Below readers can post in the comments section items they believe are important to seen right away by all other readers.
For instance if we are not at our computer and a reader spots a new issue being issued they can post it below where others can come for ‘breaking news’ from other readers.
We want to keep this page ‘fresh’ so we will slick it off every 50 days so the items below remain only newer items.
We only ask that comments beyond the breaking news be kept to other pages or this page will be ‘out of control’ and not fulfilling what I hope is a handy alert page.
TO START A NEW THREAD GO TO THE BOTTOM OF THE PAGE
Users who liked this:
CHSCL has been dropping. It may be a good opportunity to swap out of CHSCM or CHSCN.
JTrader, all of the CHS preferred shares are beyond their call date. I am comfortable holding on to my CHSCM shares with a cost just under $25 per share at 6.75%+ and the unrealized capital gain vs buying CHSCL at a greater than 1 dividend premium to the call price and the risk of a potential call and capital loss. The CHSCL shares may never be called, but the uncertainty associated with the risk is more than I am willing to incur.
If CHSCL is ever called, it will be the barometer that I use to potentially sell CHSCM and take the associated capital gain.
I would think CHSCP and CHSCO would be called before CHSCL, but perhaps they are contemplating redeeming all three of those issues and it may explain why CHSCN and CHSCM are performing better.
There’s a great write up from Tim from 2024 on these. It’s worth checking out. I didn’t dive in enough to see if the redemption price would actually be $25 or at a higher level due to call date extensions. More digging may be prudent if buying above call price + accrued dividends.
https://innovativeincomeinvestor.com/will-chs-preferred-holders-get-whacked/
And many are still are not expecting CHSCP to be called. It’s at 27.93 today.
I’m content with CHSCM &CHSCN for 0.5% less.
Dan,
Read this
https://www.chsinc.com/en/news/2025/01/02/chs-and-west-central-sale-closes
Tim, might be interested in this also.
Earlier in the week, I mentioned an SA article warning that ALL-B likely peaked recently, and it would be a good time to exit as it is falling. Has dropped almost 2% in a few days, ~1% today- off 26¢ and falling.
I might re-enter if it gets closer to par.
MSBI had a bad earnings report on Jan 23, which hit the common as well as MSBIP (7.75% non-cum, perp preferred, first call/reset 2027). MSBIP had been par hugging, now under 23.
good comment…excellent articles on S/A by Jeremy Lakosh recommending avoiding common and preferred going back to march 2024
good comment…excellent articles on S/A by Jeremy Lakosh recommending avoiding common and preferred going back to march 2024..the msbip/vclt pair is trading near bottom of range in place since september 2023
Anyone else having trouble logging into Fidelity? I’ve tried 3 times and can’t get in. I would have posted this on the Broker page but this seems important as I have never had this problem before.
Yes . but successfully logged in now.
Thanks Bigbear, I finally got in and I called them.
I got the usual responses, they have been upgrading, and there is a glitch they are having trouble figuring out. He asked if I had ATT service and suggested if I turn off the wireless and turn it back on it might help or just use the mobile date ( phone) I don’t do banking or my finances on my phone due to paranoia about security on mobile devices.
They sometimes have a weird glitch that you can workaround if you type in manually instead of using autofill.
Thanks Bear, I do use auto fill
I have no problems
YES… unable to log into Fido. Spent 1/2 hour on phone. They did this/that/whatever… NO GO!! Now they say I must wait until at least tomorrow to ‘try again’. Unacceptable; but, have been w/Fido for ~40 years. Performance deteriorating. Takes 1/2+ hour to exercise rights, tender shares, etc.
SAD!!!
I read elsewhere that FIDELITY has had a massive increase in AUM which means a large increase in customers; That would account for slower reaction times to requests.
Howard, I am more concerned with all brokers about the attacks on customers accounts. I think Fidelity has had more than its share and may be part of the reason for the limits on low volume BB’s and stocks. The reason they gave me about glitches related to upgrades in their system seems understandable.
The 1.5 billion hack by North Korea of a Meme coin trading clearance house gives you pause. Note, I don’t think N. Korea denied it.
If backers of digital currency admit that the system isn’t safe and can’t be backed by a government no one is going to trust digital currency. This is why I don’t want to see governments get in the digital currency business. Also why I don’t want to see brokerages like Fido getting into it.
CpN …Citigroup Cap trust ….. Qtr Fltr …. just reset ……
Have been in long time, and like.
Low on Wed mkt @ $30.05 … Now @ $30.28.
Any current holders comments. Thnx
KRP down on earnings. Dividend from 41 to 40 cents gives a CY of 10.5% at 15.2.
Rock, I have it up on my screen all day. I do not own it currently, I trade it as I am wary of oil explorers. A lot of investors don’t understand KRP pays a variable rate based off the last 3 months and other factors like if it buys out other mineral rights held by another company and pays the owners in shares then there are more shares to spread the profits around. Fracking requires more acreage as the oil production declines to keep replacing or growing production. Even with hedging prices to lock in the price they get there is a risk. There is talk in the market of making deals with Russia and Iran which could flood the market by driving down the price of oil.
I write this from experience and to let other readers know they need to stay on top of any news that might affect the price of this stock.
There are some long time holders of this stock that probably got in below 14 or 15.00 a share and are ok with the stock price going like a roller coaster. If you can’t stand these price changes or are not a trader you or don’t have a good entry price you might not want to consider this.
They made an acquisition and to pay for it diluted the shareholders with 10 million new shares. All the while knowing they were going to blow up the 4th quarter earnings report. Then they reduced the payout, although on more shares outstanding. Share price is at a 52-week low. CEO says 2024 was a great year and Texas Capital, part of the shills that peddled the new shares, says a fantasy $24 price target. A bunch of BS in my humble opinion.
Rocky, I don’t count any income coming from the NG. The commodity is so plentiful and abundant it’s hard to get more than $2.00 a million at the well head then the traders are making $4.00 a million BTU and the end user is paying $4.00 a gallon. Someone is making money but it’s not the producer. So that leaves the profit on the oil.
Kimbell Royalty Partners press release (NYSE:KRP): Q4 EPS of -$0.48 may not be comparable to consensus of $0.18. (analysts were calling for this average)
There was a non-cash ceiling test impairment expense of $56.2 million recorded during the quarter, primarily related to the decline in commodity prices.
Revenue of $66.72M (-32.7% Y/Y) misses by $12.6M.
I don’t know how anyone could trust the management at KRP.
Rocky the people in charge have been in the business a long time and probably been hardhats at some point in their life. I just think there are too many moving parts that they can’t control. I ran across a comment by Bea where she posted a link saying property bought in Nov. would be counted towards the production for that qtr. Yet could be production from that purchase hasn’t been what they thought or were led to believe. Then they increased the number of shares outstanding. You also have the price of oil from Oct, Nov. and Dec maybe being lower than expected. Payout was about 75% which seems low. They are not actually a Royalty trust but a (PTP) publicly traded partnership that elects to pay taxes.
I might be playing the devil’s advocate here, but personally I want a lower price entry point for a better cushion.
