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USBpH 5.56% pfd is now trading at 20 ; current yield 7.8% for this BBB issue
the others in the series Q,R,S are yielding 5.78% imho a serious mispricing
but this is a floater since 2011 ; LIBOR +.60
might not be attractive when interest rate drop;
Ted, you will tend to find this throughout the issues. The market is going to make you pay up for the security of the “fixed income”. And giving you a near term anyways yield bonus for taking on the risk of Fed dropping the short end.
Grid ; i am aware that what you say – the rest of the series are straight preferred; no float ; but I do anticipate some contraction on the spread between the two;
Very well could happen. And its also possible it narrows the opposite way, being the fixed issue and its atrocious 5.78% fixed drops in price narrowing spread that way instead.
Grid:
I tend to stay away from these floaters with these truly minimal bumps over SOFR. In USB+H, you get 86.1 basis points (60 bps +.261 bps) over 3-month term SOFR.
I was checking my older notes on this security and here is what a poster on this site wrote back on 2/10/21:
“I’m thinking floating preferreds like US Bancorp’s usb-h are a fairly safe place to stash cash. They can be bought close to par, pay about 4% at today’s rock bottom interest rates, and will float up with any rate increases. Wondering what others think.”
Way back on 2/10/21 USB+H was trading near $24. Three+ years later and after 500+ basis points in short term rate increases by the Fed, USB+H trades near $20.
A good lesson in staying away from these types of floaters.
Kid, we here are all self service investors and have our own personal tastes. But I personally dont like rolling low libors inside my papers. I dont like the yield being so dependent on the Fed. And as you mentioned, their price movements reflect the difference of it.
Here’s my unrealized gains at the moment on some of my holdings that have similar structures to USB-H:
BML-J – 8.36%
MET-A – 5%
MS-A – 7.4%
TFC-I – 15.2%
USB-A – 16.75%
(Dividends received are not reflected in these percentages)
Entry point matters a lot. One should study the historical trading patterns of these issues. It’s not as simple as these are good or bad.
I dont disagree with what you said at all Dick. Its just like fixed perpetuals. Knowing when to be in and out and what will impact them either way. Its just one battle Im not interested in engaging with. That is why I mentioned personally for me. But Im just not interested in engaging in a lot this year anyways.
If you measure from early 2021 to now, USB-H actually outperformed some low coupon fixed rate issues.
Rapid rate hikes will affect all of these issues to some degree.
One source does have 3mo Libor @ 5.58801%
The Fed shows 3mo SOFR at 5.31% — how’d you get 7.8% ?
thx
See here.
https://ir.usbank.com/shareholder-information/preferred-stock/default.aspx
.60%+3mo SOFR + spread of .261
Trading at 20 bucks a share, 5 below par, which is why the yield is so high.
The series B trades with the symbol H, oddly enough.
https://www.marketwatch.com/investing/stock/usb.prh
Gary took the last dividend .39 x 4= 1.56/20= 7.80%
since interest rates have not dropped , I based my assumption on 4 similar dividends going forward ; of course this will all change with the first decrease in SOFR rate
Monday Morning MMFs…
* VMRXX ~ 5.28%
* VUSXX ~ 5.28%
* VMFXX ~ 5.27%
* GABXX ~ 5.26%
* DTGXX ~ 5.23%
* SWVXX ~ 5.14%
* IDSXX ~ 5.16%
* TSCXX ~ 5.14%
* FZDXX ~ 5.14%
* PRTXX ~ 5.05%
* SPRXX ~ 5.03%
* SNVXX ~ 5.02%
* PRRXX ~ 5.02%
* SNOXX ~ 5.01%
* SNSXX ~ 5.01%
* SPAXX ~ 4.95%
Schwab CDs Today ~ all are Fixed, Non-Callable, FDIC…
* 3mo ~ 5.458%, 45385JBR8, Independent Bank of McKinney Texas, maturity
* 6mo ~ 5.3%, 17312Q4S5, Citi, maturity
* 1yr ~ 5.15%, 17312Q4V8, Citi, maturity
* 2yr ~ 5%, 17312Q4U0, Citi, semi-annual
* 3yr ~ 4.8%, 61690DPN2, Morgan Stanley Bank, semi-annual
* 10yr ~ 4.5%, 32110YN27, 1st Natl Bank Mi, monthly
US Treasuries…
* 2Yr ~ 4.96%, intraday high 5.019%
* 10Yr ~ 4.62%, intraday high 4.67%
Newly Issued JPM Bond…
* CUSIP ~ 48130CKP9
* Coupon ~ 6%
* Price ~ 100.28
* Senior ~ A-/A1
* Maturity ~ 1/23/34
* Callable ~ 4/23/26
* YTM ~ 5.962%
* YTC ~ 5.847%
Other…
* Express Inc (mall retailer) files for bankruptcy
* Verizon (down 4%)
DYODD…
Newbie-
Thanks for the comprehensive list. The 6% JPM bond with 2-year call caught me by surprise since I never saw it listed on TDA new issues. First settlement tomorrow, so secondary market only. TDA still has the same 5.5% JPM new issue. JPM often establishes the top rates for CDs and bank bonds.
Other 6% new issues at TDA with years to call:
RBC 2y
C 1.5y
Bank of Montreal 2y
BAC 2y
GS 1y
GS 2y
Jeffries 6.5% 1y
DB 6.25% 2y
To me, that’s a huge number of big banks willing to pay 6% for a least 2 years. These banks want your money now. Knowing why would be valuable information. If 2 years is your investment timeframe, right now there’s no reason to accept less than 6%.
AJXA – I’ve only followed this from afar as I kept 25 shares just to see what happens….. Is this actually implying they will be paying this off solely in shares and if so, shares of what?
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001614806/d7fb3959-78eb-486c-9da0-9602a1a2566f.html#tm2412334d1_ex99-1_htm
On April 22, 2024, Great Ajax Corp. (the “Company”) announced that, in advance of the upcoming maturity of its outstanding convertible notes on April 30, 2024, the convertible notes have a final conversion rate of 1.7405 shares of common stock per $25.00 principal amount of notes, which represents a conversion price of approximately $14.36 per share of common stock.
