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Purchased another new issue bond today in Fido acct… JPMChase at 5.15% due 9/21/32 with 1st call on 3/21/2028 CUSIP# 48130CJL0.
New issue incoming
AFFILIATED MANAGERS GROUP, INC.
Junior Subordinated Notes due 2064
https://www.sec.gov/Archives/edgar/data/1004434/000119312524067461/d785129d424b3.htm
Schedule for Textainer preferred redemption is out.
Also on March 14, 2024, after the closing of the acquisition, Textainer issued a notice of redemption for all its (i) 7.000% Series A Cumulative Redeemable Perpetual Preference Shares (the “Series A Preference Shares”) and the corresponding redemption of each depositary share representing a 1/1000th interest in each such share, CUSIP 88314W204 (NYSE: TGH PRA) (the “Series A Depositary Shares”), and (ii) 6.250% Series B Cumulative Redeemable Perpetual Preference Shares (the “Series B Preference Shares” and, collectively with the Series A Preference Shares, the “Preference Shares”) and the corresponding redemption of each depositary share representing a 1/1000th interest in each such share, CUSIP 88314W303 (NYSE: TGH PRB) (the “Series B Depositary Shares”).
The redemption date for the Preference Shares and corresponding depositary shares will be April 15, 2024 (the “Redemption Date”). The redemption price for (i) each Series A Preference Shares will be $25,150.69 and (ii) each Series B Preference Share will be $25,134.55 (representing, in each case, $25,000 plus all accumulated and unpaid distributions to, but not including, the Redemption Date, whether or not declared). The corresponding depositary share redemption price will be (i) $25.15 per Series A Depositary Share and (ii) $25.13 per Series B Depositary Share (representing, in each case, $25.00 plus all accumulated and unpaid distributions to, but not including, the Redemption Date, whether or not declared).
Regular quarterly dividends on the Preference Shares and depositary shares are payable March 15, 2024, to each holder of record on March 1, 2024. No dividends on the Preference Shares and depositary shares will accrue on or after the Redemption Date, nor will any interest accrue on amounts held to pay the redemption price.
Following the redemption of the Preference Shares and depositary shares, Textainer will request that the NYSE delist the depositary shares.
Just to double check, are we entitled to the .13 and .15 cents if we buy today ?
FXM,
If you purchase today, you will receive $25.15 on 4/15.
You have missed the regular dividend (0.4375) as the ex date was 2/29.
Thank you . .13 x 12 = $1.56 annual. Decent for one month !
TGH Preferreds have been good to me and now I will have to find something else to replace them. Gilbert, thanks for posting.
Thanks J – just saw it.
A new bond purchase today. Royal Bank of Canada at 5.3% due 3/19/31 with 1st call on 3/19/27…CUSIP# 78014RTT7
7yr treasury 4.20 and it is non callable
I can’t find and UBS says the same and wrong CUSIP, HELP.
May 28th, 2024 ~ Securities settlement cycle for most broker-dealer transactions shifts from T+2 to T+1.
May be of interest to those who buy higher-yielding assets as work-arounds in brokerage accounts where the “official” settlement funds have significantly lower yields. JMO.
There has been a lot of interest on CD’s since the yields hit the golden number of 5.0%+. How many times have you heard something along the line of: “Just give me my 5% CD’s again and I will be buy them and not worry about stretching for yield in other areas.”
With that backdrop a few comments based on our recent CD experience. Some accounts have substantial >=50% allocations to CD’s. All of the CD’s were purchased in the secondary market, i.e. not when they were originally issued.
1) As others have noted, many CD’s are getting called early. In particular JP Morgan Chase has called a bluezillion of them. We hold callable JPM CD’s with coupons from 0.5% to 5.75% Coupons up to and including 5.3% have NOT been called so far. Coupons from 5.4% to 5.75% HAVE been called, but not in all cases. We have had CD’s from other banks called, but not as aggressively as JPM.
