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?? Is It Time to Consider Nibbling on TNT ??
* Close today $85.47, near 52 week low
* 52 week Range ( $85.16 – $101.69 )
* Yield 4.36%
* 10Yr & longer yields have run up VERY FAST since 9/16/24.
* Still feel current T yields will remain high through Q1/25
* If we see rates eventually drop, TNT Total Return will be nice
I think you meant TLT? JMHO, but not for me for two reasons. 1 – If rates continue to rise then that would not be good. 2 – The current yield doesn’t compensate you for the risk you are taking.
Yes…TLT (my fat finger error)
RMH…understand your thoughts, just entertaining the contrarian view that “if rate gravity” comes back in play, you get 4+% interest plus potential for significant upside capital gain. I suspect rate gravity will eventually return; if it doesn’t…well it’ll be an interesting investing world
If you like treasuries, why not buy the highest yielding one, about 23-24 years which traded as high as 5.12% Friday b4 i stopped watching?
You’d avoid paying that silly ETF fee, and there’s massive liquidity unless you are Bezos or Zuck (who, btw, I noticed wearing his $895,000 watch in the “hostage video” he made about censorship)https://www.bloomberg.com/news/articles/2025-01-07/zuckerberg-wears-900k-watch-to-announce-end-of-meta-fact-checks
Knowing this, I bet Ellison is out buying a $901k watch…
I absolutely get the appeal of TLT. It’s definitely oversold and there are things, like the government getting fiscal discipline, that would cause it to have a week or month of big gains. But I just am not that optimistic at this point.
As I said recently, if you want a cap gains + yield play for a drop in long rates, why pick TLT? The dividend drops as the price rises. Why not buy WFC-L for a better yield with a fixed dividend and cap gains too.
I agree with Rocky_Mountain_Hiker and rocks2stocks, the risk/reward for buying TLT doesn’t appeal to me. That said if you have some conviction on rates and can’t look away from TLT; why not buy a call option?
For example, TLT 100 16JAN26 CALL @ $4.40 gives a breakeven price of 93.40. Most you can lose is the price of the call and you can use the $8,106 you didn’t spend on buying 100 shares of TLT to invest in something that will yield over 6%.
Not a billionaire that can buy enough 2yr treasuries. Only other option is to buy TLT calls by the fist full.
I could have sworn I saw someone comment that AGNC is planning to issue a new preferred. I think they said 8.25%. But I can’t find the comment. Anyone know if this is actually happening?
I saw it too, LI. If I recall, they also said there were 4 or so new issues coming to market in the next week or so, and Tim replied that’s a lot, relatively speaking. Can’t find that post. Meanwhile, I’ve checked daily for any press release and SEC filings by AGNC – none yet.
52 Week Highs Today…
* 10Yr Yield ~ high today 4.79%, now 4.77%…??? 5% by end of 1st quarter
* USD Index DXY ~ 109.68
SCE.PRM /PFF 7.5 perpetual seems to be putting in a bottom.. close above 24.6 would be first indicator
EIX did release some news saying some fires is most likely not them. While others started in areas where they do have infrastructure but zero evidence was them. Naturally they have stuff all over… but they are at least informing us.
https://www.businesswire.com/news/home/20250108156871/en/Edison-International-Provides-Update-on-Southern-California-Wildfires-and-SCE-Power-Outages
AGNCP trading at 13.5% YTC to the call/float date on April 15. Float will be 3mL+4.697%. DYODD
AGNC also has outstanding AGNCN which has been floating since 2022 at SOFR + 5.111. AGNCP will float if not called at SOFR + 4.697. Given AGNC past history or not calling N, wouldn’t you think that lessens the likelihood of P’s YTC to its first time upcoming call date being relevant? In other words, I wouldn’t be looking to buy AGNCP in anticipation of achieving its YTC based on today’s mkt price.. Buy for increased income perhaps if you’re comfortable with the name..
2wr-
Completely agree. AGNCP call unlikely, which is probably why traders aren’t holding the price at par. AGNCN currently 25.56, so it’s possible that AGNCP will get a significant price boost, and that’s why I like it.
Understand this is nothing more than a mental math exercise only while I’m sitting on my hands, nothing more. If you assume AGNCP’s new rate was fixed today instead of when it will on this upcoming Tuesday, it’s next coupon would be 4.287 +.261+ 5.111 or 9.659%. Current yield on a $25 9.659% coupon trading at 26.56 = 9.447% . Now lets assume AGNCN set its new coupon today as well… It would be 4.287+.261+ 4.697 = 9.245%. If you were to match the 9.447% current yield on AGNCN with an identical issue having a 9.245% coupon, you’d come up with a price of 24.446…. Surprise? I was… That means that unless you believe SOFR will go up dramatically in the next 3 months when N will fix its next coupon, or that N’s current price is being held down by “pinned to par” characteristics, the relative pricing of P vs N today is pretty much dead on, and if nothing else, maybe pennies too high… Check my numbers….. maybe I did something wrong, but it looks as though a bump up relative to the price of N would not be in the cards, except if “pinned to par” is truly in play already on N.. With AGCN stock trading at 15%+ dividend yield, I’m not so sure there’s much “pinnned to par” in play yet on N, but that’s opinion only.
I think that you also have to take into account that the price (I believe you meant 25.56) by which AGNCN can exceed $25 is somewhat constrained by the risk of a loss on call. The adder for AGNCM is 4.332%, and yet that is right at $25. This would seem to indicate that there is a pretty decent probability that AGNCP, with an adder of 4.697%, will at least get close to $25 (if not a bit above) as the call/float date approaches. I own some AGNCO.
There’s no certainty about April other than AGNCP will float, and I will collect the final 38 cents fixed dividend. I like the risk/reward.
i have 600 AGNCM at 24.96
i like the 9.44% cy on it ;
I think your numbers are right, except for some confusing typos. In particular, I think you consistently flipped AGNCP and AGNCN. “N” is already floating, “P” floats in April. With SOFR3M at 4.25%, I get:
AGNCN: 5.11 + .26 + SOFR3M (already floating) = 9.62%
AGNCP: 4.70 + .26 + SOFR3M (resets 4/15/25) = 9.21%
So your numbers check out. But I’m not sure your logic is right. I think the “pinned to par” effect may be much stronger than you are thinking. How would your theory explain AGNCM?
AGNCM: 4.33 + .26 + SOFR3M (already floating) = 8.84%
It dropped from 25.60 to 24.98 on its last ex-div (12/30/24). It spent most of today at 25.10, then dropped to 25.01 at the close. If AGNCM floating at 8.84% is trading above $25, I think it’s very likely that AGNCP at 9.21% will do so as well. Thus using YTC as an estimate for the return until it floats seems reasonable.
Alternatively argued, NLY has a number of issues that seem quite comparable:
NLY-F: 4.99 + .26 + SOFR3M = 9.51%
NLY-G: 4.17 + .26 + SOFR3M = 8.68%
NLY-I: 4.99 + .26 + SOFR3M = 9.50%
While the other two trade a little higher, NLY-G at 8.68% has consistently been trading above $25, following just about the same pattern as AGNCM. NLY preferreds might be slightly safer than AGNC, but this seems like another good reason to think that AGNCP at 9.21% will trade pretty close to par.