New York – April 22, 2024 –Great Ajax Corp. (NYSE: AJX; the “Company”), a real estate investment trust, in advance of the upcoming maturity of its outstanding convertible notes on April 30, 2024, announced that the convertible notes have a final conversion rate of 1.7405 shares of common stock per $25.00 principal amount of notes, which represents a conversion price of approximately $14.36 per share of common stock.
About Great Ajax Corp.
Great Ajax (NYSE: AJX) is a real estate investment trust that focuses primarily on acquiring, investing in and managing re-performing loans (“RPLs”) and non-performing loans (“NPLs”) secured by single-family residences and commercial properties. In addition to its continued focus on RPLs and NPLs, it also originates and acquires small balance commercial mortgage loans secured by multi-family retail/residential and mixed-use properties. Great Ajax is externally managed by Thetis Asset Management LLC, an affiliated entity. Great Ajax’s mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity.
Great Ajax
Mary Doyle
Chief Financial Officer
(503) 444-4224
mary.doyle@great-ajax.com
I believe they are just stating that you have one last opportunity to convert your notes into shares of common. Not a very appetizing alternative.
2WR, When the merger with Ellington failed, I took that as a sign that whatever they saw when they reviewed the books they didn’t like. I believe AJX buys non- performing or troubled loans and tries to find value in them as well as other investments in real estate. I think if rates continue to stay as high as they have been we will see more trouble in reits like this.
But- AJX common is ~ $3.55 So, they must be using the RITHM cash infusion to make up the difference- as in SteveH’s post just below.
This seems to be the current idea for paying off the AJXA notes:
https://finance.yahoo.com/news/rithm-capital-corp-great-ajax-225600073.html
CME FedWatch Tool ~ probability of future RATE CUTS declining further
May 1…..4%
June 12..16.9%
July 31…44.4%
JPOW is lost in the wilderness. He has no idea what to do.
Tired of the Fed big mouths always giving speeches.
My 2 year treasury now yields more than SPAXX.
Waiting fot the next Master List.
Hmm, I think this means KTH is being delisted from the NYSE?
https://www.businesswire.com/news/home/20240412190236/en/PECO-to-Voluntarily-Delist-Capital-Trust-Receipts-from-NYSE
If so, I don’t think they will go to Expert Market, so long as Exelon continues publishing financials for PECO in their SEC filings?
That would certainly explain the huge seller after hours on 4/12. Is KTH one that throws OID, or is it ok in a taxable account?
Irish, KTH does have OID, or at least it has for me. Several of these do.
Is that as terrible a thing to deal with as people have made it sound, or would it be ok in a taxable?
I just used turbo tax. Not an issue, other than it drops your “real yield”.
well, if it were to go to expert market it would be a beautiful looking candidate for Roth conversion. Has anyone here tried to move expert market holdings to a Roth from a Traditional IRA?
Pig Pile, I have moved a couple to my Roth in Vanguard. I was fearful on the first one that it would have those double digit unpredictable changes in price as it moved at the end of business day, but there was none. I believe the first one was LTSA (now LTSAP) in April 2021, followed shortly by GMLPF. It was a non event with no change on the pricing as they moved.
dj, thanks so much for chiming in. Good to hear it worked good for you. I plan to do CTGSP after my move from TD Ameritrade to Schwab is complete in May. Almost wish Schwab would just zero that pup out, wouldn’t mind paying no tax, lol.
Pig, get them transferred and then see if company will buy them from you. They said in recent past they have given up on tenders as nobody else wants to sell them. I think they offered $12 on final last tender back in ZIRP.
Thanks for the idea Grid. I actually did that very thing within a month of them going dark. No response from the company. Maybe worth a try again?
Contact their IR. Or maybe find their CFO’s email and send it. They really wanted to get rid of them all, or that was at least what they told the state regulators then.
Pig Pile, you can test the waters also by converting a few shares before you do a bunch. Might settle your nerves s little before you go all out! I recall that’s what I did.
This is damn peculiar. Based on what I have read I assumed it was a 3rd part trust created to insert the PECO Capital Trust III bonds inside the trust. Which it is by Structured Products from Smith Barney. In other words a synthetic baby bond. But the presser is coming directly from PECO which implies it is theirs. Most odd.
See KTBA is an exact Structured Product also but it had nothing to do with the delistment and expert market that it is unfairly jettisoned too. The short answer is KTH shouldnt be expert market, but neither should KTBA either. So……. What is more odd is why the hell are they waiting now, less than 4 years before redemption?
I dont own KTH anymore, but I do own some of the actual 7.38% underlying bond that are outside of the trust.
Yeah, the terminology used in this PR doesn’t match up with what was used in the Prospectus back in 1999. And since KTH was solely a creature created by SSB, it’s not really clear to me why Exelon / PECO would have been responsible for maintaining the listing?
The prospectus seems to indicate this was created jointly by PECO and SPC.
The Trust will issue a single class of Certificates, which will represent
interests in the Trust and will be paid only from the assets of the Trust. The assets of the Trust will consist of (i) $27,500,000 7.38% Capital Trust Pass-Through Securities issued by PECO Energy Capital Trust III and all future payments of interest and (ii) a single payment of principal due on the underlying Capital Securities. The sole assets of PECO Energy Capital Trust III are the 7.38% Cumulative Preferred Securities, Series D, issued by PECO Energy Capital, L.P. The sole assets of PECO Energy Capital, L.P. are the 7.38% Subordinated Deferrable Interest Debentures, Series D, due 2028, issued by PECO Energy Company.
What is odd is PECO Capital Trust was just a financing arm of PECO. So it was a trust to begin with. And they actually issued the underlying 7.38% bond into the market as a $1000 issuance. Most odd they would go trust within a trust to issue more yet 3 years later or so. Is what it is I guess.