2) Bottom line on JPM is that you should assume in today’s interest rate environment, any coupon >= @ 5.35% WILL be called on its first call date. Obviously as the prevailing interest rates change, the call decision will also change.
3) At least one nameless, large brokerage, shows somewhat misleading data on called CD’s. They still show the original maturity date instead of saying the CD matures on the call date. Just make sure any secondary market CD you are buying has not already been called.
4) You occasionally can find outsized yields, say 5.5%+ with the assumption the CD WILL be called on its first call date. Usually these are in the 0 to 4 month range. Not likely to find a 5.5% CD’s with say a 1 year+ first call date.
5) For several years the majority of secondary market CD’s were issued by Goldman Sachs. Sometime in ~ the last year, JPM rules the roost and Goldman has fallen down to the middle of the pack. Not sure why.
MMFs today…
VUSXX…5.28%
GABXX…5.28%
VMRXX…5.26%
VMFXX…5.26%
SWVXX…5.19%
PRTXX…5.07%
PRRXX…5.05%
SNOXX…5.03%
SNSXX…5.03%
SPRXX…5.02%
SPAXX…4.96%
NuStar / Sunoco transaction ….. Any posters hold NSS , or the NS-A / B / C issues have comments as to issues being Called or refinanced. Thanks
I was out of NSS when the merger was announced. And largely gave up on it. But last week it dropped into 25.50s and I bought 1000 to reenter. Since it goes exD at end of this month at almost 77 cents why not. SU who is acquiring NS already has the money secured to redeem NSS and the preferreds so its just a matter of when the deal goes through. The regulatory approvals tend to drag since they take their sweet time so this could be a few more quarters. Sometimes they take longer than a year.
Relative unimportant SP Plus which basically owns parking lots had a buy out offer in early October. And just last month DOJ asked for a second request for more info. So even this thing is dragging out. At my reentry price point this will be a high yielding short duration play, and easily money good if/when redeemed.
so if you paid 25.50 and the dividend is .77 your cost basis would be 24.75 and you expect it to be redeemed at 25 at some in withing the next year earning 7.625 quarterly payout?
More or less…. Its showing 76.95 cents this quarter. Its a live floater but roughly 12% annualized. It gets redeemed when it does. If SU gets regulatory approval it will be redeemed very quickly after merger since they have secured the cash to redeem them. If something happens and its dragged out or doesnt occur it doesnt bother me as I have owned it so many times the past 10 years I cant keep track. Nothing totally ever goes to plan, I sold it earlier this year a bit below $27 and then watched it go way over and regreted selling. Then next thing you know it drops suddenly into mid $25 range after merger was announced so it came out ok that I did sell when I did.
Grid, can you confirm if NSS issues a 1099 or a K-1 ?
Tried to Google this but could not get a definitive answer.
Its debt, Inspy. Always treated as interest on your taxes.
thanks Grid.
so no issues holding NSS in an IRA or ROTH, then.
Absolutely not!
I have my Nss in an ira
Like so many on the board . . . Thanks Grid for the comments on so many & diverse topics. High Draft Pick !!!!
Your most welcome, Jim. Speaking of something I wasnt aware of, Alpha pointed out to me a perpetual that is below 5%. NTRSO is a perpetual trading at 4.98% being issued at a 4.7%. I dont care how strong the credit it is that is crazy. This was issued when 10 year was ~1.8% and now its over 4% and the perpetual is only 30 bps from issuance yield?
mjtroll, NSS has an adjustment of 6.734% plus 3 month term SOFR.
and the .26161 bps adjustment to the 3mo term SOFR, Grid.
mjtroll, this NuStar webpage displays both the floating rate and the floating coupon:
https://investor.nustarenergy.com/debt-information
Three‑Month SOFR +0.26161 +6.734 (payable quarterly in arrears).
Effective Period Annual Interest %
January 15, 2024 through April 15, 2024 12.31214
Grid I was sleeping like a Batik air pilot still holding that NTRSO. When the lights went on yesterday sold the lot at about a 3.75/share pick-up. As the batches were clearing kept wondering who the heck was buying that perpetual at a 4.92 yield.