I don’t actually have quite as much confidence as this makes it sound, but I think AGNCP reaching par is the right way to bet. Are there reasons to think I’m wrong other than the math that (correctly) shows that the yield would be different for the different preferred in each series?
Looks like you’ve done some good work, Nathan… Thanks…. As mentioned, I was only doing mental gymnastics on an issue I didn’t care about so appreciate the corrections.. You could be right that I’ve underestimated the “pinned to par” effect on N, but if I am, then that only re-emphasizes why I’m not particularly interested in AGNC floaters or NLY’s… Be it right or wrong credit wise, I think I could be more comfortable with some of the floaters out there from the regional banks, for example, than from the mortgage REITS. I’m sure that’s an arguable premise, but I’ll continue to stay away from these two companies… but again, good work!
> You could be right that I’ve underestimated the “pinned to par” effect on N, but if I am, then that only re-emphasizes why I’m not particularly interested in AGNC floaters or NLY’s
Could you explain more of your thinking? I’m not too excited about them either, but I can feel the appeal of double digit short term returns on the lower than par fixed-to-float issues. The main reason I’m not into them more is that I don’t think I understand enough of the risks of the mREIT businesses. What are your reasons?
(I enjoyed your Monserrat video that you posted in another thread)
Nathan – You’re putting me in a position of appearing to be an expert on mREITs and/or AGNC/NLY specifically, so understand, my reply really has nothing to do with in-depth expertise on these. Basically, my rationale is probably no deeper than your own, meaning I don’t think I understand (or ever will) enough of the risks of the mREIT businesses to feel comfortable with them…. I do remember way back in the early 2000’s or perhaps even earlier than that when Michael Farrell was the face of NLY, that I spent some time trying to understand better. I had a lot of respect for Farrell…. At the time, it felt like Mr. Market felt that NLY had a business model that only allowed them to be profitable when interest rates were moving in one direction…. I thought that couldn’t be true… No mortgage based company could possibly and purposely have such a model. Then when the direction of rates changed, Mr. Market just seemed confused as NLY didn’t do all that badly. If nothing else this proved to me that nobody could have a good handle on what they were doing…. so I basically abandoned my investment in them and never returned…. I’ve essentially ignored them ever since.
That’s not a very concise or convincing thesis to be anti-mREIT, but that’s what I said, don’t take my take as anything more than what’s become a bias against investing in them…. Overall, I’m due a reinvestigation of the group before being an advocate or not… But you asked…lol
Are banks or regional banks any easier to understand overall or less risky than these? Probably not, but I’ve been more active with them and their F/F rate issues so I’m more comfortable…. probably more seat of the pants comfortable than voice of expertise comfortable…
Call schmall. They would call others before calling AGNCP and they haven’t done so yet. I’m holding some AGNCO for the higher yield not trading into P until there is a more accurate price difference. or if I have a reason to suspect there is a bigger call likelihood.
Allstate, Chubb and Travelers are reported as exposed to CA fire liabilities. Any reason for concern for their businesses? Too big to fail? Currently own ALLPRB, ALLPRJ
They have reinsurance which kicks in at certain cat (catastrophe) levels, or amount of loss per event. So, just for example, an insurer might have reinsurance in place so that for a cat they will absorb the first $2BB of losses and the reinsurer will cover amounts over that. So any one event typically won’t wipe out an insurer, although sometimes smaller ones (like MCY) could definitely have issues.
— State Farm is by far the largest homeowner issuer in California. There is also a state high risk pool. SF was a once big carrier in the devastated Pac Palisades area but it cancelled many policies. It is possible that the state plan picked up some of these expensive properties. Chubb is identified as catering to high net worth clients. I saw nothing implicating ALL.
— The three companies you mentioned are large insurance companies and IMHO should have the ability to absorb losses. It may hurt a little. It always does. (I have not researched them so DYODD.)
— There is an issue with Mercury MCY which is unfortunately both small and a large homeowner and auto policy writer in California. ALL is about as big a homeowners writer (#6) as MCY (#5) but MCY and ALL do 1/3 of SFs business. As mentioned by Rocky, the consumer-facing carriers generally reinsure their risks as a back up.
– Keep in mind that the headline economic losses include soft losses (like a missed sale, a cancelled hotel room or a wage not paid) not insured losses (like a burned house.) Divide by 4 or 5 to get a real insurer risk number,
— There are additional insurance risks after the fires end. LA has been in a drought. Forget the song: It rains there. The hillsides are barren. There is a risk of property-damaging mudslides. (John McPhee wrote about this in 1988. I don’t think that anybody who read his article ever forgot it: “Los Angeles against the Mountains.”)
– The play for day traders may be the puzzling EIX sympathy drop in Utes that have had past wildfire issues. Embers carry a long way but not 2500 miles west or 1000 miles north. Just sayin’
— The above written from memory and likely incorrect so DYODD. JMO
Bear, other ute’s falling in sympathy have still not hit their 52 week lows.
Probably to big to fail, however as their preferreds are non cumulative possible to miss some dividends.
I’m just waiting for some reports of what they think caused these fires. Even with proof, people in their grief and lawyers look for the deep pockets.
One of the reasons for the 2017 Tubbs fire was when a private property owner installed a power line to another building on their property. But then it was multiple ignition points with high winds and hills and canyons to funnel the fire. This burned along the same path as a major fire in the 60’s yet the county still allowed building expansion into those same hills over the last 60 years.
https://www.pbs.org/newshour/nation/deadly-2017-california-fire-caused-by-privately-owned-electrical-system-report-concludes
Sound familiar?
The new Urban / Woodland building codes were passed but still no effort to restrict building in areas that are at high risk of fire danger. The insurance companies recognize the risk and are refusing to insure properties. The same as areas with hurricanes ( every year). Yet the insurance companies are being called out as the bad guys.
The forests, and hillsides are beautiful places to visit and have great views but maybe we shouldn’t allow houses to be built there.
I have the cusip # on the new SO issue but I was told they will be issuing a ticker symbol as its a $25 preferred & pays quarterly. I do plan on buying this one due to the fact it looks pretty solid and the coupon is where I need it to be.
i was able to buy this new issue with a broker on Merrill using the cusip.
a solid utility with 6.5% coupon
Depoli; Fully agree with you 100%. Its a solid company with almost 9 million customers. I wonder why you were able to buy it and my Schwab Manager could not find it??? Sounds like Merrill is doing right by you.
Depoli-
Is the SO bond junior or senior debt?
r2s,
It’s junior:
Series 2025A 6.50% Junior Subordinated Notes
due March 15, 2085
https://www.sec.gov/Archives/edgar/data/92122/000009212225000006/so2025ajsnfinalprosuppfixe.htm
https://www.sec.gov/Archives/edgar/data/92122/000009212225000004/so2025ajsnfwpfixedrate.htm
The symbol has not yet been announced:
Listing The Company intends to apply to list the Series 2025A Junior Subordinated Notes on the New York Stock Exchange. If the application is approved, the Company expects trading in the Series 2025A Junior Subordinated Notes to begin within 30 days after the date that the Series 2025A Junior Subordinated Notes are first issued.
mbg-
Thanks! I’m much less interested in 6.5% junior debt than senior. There are much better yields out there on IG juniors, $25 and $1000.