Grid, With the bonds hitting 105 on Thursday surprised you haven’t flipped them. I still have the Trust II
So PECO/Citi has decided NOT to list on otcmarkets???
“PECO has NOT arranged for the Securities to be listed on another national securities exchange or for quotation of its security in a quotation medium (i.e., the OTC market).”
Yet I notice KTH listed on otcmarkets.
https://www.otcmarkets.com/stock/KTH/profile
https://www.otcmarkets.com/stock/KTH/overview
CorTS Trust for Peco Energy Capital Trust III
388 Greenwich Street
New York, NY 10013
212-723-4070
The address listed is the address for Citibank.
Will KTH continue to be listed on otcmarkets after NYSE delisting or completely unlisted and therefore untradeable??? Seems nebulous and confusing.
Dave, its “priced” on the website, its not listed on OTC. Type in KTN and it will show a price, too but it is NYSE listed. PECO doesnt have to be the one to get it listed on OTC, but some one or entity would have to. And that is assuming the financials are piggy backed for it. Something that wasnt allowed for KTBA for whatever excuse (probably involved $) it was.
If it does become delisted and untradeable this would be the perfect stock for someone worried about their capital dropping. As it could go to $0.00 after a while and then the pain is over. Nothing to worry about, then in 2028 you get a nice capital infusion at maturity. Its not so painful after you get used it. I had one show $0.00 for a year before it got redeemed (Watford if memory serves me). I loved having “nothing” with it so much, I bought me some AIC before it went dark several months ago, and now its worth $0.00 until next March’s maturity. But the interest payments continue accordingly. I havent done the math, but the interest payment yield is helluva of big one off $0.00, ha.
GB, Which brokerage is valuing AIC at 0? Schwab has the price at its last trading. I asked my representative why this is. Will be interesting to hear their reply as Schwab clearly gives a message that I cannot buy or sell.
I think Schwab will keep the price at last trade for a certain period of time (exactly how long, I don’t know), but then they will consider it stale and list the price as “NA”. All the delists I have held there seem to follow this pattern.
TNT, John expressed it the way I have been told by various brokerages. However each will do as they want. Yes, I have 100 shares of it in Schwab and its priced like yours. I have 400 in TD and it finally went $0.00 stale about a month or so ago. It really doesnt matter what they have or havent as its in a lockbox until March 2025 then its redeemed at par. The Watford and MBIN (if memory serves was it) experiences of stale and zero value pricing has made me numb to it. And unlike others I have no regular IRA to do a transfer from to exploit the zero pricing.
I have asked Schwab to explain valuation if I can neither buy or sell. I want to do ROTH conversion. By email I received late today someone didn’t delete the series of internal emails. Interesting reading. We shall see what Schwab informs me soon.
Wanda, as long as you haven’t started withdrawals from your IRA or Roth wait for it to show zero value and move it to your Roth.
Does this really work with the IRS? I would think they would want you to get the security appraised to determine its value, but what do I know?
What a slimy move! They should at least make a tender offer for the shares prior to delisting.
I’m not a lawyer but I hope someone eventually gets sued for all of these delisting of preferred stocks.
Here is the Form 25:
https://www.sec.gov/Archives/edgar/data/925910/000110465924049965/tm2411589d1_25.htm
Good catch. I missed it yesterday because it was filed under PECO Energy Capital, L.P
Whereas the April 12 heads-up was filed under PECO ENERGY COMPANY
And neither was filed under CorTS Trust For PECO Energy Capital Trust III, where the 10-Ks and 8-Ks for KTH are usually filed.
So this was filed yesterday. And KTH is still trading on the Big Board today. Not really sure what’s gonna happen next lol
Here is what investor relations in response to me asking about the delisting of KTH:
“I am following up on your e-mail in regard to the delisting of PECO Energy Capital Trust III from the NYSE.
The securities are still SEC registered and may be traded on the secondary OTC market through broker dealers. Holders should consult their broker or financial adviser regarding any trading activities. The last day of trading on the NYSE will be May 2, 2024. The delisting does not change the terms of the securities. Dividends will continue to be paid as they have been in the past and the maturity date will not change.
Let me know if this covers your questions and also feel free to reach out with any additions questions that you may have.”
So no indication that it will go expert market, just trade on the pink sheets with a Pink Current Status.
The press release from the company said this about OTC:
“PECO has not arranged for the Securities to be listed on another national securities exchange or for quotation of its security in a quotation medium (i.e., the OTC market).”
( https://www.businesswire.com/news/home/20240412190236/en/PECO-to-Voluntarily-Delist-Capital-Trust-Receipts-from-NYSE )
I’m not sure why anyone would expect this to trade OTC but who knows
I’m not sure how precise IR’s language was meant to be. But Expert Market does fall under OTC.
And I still think it could go Expert Market like KTBA. Because KTH is not a a security of PECO, it’s a completely separate trust with its own financials. So it’s not a straightforward matter of piggybacking on PECO financial statements.
Yeah, I’m not sure that I would expect this one to be tradeable after May 2. I’m surprised the price hasn’t fallen more. Everyone going to sell after the upcoming ex-date?
The expert market and “financial reporting” clouds where this thing ultimately trades…or doesnt…But just because the company isnt making any arrangements doesnt preclude it from trading OTC.
Take for example Amerens announcement when they delisted preferreds over 15 years ago. They made no effort either, yet they are on OTC.
Each series of the preferred stock will continue to remain an outstanding obligation and the dividends payable thereon will not be affected by the delisting, but the preferred stock will no longer be traded on the NYSE, and no alternate listing arrangements are being made for the preferred stock. AmerenCILCO and AmerenUE currently anticipate that the last day of trading of the preferred stock referenced above on the NYSE will be approximately December 5, 2007.
https://ameren.mediaroom.com/news-releases?item=404
Stupid question but I’m gonna ask anyway: even with it being delisted it still has to be redeemed in 2028, right? (or no?)