NTRSO as a poster-child; current credit spreads have all the depth of a saucer – and rates may or may not drop, but like you not seeing any out-sized retracements to levels of most recent few years. Given those observations, am continuing to lock cap gains on about 3K shares/week mostly of the perp pfds.
Must be nice to still be able to sleep that soundly, Alpha…Im jealous of you and those 2 pilots sleeping ability!
tks..did not know it was a floater ..was is the formula for the floating rate?
I hold NS ; and the debt NSb NSc NSS ; they all issue K-1s , the debt is listed as Guaranteed Payment and transfers to int on the 1040B ;
added more NSb today at 25.22 ; the stripped price is 25.14 as am anticipating them all being called at the earliest possible time ;
this is not a given, but SUN has the funds to liquidate this expensive debt
NSprB and C issue K-1’s. NSS does not.
it pays interest (but has the dreaded ability to defer…)
https://www.sec.gov/Archives/edgar/data/1110805/000104746913000236/a2212471z424b5.htm
I bot CUBIPRF at 25.08 (stripped price 25) ..anecdotally the cubi/kre pair has seen CUBI outperform from january 2023 and is near all time high (outperformance)…this issue was on the laundry list but was sold at about the same price I bot it
Bloomberg article suggesting greater market volatility ahead
Potentially MUCH greater
https://www.bloomberg.com/news/articles/2024-03-10/the-short-volatility-trade-roars-back-on-wall-street
Westie I would actually welcome a little volatility.
The article you cite doesn’t say anything like that. It says investors in these funds expect a continuing lack of volatility.
“But we have seen cycles in the past like 2018 and 2020 where the short volatility trade grows until a big shock blows it up.”
SAY 25.01 today 3/8/24
TPTA down again this morning 3/8/24 to 15.5.
Any takers here? Gigantic spread right now of nearly 80 cents.
Has anyone else noticed the yield gap between GOODO and GOODN? GOODO trading at 7.50 current yield, GOODN is almost 1% lower. Have been picking some up today and yesterday, seems like a good deal.
Oh yeah, good example of many pref investors buy and hold. I like the credit, have been in and out of both many times, but am finding better rel value elsewhere.
GOODN is callable this year. GOODO not until 2026
Private I agree on the call dates, however, both GOODO and GOODN are 6.6% nominal yields. I don’t think GOODN will be called anytime soon due to the high-rate environment, they’ll most probably both remain outstanding for the foreseeable future. At 7.5% GOODO seems like great value.
I swapped N for O last week as well.
If you own ATH-E (cusip# 04686J507) check your dividend status. I own it in multiple accounts, including at Fidelity and they wrongly classify it as regular dividend.
I have held it over a year and called them twice – provided them with reference to specific pages in the SEC-GOV prospectus, QuantumOnline page, even screen-snapshot from my Son’s Schwab account showing it as qualified.! After 2 calls with multiple reps, was told to repeat all the proof via secure message and have no time frame as to when this would be even looked at, or resolved.
Anyone have a similar hard time with Fidelity mis-clasifying such preferreds dividends?
Are you calling to get it fixed on the 1099, or get it fixed when it pays?
Calling to get the ATH-E dividend fixed on the 1099 for sure. Decent sized position held most of 2023 (and half even now). Had bought it for the QDI treatment and pay the lower tax rate
I have the same problem at Fidelity with LNC-D, which should also be qualified but Fidelity treats it as ordinary income on the 1099. Also ATH-E.
Can people comment on the brokerage thread about this, so that people know if they may have a problem lurking with their 1099’s?
I guess we now have the two different securities with Fidelity, but I have to think other securities at other broker’s have the same issue.
Price action of NYCB is crazy right now
I made $2.50 a share on NYCB-A in the span of 11 minutes earlier.