Hi all. I was perusing the “Preferred Stock – Floating Rates” list sorted by Current Yield and noticed that NGL-B at the top is shown as suspended. NGL had suspended the div in 2021, 2022 and 2023. It is cumulative and they caught up in Feb and April 2024 (along with NGL-C). The most recent divvy was $0.75 (or $3.00/year based on the most div alone). I bought a half position at $23.75 for a yield of 12.6%. What am I missing?
Randy-
That’s my question too about NGL-C. I think the problem is the hangover from the suspension, even though the company has cleaned it up. I’m going to watch for a while longer. A new price low would suggest a further drop to 20. Not a prediction. I don’t know where price is going.
The company has reported a long string of losses. Next earnings on Feb 10.
Back then they had upcoming maturity debt that had to be taken care of first. Their bond position thru 2027 has been completely cleaned up so free cash flow is more or less now open for the preferred.
what is the cuspid #?
arnold,
For which issue – the new SO baby bond, the NGL-B or -C, or something else?
what is the cuspid #on the bond?
842587 867
https://www.sec.gov/Archives/edgar/data/92122/000009212225000004/so2025ajsnfwpfixedrate.htm
It is a kind of toothy number, isn’t it – the The Southern Company
Series 2025A 6.50% Junior Subordinated Notes due March 15, 2085 cuspid (sic) number is 842587867
2WR Fido is showing 3rd party price of 24.50 I wonder if you can call the bond desk there?
Re : new The Southern Co. 6.50% sub notes …..
Has any III posters been able to find a Ticker , or non-underwritter, order fill.
What I have found is syndicate members can fill today …. blanked on my attempt.
Jim; I have a large portfolio with Schwab and Iam having the same problem as you. I was told maybe on Monday.
in the modern world it’s Bicuspid!
The other day, someone posted the initial temp ticker for the new ANG pfd issue (ANG-D). It was AMNGV.
It changed. Right now it’s AMNGL.
https://www.otcmarkets.com/stock/AMNGL/overview
Here’s Fido’s take on AMNGL – another disrupting rule:
(TC9051) Opening transactions for Grey Market are not permitted because of the risks associated with these securities and all Microcap securities.
Is that new?
They show over 90k traded, and get this: over 3 million 90 day ave vol !
Hot mess
Gary, where did you see this?
Pulled it from FIDO’s homepage quotes- then tried a sample buy- got the text.
Now 852,400 vol, last 25.02 B 25.02 ask 25.15
Some new issue IG senior big bank bonds are coming out at 6%. Some IG corporates are trading a little bit higher and agencies a little bit lower. When the yield curve was inverted and long rates close to 5%, the yields on MMFs, CDs, bank bonds, agencies and IG corporates were 50-150bp higher.
How do IG senior BBs compare today? (Most BBs are subordinated.) Here are some examples trading under par with CY: TBB 5.4%, SFB 6.3%, BC-C 6.6%.
New 6% GS Bond with 3YR Call Protection…
* 38151FDP5, 6%, Senior, A2/BBB+, Annual, Price 100.
* YTC 6% 1/23/28
* YTM 6% 1/23/45
DYODD
BofA 06055JJF7 same deal with one year call protection…6% 2045, call Jan 2026, SEMI-ANNUAL
Annual payments are ridiculous. You buy the bond and they don’t pay you for a year.
We may see a wave of better yields hit the market.
ANG-A – It’s going to be A that’s to be called – call date yet to be determined – https://www.sec.gov/ix?doc=/Archives/edgar/data/0001039828/000110465925002087/tm2430912d5_8k.htm. Settlement Date for the new issue is going to be JAN 10 according to the FWP. With the markets being closed tomorrow I wonder if that means that tomorrow is not a trading day as pertains to this statement and Jan 10 will turn into Jan 13… “Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in one business day, unless the parties to the trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Depositary Shares earlier than the first business day before January 10, 2025 will be required, by virtue of the fact that the Depositary Shares initially will settle in T+3, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisors.”
On January 7, 2025, American National Group Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC, as representatives for the several underwriters (the “Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters an aggregate of 12,000,000 depositary shares (the “Depositary Shares”), each of which represents ownership of 1/1,000th of a share of 7.375% Series D Fixed-Rate Non-Cumulative Preferred Stock of the Company, in a registered public offering (the “Offering”) pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-281155). The Company intends to use the net proceeds from the Offering, together with cash on hand, to redeem in full the 5.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A of the Company (the “Series A Preferred Stock”) and the related depositary shares in accordance with the terms thereof. This Current Report on Form 8-K does not constitute a notice of redemption with respect to the Series A Preferred Stock or the related depositary shares.
I screwed up the links….. The FWP = https://www.sec.gov/Archives/edgar/data/1039828/000110465925001759/tm2430912d3_fwp.htm – that talks about the settlement date.
The second paragraph comes from the first listed link
It was my impression that most of these resets are callable only on the reset date. But I checked the prospectus, and no such limitation for ANG-A. Just the 30 – 60 day notice requirement.
With the 5YT at 4.148% on 11/27/2024, I show a present coupon of $2.1175 for ANG-A. At the 25.23 closing price, that would mean a stripped price of about $25.00. Might be a decent place to park some cash until it gets called away.
Someone on here, I think it might have been mbg (thank you very much), had posted that he talked to IR and they gave him the definitive coupon on ANG-A for this period to be 8.571% which works out to be slightly higher than your number… The difference stems from the rate being calculated on the basis of a 5 day average for SOFR leading up to the date, not what the rate was on the exact date.
Wasn’t me, 2wr. I actually searched but couldn’t find that post.
Whoever did – thanks from me too. As the professor said in Good Will Hunting, “So without further ado, come forward, silent rogue, and receive thy prize.”
mbg and 2wr–from Maine. I have a better comment search screen. Am waiting for something new from the tech folks.
n reply to 2whiteroses.
No, I actually emailed IR yesterday (by chance) and he replied right away. The official rate is 8.571%. I like ANG-A here at $25.25, bot today. I haven’t done the math but seems decent by guessing.
Pickings are getting slim w these types of issues risk/reward. Its not great but I got some WCC-A a few min ago at 25.59 and I have a small position in ARGo-A here below par.
Apologies to Maine…. remembered the conversation but not who I was talking with.
mbg and 2wr–from Maine. I have a better comment search screen. Am waiting for something new from the tech folks.
n reply to 2whiteroses.
No, I actually emailed IR yesterday (by chance) and he replied right away. The official rate is 8.571%. I like ANG-A here at $25.25, bot today. I haven’t done the math but seems decent by guessing.