If you dont know it isnt stupid to ask. No nothing has changed in any other way. We are predisposed to see some value of whatever we own in our accounts as a security blanket. But stepping away it doesnt mean anything. You can manually account for it yourself it you want. It basically just becomes a private loan from you to PECO. And there is considerably more private loans out in the world than public ones I bet. After all a bank doesnt freak out giving out a 5 year loan with no ability to get it back before 5 years. And they account for the loan on their balance sheet. One can do that themselves if they feel the need.
I may have shared this story before, way back when………. In my institutional bond trader days, I had a salesman in Atlanta who was constantly asking questions… Not only did he asked questions, he’d ask inappropriate questions that he knew he wasn’t entitled to know the answers to. I remember one day asking about his habit and he taught me a good lesson…. He told me he used the strategy all the time with his own clients and he figured if he only got answers every once in awhile, he’d still be way ahead of the game vs not having asked at all. It’s really a simple lesson but one that most people don’t try. It also reminds me of the old quote attributed to many different soothsayers: “A wise man knows how little he knows….”
I ended up selling my entire position in KTH. It was around a full position for me. Part of it was replaced by TVC as well as actual bonds.
I held it in an account where I might need liquidity before the maturity date and didn’t want to deal with whatever is going to become of this thing.
I am really surprised this hasn’t sold off more. Maybe all you crazy folks are planning to do Roth conversions or something haha.
I sold out last week. Thought about keeping but just moved on. Bought some what I consider to be cheap KIM-N
I mostly bailed out of KTH a couple of years ago (?) above $30 – except that I kept one share just to make it easier to follow, thinking that I might get back in.
I got a bunch of money from redemptions/payouts over the last 10 days, so on my to do list for this week was to put in an order for KTH to try to capture the divi.
Guess I will just sell that lonely share too.
I still might pick some up if it really tanks just before it goes dark, but unless some institutionals hold it and have to sell (or something), I don’t expect that to happen. I am not too worried about PECO making payments.
The Capital Trusts were just created as various financing entities to issue the specific debt sent to market. They have no operating businesses that I am aware of and PECO is the guaranteer of payment. I think only two remain, the Capital Trust III 2028 and Capital Trust IV 2033.
I’m not upset to hold KTH if it goes to expert market, but has anyone gotten a response or tried to get a response as to why PECO seemingly is bearing the brunt of the expense for KTH being listed and, therefore, had the incentive to get it delisted? I think you brought it up, Grid, and I’d tend to agree that on the surface, if you read the original prospectus, you would think that the cost of listing shouldn’t have fallen on PECO originally and therefore, they shouldn’t be saving money by delisting…….
Very odd, especially when you throw in the fact they waited until less than 4 years to maturity after listing for over 25 years. The “few owners” excuse doesnt really hold much water as its always been this way. Plus nowadays any shareholders from say Vanguard are just counted as one person due to street name obligations anymore. It isnt like thousands are going to hold these in paper stock certificates, lol.
BTW, here is another example besides the Ameren one I had above. A recent one from NGG’s Mohawk Power preferreds delisted a few months ago. NGG made no arrangements either and they trade OTC.
National Grid does not intend to arrange for listing or registration of the Preferred Stock on another exchange or for quotation in a quotation medium.
https://otp.tools.investis.com/clients/uk/national_grid2/rns/regulatory-story.aspx?cid=374&newsid=1741240
But this a capital trust issue may put a wrench in it. My thoughts are this. I already own the 2028 PECO debt but not ones issued inside KTH though. But if there was a big sell off, it wouldnt bother me to put the big boy pants on and hold dark until maturity. But I need a sell off to make it worth my time to do it though.
Grid, you know I had trouble buying the Capital trust III at the prices you bought so I went with the IV and plan on holding until maturity.
GB and others, What brokerages have AIC at zero value? I have asked Schwab to consider zeroing the value. Received a reply from my advisor that the issue has been escalated and should receive an answer within days. Instead of arguing with Schwab it might be easier to move (if possible). I have Fidelity, Vanguard and IBKR.
TIA
E-trade let me transfer AIC from my wife’s IRA to her ROTH IRA ar 0 value about two weeks ago
TNT, I have factually misspoke. I have them in TD also. It doesnt show it as $0.00. It shows it basically as it doesnt exist. The AIC ticker is still showing but in a faded grey color, while the rest of the securities are in bold black color. The bold tickers have the shares, market value, price, etc. The faded gray AIC ticker just has “invalid symbol” next to it and nothing else. I dont know how other brokerages are coding it other than Schwab which still shows the value (last trade value actually). TD is closing up shop here in a couple weeks though.
GLADZ at $25.04 – trading about par with accrued interest here – I get YTC of >8.6% (9/25 if called), or a slightly >8% YTM in 9/28
no credit rating, but this is one of lowest leveraged BDCs out there (well less than 1x currently) with a good track record and low non-accruals as of last quarter
GS K called in full may 17
TECTP was not called for the 5/15 dividend date, so it will pay at least 1 divvy at a floating rate ~12.3%. A seller is there today at $10.30.
Wondering how you know this? I see no news and the call date is still a month or so away..
It’s too late to redeem on the 5/15 dividend date with 30 days notice.
Although I can’t really say with certainty that a dividend will be declared for 8/15
here is a question I have on when a company can Call an issue;
in general ; can the company call an issue at any time after the first call date
with 30 days notice or
or do they have to wait until the next dividend date to call ?
ted,
Once an issue begins floating, the date when the company can call it depends on the specific terms, which are outlined in the prospectus.
Take TECTP and NLY-F.
(1) TECTP: Only on a dividend payment date. Page 16 in the prospectus:
“… we may redeem the Series B preferred stock at our option, at a redemption price equal to $10.00 per share, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the redemption date, (i) in whole or in part, on any Dividend Payment Date on or after May 15, 2024 with not less than 30 days’ and not more than 60 days’ notice prior to the date of redemption specified in the notice, or …”
(2) NLY-F: At any time. Page S-6 in the prospectus.