My understanding is that production from the latest purchase wasn’t counted in the latest quarter results. Also worth mentioning that it is very tax friendly distribution – a lot of it qualify as RoC. In fact, based on today’s conference call, 100% of the latest distribution is RoC.
Sorry, but this is clearly stated in the closing presser: The purchase price of the Acquisition was funded through a combination of an underwritten public offering of common units and borrowings under its revolving credit facility. Kimbell is entitled to all cash flow from production attributable to the Acquired Assets since October 1, 2024.
Plus, who cares if the next distribution is RoC when you just wiped out 5% of shareholder value in about 24 hours?
Victor, You are correct about the property and leaseholds they added in Jan. that will be on the next qtr’s divided. You need to understand KRP pays from the past 3 quarters as Rocky pointed out. You need to understand the payouts for this stock if you invest in it.
As a suggestion, keep track of oil prices from Jan to the end of March then compare that to the prices from the 1st of Oct to end of Dec.
This method is kind of a close way to estimate what it will be.
I bot IMPPP 8.75 cumulative perpetual at 24.91 as the impp/vclt pair and the absolute price are testing the 200 dma’s which have not been breached since december 2023…good article on S/A
Imperial Petroleum Series A Preferreds: Solid, But Not A Bargain Anymore – Hold
Sep. 14, 2024 4:35 AM ETImperial Petroleum Inc. 8.75% CUM PFD A (IMPPP) StockIMPP, IMPPP
Henrik Alex
Thanks for the suggestion. But it is a no for me. A micro cap (my ceo’s annual salary and stock perks is equiv to their market cap), illiquid trades, too much short interest, etc. It was a $100 common stock and is now a couple dollars and descending.
good comment .. short interest is about 16% of the float.. I liquidated after further review
Been in the IMPPP for more than three years. The company has solid financials: cash on the BS is 3x the Market Cap, 2024 Profit $70m vs Market Cap of $77m and zero debt, and they are still (Q4/2024) profitable despite tanker rates dropping.
The short interest in the company shares reflects the current tanker market conditions, not the company’s creditworthiness.
My 2cts and DYODD
Costamare Inc. (CMRE) today announced its intent to spin-off the Company’s dry bulk business into a standalone company, Costamare Bulkers Holdings Limited…
https://www.globenewswire.com/news-release/2025/02/27/3033664/0/en/Costamare-Inc-Announces-Spin-Off-of-Its-Dry-Bulk-Business.html
Apologies if duplicate post.. I posted a link in my prior post so I assume it got flagged by Tim’s security.
NEW YORK–(BUSINESS WIRE)– Rithm Capital Corp. (NYSE: RITM; “ Rithm Capital ” or the “ Company ”) announced today that it will redeem $50,000,000, or 2,000,000 shares, of the Company’s outstanding 6,210,000 shares of 7.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “ Series A Shares ”) at a redemption price equal to $25.00 per Series A Share in cash, plus $0.274091 per Series A Share of accumulated and unpaid distributions thereon to, but not including, the redemption date of March 28, 2025 (the “ Redemption ”). The Series A Shares trade under the ticker symbol “RITM PR A.”
A Notice of Partial Redemption for the Series A Shares describing the Redemption procedures was sent to holders of the Series A Shares on February 26, 2025. Additional information related to the Redemption procedures, including copies of the Notice of Partial Redemption, may be obtained from Equiniti Trust Company, LLC by calling 718-921-8317.
Maine, Z posted it on the litter box page
You have to wonder why just a partial redemption and not a full…. Coupon ought to be around 10.42%, right? You would have to think the rationale is that’s all the cash they want to utilize for the purpose at this time…. So if nothing else, I guess that means CIM-B is safe from call for now and probably thru to the end of the year and the rest of A will not be called thru its next coupon payment date at least.
I bot a small position on A this AM at 25.23 and own B
CIM-B correlates with Rithm? Or RITM-B ?
CIM-B is in the same sector as RITM-B. CIM may be a little more risky so preferreds pay slightly higher and perhaps have lower call risk,. Not exactly the same investment strategy but Yes they are somewhat similar.
2wr, did you mean “RITM-B” when you wrote “CIM-B”?
“… So if nothing else, I guess that means CIM-B is safe from call for now and probably thru to the end of the year and the rest of A will not be called thru its next coupon payment date at least.”
I thought you meant “RITM-B” and made a typo, but Gary asked if CIM-B correlated with RITM-B.
Yes, mbg Thanks for pointing out my faux pas…. I meant all along RITM-B and never caught my mistake in our 10 minute review period….
Was hearten to see the call, but also wondering why not a full call? The common stock trades at a ~8.4% yield. They also have a Senior Unsecured Bond due in 2029 that trades, best I can tell, at ~7.4% yield. https://www.tradingview.com/symbols/FINRA-RTCC5781735/
This bond was originally rated B- by S&P. https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3133903
I have been holding a small position in RITM-D, a 7.00% Fixed-Rate Reset Series D Cumulative Redeemable Preferred Stock for sometime. It is callable 11/15/26 or resets on the same date at the 5 year treasury plus a fixed spread of 6.223%. At current prices I should earn ~7.25%, and a bit of a capital gain, if called.
For holders of RZB and/or RZC baby bonds.
Moody’s affirmed their Baa2 ratings, but changed the outlook on RGA from stable to negative.
https://www.moodys.com/research/null-Moodys-Ratings-affirms-RGAs-ratings-outlook-changed-to-negative-Rating-Action–PR_1000010950?cid=GAR9PTU7VKT2671&emailToken=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJVc2VySWQiOiJkYzVkYjczMC01NTBiLTQ3ZjctYjhjZi05NzY2ZjAxZmU0MzMiLCJEb2NJZCI6IlBSXzEwMDAwMTA5NTAiLCJjcmVhdGlvbkRhdGUiOiIyMDI1LTAyLTI1VDEwOjM1OjAyLjM1NjE0NTUtMDU6MDAiLCJleHAiOjE3NDA3NTY5MDIsIlVzZXJOYW1lIjoiY3BhbWlrZW1iYUB5YWhvby5jb20iLCJVc2VyVHlwZSI6IjIifQ.8x4_JawajJYC3LqBur5KjYsH9IkOO6joNp61uWQahz8#0572b961dceedc105347b4ba6f05cd6f
Interesting read for sure. I read the entire article. Sometimes a person says to themselves is anything out there really a safe investment??? I own a pretty large amount of the RZC.
I am not currently interested in long dated bonds, but this one from FHLB has 3 years of call protection. FHLB cusip# 3130B5CJ5…paying 5.5%…due 03/10/2045…1st call 03/10/2028…pays semi-annual.
The best to you all…Beware the Ides of March….
Tks.vanguard has none to sell.
Is this cusip correct seems to be missing a digit? tia sc
sc4,
It’s correct. At Fido, the CUSIP pulled up the bond. 3130B5CJ5
CUSIP has 9 characters, which I believe is the norm.