Pickings are getting slim w these types of issues risk/reward. Its not great but I got some WCC-A a few min ago at 25.59 and I have a small position in ARGo-A here below par.
You can get petty close to replicating that by 2.1175/25*365/360. Whatever, it still seems like a decent place to put the spare cash. Don’t think SOFR enters into it.
Wednesday Close Data…
* FOMC Minutes ~ Fed hints at moderating pace of rate cuts
* US Initial Jobless Claims ~ Fall to 11 month low
* Eurozone Producer Prices ~ Rise the most since 2022, up 1.6% m/m
* UK 10Yr Gilt Yield ~ Rises to 2008 highs @ 4.8%
* US Mortgage Rates ~ Rise, 30Yr Jumbo 7.39%, 30Yr Fixed 7.17%
* US Dollar Index (DXY) ~ up, 109.01
* CVX ~ Targets 6-8B in Free Cash Flow Growth by 2026
* Affordable Care Act ~ record 24M enrollees in 2024
* Preferred & BB Movers:
Down… ABLLL (-$4.13), GPUS-D (-$1.95), SCE-N (-$1.76), ICR-A (-$1.73), (-$SCE-M (-$1.21)
Up…PSBXP (2.37), FGFPP (1.87)
* CFP ~ Notre Dame & Penn St @ 7:30 EST Thursday, Texas & Ohio St @ 7:30 EST Friday
U.S. Treasury market is open today. So even though there may be less data to report — a report is still due!
I won’t buy any more SCE-M unless it’s near my extreme targets at 24 and 23. EIX -12%.
Been down this path with PCG. It was a rough road, but profitable. If this is similar to PCG (and I have no idea if it is) then this has a lot more to drop before it bounces.
good comment… sce.prg/pff pair had signficant rebound off intraday low.. the all time low on the pair was a double bottom on july and november 2022.. ..currently yield is 6.63
>> sce.prg/pff pair had signficant rebound off intraday low.. the all time low on the pair was a double bottom on july and november 2022.. ..currently yield is 6.63
Although I pairs trade, I don’t follow what you’re citing. Can you explain what that data is? After a few quick short trades yesterday, I put on a SCE-J/SCE-G trade.
SCE-M hit the 24 target and bounced. Waiting for 23. EIX down another 5.6%.
SCE-M down to approx 24.33. Still waiting to see if the hammer drops on this. It has to get to 23.25 to yield 8%.
Bought at par a little falling knife SCE-M (7.5% cum perp preferred). Need that cumulative.
@R2S SCE on sale
I bought some M as well. Thank you.
pd 24.90 for pce/prm as the pce.prm/pff pair at all time low (no surprise) ..tks for show…may God intervene
Not finding PCE-M. ??
I closed a short on USB-S this morning and then shorted SCE-J, picking up 49 cents on it. It was dumb luck catching it just before they all cratered. It’s been a hard month but at least I’ve reduced the losses.
SCE J is a fixed to flier 9/15/25. I’m long that!!
I can counter your good dumb ass luck by my need to kick my own dumb ass for violating my own rule against owning Cal. utilities. I bot a starter amount of SCE-J after playing the call on SCE-H. I figured J has a SOFR plus number .14 larger than the called H had, so what could go wrong with assuming they’ll call again on 9/1 when J would begin to float and be callable???? Oh wait a minute! I know what…… and that what is happening now and is the reason I didn’t want to hold CA utilities in the first place.
Hey 2WR
I own some cali utility preferreds and am buying more this week. There is a utility protection fund (mentioned below) if these fires turn out to be utility caused, but it is not that important.
more important is that the governor won’t let utilities take much of a hit from fires. PGE has been through bankruptcy twice for fires/killing customers and the preferreds didn’t take a hit at all.
The public utility commission is firmly in utilities pocket gives them whatever cover they want (leaked emails show that the utilities get so deeply involved in the PUC that they dictate personnel decisions/assignments).
The governor (for whom Utilities are some of his biggest contributors) gets personally involved in negotiations to get utilities through BK with no real harm. He talks about how we need to be nice to the utilities so they will continue to invest – regardless how much damage they cause or how many people they kill.
For example, the compensation fund for the fire that burned down the town of paradise and killed 86 people that was forced down the victims throat (with the governors help) was funded primarily with PGE common stock!
Don’t get me wrong – we need utilities in CA, but utilities in neighboring states (with similar climate issues, like AZ, NV, ID, OR do a good job without killing customers and burning down towns and they have much more affordable power.
So, I hate the way things are, but I will hold CA utility preferreds until we get a governor who will actually try to protect people (and not coddle utilities). Current gov still has two years to go, but he has been “bought” for 6 years already, and his predecessor (“moonbeam” brown) was for his whole 8 years in office, so I am not holding my breath.
Thnx, P – I’ll continue to hold but I wont average down….. Fool me once, shame on you….. fool me twice……… I wouldn’t continue to hold if I didn’t sense the truth of what you say, but still, I’m already 100% over my allotted allocation for CA utes…. dont want to go for 200 and hopefully I’ll end up having willingly missed a big opportunity.
Private I grew up in Southern Calif. There’s a different attitude and lifestyle down there. Not just the politics. Even the average person doesn’t seem to be concerned about where the water comes from and where it goes. Southern Calif already takes a large share of northern California water and wants more. The last drought was the first time I had actually heard government officials institute fines for not limiting use and they still had wealthy people in Bel aire and other towns just pay the fines and keep using as much as they wanted. When I was growing up we were washing the car in the driveway and letting the water run down the street. While my wife tells me in Sacramento in the same time period people were saving bath water to flush the toilet and a good portion of the water comes from here! Seems like nothing has changed in 50 years.
Charles-
San Diego has not been complacent. There is a desal plant running and a toilet-to-tap project under construction.
Agriculture (especially nuts and alfalfa) use more water annually than Los Angeles, and it isn’t even close.
Having no rainfall is actually easier to grow crops, as too much rain can be just as bad as too little, and using irrigation will allow the crops to be grown where they normally wouldn’t grow.
The problem is that the crops grown should not be water intensive, but since water is basically free to some farmers, they grow very thirsty crops instead of low water using crops.
Justin
Its crazy how much water-intensive farming goes on in CA.
I have a lot less trouble with nuts like almonds and pistachios because they can be more “water flexible” (i.e. you can water them less and production falls, as long as you don’t cut their allocation to zero like our state board does and kill all the trees) and there aren’t a lot of other places in the US to grow them.
What makes me crazy is cotton and alfalfa. Cotton production has been dropping for years in CA, but it should never have started. Makes more sense to grow it in the southern US where water is more plentiful (if we are going to grow it in the US at all).
My biggest pet peeve is that they started farming the imperial valley in the early 1900s. The only source of water is the Colorado river (which they didn’t have water rights to in the first place), and they grow (grew?) a lot of cotton and alfalfa. I worked the cotton harvest in the imperial valley for a couple of years as a kid. Wish they would just stop ag in the imperial valley. It would help stop a lot of water problems (in CA, and upstream), and we don’t really need most of what gets produced there anyway
Well I am along for the ride. Added 100 shares of SCE-M at 24.90. I already owned some M and N. I may add more if it falls a lot more like rock seems to be thinking.