I need a cigarette
Dang, I had an order in at 3.50 but looks like it won’t get filled
I missed out. I put in a bid of 10 bucks but got caught up in a meeting and could not pay attention. Oh well. Maybe it is for the best. The price could decline for other reasons over time and with more knowledge could be a safe play albeit a lower yield on price paid.
You can thank Steve Mnuchin and his $1 billion investment in NYCB.
Berkshire Hathaway/Buffett also made an offer to NYCB; instead NYCB went with firms that lined up to provide the infusion include Liberty Strategic Capital, a firm founded by Mnuchin (who served as the 77th United States Secretary of the Treasury) in 2021, as well as Hudson Bay Capital, Reverence Capital Partners and Citadel Global Equities.
They and some bank managers will purchase common and convertible-preferred stock, effectively taking control of the Hicksville, N.Y.-based financial company.
The deal also comes with a new change at the top. Former Comptroller of the Currency Joseph Otting will become NYCB’s new CEO, the third person to hold that title in just the last few weeks.
The transaction is scheduled to close by March 11 and is still subject to regulatory approvals.
Stay tuned, there will definitely be more interesting drama…
Ab, not out of the forest yet but this happened in the middle of the week and wasn’t drawn out until Friday and leaving the market in suspense over a weekend. Good chance for approval as the Fed will save face after allowing NYCB to take over other failed banks assets without due diligence on their part.
Hope your enjoying the show.
NYCB trading halted, 42% loss today, $1.86 hold price…seeking cash infusion, we’ve all seen this movie last year, let’s see if contagion happens & Fed response.
Nycb-u dropped to tad over $16, now about 20. Sad
Recycling Center- three best banking movie quotes to remember and re-use today that aren’t from “It’s A Wonderful Life.”
“Quite a wobble…” – The SA pumper who bought 10K NYCB shrs last week
“I feel like a beggar asking for alms.” — NYCB CEO on the upcoming stock sale
“The banking system will be fine, providing nobody panics.” — Jerome Powells prepared testimony for tomorrow
— “Rollover,” 1981
NYCB ~ plunging again, down 32.3% to $2.19…other domino small banks in the red as well today…
Something is going on with NYCB. WSJ report of an equity sale. Getting hammered hard right now on all fronts. Well PACWP pricing is here but I have no idea what is really going on yet. I cannot add. Making me wonder what I own is toast. Now this is fear?!?
JPM preferreds and WFC-L are the only ones I trust.
Why bother with risk? Not worth it. Less yield more safety.
Call me Mr. Chicken.🐔
> Well PACWP pricing is here
Almost! I remember PACWP got down to five bucks. I was too scared to pull the trigger though.
– 1B capital raise by Mnuchin’s LSC, Hudson Bay Capital, Reverence Capital
– Combination of common 2/sh, convertible preferred 2/sh, warrants 2.50/share
– Mnuchin, 3 others to join board
– Expected to close Mar 11
Without NYCB(x) trading I have no idea what -A will open at. I think I will put in a bid at 10 perhaps for a couple hundred.
Anyone have interest and information on the NFE senior secured notes due 2029 at 8.75% interest. Coming out March 8th ?
Charles, the notes are Reg S and 144 https://finance.yahoo.com/news/fortress-energy-announces-upsizing-pricing-225000421.html
Thanks Ab , might be tempted even with B1 rating going to 2029 but for now I keep trying to sit on my hands and not buy anything.
F N G insurance subsidiary just announced 30, 000 accounts had Customers info stolen. Using a Indian it services co. Called Infosys. Same company B of A was using that their customers got hacked. They have known about it for at least 4 months. Hope they notified the customers sooner than later.
I was taking training today at work on cyberware crime, section on inside account leaking unintentional and intentional
Infosys is a monster “outsourced” services company from India.
We have worked with them several times for clients (and I worked with them for a couple of my prior employers). Never had a good experience. Terrible lack of skill, poor retention, and they leak information like a sieve.
Their main business is doing services from India, but they also do “body shop” work in other countries (like the US) where they will bring in people from India to do services (at lower wages, and often displacing US workers in the process).