“. On and after September 30, 2022, we may, at our option, subject to certain procedural requirements, redeem the Series F Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any …”
https://www.sec.gov/Archives/edgar/data/1766526/000114036119008966/s002654x13_424b4.htm#tTO
https://www.sec.gov/Archives/edgar/data/1043219/000119312517236659/d417558d424b5.htm#srom417558_5
MBG – you can take the “when it begins floating” caveat out of the equation can’t you?…….. All prospectuses on fixed or fixed to floating issues define whether or not the issuer can call at any time or only on interest or dividend payment dates…. I think if someone is going out of his way to look for an issue that’s callable only on payment dates, his odds of finding one are better if he looks at the paper of financial issuers such as banks.. And of course, callable at any time usually means callable only with 30 day’s notice but that too is defined in each prospectus and is sometimes longer or shorter than 30 days.
thank everyone for their informed comments ; my take away on this is – just assume any issue , particularly floaters, can be called at any time ;
unless I want to wade thru a Prospectus to try to find it (as much fun as a Root Canal without anesthetic)
Good point about the caveat, 2WR.
With one exception, I agree we can take that out. They can’t redeem their pfd issue until the 1st call date, and that’s almost always the same date it begins floating.
When it becomes callable on a different date than the date it begins floating, then I’d say, “When it becomes callable”, not “When it begins floating”. For example, RJF-B becomes callable on 7/1/24 but begins floating on 7/1/26. Offhand, I don’t of any others.
Only thought about this because of your comment, so thanks 2WR.
What is the floating rate based on now? I know it has been mentioned here, but I can’t recall what the new calculation is.
New ; it’s usually SOFR + a factor ;
so you read on Quantum online ( a must have reference for any preferred stock trader) the float beginning on a certain date will be say LIBOR (sofr) + 630 basis points (6.3%) so the floating rate ( changes every three months) is sofr(4.94 today+ 6.30=11.24% on a 25 par value ;
just google SOFR for current rate; hope this helps ;
( reset preferred are a different animal);
Thanks. I went and looked it up there already. I am kind of hoping it gets called. If interest rates decrease, the price might go well below what I paid and stay there for a while. Thankfully I have a very small number of shares so it won’t be that big of a deal.
New ; the chances of USBpH getting called are slim to none
and Slim was seen riding out of town .
I am talking about TECTP.
ET-E will be redeemed.
From today’s press release.
Energy Transfer LP (“ET”) today announced the quarterly cash distribution of $0.2111 per Series I Preferred Unit (NYSE: ETprI).
The cash distribution for the Series I unitholders will be paid on May 15, 2024 to Series I unitholders of record as of the close of business on May 1, 2024.
In addition, on March 20, 2024, Energy Transfer LP (NYSE: ET) issued a notice to redeem all of its outstanding Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (the “Units”) on May 15, 2024 at a redemption price per Unit of $25.00. Holders of Units as of May 1, 2024, the record date for quarterly distributions on the Units, will separately receive accrued distributions to, but excluding, May 15, 2024, in an amount of $0.4750 per Unit.
ET still has outstanding 9.59 FTF cusip 29273vah3 (950mil) & FTF 8.58 cusip 29273rba6 (545mil) Both trading below par fwiw
Be careful on these. 29273RBA6 is a bond, the other is not, and issues a K-1.
Is anyone able to find a prospectus for 29273RBA6? I’m having trouble running it down.
I was actually able to find it. I forgot they changed ticker symbols several years ago so that made it harder to find on EDGAR
https://www.sec.gov/Archives/edgar/data/1012569/000119312513431737/d615421d424b3.htm
I’m sure y’all hear this, but sounds like Israel has struck Iran and places in Iraq. Stock futures down 1+ percent and Treasuries are up. Knee-jerk reaction. I’m sure there will be plenty of new info coming in overnight and in the morning. Happy Friday!!
Hopefully hype more than substance. Reports are unconfirmed and leave more questions than answers. Why would Israel only fire a small amount of missles only to central Iran, and why would they not make any statement? It would seem there would be a more widespread offensive with more targets, really murky and not making sense so far. Futures and oil easing a little as I write oil up 3% instead of 4% a half hour ago, and Dow futures have recouped about 170 points, though still down just under 1%. Oil is a major inflation index constituent and the Fed and all central banks will hold rates until inflation, including oil, is kept in check, and the central banks will continue to have an effect in keeping oil in check by reducing oil and all upstream commodity demand via rates. Hope for the best for everyone, Fan
RE: GECCI, 8.5% baby bond
Fidelity is allowing trades on this BB today. current price 24.75 [10 am ET].
The Hawaii Attorney General released the first report on the Lahaina Fire. The key issue for III’ers is whether Hawaii Electric aka Maui Electric is held liable for the fire(s). They have several preferreds and bonds outstanding which potentially might be affected if HE is forced into bankruptcy. Several lawsuits have already been filed against them. The precedent is Pacific Gas and Electric going bankrupt as a result of California fires. In that case, all preferreds and bonds were made whole. Not clear what will happen with HE, but clearly the market views bankruptcy/non-payment as a significant risk.
Not able to provide a link because it causes the whole post to go into the Spam block folder, so you will have the find the 199 page report on your own.
SEAL – A
9% Fixed perpetual now trading PAR!
(Formerly Teekay LNG Partners – LNG. Purchased/taken private for over $6.2B from Stonepeak, announced in late 2021. Preferred shares still trading NYSE.) *Also have B shares that is a floater.
https://www.teekay.com/blog/2021/10/04/stonepeak-to-acquire-teekay-lng-in-a-6-2-billion-transaction/#:~:text=Under%20the%20Merger%20Agreement%2C%20investment,100%20percent%20of%20Teekay%27s%20ownership
good comment.. seal.pra/pff pair has seen seal outperform over last 3 years… recently and it tested 3yr uptrend (2sigma cheap) and held.. it was near 1 sigma rich in october 2023.. I just paid 25..
good article on Seeking Alpha…tks for show
Seapeak: The 8.9% Yielding Preferred Shares Remain Attractive
Apr. 07, 2024 11:40 AM ETSeapeak LLC 9% PFD UT SER A (SEAL.PR.A) Stock, SEAL.PR.B Stock20 Comments
The Investment Doctor profile picture
The Investment Doctor
mjtroll – thanks for that article. I forgot to mention one other thing that actually surprised me. When I pulled up a chart on SEAL-A, it barely flinched below $24 during this past fall high yield melt down where we saw all of the junkier or high coupon preferred sink to $20s and below.