I am betting on these fires being caused by some what normal circumstances of super bad conditions for fires and people being people. Fires broke out in multiple places I read. It would be pretty obvious if down lines or what not was the cause I imagine.
I also avoid California issues. May be profitable but may also be be high risk. Maybe it’s my political bias but my top priority is to avoid big losses so my smaller profits add up.
Martin,
One thing has changed since the fires some years back. Take a look at this:
https://www.singletonschreiber.com/theblog/how-does-ab-1054-work-blog
So at least there is some type of plan in place to “better” handle the situation while in the past it was a lawsuit free for all against the utilities.
Thanks, fc. $21 B of insurance protection funded primarily by the rate payers is definitely a game changer. Perhaps I’ll add to SCE-J and SCE-K.
I think only about a quarter of that $21 billion has been funded if I read the article correctly, and that is before any payouts.
A whole lot of million dollar homes just went up in smoke and who knows how many businesses so I would not be surprised if that fund is depleted quickly.
The fund is only used if a utility is responsible in some way for the fire. So far we have zero evidence to blame anything for the fires. A cigarette butt could be the cause in each location for example. I was reading the news and they even had a fire start in Woodley Park in LA. Not exactly a place where there would be a ton of electric utility poles with a ton of trees being blown into the wires all over the place. Yes there would be some but the more likely cause is a person in that example. Place is probably dry as a bone. Sun light going through a broken piece of glass/jar/whatever acting like a magnifying glass could have started it.
10Yr Yield Wednesday…broke 4.7% threshold to a high of 4.73%, now 4.68%
SCE preferreds and parent EIX getting hit due to the fires in So. Cal.
The master list has these marked as TP but they are not.
r2s,
TP = “Trust Preferreds”?
If yes, then according to their prospectuses, they are TPs:
I got the prospectuses off QOL:
https://www.quantumonline.com/ParentCoSearch.cfm?tickersymbol=EIX
TP = “Trust Preferreds”? Could be. Usually means term preferred.
EIX -10% at this time.
SCE/PRJ floats on 9/15/2025 at 3.132% + SOFR + 0.26% (about 7.7% total, although I do not see a notice on QOL that they have accepted the switch from LIBOR to SOFR +0.26%). At the current price of $23.87, YTC = about 13%. DYOD since there is no containment in sight in LA. The Jet Propulsion Laboratory (JPL) has been evacuated, and neighborhoods are burning according to my son in Alhambra, Ca., where the fires have not yet reached.
At the last price of 23.65, SCE-J has a YTC of 14%. SCE-H was 3mL+2.99% and it got called, so there is a precedent to believe SCE-J will get called in Sep. However, traders know this and they sold it down hard already today.
SCEPRN under par
able to snag at 24.93 & 24.92
4 different fires, nothing under control yet. Pacific Plasaides High School burned down. No word yet on causes of the fires. Share prices can sink farther.
I’m used to the term “trust preferred” being backed by a junior sub debenture as occurred with all the banks prior to the GFC but these just appear to have the term “trust” in the name….
correct?
EIX down 9.50
Lt, One of my accounts was down by $5,000 yesterday just from holding some of the SCE Trust preferred. Not big by some people’s standards. One of these fires seems suspicious. Here in Northern Ca in 2020 we had one fire that later turned out to be a guy had started to cover up a couple murders thinking nobody would notice with all the other fires going on.
https://www.nbcnews.com/news/us-news/california-wildfire-killed-2-was-started-cover-murder-officials-say-n1265805
Let’s wait and see what they say was the cause of these fires. I know the high winds are partly to blame.
Conspiracy theory is the Chinese were flying drones and starting the fires to test the idea of causing panic in case of war. Remember the Japanese trying to fly incendiary balloons to start Oregon wildfires in WWII
The ex-dates for RITM preferreds has been midmonth. In Jan it’s now end of month, about 15 days before the pay day instead of 30.
I see that the price for the common stock of some preferreds has been in a steep decline. Check any you care about.
RITM preferreds have been steady lately. Prices near their highs. One of the better high yield REITs unless I missed recent news?
R2S – This change is interesting as per the OM on Series A and Series D:
Dividends will be payable to holders of record as they appear in our stock transfer records for the Series A Preferred Stock at the close of business on the applicable dividend record date, which shall be the first day of the calendar month, whether or not a business day, in which the applicable dividend payment date falls (each, a “dividend record date”).
My read on this is the new XD date is what should occur and the previous method was incorrect. Interesting some one must have noticed that recently.
New NYMT baby bond incoming. Ticker NYMTG
https://www.sec.gov/Archives/edgar/data/1273685/000110465925001887/tm252130-1_424b5.htm
Thanks mbg–just saw it.
9.125 area… Use of proceeds does not mention redemption of upcoming floating NYMTM on 1.15.25. Also noteworthy SO is in market today jr sub 6.50% area investment grade.
The Southern Company
Series 2025A % Junior Subordinated Notes
due March 15, 2085
https://www.sec.gov/Archives/edgar/data/92122/000009212225000002/so2025ajsnprelimprosuppfix.htm
J; Just think where we will all be when that baby matures. With that maturity date the coupon should be fantastic but I bet it won’t be.
Really, how much different is a long-dated junior baby from a perp preferred?
Just got off the phone with my Pinnacle Team Mgr. at Schwab, they still have not set the “final coupon rate” on Southern Company. Rated BBB. I told him I was very interested if the coupon is where I need it to be. He said he should know something by tomorrow. Going to be priced at $25 and pays Quarterly. After all of this crazy inflation my new parameter is now a minimum of 6.5%. I won’t buy anything less than that coupon.
Southern Co
Priced To Yield: 6.500%
Deal Size: $500,000,000
Expected Ratings: Baa2 / BBB / BBB-
not bad for a ute they are safer than most. though I haven’t done a deepdive on Southern.
Their bonds are in the 5.4% range, and their baby bonds are 6% and under.
Not sure when this is supposed to come to market but I am interested in it for one of the retirement funds.
The 6.5% coupon on The Southern Co. new issue bond would make sense if its a junior.
What’s the CUSIP?
r2s,
CUSIP: 842587 867
Here’s the term sheet:
https://www.sec.gov/Archives/edgar/data/92122/000009212225000004/so2025ajsnfwpfixedrate.htm
I have too much NYMTI been trying to dump it but the price just won’t go up. Not happy to see a new issue, though I’ll swap for it if initially priced better than NYMTI.