FEDERAL HOME LOAN BANKS BOND 5.50000% 03/10/2045 5.500 03/10/2045 03/10/2028 AAA AA+
Thanks.I counted eight digits-my mistake. sc4
Wesco intends to use the net proceeds from this Offering to redeem all of its outstanding 10.625% Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”) and all of the related depositary shares representing fractional interests in the Series A Preferred Stock (the “Series A Depositary Shares”) on June 22, 2025
https://finance.yahoo.com/news/wesco-announces-commencement-private-offering-130000019.html
As an aside, not to you specifically but to III’ers in general, show me any other bond calculator other than Fido’s where you can enter all the parameters necessary on WCC-A to accurately calculate YTC now.
https://www.quantwolf.com/calculators/bondyieldcalc.html
have you tried this one?
Sure. IMHO, it’s the second best calculator. But in the case of WCC-A the call date does not coincide with a normal quarterly payment date so if you put in what you do in quantwolf, it will not come up with the correct amount to be paid on the call date but you can in Fido. Granted, in this situation the difference is not great but it will be accurate with Fido and only an approximate on quantwolf
Thanks
Am i doing this right?
Bond Yield to Maturity Calculator
Price $ 25.78
dirty
Face Value $ 25
Coupon Rate % 10.625
Payments per Year 4
Settlement Date Feb 25 2025
Maturity Date Jun 22 2025
Yield to Maturity % 6.779
Annual Equivalent Rate % 6.953
Accrued Interest $ 0.48
Takes into account interest I get from january 1 through today?
If not, should I back that out from the $25.78?
I would also get a short term capital loss of about .78 a share
WCC-A pays quarterly on 3/31, 6/30, 9/30 & 12/31. When you put 6/22 in as maturity, the calculator assumes it pays quarterly on 3/22/6/22/9/22 and 12/22. so you’ll come up with you getting paid more at maturity than you actually will receive…. With fido, you can dummy up a maturity date of 6/30/25 so that it calculates the right amount of accrued and payment at maturity. Then you can put in 6/22/2025 as the call date and now figure YTC…. That way you will get the right amounts of div into the equation to know what you’ll get on call date. The calculator will then figure both YTM and YTC. Be sure to use the YTC number… As mentioned, in this example, the differences are not great and quantwolf might be good enough for jazz, but Fido can give you the more accurate YTC. I also don’t think the very basic calculator Tim has graciously placed on the site has any way to handle this circumstance
This seems like a good test case. Can you give more specifics on what you get for a number and how you exactly you got it? Here’s what I just put into https://digital.fidelity.com/prgw/digital/priceyieldcalc/:
Calculate: Yield
Bond Type: Corporate
Price: 25.78 (sticking with what P used above for consistency)
Annual Coupon Rate: 10.625%
Coupon Frequency: Quarterly
Maturity Date: 12/31/2025 (arbitrary past call but on payment date)
Call Date: 6/22/2025
Call Price: 25
Par Value: 25
Quantity: 1
Settlement Date: Feb 26 2025
It tells me:
Accrued Interest: $ 0.413
Total Cost: $ 26.19
Yield to Maturity: 6.786 % (arbitrary because I chose a fake maturity)
Yield to Call: 0.915 %
Then what do you do from here? It’s assuming that you are paying $25.78 + $0.41 interest, and is calculating yield based on that number. Do you deduct the accrued interest from the price and re-enter with a fake price so you get Total Cost of $25.78? Or something else?
You got it…….. I get the same numbers you do, but yes, you then have to take the final step of subtracting the amount of accrued of .413 that the calculator assumes you pay out but you are owed it at call instead and plug in 25.78-.413 or 25.367 and recalculate… You then come up with YTC = 5.978% for settlement 2/26.
BTW, if you’re looking at this kind of thing right, IMHO ANG-B is a better buy
2WR:
I just use Excel for that kind of thing. XIRR is your friend.
XIRR is identical to what Fido’s calculator will come up with provided identical input is used in both….. It’s just whichever you’re more comfortable with….. me, I’m still just not a spreadsheet kind of guy so I find the calculator easier to deal with.
I wouldn’t be so fast to assume it’s identical. I just tried it with “=xirr({-25.78,0.66,25.61}, {to_date(“2/26/25”),to_date(“3/31/25”),to_date(“6/22/25″)})” and got 6.22%. The first -25.78 is the price we pay on settlement 2/26, the .66 is the dividend we receive on 3/31, and the 25.61 is the face value plus partial accrued as of 6/22 (25 + .92 * .66).
Why don’t they agree exactly? I don’t know. Maybe I’ve got some rounding errors in the dividend amounts? Possible, but the difference seems a little large for that. Maybe I messed up in calculating the partial dividend? Also possible and would explain it.
Or maybe the Fidelity calculator is using a different method for compounding? I’ve seen claims that the standard is for bond calculators to assume semi-annual compounding, but don’t know if this is true. If so, I think the error would be in the right direction and around this magnitude.
Or maybe the black box that is Fidelity’s bond calculator is figuring a slightly different dividend. Is there some way to figure out exactly what payments and timings it’s using for its calculations? I’m not saying the Fidelity one is wrong, but I find the opacity difficult to accept.
AS I’ve said, I have no direct experience with XIRR, However, in the past I spent a good amount of time via email corresponding back and forth with an old III’er whom I miss on here these days who is expert on it. We went back and forth more than a few times making sure that we were both entering identical data in the proper boxes of the two ways… Once we confirmed we were both 100% agreed on Input In, we got exactly the same Input Out. To do this publicly on this forum is too much drudgery and minutiae for this forum…
Makes sense. This was useful to me because it pointed out that my XIRR based spreadsheet in-progress does not yet correctly handle situations where a call happens between payment dates, so I needed to make up a formula by hand.
In general, is it safe to assume that if a preferred or BB is called at something other than a payment date that a partial payment will always be added to the face value at redemption? And should this should be calculated based on a 360 day year or 365 or something else?
I suppose there are always exceptions but I’d say it’s safe to say the former and it’s safe enough to also say that latter, but always best to check the prospectus… There are more exception to the latter than the former but still few and far in between.
So it sounds like this will be a 144A offering. Can someone explain to me who gets to invest in these and what the rules are? I have kind of a nebulous idea of the process, but I have seen some of these leak out into the general public over the years and have even owned some, while others are completely unavailable. How does all of that happen?
Accredited investors get to buy it. So someone like losingtrader might be able to since he has a better broker relationship. If I called my broker.. even though an account may have enough money in it to accomplish the rule to be accredited.. they will just LOL.. and say find a place that you pay enough for them to bother.
As for leaking out. I imagine you have to analyze each situation on a case by case basis for the reason why it happened. Not many out there really that I recall.
AFAIK…144a cant be bought by regular retail investors unless there is a separate Reg S issue with a distinct cusip. This has been my experience on IBKR. And yes, I am retail, loud and proud! altho i used to be employed by instl..
Maine,
Thank you for the correction. So you have to be a QIB. Qualified Institutional Buyer with a 100 million plus.
So say a brokerage like Merrill buys a bunch. Do they just sit on them or do they then turn around and sell them to their extremely high net worth clients as a perk? Or will they end up in mutual funds or some combination of all of the above?
I guess this is all academic for most of us if $100 million is the ante to get in the game. But it is useful to know what one’s limitations are and how the other half lives.
fc,
Yes, I believe it’s 100 mill. I don’t have that kind of change laying around until I can yolo on something like GME options , haha.