And during the “big one” i.e. October 22 fixed income tank off, SEAL-A held up above $23 which I couldn’t believe. Going back to regular ZIRP timeline, it traded between $26-$27.
I’m just looking for decent high coupon fixed perpetuals right now. I’m honestly under allocated. People (not saying on here) are too bullish and gravitating too hard to floaters. That ship has sailed. When it comes to debt traders, you always have to be forward thinking.
fwiw.. I just donated to the website sponsor and would encourage others to do the same as during my short tenor using it have found it very informative to make actual trades
I donate to Quantam.com. I use it constantly and I know of no other place to
get the information they provide ;
K-1 Issue?
Holders of the Preferred Units will receive specific tax information from the company, including a Schedule K-1 which generally would be expected to provide a single income item equal to the preferred return (see page S-87 of the prospectus for details).
Proto123 – Thanks for pointing this out. I do see that K1 status in the original filing release. I am pasting this update below from 2019 as a 1099 status change and additionally below that a recent link as well from Seakpeak LLC confirming 1099 status.
…..All proposals, including the proposal to allow Teekay LNG to elect to be treated as a corporation, instead of a partnership, for U.S. federal income tax purposes, were approved by unitholders. As a result, effective January 1, 2019, Teekay LNG will be treated as a corporation for U.S. federal income tax purposes and common and preferred unitholders will receive Form 1099s instead of Schedule K-1s relating to distributions taxable as dividends commencing in 2019. …..
https://www.seapeak.com/articles/seapeak-llc-declares-distributions-on-series-a-and-b-preferred-units/#:~:text=Seapeak%27s%20preferred%20unit%20distributions%20are,for%20United%20States%20tax%20purposes.
2024
https://www.seapeak.com/articles/seapeak-llc-declares-distributions-on-series-a-and-b-preferred-units-march-2024/
TRINL redemption 5/17
https://www.sec.gov/Archives/edgar/data/1786108/000121390024033429/ea0203921-01_n23c2.htm
Thanks, so about 16% of the outstanding at about 25.29?
Irish, your numbers look right.
The Company expects to redeem $30,000,000 of the $182,500,000 Notes issued and outstanding on May 17, 2024 (the “Redemption Date”). The redemption price per Note will be $25 plus accrued and unpaid interest thereon from March 15, 2024 to, but not including, the Redemption Date.
Thanks Ken.
he Company intends to use
the net proceeds from the sale of the Depositary Shares to redeem all of its outstanding 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock,
Series K, $25,000 liquidation preference per share (the “Series K Preferred Stock”). The depositary shares, each representing 1/1000th interest in a share
of Series K Preferred Stock, are currently traded on the New York Stock Exchange under the symbol GS PrK.
https://www.goldmansachs.com/investor-relations/financials/8k/2024/8k-04-16-24.pdf
Aha, I guess they needed to get past the earnings announcement yesterday before launching a new preferred to take out GS-K. We will get a few days of accrued dividend at the floating rate which should be around 9.0%
GS-K redemption has been set for May 17
https://www.goldmansachs.com/media-relations/press-releases/2024/announcement-04-16-2024.html
10 year already green out of the gate +6 bps. Technically speaking, the 10 Year chart has been quite bullish as currently trading now just above a previous resistance point. Today and tomorrow will be a big test as it tries to fill this current channel with next major resistance point at 4.778%.
theta-
I’ve been wondering at what yield I’d be willing to buy a 10 year. I think somewhere between 5% and 6%. At 5% I’m pretty sure high quality two-year call bonds at 7% would be available to compete for my attention. I love 7%.
10yr T ~ up a whopping 90bp since Dec 26 low…ready to test 4.7%.
FBRT-E
Well, that was cryptic…
DALLAS, April 16, 2024 /PRNewswire/ — Sunoco LP (NYSE: SUN) (“Sunoco”) today announced a private offering (the “offering”) of senior notes due 2029 in an aggregate principal amount of $750 million (the “2029 notes”) and senior notes due 2032 in an aggregate principal amount of $750 million (the “2032 notes,” and collectively with the 2029 notes, the “notes”). Sunoco intends to use the net proceeds from the offering to (i) repay certain outstanding indebtedness of NuStar Energy L.P., a Delaware limited partnership (“NuStar”), in connection with a pending merger between Sunoco and NuStar (the “NuStar Merger”), (ii) fund the redemption of NuStar’s preferred units in connection with the NuStar Merger and (iii) pay offering fees and expenses. This offering is not contingent on the completion of the NuStar Merger. If (x) the consummation of the NuStar Merger does not occur on or before April 22, 2025 (the “Outside Date”); or (y) prior thereto, Sunoco notifies the trustee in writing that (a) the Agreement and Plan of Merger, dated as of January 22, 2024, among NuStar, Sunoco, and certain of their respective affiliates, has been terminated, (b) Sunoco will not pursue the consummation of the NuStar Merger or (c) Sunoco has determined in its sole discretion that the NuStar Merger cannot or is not reasonably likely to be completed by the Outside Date, the notes will be subject to a special mandatory redemption at a price equal to 100% of the initial issue price of the notes to be redeemed plus accrued and unpaid interest to, but not including, the payment date of such mandatory redemption. The offering of the notes has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, the notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Sunoco plans to offer and sell the notes only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act. This news release is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
Read more at: https://www.lelezard.com/en/news-21336202.html
Sunoco has 33 other bonds outstanding with the last few trades occurring on Friday the 12th at about 6-1/2% The ones with 144a restricted haven’t shown trades in the last 2 to 3 yrs on 4-1/2% bonds. I wonder which institutions are holding those low coupons.