Tuesday Close Data…
* 10Yr Yield…up 4.69%, high 4.699%…up 105bp since 9/16/24
* US 2/10Yr Spread…up, now 0.40…highest since 5/1/22
* CME Group…probability of NO rate cut on 1/29/25 at 95.2%
* JOLTS Job Openings…up, now 8.098M at 6 month high
* ISM Service PMI…up, now 54.1
* US Imports…up, 2nd highest on record in November 2024
* UK 30Yr Treasury Gilt Yield at 5.27%…highest since 1998
* Euro Inflation ticked up…now 2.4%
* US Mortgage Rates (MND)…up, 30Yr Jumbo 7.37%, 30Yr Fixed 7.14%
* Loudest Dogs of Dow Yield…VZ 6.87%, CVX 4.78%
* US Rig Count…589
* AAA US gas average…$3.07/ga
* US National Debt…$36.3T = $323K per taxpayer = $106 per citizen
* Unknown Cost of buying Greenland, Canada, Panama Canal
Kimbell Royalty To Acquire Mineral And Royalty Interest At Midland Basin For $231M
Kimbell Royalty Partners Launches 9M Common Unit Public Offering, Plans To Use Proceeds For Debt Repayment And Funding Pending Acquisition Of Oil And Gas Interests
Trying to get my arms around this one but I think there are two separate stock issuances. One, the $231 million Midland acquisition to be funded by either cash or cash and 1.4 million shares of stock valued at ~17. Two, a separate offering to reduce debt. The offering was upsized to 10 million shares and the price downsized to 14.90. KRP closed at 16.27. Looks like a large boost in shares outstanding. JMO. DYODD.
Bear, I know in the past Ab has said he owns this. I have too, but I traded it. I don’t like the swings in stock price although it’s been stable since the last dividend. A lot like a BDC in its volatility, you think you’re getting good returns with the dividend but then you look at what you have gained or lost in share price and people forget the dividend is variable depending on the price of oil and how many shares are outstanding. I have been watching and don’t own currently.
Agree, DYODD
Hit 16.54 yesterday- 15.36 now, up from 15.25 erkk!
New 6% Bank Of America Bond…
* 06055JJF7, 6%, Senior, A1/A, Semiannual, $100.
* YTM 6% 1/23/45
* YTC 6% 1/23/26
Just a suggestion. AAA taxable 30 yr housing bonds priced at 6.20 last week. I beleive that was New Hampshire but I could be wrong on the issuer.
The are callable at any time. I’ve never had a taxable housing bond called and the last tax free I had called was after 200 bps drop in rates for 2 years . I think that one was called mainly because the housing authority had not lent the money and there’s a time limit to do so.
ABLLL $36.00 BID @ $38.89 OFFER – 10 min before the close
(if someone is interested )
I’m going to guess that’s a “buy-in” on a short that could not be located.
Midday data dump…
* 10Yr Yield…Up, 4.699 high, now 4.69…up 105 bop since 9/16/24
* US 2/10Yr Spread…Up, now 0.39…highest since 5/1/22
* CME Fed Rate Probability…95.2% chance of NO rate change on 1/29/25
* JOLTS Job Openings…Up, now 8.098M at 6 month high
* ISM Services PMI…Up, now 54.1
* US Imports…2nd highest on record in November 2024
* UK 30Yr Treasury Gilt yield highest since 1998…now 5.27%
* Euro Area Inflation Rate ticks up…now 2.4%
* US Mortgage Rates (MND)…30Yr Jumbo 7.37%, 30Yr Fixed 7.14%
* Loudest Dogs of Dow Yields…VZ 6.87%, CVX 4.78%
* US RIG Count (Oil & Gas)…589
* AAA US national gas average…$3.068/ga
* US National Debt…$36.3T = $323K per taxpayer = $106K per citizen
* Preferred/BB Movers…ABLLL -1.40, FCNCP -0.92, PSBXP +2.37
* Unsure what Greenland, Panama Canal, & Canada will cost
Interesting that I heard a report that unemployed numbers are getting high– and all those openings? Hmm.
And of course buying/ invading those countries wouldn’t raise the debt at all-
we would just harvest all resources.
I did see that Denmark is deploying troops, etc, to help defend Greenland- Bwwhhaa!
What the hell is going on with FIDO? – just place orders to buy some more USFR in my IRA & ROTH- now they are not showing in Activity/Orders!!
Can’t change them or cancel if I wished to. Luckily, the daily B/A is very stable, unchanging usually. And no, they did not fill.
Anuyone else with this problem?
Ck’d ATPro- they do show there- thank goodness.
Turns out, the STOCK/ETFs filter button deactivated itself, so nothing could show. Ughh.
Wearing me down with drips on the forehead. Must call e-Trade.
Houston, we have a problem.
TLT at new 52-week lows. Buckle up.
CRBD (6.375% 2064 junior BB) new issue last month is trading near par. Right now, I’m not interested in CYs under 7.5% or equivalent YTC and YTM.
American National Group Inc.
Each Representing a 1/1,000th Interest in a Share of
% Fixed-Rate Non-Cumulative Preferred Stock, Series D
Application will be made to list the Depositary Shares on the New York Stock Exchange (the “NYSE”) under the symbol “ANG PRD.”
USE OF PROCEEDS
We intend to use the net proceeds from this offering, together with cash on hand to the extent necessary, to redeem in full certain of our Outstanding Preferred Stock and the related depositary shares in accordance with the terms thereof.
As of January 2, 2025, $400,000,000 aggregate liquidation preference of our Series A Preferred Stock and $300,000,000 aggregate liquidation preference of our Series B Preferred Stock were issued and outstanding. We may, at our option, redeem, in whole or in part, the Series A Preferred Stock on or after December 1, 2024 and the Series B Preferred Stock on or after September 1, 2025, at a redemption price equal to the stated amount of $25,000 per share of the applicable preferred stock, plus an amount equal to any declared but unpaid dividends and the portion of the quarterly dividend per share attributable to the then-current dividend period that has not been declared and paid to, but excluding, the applicable redemption date.
Thanks J
Sigh, it was looking like they may leave A outstanding, the rate had reset to 8.57% in December.
Just another data point that prefs from decent issuers that trade near par w high floater/reset spreads are good value, esp those that trade below par when factoring in accrued div. Pickings are currently slim, but can change when someone just wants out.
Interesting choices to be made regarding what to call, A or B…. A is callable now on 30 days notice and did reset at or around the 8.57% level Maine mentioned (did you see an official announcement anywhere, Maine?), but if B were to reset now (it doesn’t until 9/1/25 when it will also be callable), it would reset at approx 10.76%. It will be interesting to see how they size the new issue to get a feel as to whether they will be locking in enough to use on 9/1 for B as well as immediately for A. My guess is they will announce call on A on immediately after close of the new issue.
No, I actually emailed IR yesterday (by chance) and he replied right away. The official rate is 8.571%. I like ANG-A here at $25.25, bot today. I haven’t done the math but seems decent by guessing.
Pickings are getting slim w these types of issues risk/reward. Its not great but I got some WCC-A a few min ago at 25.59 and I have a small position in ARGo-A here below par.
Seems like were on similar tracks here, Maine…. bot wcc-a yesterday at about the same price as you. Bot ANG-A today at 25.245 but also added to B as well at 25.10. I had started buying B on 12/16 so had an av cost of 24.80, but with this new issue announcement seemingly decreasing the odds of this surviving past 9/1 and taking some of the uncertainty out of the internal plans for the issue, averaging up seemed OK to do.. I did the math on A assuming 25.25 and 8.50 coupon to be called on 2/15 and you’d get 7.15% YTC…. . That gives a slight cushion on the coupon but potential for a call being slightly earlier is real as well.