I heard a bloomberg discussion yesterday which I agree with. The moderator was saying if you repeated everything Zuckerberg did to make Facebook but did it 3 months later you might have failed. So, following in someone’s footsteps with a start up doesn’t work. Still, I’m sure there are some things you could learn to avoid
> Accredited investors get to buy it.
No, 144A offerings are to “qualified institutional buyers” (QIBs) which require much much more capital ($50MM IIRC) than accredited investors.
RPTP incoming
https://www.sec.gov/Archives/edgar/data/1614806/000110465925016733/tm257300-1_424b5.htm
Any initial price talk?
Thanks J–just saw this one.
RPT is KIMCO now. RITH-C (RITHM) already exists, but is perpetual F-2-F.
Confused.
Sorry– meant the current symbol to be RITM-C. Not sure why they have to switch to the RPT when others are RITM.
Oh well.
Actually RITM and RPT are different companies. If I understand correctly, an RITM subsidiary is the external manager of RPT. RPTP is not another preferred of RITM, it’s a new preferred of RPT.
1. Rithm Capital Corp. (RITM) has RITM-A, B, C, and D preferreds.
2. Rithm Property Trust Inc. (RPT) has just common stock now. RPTP will be RPT’s first preferred offering.
Gary,
When Kimco bot RPT Realty, the “RPT” ticker symbol went away and RPT-D became KIM-N.
RPT is now the symbol for Rithm Property Trust, which used to be Great Ajax Corp.
https://finance.yahoo.com/quote/RPT/history/
Even QOnline has NRZ as the precursor (which I owned before becoming RITM or whatever). Ellington almost bought the old RPT.
Anyway you slice it, this can be confusing Matryoshka doll structuring.
thanks all-
Has anyone heard if there are plans for this issue to be called before it resets: Medallion Bank 8% PFD Callable MBNKP
I am holding for the potential of a near 11% yield.
Tim please note this issue is not actually floating yet. I believe in April.
Me too. Nothing is published about a call.
We may, at our option, redeem the shares of the Series F Preferred Stock (i) in whole or in part, from time to time, on any dividend payment date on or after the dividend payment date on April 1, 2025, or (ii) in whole but not in part at any time within 90 days following a “regulatory capital treatment event” (as defined under “Description of the Series F Preferred Stock—Redemption”). They also must give between 30 and 60 days notice. The first redemption date (and float date) is 1 April 2025, so they have about a week to choose to redeem this stock on the 1st of April. They can then redeem on any dividend date with the same 30 to 60 day notice. So, if they don’t give notice in the next week, we get at least one juicy dividend. It is possible that the issuer is hoping for SOFR to go down in the relatively near future and hopes to avoid call and undergoing the expense of issuing new debt.
This investment grade issue, BAA3/BBB- (Moody’s & SP ratings), has been moved from my Sandbox discussion for those interested. DYODD. It is from TransCanada Pipeline Strip, a subsidiary of TC Energy. It has a 7% coupon. Next call date 3/01/2030. Resets at 5YR CMT + 261.4BP. Cusip is 89352HBG3. Purchased at Schwab bond desk for $99.58
https://www.sec.gov/Archives/edgar/data/99070/000119312525030844/d905971dsuppl.htm
Steve, did you see my questions in the Litter box?
answered in sandbox
Thank for the show .. I paid 99.38 on IBKR
Thanks! Managed to snag this at $99.40 this morning in my IRA.
Tim. You need to create a daily rant page. Up to 200 comments per day at times and various musings. Somehow, the random thoughts simply keep making their way to the “Alert” page.
Tim’s Daily Rant Page:
Feeling the need to rant, rave, or just share your musings over your morning coffee? Welcome to Tim’s Daily Rant Page! This is your space to:
Vent: Got something on your mind? Let it out. Your frustrations are welcome here.
Discuss Politics: Debate and discuss the latest happenings in the political world.
Predict the Weather: Share your thoughts on what the weather’s up to – we all know how unpredictable it can be!
Free-Form Thoughts: Had an epiphany after that third cup of coffee? Type it here, no matter how random.
Whether it’s an intense discussion or a whimsical idea, this page is your canvas. So grab your favorite mug, pour yourself another cup, and let’s get chatting!
Mr C. perhaps change the title from the sandbox to the litter box page !
I would still advocate leaving politics out of it. This is one of the few safe spaces and if politics were to be included on a rant (litter box) page, I think it will degrade the overall site, because, as you can see, things like this end up on RIA page when Sandbox might have been a more appropriate place to post the original suggestion.
Or better yet, go to reddit for your rants and leave III as it is without all the extemporaneous BS.
Agreed, overall, that people ought to be a bit more selective about where they post their posts. This post included.
Mr Conservative, please give it a rest and lower your blood pressure, it’s the weekend for God’s sake!
I agree with Mr C. Yesterday’s posts here were particularly chatty. Just a little discipline please, folks.
how did a facebook post end up on our economic discussion:?
No politics- no good will come of it- no need for anger among commenters.
Nothing will get resolved.
Will US & Global Investors Demand More Interest to Buy US Debt??
US Debt Clock ~ 2/22/25, now halfway to 37T!
* US National Debt…36.5T = 323K per taxpayer = 107K per citizen
* US Federal Spending…7.0T
* US Federal Tax Receipts…5.0T
* US Federal Budget Deficit…2.0T (Annual)
* US Federal Spending By Category
^ Medicare…1.6T
^ Social Security…1.5T
^ Interest on US Debt…1.0T
^ Transfers to States (Medicaid, Chips, Educ., Roads)…1.0T
^ Defense…0.9T
^ Transfers to Individuals (SSI, EITC, Nutrition)…0.5T
^ Other…0.5T (Public Health, Vets, Banking, Transportation)
# Interest on US Debt now Exceeds our US Defense Budget
# China, Japan, UK dumped 81B of US Treasuries in a single month this past December 2024.
newbie—medicare, soc sec, debt & defense total $5T and they will not/can not be cut back. Cuts from everything else can’t save more than about $250M. How can there possibly be a significant income tax cut? This whole process is an academic exercise in denying the obvious. The deficit can will once again be kicked down the road (by any administration) until a gigantic financial crisis occurs. Perhaps international investors will require much higher interest rates on Treasury securities. Perhaps the US government will decide that the dollar will be devalued in a way that all issued Treasury debt will be redeemed at a certain percentage on the dollar. Something’s gotta happen and it’s not gonna be pretty. JM2C
Newbie; My question would be at this very monumental moment in time is just how much money could be saved regarding just “TWO THINGS”. How much could we save if we stopped sending money to all these foreign nations around the world of which some of them even hate America. And last how much money could be saved if we stopped spending money on everybody’s pet project and even stupid things. These last 30 days have really opened everybody’s eyes to the amounts involved and it goes well into the $Billions of fraud, waste, & total corruption. So shameful these people.
Regarding the CHSC preferreds, CHSCP has an 8% coupon and trades at $28.28 for a 7.05% current yield. If anything was gong to be called, strictly from a financial basis, wouldn’t it be this one? The rumor has always been that the farmers own this one and thus it was somehow protected from being called. Could the firm call the lower coupon issues and leave this one outstanding? Maybe they would call all three >7% coupon issues at the same time. Anyway, I own a ton of the CHSCL & CHSCN and I’m just going to sit tight.