So, redeeming 3 preferreds, but not the NSS note ?
Prx action on the NSS seems to be stable.
Gary,
They’ll redeem NSS too.
On page 11 of their Form 424(b)(3), filed April 3rd:
The Surviving Entity intends to effect the Redemptions to redeem the NuStar Preferred Units and NuStar Subordinated Notes following the Effective Time with the proceeds of the Debt Financing.
“NuStar Subordinated Notes” refers to the 7.625% Fixed-to-Floating Rate Subordinated Notes due 2043 issued by NuStar Logistics, L.P. pursuant to the Subordinated Notes Indenture.
Textainer filing:https://investor.textainer.com/sec-filings/sec-filing/25-nse/0000876661-24-000274
Monday: Preferred ETFs & Preferred Indices at close…
* PFF ~ (-1.7%)
* FPE ~ (-0.76%)
* PGX ~ (-1.65%)
* PFFD ~ (-1.84%)
* PFXF ~ (-1.75%)
* PFFA ~ (-2.61%)
* PGF ~ (-1.7%)
* PSK ~ (-1.75%)
* PFFR ~ (-2.03%)
——————-
SPPREF (Index) ~ (-1.62%)
SPPHQUP (Index) ~ (-2.00%)
preferred sector breakdown..on absolute basis close below 30.95 on PFF is ominous
My opinion is that things were priced well above perfection, which is why i sold a chunk and rotated some to MM. Today, was fun going on a bit of a buying spree. CHS, ADC, AMH preferreds that have dropped to an acceptable level. I welcome a little more fear as to pull the funds out of MM and back to > 5%. Staying invested doesnt mean staying in skyhigh investments, but appropriately valued investments.
mj ; I would never buy this fund because; it’s an INDEX fund; they buy indiscriminately to attempt to shadow their Index; with no eye to price;
and after deducting the 45 cents a share in fund expenses you are left with a puny yield under 7% ; but I love them -when they rebalance their sales
move the market ; they the 500 pound gorilla in the Space;
i’de suggest PFFA if you need a Fund; they are stock pickers and with leverage
produce a nice yield of close to 10%
For those of you with too much floater allocation, check out these fresh uber high credit quality (well maybe not BAC but proven at least TBTF) new under par lows landing right now:
HIG-G 6% perpetual fixed now under par
BAC-B 6% perpetual fixed now under par
SCHW-D 5.95% perpetual fixed now under par
GAM-B 5.95% perpetual fixed now under par
Monday Morning MMFs…
* VMRXX ~ 5.28%
* VUSXX ~ 5.28%
* VMFXX ~ 5.27%
* GABXX ~ 5.26%
* DTGXX ~ 5.23%
* SWVXX ~ 5.17%
* IDSXX ~ 5.16%
* TSCXX ~ 5.15%
* FZDXX ~ 5.15%
* PRTXX ~ 5.04%
* SPRXX ~ 5.04%
* SNVXX ~ 5.03%
* PRRXX ~ 5.02%
* SNOXX ~ 5.02%
* SNSXX ~ 5.02%
* SPAXX ~ 4.97%
** 10yr T ~ up 13bp, now 4.63%….intraday high 4.66%.
** 2yr T ~ up 3bp, now 4.94%…intraday high 5.004%
*** Mortgage Rates ~ 2024 YTD highs…30yr Jumbo 7.60%, 30yr Fixed 7.44%, 15yr Fixed 6.85%.
MFA Financial, Inc. Senior Notes due 2029
MFAO incoming
https://www.sec.gov/Archives/edgar/data/1055160/000110465924047042/tm2411796-1_424b5.htm
Thanks J–just saw this.
Oak A and B down more than most 5% ish, can’t see any news on Brookfield/Oaktree? Big seller…
Was this already posted?
JPMorgan Chase to Redeem Four Series of Preferred Stock Represented By Depositary Shares
New York – March 21, 2024
https://www.jpmorganchase.com/ir/news/2024/jpmc-to-redeem-four-series-of-preferred-stock-represented-by-depositary-shares-3-21
Great Elm new baby bond coming. GECCI, 8.5% coupon 4/26-4/29. Settlement date 4/17/24. Not trading yet.
Not sure if noted before.
Iran counterstrike. Asset prices will be adjusting come monday. Oil going to moon?
https://www.bbc.com/news/world-middle-east-68812094
We will see how futures open at 6 pm EST. There are several ways to look at this.
Iran has demonstrated that they are willing and able to attack Israel directly, however, Israel has also demonstrated that they (in conjunction with allies) can deter such an attack.
The attack was very well telegraphed, scheduled to occur after key religious holidays and when markets are closed. Everybody knew this was coming and approximatly when.
It looks as if Israel has to mount some kind of response. Perhaps a reciprocle response would be to launch a very well telegraphed strike against a target inside Iran? The importance of this target would partially dictate the need for a subsequent response. A bunker buster strike against an Iranian R&D facility will require a different response than say a strike against an oil terminal in the desert. Either way Israel would demonstrate the capability to strike in Iran with F-35 strike aircraft.
Based on what we have seen so far, I would not be shocked to see gold/oil sell off on this news this evening. Not a prediction – I would not be shocked to see a rally either. Bitcoin did sell off on the news – could be a preview of coming attractions.
Also – escalation in this conflict sure would give the Fed the cover I think they are looking for to cut rates…
Full disclosure I am long wti, gold and silver futures and short puts on those futures.
Oil going to the basement. Only thing going to the moon will be stocks. Rates were looking toppy last week. Not a timer, just expecting a relief rally this week.
A non-event. Like the solar eclipse. Like watching professional wrestling in the 1950s on a black and white DuMont TV with my elderly aunt. A heavy vs. a hero. (Your choice.) Excitable ringside announcer babbling from the sidelines. Lots of violence. Nobody really gets hurt. A rematch can be expected. Maybe a tag team, hopefully not. Long oil and gas. But realistic.
I believe that “heels” and (baby)”faces” are the terms used in the industry for the bad and good guys.