They are also one of the ones exploiting the US immigration lottery by submitting thousands of applications into the H1-B lottery (on the chance they can bring in people to displace US workers) and diluting out the chance for “real” US companies who need workers to get visas.
Yup
But they remain a dominent player. Don’t ask me why.
August – I think the “why” is pretty simple. Too many corporate execs see that “body shops” appear to cost less, so hiring them will improve profits. The challenge of having too many b-school grads with little real world, operational experience.
I have been in so many meetings in companies big and small where this fight plays out:
“Lets move X function to India (or China, or Philippines…) and we can save a bunch of money”. No consideration of where skills will come from how they will be retained, or how transitions would work, or how an offshore team could work with their team in the US….
The response is often “oh, we can reduce risk by not owning the offshore operation ourselves, we will go with a big offshore body shop – they are experts at doing this.”
I have never seen it work out that way. Not once.
In recent years, I have had to mention to more than a few companies that transfers that are being considered aren’t even legal (violate data protection or US export laws or ….). Kind of a funny discussion sometimes – “have you considered that you can’t actually send the data these folks will need to do their jobs because of US export controls?” Or, “have you factored into your financial analysis the penalties you will face for exporting that technology (or data) to the China?” Mixed results. Some management teams appreciate the blunt input, others don’t hire us again (or don’t, until they (or their successors) need help unwinding the blunder they made).
That said, I have seen companies successfully move things offshore (I have helped move a bunch of operations personally), but it takes a huge amount of work, lots of planning, commitment to finding/retaining skilled people, etc. etc.. The successful ones aren’t just a “cheaper bodies” play, and they never involve the body shops.
Thoughts on this “new” bond issue at Schwab?
Bank of America
CUSIP 06055JDQ9
Price at Par 100.00
Coupon 5.7%
Senior debt
Maturity 3/6/34
Callable 3/6/26
YTM 5.7%
YTW 5.7%
Newbie,
In the last year+ I bought a number of big bank bonds when I was a major newbie and still hold many. The coupon on the bonds was always better than CDs, though less than agency bonds (which I gravitated to). In this world of every bond has a call date, I wanted at least a guaranteed year and preferably two. At first I was concerned about credit risk but later got comfortable with big banks and the unlikelihood of senior debt failing, even at C.
Your BofA bond has at least two years to run. I wouldn’t count on more when planning, but you might get lucky. IMO, there’s no way BofA will default. The coupon looks decent in the current environment.
Thanks rocks2stocks…If Fed rate cuts ever materialize, an additional gain might be in store if sold before call or maturity 🙂
Newbie,
Sell a brokered CD? The spread can be brutal. OTOH, you will receive accrued interest.
RZB seems to have a big seller, declining further after the xD drop a few days ago. The common RGA is actually up today though. Just picked up a bit more at $24.61
2C-
I see that RZB floats in June 2026 and has a deferral clause. Has anyone seen a deferral clause invoked? I’ve looked at the dividend history of dozens of pfds/BBs and have only found one skip: PCG-A.
It happens. NGL preferreds suspended and recently reinstated about half the suspended preferreds owed for example. A few preferreds were temporarily suspended during covid. And of course you have issues that did suspend and ultimately got redeemed that you cant really track now. OSBCP is an example of that.
New convertible preferred coming from a lithium miner:
https://www.prnewswire.com/news-releases/albemarle-announces-proposed-public-offering-of-depositary-shares-302079008.html
Bloomberg is expecting a 7.00-7.50% coupon.
Mandatory convertible so you’re essentially paying for the dividend distributions upfront.
With the world more focused on commodities with declining fiat currency I would welcome a perpetual preferred convertible like Hecla Mining.
Legend, and based on Hecla’s history, its more perpetual than convertible. I used to love playing in this one during ZIRP. Was a great one. Now considering current yield and credit profile, it doesnt have allure at present price point.
100%. That perpetual term is a real deal breaker for me. If this was a busted EP-C type with defined duration, different story. Speaking of which are there any other EP type plays out there?
Great Elm Group, Inc 8.75% Notes due 2028
144: Securities Information
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001675033/3355a698-e82c-40a4-bae3-028f8f9625aa.pdf
Small Bank Commons today…
NYCB (-23.1%)
DCOM (-6.82%)
VLY (-5.61%)
FFWM (-4.33%)
INDB (-3.57%)
AX (-2.76%)
PPBI (-2.48%)
TRMK (-2.07%)
WAL (-2.02%)
Newbie – exactly why I exited most of mine last month – although some of these might be excellent buys if one has the guts to step into the fray.
Just saw headline about AMT pricing new senior notes due 2029 and 2034. $650 million of each. Any detail?
Tom–they just priced $1.3 billion of notes. These would be $1000 issues.
https://www.sec.gov/Archives/edgar/data/1053507/000119312524058003/d761990dfwp.htm
Aub/pra huge sell off down 8% at close on volume of 70k, snapped up 200 shares, since no big news or movement in common. Sounds like someone eager to exit to large a position?
I was wondering the same, looked around for any news, don’t see anything.
Original D –
On Feb 23, AUB announced that the merger between AUB and AMNB had been approved by the Federal Reserve and the Virginia State Corporation Commission. Since Material Events can cause addition to, or deletion from preferred inices contiuents, could this merger be grounds for AUB being removed from preferred indices as a constituent? Average colume for AUB/A is 27k, today 70k, definitely looked like an insitutional seller pushing blocks into the buzzsaw to me!
“
AUB is acquiring the smaller AMNB for stock and is the apparent survivor of the merger so I don’t see the fear of a delisting event as a cause. (Wash Bus Journal 7/25/23.)
Have no idea what the reason was – maybe whoever bought the preferred at 21 in mid-January just before it jumped, then watched it jump to 24 in a week, decided to cash out. After all it had traded pretty tight at the lower price for the previous 6 months, FWIW, the common didn’t have a similar abrupt jump or drop.
JMO, DYODD.
Thank you, Fan, and thank you, Bear, guess it’s one of the risks of not tracking the news every day. Color me looking forward to retirement. Thanks again.
MMFs today…
VUSXX ~ 5.29%
VMRXX ~ 5.28%
VMFXX ~ 5.28%
SWVXX ~ 5.19%
PRTXX ~ 5.09%
PRRXX ~ 5.06%
SNOXX ~ 5.03%
SNSXX ~ 5.03%
SPRXX ~ 5.03%
SPAXX ~ 4.96%
Once again SPAXX in last place. I have this one of course. Why isn’t the yield
Over 5%? Thanks for this even though the outcome never changes.
NYCB ~ Common now $2.99, down 16% today
others…
VLY ~ (-3.74%)
INDB ~ (-2.87%)
FFWM ~ (-2.75%)
AX ~ (-2.30%)
DCOM ~ (-2.24%)
On the bright side…RILY +23.78% on 3x volume today.
The question is do I continue to ride the Z and M or lock down the profits and run before the next shakedown begins? Its a disease I tell ya, and I need to visit the doctor for some meds. I bought 200 of K at $18.50 today, so now I have more to sell. At least I shook off the fever long enough to buy $10k of the 7.38% PECO 2028 debt at about $104 today to ride a 6.2% YTM today. One can do a little better through KTH but these were just laying there for the taking so I took em.
Some have said the 10k that they eventually file is going to be ugly and may be another entry point. Which if you’re trading means you take profits before that happens.
Its always something, legend. The question for me is why am I even in them. Its not an investing situation that fits my profile. I always have viewed this outfit suspiciously even during “normal times”. I will need to wrap this little party up soon.
I’ve been toeing into the M notes using some of the proceeds from the O. When the M notes mature in Feb 25(or get called before then) I’ll take another look at the longer maturities. That gives Bryant Riley almost a year to pull a rabbit out of his hat. 😉
Grid, I took a little gamble myself: the flagstar/ Nycb 2030 FTF amidst the selloff.
But I think I am married to this one, no dating for an illuquid!
Does anyone know what is going on with ALL-B?
It was one of my workhorses and sported an ~8% yield until recently. In January I received 56c/share interest and my cost was 24.89/share so actually more like ~9% yield.
Now it shows the yield as 4.91% on a price of $25.96; suggesting that the dividend is 32c/share quarterly or $1.27/year… the 5.1% stated/coupon rate.
However, after 1/15/23 the rate was supposed to be three-month LIBOR plus 3.165%, which would be a lot more than 5.1% I would think.
pb, SA probably confusing ALL-H with ALL-B (they had the same fixed rate until ALL-B floated Jan ’23. SA dividend guys aren’t the sharpest tools in the shed.
According to my calculation it is scheduled to pay 0.545725625 per ahare.
Suncity, how are you calculating that 0.5457?
Also, which Sun City… AZ, TX, FL, other? Sun City, TX here.
ALL/PRB Fixed to Float 4/15/2023 3ML 3.17 8.73161 0.545725625
Rate is 5.3 + 3.17 + .26161.
I live in S.C.
Both Fidelity and Schwab are showing the next payment as $0.3188. Weird
I’m not sure what this is about.
E-Trade is showing Qtr div of $0.5635 for ALL-B, Yield of 8.69%, ex-div of 12/28/23, so that is probably the prior payment. Next pmt should be about the same.
I ended up selling my ALL-B for $25.96. I couldn’t get an answer from my broker. Also, Allstate IR wouldn’t return my call. The bid price alone was enough justification for me to sell. I don’t need the annoyance.
I did receive an email response from Allstate IR about 4 days after emailing them a question on this.
“We’ve encountered a few issues with broker understanding after the notes went from fixed to floating and the subsequent conversion from LIBOR to Term SOFR. … The current variable rate is determined as the 3 month Term SOFR + 316.5 bps + 26.101 bps (CSA). The 3 month Term SOFR is determined on the second banking day preceding the first day in the interest rate period (so in this case the 4/15 interest would leverage the 3 month Term SOFR as of 1/11/24).
So for the next interest payment on 4/15/24, it will be calculated by taking 3 month TERM SOFR as of 1/11/24 (we haven’t priced it yet, but should be close to 5.3%) + 3.165% + 0.261%. Then divide this rate by ~4 to reflect the quarterly interest payment.”
So I get a interest rate of 8.736% (5.31% 3m SOFR + 3.165% + 0.261%) and a interest payment of 0.546.
I see this one is trading above $26.00 today. There’s probably a strong case to be made that it should be sold at or above that pricing.
It seems inevitable that this issue (ALL-B) will be called..what am I missing?
Athene 7.25 new issue 500mm 5 year reset like a 2064 final.
The new Athene issue is a debt preferred aka baby bond not an equity preferred. The trade off is a slightly higher position in the capital stack vs the tax benefits of QDI dividends. The issue has a repeatable 5-year interest deferral clause. This make me nervous. Verizon comes knockin’ on the 1st of the month and Alessandra at the Pancake House depends on her tips and I upon her for a free coffee refill. (I’ve had this deferral debate before – a lot of SJIJ fans here are okay with taking a chance on interest deferral.)
Here is a comparison of 10 annuity companies, one of many lists out there. Popular favorites like Athene, Lincoln and Prudential fare well. (Although Athene has the lowest capital ratio of the lot. ) Fidelity is a surprise winner, a little issuer with a big capital ratio. The article has a paragraph or two for each company and a Pro/Con checklist. It ends with a summary table at the end. The article discloses the rating methodology and sector weightings if you want to do your own research. Customer satisfaction is something you never see mentioned by the stock touts.
It’s the week-end. It’s cold and rainy. I don’t need challenges — this article was easier to digest than 6.000 words of verbal clutter and cut-paste charts written by a stock tout.