Whidbey; I too pray that they don’t call these issues. Over the last 3+ years I have accumulated now 18,780 shares of CHSCL. It is “currently” so damn hard to find anything of decent quality & value right now so it would be frustrating to lose this fantastic company. I scroll thru Schwabs inventory probably twice or even 3 times a week. Nothing of decent value, including the new issues they continually keep getting. Really very Long Term paper can get you a 5.70% or so.
Also regarding the CHSC preferreds. Have there been other CHSC preferred issues that were previously called? I’m assuming there have been since the issues I see references to are L,N and P. That’s aways down the alphabet.
It looks like (based upon the LIBOR problem) that all issues are de facto fixed rate. Tim had a good article I found when googling for this and the dividends that have been paid by the reset issues are consistent with fixed rate. It doesn’t seem like they switched to SOFR.
Just my opinion, I think they would be logical if they called in this order:
CHSCP is 8% fixed
CHSCO is 7.75% fixed
CHSCL is 7.5% fixed
CHSCN 7.1% and then LIBOR plus a spread of 4.298% not to exceed 8% but really 7.1%
CHSCM 6.75% and then LIBOR plus a spread of 4.155% not to exceed 8% but really just 6.75%
https://innovativeincomeinvestor.com/chs-reset-preferreds/
Yield,
In January 2024, the company announced that CHSCN (Series 2) and CHSCM (Series 3) will remain fixed. Found this in their 10-Q, filed 1/10/2024 (page 36):
ITEM 5. OTHER INFORMATION
On January 2, 2024, per the terms of our Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 and Series 3, and the Adjustable Interest Rate (LIBOR) Act, the stated rates of 7.10% and 6.75%, respectively, were fixed at 7.10% and 6.75% (the “Fixed Rates”), respectively. We will pay dividends on Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 after March 31, 2024, and on Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 after September 30, 2024, at the Fixed Rates until they are redeemed.
So, if I think the company is playing fast and loose with the interpretation , taking into account the LIBOR Act, perhaps I should ask CFPB to intervene?
Yes…. that’s sort of a joke !
A joke indeed, given that the current administration is shooting the CFPB in the head. No this is not a political statement, just calling the facts facts: all work ordered halted, staff fired, lease cancelled on headquarters.
bought a little CHSCN already owned some so this gives me a full position.
Charles M; Iam beginning to wonder if they are going to call any of these issues. As I suspect you know their CHSCL (which I own in size) is now past the call date. They don’t seem to be in any hurry. I would “guess” that your buy of CHSCN will also be safe as it was “callable on March 31st, 2024”. I see it closed on friday at $25.42 with over 15,000 Volume. I noticed on Quantum they had a line drawn thru a sentence that spoke about the possible reset rate. When I see these new bond issues coming out in size and no one of them worth buying something like this looks pretty darn good. I own a ton+ of their CHSCL so just have to decide if I feel comfortable with even more.
Chuck, I sold EFSCP that I had been getting a yield on cost of 7.4% it was a 5% perpetual non cumulative and I had a capital gain that I locked in. The CHSCN is giving me almost 7% on cost and 7.1% with the upcoming dividend factored in. It is cumulative and as you say it is past first call. If it gets called. I will have to find another rock to hide under.
I have been reading too much liberal propaganda and my gut feeling is telling me something could break in the economy so not sure I am making the safest bet by backing the farmer.
Look at the chart. Prior to Sept 30th this stock would rise into the dividend date then drop. Now the chart is inverse. It falls going into the dividend date then rises after the dividend. Almost like investors are breathing a sigh of relief it survived getting called and are buying pushing the price back up. If this herd theory holds, I will see CHSCN go lower and have to buy another tranche to follow it down and go overweight then hopefully lighten up after I collect the dividend. This means I am trying to look out about 45 to 60 days with my cracked and cloudy crystal ball. Not so sure this is the best idea playing in the water with the waves being kicked up by tariffs.
Charles M. THANK YOU for your very nice reply. I sometimes feel that YOU & I actually have alot in common. Maybe the only difference is I just simply do not trade “in & out” of these preferreds. I just buy em & hold em–LOL. What part of Calif. do you live in??? I live in beautiful sunny all year round Omaha, Nebraska—LOL. PS Just 2 days ago it was a minus 35 windchill index here. When I got up this morning at 3:05am it was 10 degrees.
Chuck, I think I said this before. I live in the Sonoma whine country and enjoy being close to a city that I can get everything I need. It used to be rural but the mountain has come to Mohammad. With the city folk moving in around me I have to be a little more careful of people complaining about things they don’t know anything about. I live along a major road and yesterday I had a ewe die trying to give birth. So I lost the possible twins and the mother. Spent the day hiring some Hispanics ( yes they are still around and not hiding from ICE) to help me drag a 250# ewe from the field and load in my truck so I could take it to the county disposal. Had to pull it out myself to drop in the front end loader. Such is the life of the hobby farmer. At 68 I’m starting to get too old for this stuff.
Charles,
Your story reminded me of something that happened to me back in 1990. We had a horse and a pony as pets and my daughter’s ageing pony died one hot summer day in PA. Called a service to dispose of it and scheduled the deposal but my daughter out of concern called back to ask what will become of her pet and they said dog meat.
Well, that killed that idea and at the time I was working on a construction project at an animal research center and knew the director. I asked what they do with all their animals that pass away. He said we have an incinerator. So, once he heard of my problem, he said bring it in and we will take care of it. Thinking about that I asked how big the door to the incinerator was and his answer made it clear the pony would not fit. But his suggestion was to chain saw it into pieces. That ended that idea, so I loaded it on my truck and hauled it up to my rural property and gave the poor thing a proper burial cross and all.
Yeah Jaberstein times change. The dad of my friend in college had 20 acres in downtown Cotati and had 5 or 6 steers on it. When one died he had a backhoe he would dig a hole and just bury it on the property. County back then was mostly dairy, apple farms and chicken ranches. They boasted they were the egg capitol of the world.
Charles,
Why is chicken cheap, but eggs expensive?
Better: Why are egg whites on sale?
Lt, I like your posts! But I’m going to move over to the kitty litter page
RITM-C is past the call date, either Feb 15 or Feb 18, and floating at 3mL + 4.969%, which is about 9.56%. Last 24.87, CY 9.6%.
RITM reported on Feb 6 and price is up.
Is there any assurance they will replace Libor with SOFA???
Jack,
They said (in their 10-K, filed 3 days ago) they’ll use the fallback language in RITM-C’s prospectus. To me, the fallback language says they’ll use SOFR.
10-K, page 101:
“… and from and including February 15, 2025, with respect to holders of our Series C, at a floating rate per annum which is determined pursuant to the USD-LIBOR cessation fallback language in the Certificate of Designations for our Series C …”
The fallback language, page S-71 in the prospectus:
“Notwithstanding the foregoing, if we determine on the relevant Dividend Determination Date that LIBOR has been discontinued, then we will appoint a Calculation Agent and the Calculation Agent will consult with an investment bank of national standing to determine whether there is an industry accepted substitute or successor base rate to Three-Month LIBOR Rate. If, after such consultation, the Calculation Agent determines that there is an industry accepted substitute or successor base rate, the Calculation Agent shall use such substitute or successor base rate.”
To me, this is pretty close to an assurance without actually announcing that’s what they’ll do.
Thanks, I missed that.
The Series A and B switched to floating last year and for those deals they now reset using SOFR
I liquidated abr/prf at 21.94 on back of 12% drop in stock (ABR) and bearish article published on S/A by Harrison Schwartz on 1/28
Arbor Realty: Short Opportunity As Southern U.S. Housing Glut Forms
additionally..abr.prf/sjnk pair has gone from 2 sigma cheap in august to 2 sigma rich in january (1yr horizon) and seems to have rolled over
I bot mfao at 25.10 (8.7 ytc 8/15/2026) as mfao/sjnk pair has gone from 2 sigma rich in mid january near 1 sigma cheap and yearly low now.. the price based pair has seen mfao underperform solely due to the differnce in distribution rates (9 vs 7)..good article on Jeremy LaKosh on S/A
I have some of that, it’s slightly lower div than their peers but also slightly less risky, 9% is a nice return. Not many trading opps for me since their perpetual is paying a lower rate but I might buy some simply for the dividend capture next week.
PNFPP
Pinnacle Financial Partners
Perpetual Fixed Rate 6.75%
Callable in 7 months
Trading just under par right now
PRH
Prudential Financial, Inc. 5.950%
Junior Subordinated Notes due 9/1/2062
Trading under par
Big seller of NEWTZ @ $24.67 if anyone is interested in picking a short term maturing Notes (2/1/2026).Not a bad parking place for a yr. I haven’t yet picked any up, but I will most likely be buying some.
pig
Thanks re NEWTZ
Interesting that nanny FIDO let me buy 200.
pig-
I’ve got the YTM for NEWTZ at 7.3% bought at 24.65 today. One might wonder why it’s not par hugging with such a favorable outcome in less than a year?
I looked at the chart of WTFCP to see what it was doing in July 2024. It hit a low of 24.53 nine days after the 7/1/24 ex-date and never looked back. NEWTZ hit 24.41 sixteen days after the 1/15/25 ex-date. Is NEWTZ on the same path as WTFCP? Among the differences between the two are the coupons: WTFCP 6.875%, NEWTZ 5.5%.
I have a warm, fuzzy feeling for WTFC that I don’t have for NEWT, which reports on Feb 26. If I felt confident in NEWTZ, I might want to move some of my WTFCP/M stash to NEWTZ. Right now, I’m treating WTFCP/M as a cash reserve that I will spend like SGOV if needed, but I can feel the July 15 call dates approaching.
I bought some NEWTZ. Turns out I sold some at 25 on Jan 2.
Rocks, Yes I also have WTFCP, and also got in on some NEWTZ this afternoon. Will sort of just let them run out the clock.
I still own a boatload of NEWTZ despite my long standing never answered questions posed to NEWT about their treatment on NEWTZ and L upon conversion from a BDC to bank. Old time III’ers know all about that however, regarding your comparison to WTFCP, of course WTFC doesn’t have outstanding current coupon alternatives open for comparative purpose for someone looking to invest with them as NEWT and NEWTZ investors have… I suspect that plus the fact that although both are short term, Z is a lot longer than WTFCP….. Then again, NEWT has the ‘tweener out there as well in NEWTI which is callable on 9/1/25 and has a ’28 maturity… On a YTC basis vs NEWTZ’s YTM, that makes NEWTZ look relatively cheap. Interesting to ponder whether or not NEWT might want to call NEWTI before NEWTZ matures… hadn’t really considered that alternative..
And- NEWTH
good comment.. fwiw..newtg/sjnk pair trading new fair value was 2 sigma cheap in september and 2 sigma rich in december
I bot FTAIM 9.5 FTF 5YR +5.15 6/15/2028 at 26.26(25.86 stripped) ytc 8.3 on back of audit committee rebuttal of Muddy Waters short seller report.. The FTAIM/SJNK pair was near 3 sigma cheap in mid January and is now near 1 sigma cheap (1yr horizon) good article on S/A recommending purchase of stock on 1/23 near 100
FTAI Aviation: Why I Believe The Stock Is Now A Strong Buy
Jan. 23, 2025 1:02 PM ETFTAI Aviation Ltd. (FTAI) StockAER, WLFC, AL, AIR, FTAI
Dhierin Bechai
Investing Group Leader
Does anyone know if anything has been written about DLNG-A being called in the near future? Thanks.
Oxford Lane Capital Corp.
% Notes due 2032
https://www.sec.gov/ix?doc=/Archives/edgar/data/1495222/000121390025015045/ea0231320-01_424b2.htm
Another senior BB from Oxford Lane. The most recent one was July’s OXLCI 8.75% (last 25.77).
https://innovativeincomeinvestor.com/security/oxford-lane-capital-corp-8-75-notes-due-2030/
“We intend to use the net proceeds from this offering to acquire investments in accordance with our investment objective and strategies described in this prospectus supplement and for general working capital purposes.”
Thanks J
TRTN with a new issue I’ve heard 7.625%. Their other two issues pay higher but slightly above par and callable. Acquired by Brookfield and spun off into a separate entity, they have a history of defaulting on troubled preferreds that way this one isn’t struggling now but know what you are getting into.
Recent article in SA on this one (TRTNF). Even handed presentation. Author also not
not keen on Brookfield.
How about replacing one of the columns on the baby bond spreadsheet with a yield to redemption calculation? The yields on some of the 2026 baby bonds like TPTA and FOSLL are very large (I own both) but it is a pain to go off and try to calculate them yourself. This is a more useful number than the current yield which is entirely dependent on the coupon.
Formulaically speaking the “current yield” is a much more simplistic, easy data point to denote as it is just simply a function of EOD close price vs. the coupon dollar amount.
Creating a dynamic functional tool that can handle a computation of the above in aggregate and conjunction with a separate variably changing market price/discount to par value is a heavier lift.
The Ellington Financial 6.75% baby bond is maturing.
Fido has the price as being $10 instead of $25 in the alert, but their alert prices are often wrong for some reason. They have also been valuing it at zero since it was bought out and I have been manually adjusting when I do my portfolio tracking.
I did really well on these given my entry price. It has been hard to redeploy cash for a while now so I have just been taking bigger positions in fewer issues. Not sure where this will go.
Scott – At 24.1, RCB has a YTM 9%+ and matures in 1.5 years. They are not as safe as Ellington but I have gotten comfortable with the credit. They recently issued a 9% baby bond that has been trading above par.
Why do you say that Ready Capital’s baby bonds are less safe than Ellington’s? I think CWMF on SA has it the other way, with RC’s issues being considered more safe than EFC’s.
It’s always been confusing to me to figure out which of these mREIT’s are safer than the others. What’s the right way to measure this? Are there standard lists that people use?
Also, I think RCD (the 9% BB you mention) is still trading under par if you account for accrued interest. It closed yesterday at $25.25 with 48 cents of accrued.
Nathan,
Just my 2 cents. Not speaking for Maine.
Ellington doesn’t have any baby bonds trading on an exchange. Only preferreds. My guess is CWMF considers RC baby bonds safer than EFC preferreds because baby bonds are higher in the cap stack.
If you’re a paid subscriber to his service, you can ask him about this and also how he measures company risk (and where to see his risk rating of each mREIT).
Did you get $0.48 accrued so far by taking the IPO Trade Date (12/3/24) as the day it began accruing?
It began accruing on Dec 10 (Settlement Date) and it accrues on the basis on twelve 30-day months, not the actual # of days in the quarter.
I calculate ~$0.41 cents accrued so far.
Dec = 30 days. So 21 days accrued in Dec (including Dec 10, that’s 21 days).
Jan = 30 days. 30 (Jan) + 21 (Dec) = 51 days.
Feb = 15 days so far. 51 + 15 = 66 days.
66/90 * $0.5625 quarterly interest payment = $0.4125
424B3 prospectus, filed 12/5/2024 (page S-7):
Interest rate
9.00% per year, accruing from, and including December 10, 2024 and will be payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year, beginning on March 15, 2025.
From the FWP:
Interest Rate: 9.00% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months
> My guess is CWMF considers RC baby bonds safer than EFC preferreds because baby bonds are higher in the cap stack.
I think it’s more than just that. I’m not currently subscribed, but I did the free trial last year. As of then, he had RC BB’s at a risk of 1, and the EFC preferreds at a risk of 2.5 (where higher numbers are riskier).
But maybe you are right. I was assuming a 1 point difference for BB and preferred (because there usually is a 1 grade difference for Moody’s/S&P) but I guess I don’t have any reason to believe this matches the scale he’s using.
> Did you get $0.48 accrued so far by taking the IPO Trade Date (12/3/24) as the day it began accruing?
First, I had forgotten that this was the first payment, so my dates might be indeed be off. But I think the main difference is that I’m using the ex-div date as the end of the period rather than the actual payment date. And instead of adding up the accrued from the beginning, I’m counting the days not yet accrued and then subtracting this from the quarterly amount.
I think this actually matches better to the “facts on the ground”, but I’m not sure. I’d welcome a longer conversation about how stripped price should actually be calculated for preferred and BB’s that trade “dirty”.
On the one hand, this is really making me think deeper about why I calculate yields the way I do. On the other hand, I may be making things more confusing (I have more thinking about this to do!). At the risk of doing that, here’s why I calculate stripped prices and yields (SY, YTC, YTM, YTW) two different ways, and why.
NEARING MATURITY OR A GOOD CHANCE OF BEING CALLED
When I’m considering buying something nearing its maturity or that has a good chance of being called soon, I use the ACTUAL accrual period (prior div pay date through the day before the upcoming div pay date). This is how divs are actually accrued by the companies. This way, I can calculate the ACTUAL amount of the final div , which is often a partial div, and it gives me the actual yields (stripped, YTC and YTW). If I calculated stripped prices and yields with the “the ex-date to ex-date” method, my 1st day of accruing would begin too soon. By the maturity/call date, I’d end up having accrued too many days. So I’d overestimate the final (partial) div amount and overstate the yields.
OTHERWISE
Otherwise, I do use the ex-date to ex-date. All else equal, on the ex-date the price falls by the div amount. On an ex-date I want 0 amount accumulated (i.e., clean price = dirty/stripped price) and I get that with the “ex-date to ex-date” way.
–> I did the free trial last year. As of then, he had RC BB’s at a risk of 1, and the EFC preferreds at a risk of 2.5 (where higher numbers are riskier).
RC BBs getting riskier but EFC’s preferreds staying the same fits with my guess that he thinks RC’s portfolio deteriorated more than EFC’s.
Mbg- your methodologies seem sound to me.
In regards to Colorado’s risk ratings, I can’t really get into that. Just a few thoughts:
mREITs can be complicated and very volatile. I find it’s best to understand them from a bottoms up perspective so I can have conviction to hold (or buy more) when they trade off too much. Said another way, I don’t rely on others ratings. I have the benefit of researching these companies over many years and have met w mgmt. not everyone has this benefit.. therefore many mreit investors can be panicky, creating opps for others. And if I were forced to use ratings from others, I would choose SK over Colorado… and last I looked, Colorado does the risk rating for the prefs/ baby bonds.
Capital structure only provides so much protection. I will often deem a pref as safer from a quality run company vs a bond from a more risky credit. Also, it really just depends on the specific cap structure of the issuer. RC doesn’t have many prefs (is it 1?) therefore the baby bonds don’t have as much protection below it.
Getting back to the safety of RC vs EFC from a credit view. I simply think that the EFC investment portfolio is a lot safer than RC. EFC has a mixed portfolio of various investments and they are mostly marked to market, meaning I can believe the valuations. RC is mostly comprised of multifamily loans, mostly bridge loans that are used to stabilize properties until they can be refinanced w cheaper Freddie debt. And while I don’t believe RC is committing fraud, the valuation and CECL reserve process is subjective and I do believe they have been slow rolling some losses. RC isn’t known for lending to the highest quality properties… many w hair on them that have encountered difficulties these last few years. RC also bought out one of the worst ever mREITs in broadmark.. that portfolio was full of garbage. And now RC is looking to buy out another (private) mreit w issues.. do I think RC will survive? Yes. Do I think RC common stock is undervalued? Yes. It just has many issues to work through before I can deem their portfolio as a similar risk profile to EFC.
Maine, thank you for your perspective on mREITs in general, RC in particular, and risk rankings by Colorado and SK.
I certainly benefit from it and I believe Nathan – as well as anyone else who reads it – can as well.
I concur with how you see the “cap stack” issue re bb’s and pfds – company risk is a major factor as well. Without researching any BKs, it wouldn’t surprise me to find out that in some BK’s bb holders got nothing. Cap stack order didn’t help.
fyi, RC has two pfds: RC-E 6.5% perpetual fixed and RC-C 6.25% convertible (formerly ANH-B before RC bot Anworth in 2021). I see the protection afforded RC’s baby bonds the same as you – the pfds offer not a lot of protection below.
Maine, mbg, Nathan Kurz, et al.
Another 2 cents. I was invested in RCB from a bird’s eye view until they recently issued RCD. I became concerned when looking at their last 10-Q, page 46, when I saw that they will hit a HUGE debt maturity wall in 2026, roughly 760 million out of 1.2 billion outstanding. About 350 million is secured ahead of RCD in the event of bankruptcy. I just figured I couldn’t afford to wait around and watch things go side-ways when they try refinance all that debt!
Risk is part of the game that’s why you get a higher dividend. REITs are so complex and opaque most of us shouldn’t even pretend to know the exact risk level. We read reviews and other ways to fake it. As long as it’s working for me I’ll keep doing it.
Maine, sitting here at breakfast with the wife eating out and something occurred to me. Since you seem to understand Reits and maybe mortgage Reits more than others, have you looked at AGM and looked to see what percentage of their loans they are holding is non performing? I feel a lot of investors assume these are backed informally by the US government but is that really true?
So just your thoughts on these 2 questions.
Hey Charles.. sorry I am a novice in terms of Farmer
Mac.. but I do own some… ha!
My take is that they have a conservative enough balance sheet and quasi support from the govt.. but would love to hear from others. My sense is there is default possibility but it would take a lot for that to occur, especially since the US is trying to maintain food independence.
https://www.farmermac.com/investors/investor-faqs/
I agree it has been a generational history to support the farmers with the added issuance of insurance. You wouldn’t be a farmer unless you loved the life and what you do. I also own some of the D & E and like I have said before, I like looking at all the angles, same as a game of chess. Look at Fannie Mae and Freddie Mac income investors held those for the safety and security. Same as Washington public power. All quasi government entities that people believed would be rescued if there was trouble.
Call me a worry wart, but I sleep lightly.
Maine: Thank you for your thoughts. You’ve got a lot more knowledge about the relative risks of their different portfolios than I do and I appreciate the insight.
mbg: Using different methods to calculate is one solution, but comes with obvious downsides. My current goal is to figure out a single formula I can use in Google Sheets that comes closest to approximating the actual IRR.
I’m currently calculating stripped price based on the last ex-div date. But as you point out, this causes increasingly large errors as you get close to call or maturity. My “homebrew” fix for this is to compensate by calculating the percentage of the remaining time that is after the last ex-div date, and then using this to artificially lower the coupon rate I put into the YIELD function.
I think this mostly works, but it’s certainly nonstandard. I’d love to discuss it with people who’ve thought more about the issues. It seems like this should be a solved problem. Since it doesn’t seem appropriate for Reader Alerts, I started a thread a few days ago on the “Flipping/Div Capture” page to see if I can get that discussion going: https://innovativeincomeinvestor.com/flipping-and-dividend-capture/
What would you think about a bond yield calculator that says the following?
“The calculator is intended to help you in making an informed decision about investing in bonds. When considering different bonds, yield and price are only two factors of many to consider (others being, for example, quality rating and term-to-maturity). Of course, as with any investment, your decision should take into account your personal investment objectives, needs, comfort with risk, and time horizon. Standard Securities Calculation Methods (Volume 1, 3rd Edition) , a publication of the Securities Industry Association, is used to calculate the Price/Yield. [We] are unaffiliated with the Securities Industry Association. While [We] believe the information provided by the Securities Industry Association to be current and accurate, [We] in no way warrants or guarantees the currency and accuracy of this information.”
Would you think that to be a potentially definitive way to calculate YTM and/or YTC once you know the ins and outs of how to use it properly?
…and which website or tool did you pull that nice footnote from ? Inquiring minds want to know !!!
Welcome, Mike.
Long suffering but inquiring III minds have heard my answer on this subject ad infinitum – https://digital.fidelity.com/prgw/digital/priceyieldcalc/
Click on the link at the top titled, “learn more about this calculator.”
> Would you think that to be a potentially definitive way to calculate YTM and/or YTC once you know the ins and outs of how to use it properly?
Feels like a loaded question!
I guess my answer would be that I’d presume it to be accurate for the exact task for which it is designed, but subject to a lot of interpretation when trying to use it for other purposes. In this case, I’d assume (barring implementation errors) that it would tell me correct yield and pricing for traditional bonds that trade clean, but that it probably isn’t the right tool for preferred stock and baby bonds that trade dirty.
Yes, you can mostly make it work by putting in the stripped price instead of the actual market price, but that just moves the question to how to correctly calculate the stripped price. And it’s not that useful to in the context of coming up with a formula I can use in Google Sheets to compare a list of stocks. If I want something definitive, I can already use XIRR and manually put in all the payment dates, but I haven’t figured out a way to automate this.
That said, I am very interested in your thoughts on how stripped price should be calculated to make it work correctly with this calculator. Does “Standard Securities Calculation Methods” address the differences for preferred stocks? I haven’t been able to find a copy online. I’ll try to keep the thread in Flipping/Div Capture active for a while, but I don’t want to take up too much of this thread with something that isn’t an alert.
Nathan – Play with it a bit… Although it’s designed primarily for typical bonds you’ll note that when you put in the necessary parameters, it’ll show you the amount of accrued, accrued in the case of the baby bond world that’s NOT included in the price as the calculator assumes it is…. So then all you have to do is subtract that amount of accrued they show you from your original price and recalculate to get the accurate YTM. Don’t forget to add that accrued back in though when you decide to put in a bid.
As an example, use NEWTZ 5.50% 2/1/26 @ 24.74, settlement 2/19. When putting in “quantity” use 1…. That way you will see the amount of accrued per bond.. In this case, in the upper right, you’ll see the calculator tells you the “accrued interest” is .069/share….. 24.74-.069 = 24.671…. Using 24.671 as your price, you get a YTM of 6.94%. That’s your YTM if you purchase today @ 24.74. You will also note that right next to the “accrued interest” box you’ll see the “total cost” box which shows you 24.74….
Does that help? As far as the “loaded question” aspect, that more comes into play when using the calculator for special circumstances such as when maturity (or call date) doesn’t coincide with a normal payment date…. That’s when you have to be comfortable on figuring out how to enter the parameters to come up with an accurate yield. I suppose, though, that that’s no different than what you have to do to set up your Google Sheets parameters correctly. I remain a Google Sheets IRR/XIRR virgin, so I can’t directly compare, however, I have done so with another III’r who is and once we determined collectively that we were entering identical parameters in the right boxes in the two, we came out with for all practical purposes, identical answers
Thanks, 2WR.
I was doing that same calculation on Fido about the time you posted, but forgot about the stripped price, and came up with 6.8+% at 24.7. Bought a few more shares.
CWMF has RC’s BB safer then EFC’s preferred but they have RC’s preferred the same risk level as EFC
RCB,RCD and RCC are all 1.5
RC-e as well as the EFC preferred are all 2.5’s
good comment.. market seems to have implied that EFC is “safer” than RC because when comparing stock price performance vs MORT over the last 3years EFC as outperformed whereas RC has significantly underperformed
Thank you for that. I owned some of the RCA before it matured so I will check and see how they are doing these days.
Just took a quick look and RC’s last quarterly earnings number was really bad.
When RCA matured I remember deciding not to invest any more with them but I don’t remember why and don’t have time to research it in depth. Whatever reason I had may not apply now, but I don’t generally like companies with negative earnings.
PartnerRE / PREJF dividend declaration filed with FINRA earlier today:
+++++
Daily List Date/Time 02/14/2025 10:31:21
Event Type Cash Dividend Regular
Daily List Event Code DA
Effective/Ex Date/Time 02/27/2025 00:00:00
Subject to Corporate Action
Offering Type No Restrictions
Forward Split Ratio
Reverse Split Ratio
Dividend Type Cash Dividend
Percentage 0
Cash Amount 0.304688
Declaration Date 02/13/2025 00:00:00
Record Date 02/27/2025 00:00:00
Payment Date 03/17/2025 00:00:00
+++++
https://otce.finra.org/otce/dailyList (scroll down or filter by symbol …)
Darn ESW3 I own some and was trying to steal more with a low ball bid. Guess that isn’t going to happen.