Maine-
Been closely watching ANG-A for months, but never bought in. I couldn’t see a diversified insurance company making gobs of money paying 8.5%+ for the next 5 years.
So AEL is now owned by Brookfield as of May 2024?
Any word on pricing?
Price talk 7.375-7.50. BB+ and hearing QDI
I’m waiting for ANG-G…oh Angie, Angie
ANG-A and ANG-B, formerly AEL-A and AEL-B, are still incorrectly listed as redeemed on the master list. Am I wrong?
F&G Annuities & Life, Inc.
% Junior Subordinated Notes due 2065
FGSN incoming
https://www.sec.gov/Archives/edgar/data/1934850/000162828025000460/fg-424b5x01062025.htm
Coupon talk..7.50 area. As many as 4 pref deals this week…
Jerrymac–now that would be an active week—relatively speaking.
Thanks J
The CY on BB FGN (7.95%) is 7.56%.
ytc 12/15/2028 6.02 assuming 26.37 price
S&P and Moody’s BBB-/ Baa3
Fitch: BBB
Fidelity volume trading limits: III’ers are in a WORLD OF HURT! Our friend Wolverine99, talked to Fidelity and extracted the algorithm they use to determine how many shares you are allowed to trade. The rule is: “you take the 20 day moving average of volume, then you are allowed to buy a quantity of 5% or less without triggering this error.”
I decided to take a snapshot for what the rule implies for the last 20 trading days. Understand that the numbers will literally change every day plus the reported volumes are sometimes different depending on whether you include extended hour trades or not. With those caveats, here are the stats:
Total preferreds/babys/terms= 869 (627 prefs, 242 babys/terms)
Can’t trade a single share= 12 (1.4%)
Can’t trade 100 shares= 182 (20.9%)
Can’t trade 1,000 shares= 560 (64.4%)
Can’t trade 5,000 shares=808 (93.0%)
Can’t trade 10,000 shares= 851 (97.9%)
III’ers come in all shapes and sizes from a trade size perspective, but let’s assume buying or selling a 1,000 quantity order is typical. This means that Fidelity will NOT let you trade 64.4% of the available issues. Seems unworkable to me, which quantifies III’ers frustration. Three possible outcomes that I see:
1) Other brokerages follow Fidelity and limit trades in a similar fashion
2) Fidelity internally says: “We don’t care if the 250 people, including III’ers, walk and go somewhere else, we have ~45 million other customers that are not complaining.”
3) Fidelity caves and changes their algorithm to let more trades automatically be placed
Unknowable which is the most likely outcome and/or what Fidelity will do.
Disclosure: Not a current or past employee of Fidelity.
Does this include the buy side as well?
The rule is: “you take the 20 day moving average of volume, then you are allowed to buy a quantity of 5% or less without triggering this error.”
Also, is the 20 day moving average across all platforms, or is Fidelity using their own trade volumes for this calculation?
What I don’t understand is who this is trying to protect – us, or Fidelity? And who else benefits from it? With all the frustration expressed here, it is certainly not a win-win.
I’m sure I’ve read it on here, but what is their rationale? If I recall, it has something to do with an SEC rule? I wonder if it is being applied universally on Fidelity’s platform, or if accounts with a high enough net worth are allowed different rules.
It sure seems strange that I can buy crypto / meme coins, and even some expert market, but I can’t sell a legitimate preferred stock with a legitimate bid / ask spread. Disclosure: I do not buy crypto, and I haven’t actually been affected by this rule as I am mostly in accumulation phase, and I have a tiny balance where I am dealing in 1 – 10 share buys in the illiquid realm. Some day I may wish to sell though, so I have been following this debacle with great interest.
Recently have encountered these new restrictions when I attempt to place an online order for a thinly-traded preferred. For example, I call Fidelity Fixed Income and when the automated prompt asks for a short explanation of the reason for the call, I say “Preferred Stock Sale.” Every time, the representative agrees to obtain permission to “open a trading window,” in which case I have five or ten minutes to place a sell order, or the rep places the order for me, waiving commissions. No one can provide a bona fide reason why the owner of a preferred issue can’t place an order to sell part OR ALL of that issue at any price they seek. A similar process occurs when I want to buy a thinly traded preferred! Further, when I place a “good ’til canceled” order, I now am limited regarding the price I seek (either buy or sell). If I’m aggressive, I get an error indicating that the price I seek is too far from the most recent trade. All baloney. But, none of Fidelity’s competitors are easier to work with and they all have their kinks. Hopefully, reasonable people at FIDO–if any remain–will fix the many new problems (the imposition of silly restrictions). The phone reps, who are not empowered (until about five years ago, they were!) are equally dismayed which, in the end, may be why changes could come soon.
OldmanRB–Growl–these problems with Fido go on and on. Fortunately we have numerous accounts and I never have issues with eTrade accounts–so I don’t even bother to call them–simply go to the other account and do my trade.Realizing my account is nothing to them one day they will see they no longer have our business. The little guy/gal has no power whatsoever and the best vote will be with our feet.
It is not as simple as a % of volume limit. I often can place a trade if I switch it from market, or day limit, to limit GTC.
It’s a bizarro situation as none of the reps can correctly explain the exact formula. I have had a few that tried, but I’ve found instances where there is some additional kink. I agree w Oldman.. the reps are dismayed by this as well, and embarrassed we have to deal w it, something will change eventually.
It also doesn’t seem to apply (as much) to the OTC illiquid issues. For instance, I’ve been able to buy 1,000 of a Connecticut light issue with average volume of 800 and current day volume of zero. I’ve also been able to buy some of the expert market names in size. Kinda ironic…
Maine same here. I put in a GTC after hours on the weekend for the AFFT on Tex’s list which showed it as expert mkt. with no problem.
And guess who is making the most money in the gray mkt? The ones that benefited from the SEC that killed investors’ goose. I can see whose side Fidelity is on, and it reeks.
If e-trade is free of this crap, I guess that might be the place to go.
Just checked- they have up to $1000 bonus offer for opening a brokerage acct by Jan 31st– to get that- it has to be 500k or more ! Too much for a taxable acct- for me! Will have to jawbone some on the total pkg.
Gary, Have you or anyone else on here talked to an E-trade rep to see if you can transfer some of the expert market preferred or all the ill liquids talked about on here? I seem to remember over the past couple years people talked about with Vangard and Schwab that they wouldn’t accept transfers of certain stocks and you had to leave them stranded with your old brokerage or liquidate them. Also are there any fees for OTC or OTCP with E Trade? I have gotten hit lately with small fees at Fidelity and larger ones at Schwab.
Nothing like the good old days. Was cleaning out file cabinets and found paper copies of trades with Waterhouse from 1984. Back then it was $35.00 to buy and the same to sell. Need to shred this stuff as back then they were still putting your SS# on the tickets.
I’ll be sure to check on that- along with the stuff Fido is pulling- limiting trades- my biggest concern.
