Sandbox Page

I will be adding a new link titled “Sandbox” in the right hand menu.

That link will get you to this page.

I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.

I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.

I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.

996 thoughts on “Sandbox Page”

  1. CUBI-E – not sure if they have formally announced the new floating rate for this quarter – but when I look at my position on Fidelity, Fidelity shows it is paying 6.96886% based on par. Hope that is correct

  2. This may have been answered previously, so pardon me if it has. I would like to know if (a) the way i am calculating interest on individual bonds i buy is correct and (b) if there is an easier way to do it, say an online calculator. I buy bonds and hold them to maturity. The problem with YTM (and i believe YTC) is it assumes you reinvest all your dividends. That’s not something I do. My system has been to add the total amount on coupon payments i would receive if I held to maturity, subtract accrued interest that I have to buy upon purchase, subtract the brokerage fee to get the total amount of money i will receive over the life of the bond. I then divide that amount by the amount paid and get the total interest rate, which I then divide by number of years and months I hold the bond to get the annual rate (does this have a name? True yield?) This system is cumbersome. Is it a valid/accurate way to do the math? is there an easier way to get to this. Any help is greatly appreciated.

    1. Franklin – In a way, it seems as though you are attempting to reinvent the wheel because, as you say, conventional calculation of YTM assumes reinvestment of interest and you don’t….Nothing wrong with that if what you do better suits your needs.. Take a look at and see how that definition compares to what you feel is more accurate for you…… Assuming willingness to accept conventional bond math, for me, the easiest online calculator of bond yield and also bond price if you want to figure out what price will give you your targeted yield, is Others use other methods that come up with essentially the same answers but this is what works best for me. Play around with it. It’s easy to put in the parameters for what you need including $25, $50, $100 and $1000 par bonds, semi-annual, quarterly and monthly pay bonds, etc.

      1. Thanks 2WR, that calculator seems to work well as i manipulate the inputs. Much appreciated

    2. It doesn’t matter if you are reinvesting the income – you have an opportunity cost either way, which is factored into the calculation. Almost no one that owns bonds and preferreds actually attempts to buy more of the same security that paid the income, and the YTM at each buying point would not be the same, so it is never going to be a perfect number. Just use the YTM that everyone else uses.

  3. Some III’ers are concerned about the principal value of preferreds whereas others mainly care about how secure the dividend payouts are. For those concerned about price, I have updated a model to illustrate a range of possible outcomes for a single issue, OPP-A. This is a high quality $25 A1 rated, fixed 4.375% coupon issue with 2.2 million shares outstanding. I chose it because it is very liquid and highly correlates with the US Treasury 10 year. This exercise is intended to demonstrate “bond math” as opposed to being a specific comment about OPP-A. I could have chosen many other issues to illustrate the same points. I modeled it as an interest rate spread plus the UST10 yield. This is simple and everybody reading this should be able to duplicate this analysis. I “fit” the yield over 2021 data which gives a spread of 3.013%. The 2022 year to date forecasted prices have a median error of +/-4.6%. (Out of sample data.) However, the trend of forecasted prices matches closely what “bond math” would predict: higher UST10 interest rates mean lower prices. Exactly what we have seen so far in 2022.

    As other III’ers have stated, nobody knows with high certainty where interest rates will be on a given date. With that in mind, every III’er will have to make up their mind, aka guess what the future holds for interest rates. If you get that correct, here is the forecasted OPP-A value.

    UST 10 year yield, Modeled OPP-A price, % change from today (6/24/22)

    1.00% 27.26 53%
    1.50% 24.24 36%
    2.00% 21.82 22.4%
    2.50% 19.84 11.3%
    3.00% 18.19 2.1%
    3.13% 17.82 0% (Current UST10)
    3.50% 16.79 -5.8%
    4.00% 15.6 -12.5%
    4.50% 14.56 -18.3%
    5.00% 13.65 -23.4%

    If you are an interest rate bull and think the UST10 will go down to 1.5%, the model forecasts OPP-A will increase by 36% to 24.24. If you are an interest rate bear and think the UST10 rate will go to 4.5%, the model forecasts an -18.3% drop to 14.56. Even though the model forecasts the current price to be 17.82 versus the 18.93 actual, the forecasted percent changes versus UST10 should be reasonably accurate. If nothing else it gives you the right direction to expect.

    And yes, as I have often stated, preferreds generally are better modeled with the Corporate Baa rate. But I chose this example since the UST10 data is more widely available.

    1. Thank you. I love math-based investing, and I’ve learned much from your previous posts. I use an interest-rate based modeling equation derived from intersecting lines to a given maturity or reset date. I also use a separate equation for perpetuals with no maturity or reset date. However, my results are slightly different than yours. Please present the equation you are using.

      1. Goin2, here is the method I used for this analysis.

        1) Define the yield of OPP-A= UST 10 year yield + “Spread”
        2) Subtract UST10 from OPP-A yield for every trading day in 2021, which gives you a daily spread
        3) Pick any number as a starting point for the best fit spread for the whole 2021, say 1.0%
        4) Calculate the difference between the assumed spread for the year minus the actual daily spread, then square the number and add them up for the whole 2021
        5) Solve for the best fit annual spread which minimized the sum of the squared daily differences.
        6) Doing this for OPP-A give you 3.013%
        7) If you woke up on January 1, 2022 and wanted to predict OPP-A’s price going forward versus UST10, this is what you would use. You use the 3.013% + UST10 guesses, then solve for the OPP-A price

        Hope this makes sense and like I said, anybody reading this on III can repeat this exercise. You can make more elaborate models which I sometimes do, but this excessive should do a reasonable job forecasting prices versus UST10 interest rates.

        1. Tex,
          Does your model take into account how the call feature will come into play if interest rates drop? Wouldn’t that constrain the increase from a significant drop in rates? Not a huge concern now with almost everything well below the call price. But in a situation where the coupon is closer the present level of yields, I think that would be a factor.

          1. NH, the data I presented along with the methodology used does NOT consider possible calls. Not a lot of recent discussion here on III about “will XYZ be called,” compared to what was discussed in 2021. Obviously, if long term rates go back down to say the UST10 is 1.0%, yield to call calculations would be pertinent. Until that time arrives, I broadly assume that the majority of preferreds have turned into perpetuals. I still calculate yield to first call on every preferred every day, I just don’t spend much time looking at it. Frankly, we all hope we get back to a time when we DO consider YTFC.

            1. Thanks Tex. I would add that if we have new IG issues coming out with say 5.5 – 6% coupons, it would also be pertinent.

    2. Your data almost perfectly matches up with that I did with PSA preferred. For the rating we are using a spread of 2.5-3.5% (3.0%) is very consistent. The difference is I wanted to see what a new IPO would yield based on the 10 yr treasury right before IPO. I was trying to spot any anomalies that might have taken place during times or rising/lowering of the 10 yr as well as get an average idea of what PSA preferred was an optimal purchase for the length of time going back to the 1990s.

      The reasoning behind this was as rates go up I am very unclear if many businesses will want to issue much in the way of preferred or BBs at higher rates then the recent past when it was obvious rates would have to go up. We already see a clear slow down in the issue of new IPOs and I only expect this to get worse when discussing IG. Thus purchasing existing released ones will probably be the meat of the options. If one can figure out an “optimal” yield over many decades the low yield issues will stick around the longest and hypothetically stay outstanding for a long time.

      The problem with this whole exercise is predicting the future. At this stage I have so far reckoned that a PSA preferred that pays > 6.5% would be a good long term purchase. Current issues are right around 5.5%. 5.5-6.0% there has to be some other idea behind the purchase of a PSA preferred like buying below par and a call might be likely with their incoming cash. I am also toying with the idea that interest rates have a new lower plateau now days compared to the past. Serious cracks in the global/local economy may show up with a 10 yr at 4-4.5% resulting in a lowering of rates (recession and higher unemployment). If we reach that it might be quite brief.

      In conclusion if you want income and do not care about principle fluctuations now is a better time to buy then last year. Rates go up and rates go down. Admitting to myself I cannot perfectly time the market is necessary to take action. Having some shape of plan is better then none.

  4. Well, until this week, I thought SA had retired their stupid monthly article limit…but, no.
    Stupid marketing ploy – “Let’s make the masses angry, ’cause a few will pay up for this stuff.”

  5. Anyone hearing anything about BW? BW+A and both baby bonds getting crushed even as yields on government bonds have fallen well below recent highs.

    Last quarter’s performance for BW certainly wasn’t anything special (and this is a weak company when looking at operating cash flow), but don’t think any of these 3 securities are in danger of not being paid.

  6. CDR preferred holders lost their lawsuit to block the sale to WHLR, who has a reputation for suspending preferred dividends just because they can. CDR-C and -D dropping while the common stock of CDR and WHLR going up. Common stock benefits when preferreds get shafted.

    1. Been trying to follow this soap opera via SA’s “Take A Shower After Reading The Wheeler/Cedar Merger” thread….. There seem to be some very knowledgeable contributors on there, including the return of Bob-in-DE, yet still everyone’s gobsmacked about this decision…. I’m following for entertainment purposes only although there are those on the thread who consider this decision to have possible negative consequences for all preferreds – meaning just how preferred can a preferred be if they can Wheeler’d or Cedar’s in the future?….

      1. 2WR, The name is not as glorious as it sounds. Management is not a friend of preferreds and many times view it as the enemy to be exploited when times are tough. Hence why preferreds get to solely vote the majority of the board members after they get stiffed 4 quarters to protect them from management… Oh wait, my bad its not 1955 anymore. All these provisions to protect preferred holders have been stripped out over the years. Why? Because they could get away with it. Now occasionally you get an outfit like Ergon who owns 60% of the preferreds, so they offered well over $2 more above liquidation value to BKEPP preferred holders. And first two offers tried to really screw the common unit holders instead because they owned 7% of those…Gee, I wonder why…

    2. Unless this gets reversed on appeal, any preferred issuer could find its own WHLR, or even invent one, to get rid of its preferreds. There was no warning with CDR other than some unnoticed change in its charter. We now have to be worried about any marginal issurer doing the same (don’t expect banks and high reputational companies to do this).

        1. I agree because I own ALIN/E and wonder if Brookfield will eventually make some low ball offer to redeem it. Brookfield’s ‘high’ reputation is high for being a cutthroat firm.

        2. Speaking of Brookfield – anyone here suffering as I am holding 1000+ shares of BPYPM and BPYPO 6.25, 6.375? These are hit harder than ‘similar’ perps and though I invest for income and not trading, am having trouble thinking about these…

          1. Steal from the preferred investors once, don’t be surprised investors don’t trust you not to do it again. Different situation but same management team.

      1. Tom:

        “any preferred issuer could find its own WHLR, or even invent one, to get rid of “its preferreds.”

        I disagree. What you are describing would very likely be a fraudulent conveyance, especially if a structure is “invented” to provide a dumping ground for preferred capital.

        The unique CDR-WHLR deal came way out of left field, and involves two very unscrupulous management teams. By far the two worst REITs in the strip center category. Every other quality shopping center REIT had the good sense to pass on buying the 19 centers WHLR is “acquiring” from CDR.

        Just don’t believe there are enough pure crap REITs like WHLR around for a deal like this to happen again.

  7. Max: I own some SCE-L . Living in CA I have had service from SCE and now have PGE, SCE much better run company IMHO. Both issues are good, I bought SCE-L a couple of years back and chose it over SCE-G because G was already past call date and the L issue still had 2 years to first call date. I have added a little more SCE-L lately at bit under $19, hope they never call it, good income.

  8. TIM-
    I don’t see this on the master, BB, or short term preferred/BB lists:
    ATCOL Atlas Corp. 7.125% Senior Notes due 10/2027


  9. Added a bit to my small position in PSB-Z today. This cumulative BAA2 rated issue is yielding 7.04% which I figure is at least a 1/2 point above average for low IG issues now.

  10. Thoughts on these perpetual non-cumulative bank preferreds?
    bac/m ~ 5.375 coupon, current yield 6.04%, 1st call 6/25/24, IG
    jpm/k ~ 4.55 coupon, current yield 6.16%, 1st call 6/1/26, IG
    frc/h ~ 5.125 coupon, current yield 6.2%, 1st call 6/30/22, split IG
    ozkap ~ 4.625 coupon, current yield 6.51%, 1st call 11/15/26, non IG

    1. I also watching BAC-M, BAC-K, BAC-B. OXLCN 7.125% trading 24.20 today. Any general thoughts out there on Oxford Lane Capital?

  11. Today, I bought CRLKP (5.25%) at $23. YTM on 4/01/28 is 6.89% Non-rated, but I’m comfortable with it.

      1. I’m long Central Parking (CRLKP) as well and happy to hold it until maturity.

        I’ve been looking to add, but TD is charging me $6.95 per transaction (as it’s on the OTC) and it gets expensive when only a few shares are filled at a time.

        I think the parent (SP) is a nice play on COVID re-opening

        1. I see similar at schwab.

          Hard to make money when you have to pay a commission equal to five years of dividends on a single share trade.

          Luckily, when i transferred my accounts to schwab, they gave me about 20 years of commission free trades, and I convinced them to put it in writing. Didn’t matter much for a few years However, when they started charging commissions for OTC – I just got out my letter and they now reverse the commissions on all those OTC trades. So, I can still get those single share buys without a headache.

          Two thoughts
          -Maybe you could look at transferring part of your holdings to a broker who will offer you zero commissions as an incentive for the transfer? Not sure anyone still does that, but you never know. It is kind of a pain in the neck to add a broker, but maybe it would be worth it if you do enough OTC

          – you can probably place an “all or none” order to get the lot size you want. You will miss some of the tiny lots, but you won’t get hit with commissions on those tiny lots either.

          *Disclosure – I have some CRLKP in the sock drawer, and I picked up some of those shares over the years in tiny lots (incl. single shares).

          1. I had a partial fill on CRLKP at TDA about a year ago. The rest of the order never filled, but I was told at the time that the remaining shares would not be charged a commission if it filled within the timeline of the original GTC order. If I made any modifications, it would be treated as a new order and subject to commission.
            Please verify for yourself if you are attempting this as things could have possibly changed. I’m pretty sure this was before rule 15c2-11.

            1. Doesn’t work like that. You will be charged a transaction fee on any day where there is a partial fill. If you have 6 partial fills of 100 shares each in one day – still just one fee for that day. If you have 1 share filled on 6 consecutive days – that’s 6 fees.

  12. FWIW-
    Last week comments revolved around cash stash places. just received notice that Bask Bank raised from 1.5 to 1.61% (FDIC)
    Thanks for the tip- can’t recall who mentioned them.

  13. I bought EP-C (4.75%) due 3/28 last week at $45.50. YTM = 6.89%
    Split rating Baa3/BB+ I feel comfortable with it and will buy more if it drops even lower.

  14. Regarding BKEPP:

    Based on the posts last week, it appears reasonably certain that this will be called in conjunction with the acquisition of BKEP, expected to close “mid-2022.” Trying to figure what you will get if you buy now at $8.50 and an assumed call date of August 31 (for the purpose of calculation).
    It will be called at $8.75. The next x-date should be about August 5 or so, with a payment date not later than August 15. Based on the prospectus and 10-K, this payment of $0.17875 will be for the quarter ended June 30, 2022. In other words, it is paid up to 45 days in arrears. Typically, there should also be a payment for the stub period July 1 – August 30, which would be about 10-11 cents, although this is not 100% clear to me.

    So, on an investment of $8.50, you net about $0.53 if the above is all correct, with a holding period of 72 days. The annualized return is off the charts.

    1. BKEPP will be the last of my big 3 still standing as my biggest issue CNIGP is apparently getting redeemed soon as merger was approved by New York finally and Corning expects to complete merger with Argo July 6. And WTREP is being redeemed next month.

      1. It seems like that Corning issue has taken something like 4 decades to close, doesn’t it?

        1. NY was very slow in getting ball rolling. It has been 18 plus months, enough time for me to make money 2 different cycles on it. Once PA approved and NY process looked slow but harmless, I basically have got every share I could get my hands on since winter typically a 1-1.50 below redemption. I own way too big of percentage tied into this. But it was a relative layup and now I can hope for a 50% preferred market crash while waiting to get my proceeds from these two……

    2. Since the BOD approval of the Ergon acquisition months ago its been quiet regarding the merger with no challenges filed as far as I can see. Here we are nearing the “mid-2022” merger date and BKEPP sits @ $8.51. There must be an elephant in the room that I’m missing since it appears the merger will be consumated and the “likely” BKEPP yield at this point is, as you say “off the charts.” Per Grid, the GP’s attempt to acquire BKEP failed twice in the past and maybe the market is still skeptical. Kinda like the boy who cried wolf.

      1. GR, I claim no expertise here, but the “conflicts committee” rejected both the previous low ball offers. So it never got any further than that. They approved it this time. Now its just the customary check off list…
        Completion of the Merger is subject to certain customary conditions, including, among others, approval of the Merger Agreement and the Merger, which requires (i) the affirmative vote of holders of a majority of the issued and outstanding Common Units and Preferred Units (voting on an “as if” converted to Common Unit basis), voting as a single class based on one vote per Unit, and (ii) the affirmative vote of holders of a majority of the issued and outstanding Preferred Units, voting separately as a class based on one vote per Preferred Unit (such approvals, collectively, the “Partnership Unitholder Approval”). Pursuant to the Partnership Agreement, the Preferred Units are convertible on a one-to-one basis into Common Units at the option of the unitholder. The Partnership is holding a special meeting of its Unitholders to obtain the Unitholder Approval.
        ….They have submitted “going private” info to SEC, but no formal approval has occurred. The first part which needs to occur is unit holder approval, and that vote has not occurred. Possibly since Ergon does not own enough votes themselves to ensure a positive outcome, they are still “rounding up the usual suspects” to ensure the votes are there come vote time which to my knowledge has not been set yet.

    3. It is a very interesting trade opportunity that I am not involved with. Maybe I am just not wanting to have to deal with the K-1 showing up around April 14 or so.

      1. I would suggest that isnt a likely happening since the offer is already presented at preferreds recieving $8.75. This is an odd set up where Ergon controls managing partner and they also own 60% of the preferred. But they own a small minority of units. Preferreds have voting rights here though which assists Ergon. In the 2 previous common unit low ball offers they always were very generous to preferreds. Even at previous rejected offer by conflicts committee of I believe $3.32 or so a share, the preferred offer was $8.48. Unit holders were howling at that. Latest one jumped common unit offer well over a buck, and just added a smaller increase to the preferreds.
        This isnt a hidden off beat investment. The risks and rewards are well known being the thousands of shares that trade each day on both common and preferred. The risks are not getting acquired approval and pressure that would then put on preferred, and or the value of time being no exact certainty if it is completed.

        1. So, if the deal doesn’t go thru BKEPP continues to trade albeit at a lower price probably. If the deal does go thru it gets redeemed. I don’t see any risk of it going dark. It better be redeemed this summer since more than one dividend payment will exceed the dreaded $1,000 UBTI threshold for me.

    4. NH, I always have bought under assumption its basically got to get to end of Julyish to get full distribution payment mid August. I seems unlikely to me there is an additional delayed payment. I just think that is too much meat on the bone there and market would know it.
      Holders of the Series A Preferred Units are entitled to quarterly distributions of (i) in the case of any quarter or partial quarter during the period ending on October 25, 2011, $0.138125 per unit and (ii) thereafter, $0.17875 per unit, plus any arrearages from prior quarters, before any distributions of operating surplus are paid to the holders of our common units.…
      ……It seems to me after these were issued the partial payment cycle was cleaned up at that point (Oct. 25) and the full payment starts there going forward. So that would make a full payment end of July and payment mid August. Either way the 25 cent cap gain, and accruing 8% paid to wait is fine by me.
      GR…I just plugged the numbers in and paid no mind to it, (thanks Camroc for helping me put my big boy pants on as K-1’s are kindergarten math with Turbo) but have you checked to see if the UBTI for BKEPP is dollar for dollar? If not, its possible you may not be as close to threshold as you think.

      1. You’re absolutely right GB. I’ll try and check but UBTI is probably less than 1 to 1 due to depreciation.

        1. Please post back what you find about UBTI.

          Unfortunately, I am on the road today and researching is hard on my phone.

          I did take a look at the k-1 for BKEPP for last year, and it says:
          “Gross Income for Unrelated Business Taxable Income Purposes Included in Line 1 = 0”
          In fact, line 1 shows a loss and deductions for UBTI, so it looks like there was negative UBTI last year. However, someone with more access and knowledge could probably tell more about what is going on there.

          The k-1 does show that the distributions are “Guaranteed payments for capital”, which IIRC usually does not include UBTI.

          However, as I said, I can’t research it in detail right now, so I could be mistaken.

          1. Private you guys got me thinking since it wasnt registering with me when I filed. And the reason why is there is no UBTI. This guy on SA also stated that.

            Matt. I have owned BKEPP for several years and have built out my position to 5,717 shares with a capital gain of 34% at this time. Last year I received $2,684 in dividends in my IRA’s with no positive UBTI reported. K-1’s have not been an issue for me in all the years I have owned them in my IRA’s.
            …Another poster mentioned this…

            Guaranteed payments work great in IRA’s as they do not generate UBTI taxes.

      2. Grid,
        It’s pretty clear from the documents that any payment in mid-August will be for the quarter ended June 30. If the transaction closes before September 30, will there be an additional payment for the stub period after June 30, as would be normal and typical? Hopefully we’ll find out.

        1. NH, I certainly hope you are correct, but I havent scanned your reference point…Are you referring to this?
          Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash (as defined in our partnership agreement) to unitholders of record on the applicable record date.
          Available cash, for any quarter, consists of all cash on hand at the end of that quarter:…..
          That isnt directly related to the specific payment obligation of the preferred is my understanding. The quarter and specific quarterly preferred payments are not directly aligned, but the payment is still falling on butt end of 45 day window, satisfying both terms. It sure seems to me on what I have tried to understand, we are accruing from last direct payment and that likely is it. But, I am certainly hoping you are correct!

          1. Grid,

            I am referring to that language and also:

            From the most recent 10-Q, Footnote 8

            On April 26, 2022, the Board approved a cash distribution of $0.17875 per outstanding preferred unit for the three months ended March 31, 2022 The Partnership will pay this distribution on May 13, 2022, to unitholders of record as of May 6, 2022

            Form the 2021 10-K, Footnote 10

            Holders of the Preferred Units are entitled to quarterly distributions of $0.17875 per unit per quarter.

            I’m not sure how much to read into the “are entitled to” wording in the 10-K, but some could interpret it to mean that the Preferred Units continue to accrue into any stub period. Again, I’m not 100% sure, but that would a nice little kicker to what’s already a pretty good return, and hopefully we’ll find out soon.

  15. This is an update to a post I made on 5/7/22. I have NOT changed the verbiage, only the data that was used. At the end, I have added a few comments to address questions that were raised on the original post. You can see the original post by searching here using “5/7”


    A consistent theme I see here on III is along the lines of “I am going to buy now and will get dividends/interest which will moderate any losses of principal.” Stated differently, you still expect to get a positive total return. I have proposed taking the opposite side suggesting that principal losses will exceed any dividend/interest payments resulting in a negative total return. I decided to take a look at that with the largest preferred ETF, PFF. Here are the total returns for different time periods:

    Purchase date Total return
    6/10/2022 -3.90% 1 Week
    5/17/2022 -3.68% 1 month
    3/17/2022 -10.88% 3 months
    12/17/2021 -18.76% 6 months
    6/17/2021 -16.55% 1 year
    7/14/2020 0.68% Breakeven

    If you purchased PFF any time in the last year, you have a negative total return. You would have made more money investing in a money market fund with its 0.01% interest. You would have needed to buy PFF on 7/14/20 to break even through 6/17/22. That is 23 months of losing money versus sitting in cash.

    The question is how long will this losing trend persist? Each investor gets to make their own decision if they are contemplating a purchase. Obviously there are a range of outcomes from positive to negative returns. My personal highest probability is that this losing trend will continue, i.e. there will be negative total returns when buying preferreds. There are certainly exceptions due to distressed issues that got healthier, plus issues that are likely to be called. Not to mention illiquid, Grid like, issues that trade “by appointment only.” Plus some investors successfully pick up nickels in front of the steam roller by short term flipping. So this analysis is done with the broad market of preferreds in mind.

    New comments:

    a) Karma said: “Looking in the rear-view mirror has absolutely no value in projecting future returns.”

    Karma, I agree that past performance is not a predictor of future returns. However, trends do tend to persist. Here are two PHD level references that discuss this. (1,2) The point is that the trend of failing preferred prices is down and is likely to persist further. Obviously at some point, the downward trend will stop, we just don’t know when that is.

    b) Bill S. said: “A preferred fund is not not the same as a preferred stock, as a bond fund is not the same as a bond. If you have a current loss in a term BB or Preferred and you plan to hold it to maturity do you really have a loss?”

    Bill, I chose to show the data for PFF which is the largest ETF and/or mutual fund that predominately holds preferreds. I could have shown the exact same data for one or five or ten individual preferreds, but might have been accused of cherry picking the data. Or I could have shown the data for all 614 preferreds that have been trading for over one year. Obviously there would be a range of outcomes, but I expect the median returns would be comparable to PFF.

    c) Maine said: “With all that said, I think it’s easy to pick on bonds in this current environment, and maybe, just maybe.. now could be a good opp for fixed income. You picked on PFF, but even the mainstream Barclays agg is down 10% YTD. To put this in perspective, -2.9% (1994) was its worst annual return since it’s inception of 1977!”

    Maine, I will take the under on Barclay’s aggregate bond index having its worst year since 1977. The ETF, AGG is down -11.34% year to date. I expect it to set a new record for losing the most since its inception in 1977.

    d) BOTTOM LINE: The highest probability forecast I have is for preferred total returns to continue falling. Stated differently, put your money under a mattress and wait for the storm to clear hopefully later this year.

    1) “On Persistence in Mutual Fund Performance”, Mark Carhart, March 1997

    2) “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency”, Jegaseesh & Titman, March 1993

    1. One way to interpret this data is that today is a better time to buy bonds/preferred then last year.

      As well as no clear signal or example of what is a good deal even if the security loses a bit more in price. Using the example of stereotypical PSA preferred since it is well known and reliable there must be some yield value that what is going on with the fed (everything in a way to a point) becomes irrelevant except PSA’s ability to pay. 6.25%? 7%? 8%?

      Tex, I really enjoy your posts but I don’t think we needed that much data to know that bonds/preferred have been hit hard in general. I think more discussion or thought should revolve around what is a good deal even if inflation goes wild for a few years. When it all settles down and rates go back down we are sitting pretty. For you personally what is something you would buy today if it was buyable? What quality? What yield? And naturally you don’t get to know the future.

      1. FC, thanks for the feedback. A few points:

        1) Not everybody on III has seen this background data. Yesterday somebody posted here (III) along the lines of “Why should I NOT buy/hold XYZ preferreds today?” That is specifically what prompted me to update the data and make this post.

        2) For me personally, preferreds/babys/terms are maybe 5% to 10% of what I spend time on TODAY. In the past, it might have been 25%-50% of my time, but given the current conditions, as you can tell I am not looking to make any long term buys right here. The other 90% to 95% of stuff is not pertinent and/or applicable to III, so I do not discuss it here. (Don’t ask, don’t tell!)

        3) The largest purchase of preferreds in the last many months was UMH-C. We bought it in many accounts. Thank 2WR for saving us on that one with it being called! Like I mentioned yesterday, one account had a 30% allocation to it. I don’t know if/when/where those funds will be redeployed and this is a “100% invested at all times” account.

        4) I have not spent any time recently updating the models on when we might start buying preferreds again. I might post again about some “mispriced” issues, but broadly would not recommend most investors buy generic preferreds right now. Special situations like flipping is obviously different. There will be a day when we go back into preferreds, but my crystal ball does not see that far out, hence I have no actionable buys today.

        1. re: “The other 90% to 95% of stuff is not pertinent and/or applicable to III, so I do not discuss it here. (Don’t ask, don’t tell!)”

          This is an income site, no? If it generates income, it’s pertinent. Or so I believe.
          Entonces, this past week, I added to:

          EPD, MPLX, AM, CEQP, CEQP-, MMP, ET, et al. Why? Because we have massive shortages that aren’t going away anytime soon and I think these will continue to pay me. And now, my income has never been higher.

          So. If you’re doing income stuff, please tell us about it.

          Or am I totally in the wrong place?


          1. Always appreciate your wisdom but from a charting perspective the entire midstream gas & oil industry is in a steep sell off, and those names you mentioned have all moved down with high volume from recent highs. I’d avoid this entire sector for the next month at least, or until there are some better entry points…maybe once the Oct 21 lows are retested.

            1. I hope you are right. EPD below 20 would be an especially nice, unexpected gift.

              I don’t trade MLPs. I’m only in them for steady or increasing tax-deferred distributions.


          2. I had held EPD from $21, sold all over the past 2 weeks. Midstream is dependent on economic activity so their earnings could suffer in the recession that everyone is now predicting will hit us by year’s end or even earlier. The market seems to agree.

    2. That argument only works when we have a bear market. What about the many times you play it safe over the years and the market doesn’t crash? All of those lost profits add up. You can show either side of the argument by cherry picking the starting point in hindsight.
      Also I play for trading profits too. All I need is for the dividends plus trading profits to exceed price drops over the years. In risky times like this there are ways to hedge if you want to continue trading without risking major losses.

    3. Tex, appreciate the post. But I do have an issue with PFF. Yes it is the largest. But it is an embarrassment..very poorly managed. Time after time this fund buys high and sells low.
      Given your negative outlook for preferred stocks, i have to ask…what is your outlook for the S & P 500?

    4. Bill S. has it right as far as I can see, and PFF by the way is one of the worst performing investments for preferred stock in my opinion.

  16. Today should be lock-in day for CUBI-E and F’s next floating rate rate. With 3 month LIBOR currently at 2.06%, that would put CUBI-E’s next dividend at about 7.20% and CUBI-F @ 6.82%. Tasty! Both are only callable on dividend payment dates, so although it seems as though CUBI-E at least should be on the table for being called on 9/15, there’s at least this next quarterly to look forward to @ about 7.20% annual rate if nothing else.

    1. If expecting call, holding CUBI-E until next quarter call would get ya $25.45, closed at $25.35 today. So incremental 10 cents or 1.6% return for holding for the quarter. Might be better to sell now and invest proceeds in another issue.

      1. It trades with a spread so there’s no guarantee you would’ve gotten that price selling it today. If call is announced short term buyers would pay something close to that, and if not called you get a good rate until it is called.

  17. The crazy trades of the day once again were on AGM-C. It is $25 face, 6% until it floats on 7/24. It closed yesterday (6/14) @ 26.92. The official high today was 33.515 on 100 shares, which is $6.60!!!!!!!!!!!!!!! above yesterday’s close. And it was not just one aberrant “flash crash” type trade. 3,904 shares traded @ >=31.00 on 54 trades. A single share traded @ 34.36 but that is not counted towards the official high for the day.

    I can’t think of any rational reason for AGM-C to trade like this. The trades did not look like someone placed a large “market” buy order since they occurred over about a seventeen minute window. Flash crash type meltups typically occur over a few seconds then sellers rapidly come in to refill the ask book. In today’s case, the ask did go up to 2,147.48 so clearly the entire book was cleaned out. It ended up closing @ 28.00, up 1.08 on the day which is really strong.

    Just simply looks like somebody(s) wanted to buy it regardless of price and sellers did not want to sell it at a reasonable price.

    We do not own it any any account nor we involved in any of the trades today. IIRC, I think we owned it sometime in the last year.

    if you own it, you might consider setting a generous sell price GTC order. You might make enough to do something special, like steak dinners for all III’ers. . .

    1. Tex, thanks for this news-of-the-weird piece … I had to go look up the prospectus and remind myself that when it floats (18 jul 2024), it will be off 3M Libor with a 3.26% spread. No thank you…

  18. Does anyone have a clue as to why Schwab posts a Tellurian (TELZ) div on 5/2 (for pay date of 4/30) at the correct interest @ .5156/sh. Then on 6/14 they post pmt of .4641/sh and at the same time post an adjustment of .4583/sh !! Not correct. The pay date should be 7/31. Here’s how they listed it: 06/14/2022 as of 01/31/2022 Interest Adj (Jan ’22 ??)
    In Jan & Feb they posted the same, but the adjustment was .4641 in Feb.
    I’ll probably have to call, but thought maybe someone could see what I can’t
    From IPO ( QOnline is in error) : Notes will accrue from November 10, 2021 and will be paid quarterly in arrears on January 31, April 30, July 31 and October 31

  19. Every cloud has a silver lining. Today for me it was selling 100 BACRP (7%) at $170. I bought it 4 months ago for $107. Even a blind hog can find an acorn if he roots around long enough.

      1. I put most of my tiny stash of BACRP up at $175 (based on your “heads up”, so I thank you Randy). Strange thing is that they all sold in one share increments over the last couple of days.

  20. I added to my BKEPP position @ $8.50 yesterday. BKEPP is being redeemed @ $8.75 in “mid 2022” pursuant to the general partner’s acquisition of BKEP. The merger has been reviewed by an outside independent law firm and approved by the board of directors of BKEP. Assuming a mid-July merger date the gain on yesterday’s purchase would be 37 cents which includes interest from the last paydate of 5/15/22. This equates to an annualized yield of 26%. The market obviously thinks the deal may not go through in spite of the reviewed and approved “definitive agreement.”

    1. Im deep in this one too. 3rd time is the charm here. After trying to steal the company two previous times GP finally gave apparently a fair offer and I believe this one will slide through.

        1. I cant remember. I have previously had it in tax free so didnt do anything. Last year I had in taxable but just plugged numbers into Turbo and really didnt pay attention. I have a mix this go around.

          1. Grid, notice how when people make an investment that goes down (especially dramatically), they all of a sudden become “long term investors” and “price movement lower doesn’t bother me”. Just another day at the office with this administration/Congress and Fed destroying the bond market, purchasing power and prestige of the US…
            Inflation? It’s Putin’s fault 🤐

            1. Hey Azure! You can take this to the bank and cash this check… If BKEP buyout doesnt bear the fruit I want it to…..My BKEPP will suddenly put me square in middle front row of the “long term investors club”. 😕
              FWIW, I am a long term investor with short duration horizons. And yes it ticks me off to lose money. Im not a JohnPennilessY subscriber. I mark to market because its worth what it says its worth. Unfortunately not what I paid for it, ha.

        2. Jack,
          I don’t currently hold BKEPP, but have K-1s from 2019 and 2020. In both years, UBTI was 100% of the income.
          However, my holdings were small, so I came no where near the $1,000 threshold.

    2. GRj,
      I know pretty much nothing about BKEPP. But looking at the latest 10-Q, I see that the payment in May was for the quarter ended March 31. Does this mean that presently the dividends are accruing since March 31? If so that would make the annualized yield if purchased now even more. (See UMH and BRG.)

      1. I believe when preferreds are redeemed the accrued interest paid is from the last paydate – not the last ex-date.

        1. This is not about the x-date. It is about when the dividends are paid for the relevant dividend period. Generally the dividends are paid on the day after the relevant quarter. However, sometimes there is a lag between the relevant dividend period on the date on which the dividends are paid. And there will be a catch up on redemption. For example, UMH-C is called for July 26. The last payment was on June 15. But that payment was for the quarter ended May 31. The holders will get 55 days of dividends at redemption, in other words the accrual since May 31.
          The last 10-Q for BPEK says that the payment on May 15 was for the quarter ended March 31 (a 45 day lag) – Note 6. Thus, if you buy BPEKK now, and the UMH-C example applies, and it is soon redeemed, you would get dividends since March 31. But I don’t know for sure.

  21. A question to the III experts:

    In the last 12 months I have been buying a number of issues to hold indefinitely and enjoy the stream of dividends, regardless of the price fluctuations. Two examples are BAC-L and WFC-L, which in my mind I consider quite similar.

    With the drop in the last days, I am reminding myself that I have them to continue to receive their dividends and I should not care what the price of the issue is, and I am not selling and will continue to hold them.

    Nevertheless, I observe that without significantly changing my portfolio, I can “harvest” short term capital losses if say, I sell some of BAC-L and buy the same amount of WFC-L (or vice-versa). If after 1 year, WFC-L goes up and I sell, I will have long term c.g., effectively gaining the difference between s.t.c.g. and l.t.c.g. If it does not go up or if I don’t sell, then I am in the same situation as I would be if I did nothing, except that I can claim the s.t.c.g. this year.

    The question is: what do IIIs think of this approach? There are quite a few examples of such pairs of practically identical issues on which this can be applied.

    Your inputs would be greatly appreciated!

    1. DD – I have flipped between very similar preferred issues numerous times for various reasons. What you describe is common. Whether it be for tax reasons or to take advantage of price differentials among substantially similar issues, quite normal.

      1. Maverick,

        Ok, thanks (as usual, I see I am not re-inventing the wheel).
        And I see that sometimes when flipping pairs you can gain some $ in the price diff. (even if you are selling l.t.c.g).

        So I guess this is a strategy one can try to enhance in order to gain some pennies while the hammering continues.

    2. News on WTREPif you own…
      —–Original Message—–
      From: Butler, Sioned
      Sent: Wed, Jun 15, 2022 12:04 pm
      Subject: RE: Watford Holdings Ltd, 8.50% Cumulative Redeemable Preference Shares

      Hi Mark,

      No, WTREP did not go ex dividend. We have given 30 days call noticed for the outstanding shares.

      The Q2 dividend will be paid by the end of the month and then on July 13th the principal and accrued interest (to Redemption date) will be settled.



      1. That’s good news. At least something isn’t losing money this month. Dividend was nice but I don’t like things I can;t trade or get out of.

  22. Newbie question ~ as we know the fed will raise rates in June, July, and probably September as well as start to off-load balance sheet:

    * Why not wait until more preferred price destruction before buying?
    * What 10 year rate would likely accelerate “coupon deferral” of lower quality preferreds?
    * Isn’t it best to stick with term preferreds that are cumulative and IG if they even exist in our current turbulent environment?

    Thanks for advice.

    1. If you look at the interest rate curve you will see the longer maturities are already at 3%. The fed does not have to raise rates as the back end has already done the work of future demand destruction.

      Fed can not print oil. Only slow down the aggregate demand for it.

      They will not lift until they see commodities roll over.

        1. Fed will keep raising rates until commodity demand rolls over.

          The problem is commodities are not suffering from a demand problem but supply.

  23. I picked up UMH-C below par, we’ll see if that is wise. Went ahead and did it on margin since I’m at IBKR and pay 2.3%. Of course we all assume they stick to their word and redeem it soon.

    1. I had a GTC order for UMH-C fill at $24.90 today. I put in for some more at $24.80 but no luck.

  24. Did Conifer ever get their new debt issued to call CNFRL yet?

    Seems I remember they were working on that and CNFRL is trading down a bit so there is some money there if that goes through.

    If somebody wants to take a real flyer Bed, Bath and Beyond has some 2024 bonds trading at a 25% discount. Their turnaround is not going all that well, but they have an untapped credit line that might cover them for 2 years. I would have to look it up again to be sure. The key will be how much they are generating in losses over those two years. It looked like it would be a near thing with current burn rate when I glanced at it a while back, and the economy is only going to get worse.

    I am not enough of a cowboy to ride this one.

  25. Dang, there goes my best 18% interest guaranteed, money good asset!

    Verbatim from the article:

    Celsius Network, one of the biggest crypto lenders, told customers Sunday evening that it is pausing withdrawals, swap, and transfers between accounts in a move that has sparked discussions and prompted the price of the firm’s token to take a 60% tumble in the past one hour to as low as 19 cents.

    Celsius, which was valued at $3.25 billion when it extended its “oversubscribed” Series B financing round to $750 million in November, allows users to deposit their Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and the token, the platform offers as much as 18% interest a year.

    “The beauty of what Celsius managed to do is that we deliver yield, we pay it to the people who would never be able to do it themselves, we take it from the rich, and we beat the index. That’s like going to the Olympics and getting 15 medals in 15 different fields,” Mashinsky said in a video streamed in December.

    1. Well, at least no hyperbole in marketing….
      From that, Binance CEO reported they had a ‘stuck transaction’ and had to freeze.

  26. A math problem to consider:
    1) Latest reported US family median income was $67,521. (This is 2020, 2021 data has not been released that I have seen.)

    2) “Bloomberg Economics estimates that US households will have to spend an extra $5,200 this year, or about $433 a month, for the same consumption basket.”

    3) $5,200/$67,521= 7.7%, so households need that much more annual income to break even.

    4) We have all seen the reports over the years along the lines of “50% of American say they cannot afford an unexpected expense of $1,000.”

    5) Maxing out credit cards only works for a while, unless you are the US Government. Even if the Fed can raise rates to somehow lower headline CPI back to 2.0%, all that will do is to preserve the extra $5,200 in expenses. Unless you have price deflation, the imbalance still exists.

    6) Investment takeaway is to carefully consider which household expenses, aka top line sales for companies, will be cut back. Which companies? You have to think commons will be affected more than preferreds/terms and that is what we have seen year to date.

    7) You will have to decide on your own what if any impact this has on the probability of a recession. Everybody probably has a different opinion and it is not provable at this point, but it might impact your investments allocation. Since I have no divine guidance, I will not offer up any opinion, but I do have one that I will use for our portfolios.

    1. Do I remember the late 70’s maybe early 80’s correctly? Does anyone else remember a time when mortgage issuers used to offer mortgagors a discount to the total amount of principal remaining on their mortgages to try to induce them to pay off their low coupon mortgages???? I wonder if something like that could happen today? It’d be an interesting calculation to figure out just what kind of a discount would tempt me… I’ve got a 15 year 2 1/4% mortgage with about 9 years left….. It’s cheap money now that’s for sure, but it’d still be tempting…. The interest deduction doesn’t help me at all so paying anything is wasted money..

  27. Have any of you “T” investors held on to your WBD spinoff shares? WBD has declined about 35% since the T spinoff. A smart fixed income investor would have sold the WBD shares, but silly me has been adding to where WBD is now 2% of my port and I’m down 14% on it. I originally liked the WBD story and think the price has declined due to non-fundamental factors. The combined Warner Bros., HBO and Discovery offering to consumers is one of the best in the market. WBD now sells at 9x projected 2023 EPS and 4x projected 2023 FCF – stupid cheap imo.

    1. I sold out of T around $35 for a small gain in dividends and a small loss in capital.
      T is a mess IMO and will continue to be
      Management could never figure out the streaming content service.
      And even Netflix is getting beaten down.
      WBD may have some content I like but nothing I would binge watch.
      I hold T.PC and TBB under par.
      I missed 6 birdie putts today, not how I want to start the week.

      1. Its not you its the putter or maybe the greens. Jack Nicklaus said he never missed a putt.

        I sold all my WBD at the exchange. T off loaded a lot of debt to them.

    2. GRjoel, I sold WBD after spin and added to T common and options. Got interested in WBD again after reading it’s Michael Burry’s (Big Short) 3rd largest position. Started buying WBD June 2024 calls. Agree that it’s “stupid cheap”, projected ’23 FCF is $3.65/share, at $14 it’s FCF yield is ~26%! Going to be painful for awhile, my calls are down 40%.

  28. Newbie question:

    IG Corporate Bonds vs IG Preferreds

    Both of above have taken a hit YTD due to US & GLOBAL macro issues. Many IG Banks & Energy companies with YTM bond yields over 5%….so why would equivalent yielding IG preferreds be desired, especially if the preferreds are non-cumulative and perpetual in contrast to the bond which has fixed payments & a maturity date?

    1. It’s a matter of investing style. Bonds are for buy&hold investors, not suitable for active traders because of the wide spread. Bonds rank higher in the event of bankruptcy you’re more likely to recover a fraction of your losses but no guarantees.
      Preferreds generally pay higher dividends to compensate for the higher risk. Most importantly you can trade them back and forth without losing an arm and a leg on the spread. I’m a active trader and I’ve had success trading preferreds so that’s what I do. Your mileage may vary. This board is biased toward those who trade preferreds and baby bonds.

    2. Newbie: Also, bonds only pay interest every six months. I like preferred stocks and baby bonds for their quarterly and some pay monthly interest payments. I know it shouldn’t make a difference, but it is nice seeing the income roll in every month, especially on a day like today.

    3. Newbie, a lot of situational variables here also. These preferred issues are generally QDI which is a tax break also. And most bonds are generally senior unsecured and sit above true preferreds in cap stack. They have more protections than preferreds do. But that also depends on credit ratings and individual company credit quality. Generally if I was just an income only guy and the bond hit my needs duration included, they would hold more allure to me. BTW, the debt market dwarfs the preferred market like a dog does to an ant.
      Perpetual preferreds generally have asymmetric risk also.. A negative person could say with some truthfulness preferreds are the worst of both worlds. They act like stocks when market is dropping and act like bonds when market is racing up.

      1. