h)(11)(C)(i)(II) because of the US/Canada tax treaty.
(i)In general
Except as otherwise provided in this paragraph, the term “qualified foreign corporation” means any foreign corporation if—
(II)such corporation is eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary determines is satisfactory for purposes of this paragraph and which includes an exchange of information program.
It can get weird where the status comes from the securities market part of the law, where the common shares can be qualified, but preferred shares from the same issuer are not.
Bunge Ltd used to be a company that falls into this category because the common dividends were qualified but the preferred stock were not because they traded OTC until their redemption in 2022.
The Quantum site states EBBGF pays qualified, not so EBGRF
which is odd. The documents don’t say anything about the qualified status because they were sold only in the Canadian market where the qualified status is irrelevant (and the USD ones were sold as a hedge against the CAD), so Quantum should have them all as qualified or all as non-qualified, since they have no guidance from any of the prospectuses to go on. (Unless a site user asked them to update them, and they reached out to IR for an answer for the one that they updated to qualified)
bot MGR at 23.07 7.33 cy as the mgr/vclt pair near 3 year low and vclt appearing to have bottomed
Typo? $20.07? MGR is at $20 with a CY of about 7.4%.
I stand corrected 20.07 thank you
MJ, This has been the closest MGR has been to it’s low since it came to market 6 yrs ago. I assume you are not buying a full position? or are you buying in tranches. I get the impression from your posts that you are more of a buy and trade person. I would prefer to buy and hold unless of course there is a reason to sell, like a good capital gain. Normally I would buy a 1/2 to full position in something if I consider it safe, but I can see this going lower in this market so maybe just a nibble. It’s parent AMG manages and makes investments so I wonder how it is doing in this market?
good comment. as a relative value trader I most always buy a full position as I trade at extremes (which of course can get more extreme).. good article on AMG on S/A titled AFFILIATED MANAGERS GROUP: AUM OUTFLOWS TRIGGER UNJUSTIFIED SELLOFF DATED 2/12/2025..also check IN SEARCH OF INVESTMENT GRADE YIELDS FOR THE LONG TERM by Arbitrage Trader on 2/19
Thanks Mj I like reading Arbitrage Traders articles
Another outsized AAA muni yield comes to market: Fidelity showing a AAA Arizona single family offering at 5.3 on the long end (2053)
LT, Thanks!!! You are the best at these.
Some news on muni tax exemption from WSJ, hopefully is a good sign, but it is still too early to be sure
https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-15-25/card/muni-tax-break-garners-key-support-BrRB6SZNrlWHxCFtL3kz
BYG,
Thanks a lot. I don’t know this ends the debate but I won’t hedge as much as I’d planned.
I have a subscription to wsj and didn’t read it today!
Does the (non-AMT) aspect of this issue enter into its pricing? Also, FWIW, Fido does not show this with any rating from S&P, just the AA1 rating from Moodys’
Non amt, but also callable at any time…but won’t be called, from experience , without a 200+ bps move. Frankly, the shortest call time I’ve had on a housing bond was 3+ years or more because the funds were never actually lent out at high enough rates. Unless the funds are lent , IRC sec 143 requires the call after a certain number of months (42 months, from memory)
Trading WAS halted in CMSC! Someone dumped a HUGE amount into the buzzsaw until it reached $18.79 and was halted! It has recovered now and it is now down only 4c……
Fan59,
Trading was halted for 5 minutes with Halt Code “M” which is a problem since there’s M1 and M2 but I’m not aware of any code M without a 1 or 2.
M1 : corporate action
M2: quote not available
I’m going to say it was M2.
I looked through time and sales and I didn’t see any trades on the tape at the $18.79 price.
Perhaps that was busted by the exchange for being out of line?
There’s no news, is there?
lt –
No news from th parent, CMS…..maybe no trades at $18.79, but surely some outsized selling pressure, keeping an eye on CMSC to see if any whale seller might possibly resume…
I bot SREA at 20.23 (7.11 cy) as the SREA/VCLT pair near 3 year low and VCLT appears to have put in a bottom (close above 73.11 confirms)
mjtroll, I have a full position on SREA and it is a long time hold. But, I do not understand the significant drop in its price. as compared to other utilities. The 52 week price range is $25.24 to $19.52. A quick review of its EPS, cash position, capital spending plans, and EPS growth forecast don’t show any significant issues. I am not aware of any involvement in the Calif wildfires.
Any insight that you can share on the price drop and your confidence in buying SREA will be appreciated.
Larry-
SREA is a long-dated IG junior BB with CY 7.1%. In the current environment, I think markets are setting prices based on these simplest of criteria. What is there to support the price of SREA that distinguishes it from other long-dated IG junior BBs. Nothing? Similar with CY from my spreadsheet:
MGR 7.3%
MGRE 7.4%
WRB-G 6.6%
KKRS 6.9%
BNJ 7.5%
RZB 5.8%
RZC 7.1%
The average is 6.9%.
US Dollar ~ another new 52-week low today…
* 1/9/25 high at 109.96
* 4/14/25 low at 99.79
Newbie, Noticed Canadian Dollar (CAD) has strengthened about 4.5% since the Troubles started. Nice little dividend raise to counter recent Canadian stock price declines. Currency hedge during troubled times was one of the things I considered when initially buying Canadian Banks many yrs ago.
PP ~ agree, we have to work with the evolving financial conditions of each day in 2025…
PP GBNXF is one I am sitting on holding tight.
Interesting Charles M. Had to look this one up–nice yield at 7.9%. Are you looking for some capital gains as well (I assume)?
Tim not really looking at capital gains for this one. Just wanted to diversity from US and find a decent yield. Maybe an added kicker if the dollar weakens letting the Loonie gain. This one also has holdings in the US and Canadian railroad has it as a holding in their employees retirement accounts.
I have to give credit though where credit is due. I didn’t find it, I learned about it from momma bear Bea.
Charles–great that Bea could contribute for you.
Re: GBNXF
Charles- 1) Is GBNXF subject to a 15% Canadian withholding tax for taxable accounts I assume?
2) VLCC’s are limited to certain destination ports due to their size. Are you concerned about a trade war with China potentially affecting oil exports from the South Gateway Texas Terminal?
Dave this is in an IRA. Just have to wait and see how this all plays out.
Charles (et all), yes I am already a holder of Gibson Energy. So far held up well in the turmoil.
GBNXF is down 9.25% YTD, which means that holders going into 2025 have already lost more than the dividend pays annually. It might be worth a trade here but given the uncertainty around tariffs and Canada’s upcoming election there’s plenty of risk.
CW, as stated, its held up well through this turmoil. Perhaps I have different perspective since I bought in early March and am currently up over 8%. Considering where the oil market and general market has gone since then, that is a win to this point anyway. Probably wouldn’t add to it quite yet though, would have to go much lower.
good comment..it has underperformed its relevant index etf AMLP since august 2020
fwiw…GBNXF/AMLP pair has seen GBNXF outperform since january 2012 but underperform since august 2020 going from 2 sigma rich to to sigma cheap last month from which point it has bounced.. on absolute basis close above 15.87 confirms..recently recommended by Trapping Value on S/A
OceanFirst Financial 7% FTF OCFCP preferred redemption 5/15/2025
https://www.morningstar.com/news/globe-newswire/9421340/oceanfirst-financial-corp-announces-redemption-of-all-outstanding-57370-shares-of-700-fixed-to-floating-rate-non-cumulative-perpetual-preferred-stock-of-oceanfirst-financial-corporation
Someone selling SLMNP at 880. Perhaps someone here. Net price is close to 865.50 given the ex date is Tuesday. That’s a decent risk profile for me… I’d take the capital loss by tendering if we got credit quality seriously deteriorating, only a smallish loss. I might even tender if I found something better to buy!
Lt big chemical company, exporter out of US and built plants in China. Wonder how the Trade Wars are going to affect it. Sounds like the name of a reality TV series!
https://en.wikipedia.org/wiki/LyondellBasell
Yeah, that does worry me and the stock has dumped pretty dramatically. If I could buy it at the 820 ish bid, I could average down and tender it for cash.
Here’s one perspective:
You’re getting about 2.60 excess yield per year above a money fund, so if you can offset the capital loss you’d be ahead by holding it one year and tendering it for cash because the dividends are taxed at a preferential rate.
Lt, now I know why you live in Vegas. Hope you enjoy your vacation after that uncomfortable ride.
LT- that was me that sold. Hope some folks here got them. I bot it at $890.. I still like the risk profile.. just used it as a source of liquidity to fund names down 7%+.
I have had bids in for a long while with no fills. I like the downside protection SLMNP offers and the yield is pretty good. My average for it is right around the put price of $848. $865 net is still a pretty good price considering the yield and the downside protection. I will keep accumulating it as long as the parent remains in good financial shape. LYB dividend is over 9% at the moment.
Thanks for the info. We may be the only buyers and sellers!
I looked at the 10-k and they had a 900 mill write down last quarter, so still
FCF and earnings look good. I’m sure tariffs will affect them but , like our admin, i don’t know how.
Nice to know I don;t need to rush out and buy a big screen. Best Buy should be up.
you may be the only buyers and sellers avg 10 day volume 11 90 day 5 (don’t know if that hundreds but it appears that it is not)
On 3/27, I bought a share at $810. I have no idea why such a thing happened, especially when considering my GTC order was for a higher price than that, but I am glad it happened to me. My average cost for just four shares is now $957.50 which is not great, but after the 5/1 dividend, I will be able to sell them back at the tender price and still have positive cashflow from this investment, so I have that going for me.
Don’t tender your shares of SLMNP, as you will find a buyer well above the tender price. I had a bid for $865 and I did not get a fill. I am starting to wonder if Fidelity is posting my bids.
I am not planning to tender them back, but it is nice to have it as an option.
My recent purchase at $810 was in my 401k brokerage account at Fidelity. Whatever that is worth.
ATCOL sold down to 22.45 on 1275 shares over one minute. Quite a sight. Closed at 24.23. The ask never fell.
Unbelievable. The day has finally arrived. After an eternity of trading near $30 a share, the MS-F preferred has fallen just below par. This is a fixed 6.875% coupon and as I previously linked the original MS PR, one of the series not going to float.
Per Quantum:
Notes: April 28, 2023 — Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F (and related depositary shares) (and related depositary shares) is one of the preferred stock (and related depositary shares) and debt securities issued by Morgan Stanley that will not transition to the Replacement Rate by operation of law or otherwise. After the LIBOR Cessation Date, dividends or interest on these instruments will continue to accrue at the Initial fixed rate.
MS-I and MS-E all trading at lows and likely good buys for the risk averse who does not mind them being called away – though IMHO do not see them being called any time soon. Rates need to fall quite some (when they can issue news ones with coupon below 5.5-6%.
Also consider MS-Q if you want longer to 1st call and MS-K if you prefer appreciation potential.
disclosure: I own most of these and adding
good comment MS-Q/VCLT pair has traded in narrow band since may 2022 ..its currently trading near 2 sigma cheap ..if we go bakc to inception in january 2017 its trading near fair value .. all time low was set in march 2020 (like most individual preferreds).. probably worth a trade although there are many similar lower coupon preferred are trading near 3 year lows
??? MS-F has been just above par all year, and at best was in the 28s 3 years ago… don’t know how you can say it’s been at 30 for eternity…look at the chart…are you confusing it with another MS preferred? Other financial companies with similar credit rating following same below par plunge, nothing screaming bargain here, but interesting either way.
MS-F (and similar MS-E, MS-I etc) It used to be a floater before LIBOR to SOFR conversion when they said it would be fixed. As a floater, I guess it should have priced higher (as it was).
QOL note on the conversion is April 2023, so what it traded before that should not be that relevant.
I paid 21.79 (21.65 stripped) for EBNNF 4.96 FTF 9/1/2027 5YR +4.04 6.75 CY 11.76 CTC assuming 25 terminal value …EBBNF/SJNK pair has seen ebbnf outperform since 5/2023 and is currently trading near 2 sigma cheap
Oh so it was you stealing everything before it got down to my 21.76 bid?
Could you explain some of your abbreviations?
I think I understand most of them, but I’m not sure of the +4.04. I think it resets to the 5 year treasury plus 3.15%? And is CTC supposed to be YTC?
But probably it’s just the notation that’s confusing. Anyway, at 21.79 I get it as a 12.6% YTC (9/27) assuming reinvestment at 6%.
Nate, Look at this.
https://www.quantumonline.com/ParentCoSearch.cfm?tickersymbol=ENB
Pull each one up and check which ones reset with the 5yr US treasury or the Canadian.
MJ is making an assumption these will reset at a higher rate or they will be called. All 3 have reset in 2022, 2023 and 2024 so the next resets will be 5 yrs from those dates. The one that reset in 2024 of course has the highest yield now and will hold it for another 4 yrs. The one that reset in 2022 has the lowest rate and will not come up for reset for another 2yrs 5 months.
I assume your looking at collecting all 3 ?
Check the rates on this page.
Some trade on the Pink sheets, but some only trade in Canada and pay in Canadian dollars.
Any yield increase can be wiped out by a currency valuation change.
(though if the USD weakens, it goes the other way as well)
https://www.enbridge.com/investment-center/stock-and-dividend-information/preferred-hybrid-shares
Also Justin I think some people have said Fidelity and Schwab don’t get the Canadian tax withholding reversed as allowed by treaty but that could get thrown out the window as well.
If held in an IRA. With Schwab and Fidelity, that has no impact if held in a taxable account.
Thanks! I had been holding EBGEF, but sold it a couple months ago planning to switch to either EBBNF or EBBGF once there was an opportunity. I thought this was that opportunity. Here’s how I’m showing them today:
Ticker Last Coupon CY Reset Rate YTC*
EBBGF $23.30 6.70% 7.60% 6/28 5Y+3.14% 11.00%
EBBNF $21.70 5.86% 6.82% 9/27 5Y+3.15% 12.76%
EBGEF $23.06 6.68% 7.32% 3/29 5Y+2.82% 9.20%
We can mostly ignore the YTC since I don’t think they are likely to actually be called, but my simple theory is that based on the reset rates EBBGF and EBBNF should be trading at about the same price and higher than EBGEF once they all reset. I’m chose EBBNF since it’s currently priced lower and thus has more room to go up to match. Does this logic seem reasonable?
I hadn’t considered trying to hold all three. I try to restrict myself to 2% per issuer, and holding just one issue makes life a little simpler. I guess there is a reasonable argument that splitting between EBBGF and EBBNF might add some useful diversity depending on what happens to the 5YR rate over time. I don’t think there’s a good argument for EBGEF?
YTC*: My YTC (which is actually YTR here) is calculated in a nonstandard way so probably don’t match others. I’m using XIRR and actual dividends, but leveling the playing field by assuming a fixed 6% return on all dividends.
Bare in mind that ENB has a whole raft of preferreds, some in Cdn and these few in USD, and many of those that reset have been outstanding already for more than one cycle of resets without ever being called… For example, when EBBGF first reset on 1/1/18, the 5 year was around 2.50% and yet ENB chose not to call… Although, I’ve not done the research overall, I do know that historically, they have not called many of the preferreds.. As I remember, it has happened, but personally, I own all 3 without expectations they’ll ever be called. And you know my bias for buying anticipated to be called issues across the board.
https://www.enbridge.com/investment-center/faqs/~/media/97BFF197ECAA49AE99FA18A5B65F1953.ashx
I stand corrected 5yr + 3.15 is correct.. good article on S/A..I agree with your YTC 12.6
Expect A 10% Annual Return On This Enbridge Preferred Stock
New 52 week low ~ USD now at 100.10
SPLP-A will still be tradeable and not going dark – right?