Kth has a seller after hours, now at 28.45, been buying and the price keeps falling.
Thanks Irish!
I was able to grab about $15k worth. I get a stripped YTM of 6.87% at thtat price. The after hours sale at that price is really weird.
assuming stripped of 27.77 4/06/2028 maturity I get 7.20 current yield 4.95 maturity ..additionally is it callable prior to maturity
Call Date:
2028-04-06
Pick a date*
Coupon Rate (%):
8
*
Call Price ($):
25
*
Latest Price ($):
27.77
*
Yield to Call:
4.95%
Its redeemed at $27.10. OID is involved and the proceeds are given to owner at maturity of the actual PECO bond held in some 3rd party trust I dont remember offhand.
Here are the inputs I used.
$2.00 annual coupon
$28.45 purchase price with $0.92 accrued ($27.53 stripped)
$27.10 redemption price
Matures on 4/6/28
I’m still getting around 6.8%. I’m assuming the disconnect is in the stripped price and the redemption price. Let me know if I’m missing something here.
BCPR A, B & C are at yields around 6.7% if you are into long maturities.
Oil/Gas/Metal Commodities update…M/M change
* Brent ~ $90.55/bbl, up 8.5% m/m
* WTI ~ $85.09/bbl, up 8.3% m/m
* AAA gas ~ $3.69/ga, up 7.1% m/m
* Gold ~ $2353/toz, up 8.44% m/m
* Silver ~ $28.15/toz, up 12.78% m/m
* Copper ~ $4.26/lb, up 5.1% m/m
* Aluminum ~ $2482/T, up 9.8% m/m
* Tin ~ $31689/T, up 15.1% m/m
**Might see Oil go higher if all the Middle East war mongering news today comes to fruition. Bloomberg article “Stocks get hit as war jitters fuel rush to bonds”, WSJ ” Iranian attack expected on Israel in the next two days”. If it happens, expect oil to touch $100/bbl & flight to Treasuries IMHO.
Newbie – You also posted on 4/4 that “the CIA is expecting imminent attack on Israel from Iran” and basically forecast an oil spike as such then also. You’re doing the exact same thing today. To me this is not breaking news. Oil is currently at $85.63, though up slightly for the day, is down from $87 earier this week. Respectfully. Fan
Fan 59… Blessings & wishes for you to have a beautiful weekend! May you have prosperous investing in the days ahead of you in 2024.
For those looking for a short term parking spot. RMPL- at 25.09. Matures 10/31/24. Ex +- 5/1. I calculate about 7.29% annualized if held full term. I bought 500 shares this morning. Price should hold around 25
Funny you mention that. Just the other day I was considering what to do with my 800 shares of RMPL- I bought back in the day. Trying to figure out if there was anything I could do with the money if I sold early. I came to the conclusion just to wait until it matures and see where the market is. Timing wise it is a pretty good time frame to get a lump of cash. On the flip side I was even thinking if I should add to it if the price was right. As usual I did nothing and even when Oct comes I have no idea where to place the money. I figure anything > 6% QDI IG would be fine though.
what is the stripped price you used to calculate ytm.. i assumed 24.85(.25 accrued from 2/15 pay date) if I paid 25.09 giving me ytm of 6.98
Hi Mjtroll
I just look at total return per share until maturity = 3 divs* .3672=1.10. Then subtract capital loss of .09 (at a 25.09 price) so total return =1.01. Divided by 25.09= .040255 total gain. To annualized I divide .040255 by 202 day count to maturity and then multiply by 365 to annualized at 7.27%
I hope this is correct. I set up my own formulas and day counter on excel. I do notice on quantumonline it shows final distribution on 11/15/24 instead of the maturity date of 10/31/24. If that’s the case I come up with 6.78% annualized
I would expect to only get 5/6 of that final divi, or 1.04 total, because of the 10/31 maturity. Or 6.98 IRR
Thanks Irish, I see that now. The maturity date is 15 days shorter than the normal distribution date, so the div will be a little less in the final quarter. Sorry for the screwup
I’m back on the yield calculator crusade. I may not be back to generating any original ideas yet but I can pick up the crusade again – lol …… The stripped amount is calculated for you exactly by online bond calculators. Both https://digital.fidelity.com/prgw/digital/priceyieldcalc/ and https://quantwolf.com/calculators/bondyieldcalc.html will not only tell you the amount of accrued but will also tell you the yield after taking into account the accrued IF YOU ENTER THE DATA correctly. Interest calculated from payment date to payment date and be sure to take into account situations where the stated maturity may not coincide with the issuer’s standard interest (or dividend) payment dates.
BTW, RMPL- is one of those where the maturity date does not coincide with normal quarterly payment dates… That means Fido’s calculator is better for providing the most accurate YTM. At 25.09 and settlement of 4/16, accrued = .249 and YTM is 7.086%. To be accurate, you would dummy up a maturity that coincides with a payment date but is longer than 10/31/24… Use 11/15.24. Then put 10/31/24 in as CALL DATE instead of maturity date…. Use “1” as amount and it will give you the accrued as .249/preferred. SUBTRACT .249 from 25.09 to come up with 24.841 as your actual price and recalculate… You’ll see a YTM of 6.998% and YTC of 7.086%. The YTC is the accurate yield because of the way you’ve entered the info.
Thanks 2WR! I thought you might enter the conversation at some point.
Don’t know how long this is going to last. New issue 20 year agency just landed now with a 6.50% coupon @ par. We haven’t seen this in quite awhile now. (Call protection for 3 months as officially settles on the 22nd.)
Definitely worse places to park money right now.
3134H1F81
there seems to a real fascination with these long maturity short call agency issues as if they were somehow a “free lunch”.. an important part of the story is what is the “option adjusted spread” of the issue which compares to value of the security to those which do not have the embedded call option. Below is a link describing this.
https://www.investopedia.com/terms/o/optionadjustedspread.asp#What%20Is%20Option-Adjusted%20Spread%20(OAS)?