10 best annuity companies for March 2024
https://www.cnn.com/cnn-underscored/money/best-annuity-companies
Pricing term sheet
https://www.sec.gov/Archives/edgar/data/1527469/000119312524053695/d800194dfwp.htm
JMO. DYODD.
Bear. You are funny.
Athene is know to be very aggressive within the insurance space. Put it this way, athene’s balance sheet is comprised heavily of private credit. Will they be fine? Probably. Would I prefer a Pru or MetLife or TIAA for credit? 💯
Bear, Thank You. Not necessarily a lot of reading but a lot of research. Also Maine, Thanks.
Bear, just taking the first insurance company on the list ( MassMutual) and running it thru Google comes up with a 1/2 dozen affiliated companies it owns. Oppenheimer funds is a old one I remember and MetLife is another Maine mentions.
I then ran them thru Quantum one by one. Out of those affiliated companies, MetLife had no BB listed but did have preferred listed. The market must consider them pretty safe as all 3 are only yielding about 5-1/2% for perpetuals. Although in the Nov. market drop they were a better buy.
If I was really interested in an investment in MassMutual I would probably go look on Finra at all the affiliated companies to see what bonds are offered.
Berings Asset Management, a division of MassMutual has some.
Sorry Misspell on that folks should be Barings another of those too early in the morning posts
Maine, not sure how you would invest in TIAA but considering the public schools system in Calif has their teachers union and a contract with the State of Calif to make up any shortfalls in their pension plan TIAA has a pretty good deal.
I don’t get hung up on QDI or not. What I am concerned about is Apollo and all their debt issuance! In between APOS, ATH A/ B/ C/ D/ E AHL A/B/ C they have a ton of debt. I try not to overload in any 1 company….but with a shrinking line up of market $25 pfds I find my positions on Apollo (related) companies possibly higher than I feel comfortable with.
In spite of my well-advertised paranoia about annuity companies owned by private equity, the Bermuda Triangle, weak state regulatory oversight and the misnamed State Insurance Guaranty Funds – I am a holder of the equity preferreds of Apollo units Athene and Aspen. Risk-reward ratio seems in line. I am not at this point worried. It doesn’t mean they are risk free.
An old FT article from 2021 crystallizes the risks presented by PE ownership. Note the comment about insurance feeding Apollo’s lending business. Not a word there about policy holder safety.
Athene’s growth … “makes it the principal source of funding for … (Apollo.) The insurance business…injects cash into Apollo’s vast lending business, which functions less like a Wall Street investment partnership than a diversified national bank.”
Apollo-Athene: the new Berkshire Hathaway?
https://www.ft.com/content/5b1a1c63-5920-4876-829f-e3f1552a3903
Annuities — Not an owner but often look at Immediate Fixed Annuities. Beyond IFA’s: annuities are complex, with more flavors than Baskin-Robbins. A lot to pencil out. Mutual insurers or a non-PE-affiliated insurers rank higher on my shopping list.
JMO. DYODD.
Bear your one of the reasons I hang out here. The mention again about the Bermuda Triangle fits in with my feelings about PE.
Play the game but be watchful and identify the exits in case there’s a fight in the bar. I didn’t go often and when I did I always sat with my back to the wall where I could see the room.
Thanks for the link to CNN’s best annuity companies for March 2024. I’ve been kicking tires on a fixed annuity for my wife whose close to retirement and wants to convert part of her 401K to an income stream. Customer service was not on my list of things to check, but now it is.
Citadel The reference in the article to the non profit Alliance for lifetime income might be a good place to start.
TVC is sitting out there with an ask of $22.26. Rated Aaa/AA+ and maturing on 6/1/28.
I come up with a YTM of 4.96% at that price.
Another Tennessee Valley Authority bond (CUSIP 880591EZ1) with a 03/15/2028 trades with a YTM of 4.18%.
TVC would need to have a price of $23.00 to have a similar YTM.
TVC has an ask of $22.24 at the moment. I get a YTM of 4.98%.
TVE (5/1/29 maturity) is at $21.92. I get a YTM of 4.95%.