Thanks for the suggestions. I remember those $35 trades all too well- compared to that we are in trading heaven.
Etrade you can sell expert market stocks but not buy them. No dumb size limits like Fido the Nanny Broker.
I don’t know if they’d let you transfer them or not.
Otc commissions are standard there, $5/trade or whatever you negotiate, but not free.
Etrade is now owned by Morgan Stanley. I’ve only noticed a souple nuisance fees so far but I don’t trust them. That’s what they do.
Thanks
Charles – A few months ago I tried to take advantage of an appealing Etrade incentive to move my Vanguard account over to Etrade along with my other Etrade accounts. I was told I would have to sell GMLPF, HMLPF and KTBA prior to the transfer. I wasn’t able to unload these at what I consider a reasonable price so I didn’t go ahead with the transfer.
Interesting. I don’t think Morgan Stanley has the same restriction. (but having an account at Morgan Stanley is much pricier)
OldmanRB I am a sniper and like to put in low ball GTC orders and I have run across that message also saying I am outside the trading range.
Really? Outside the trading range is quite some distance below current value. Don’t need that much air for GTC orders if prepared to update them not forget about them for 6 months.
An example is a thinly-traded (say a handful of recent trades with volumes of 100 shares or less), non-callable issue with a 52-week range of 105 to 150, but has a two-month range of 105 to 110 and a most recent trade at 108. Assume it’s an 8% rate and 100 par. Good credit. At 140, the yield is 5.7%. If I’m happy with a 5.7% yield and want to enter a good until called order for any number of shares at 140, I get an error message that I’m too far from the 108 recent price and range. If I play with the limit price and continue to reduce it, Fidelity won’t accept the order until I’ve reduced the price to about 114. Same situation if I want to sell. An equally bizarre situation pertains to the number of shares I want to buy or sell—there are artificial limits imposed. I think a solution might be for Fidelity to establish an investor credential, similar to an “Accredited Investor” for options or partnerships, that permits the preferred stock-buying or selling customer to trade all types of preferreds (and, in the process, indemnifies Fidelity). This has nothing to do with Fidelity fearing they might lose business—as another IIIer said, they could care less. It is about fairness and customer service.
good comment.. I used with my fidelity rep the metaphor of both us taking the same flight but I have TSA precheck and he doesn’t …assuming that each of our safety is dependent upon adequate preflight security does he feel less safe because I did not have take my shoes off or empty pockets ..in the same way If customers were prescreened to trade less liquid securities would not the safety of all customers be assured
From recent personal experience –
— Fidelity’s trading limits do not only apply to low volume preferreds. They apply to all securities. I did some live test sales. I found Fidelity limits apply to a low volume utility and even a low volume ETF. The ETF surprised me. I don’t see how a small retail trader can manipulate an ETF when the sponsor can issue unlimited stock at NAV.
— Fidelity sets a big trap set for unwary III’ers who buy a new preferred issue around IPO time, hoping to get a little uptick before it gets noticed. Post-IPO trade volumes look like Dino, the Sinclair gas dinosaur: a high average volume at the head but the small at the tail as the average diminishes. One my recent purchases: has 50,000 shares average volume but daily trades are only around 2,900 shares. As you slide down Dino’s tail, the exit window became smaller. (My HS English teacher requires me to disclose: that was a mixed metaphor.)
— You save pennies when you buy for free with Fidelity. You lose dollars when you sell. I am a “buy and hold” type but liquidity is of paramount importance to me. A market panic, a banking crisis, a take-under with a go-dark, I look for the exit sign. Fidelity does many good things but the “roach hotel” policy is not one of them. My preferreds and BBs are now bought and sold elsewhere. Disclosure: I have strong opinions on this issue. JMO. DYODD.
I’m gradually shifting those issues to other accounts as I sell some at Fido, then shifting some but not monies back. It’s a pain but worth it, each broker has its advantages and disadvantages so I play accordingly.
I decided to check and see how my model of Fidelity’s order blocking routine worked. I tried placing 1,000 unit buy orders for all 49 positions in the Justin Bank Preferred Portfolio aka JBPP. For new readers, it was constructed during the regional bank crisis of May 2023. Here are the results of trying to buy 1000 shares:
Not able= 22 issues (45%)
Able= 27 issues (55%)
Blocking 45% of the issues is better than the model predicted of 64.4% for all preferreds/babys/terms. However, blocking 45% is unreasonable in anybody’s book. As many III’ers have noted, this is NOT WORKABLE and you have to use a different brokerage. The “call a representative” every time you want to place an order is 3rd world and “we’re not gonna take it anymore” (Yes, lyrics from a song.)
BTW, I do NOT post on the Reddit Fidelity page. It is actively replied to by a Fidelity employee. If any IIII’er wants to post any of this data over there, have at it and see what the rep says.
Meanwhile, PFF can do whatever it wants and totally distort the market (see ABLLL and Tex’s posts). I’ve moved 1/2 of my account from Fido to Etrade. I had an old account there and they are giving me quite a bonus for the move (bonus paid after 60 days, assets must remain in the account for 1 year).
This is not correct, the E-Trade bonus only requires the assets to remain for 6 months.
https://us.etrade.com/what-we-offer/how-it-works/promo
FWIW, there are different incentives available to qualifying accounts, some are 6 month lock up and others 12 month… I know because I originally signed up for one with 6 month but was later told I qualified for a higher one that locked you in for 12.
How does the offer that you got compare to the current published ones? How did you find out about it?
I called and talked to a person at Etrade. This is what they sent to me via email:
Here is how to get your cash credit:
Deposit cash or securities from any external account
Get rewarded based on net new deposits made within 60 days (see table and disclosures below)
Deposit Amount Cash Credit
$25,000 – $99,999 $250
$100,000 – $199,999 $625
$200,000 – $499,999 $1,000
$500,000 – $999,999 $2,000
$1,000,000 – $1,999,999 $4,500
$2,000,000 – $4,999,999 $6,000
$5,000,000 – $9,999,999 $7,500
$10,000,000 – $14,999,999 $12,500
$15,000,000 – $19,999,999 $17,500
$20,000,000 or more $20,000
Rocky-
The bonus makes me think about moving SGOV to Etrade.
Maybe Schwab will pay me to leave it there. Ya think?
“Maybe Schwab will pay me to leave it there. Ya think?”
Hahahaha!!!
I first found out by calling and asking for incentives as a new customer…. What I was told was “Offer24” gives you the original amounts I was promised…. In my case, getting the account set up was a nightmare primarily because I had an account the was closed in 2019… Getting that straightened out was terribly cumbersome…. Then somewhere along the line somebody I talked to told me I qualified for the 4500 instead of 3000 because I qualified as an existing customer, despite originally being told that because of the old account I might not qualify for anything! … However, what I’ve been told is that I have to leave funds in for 12 months to get the new bigger total…. I’ve not seen anything in print yet to everify any of this…. So far, having and using this ETrade account has not been fun. Newest discovery is that you have to pay if you want comparable complete Level II quotes that you get for free at both Fido and Schwab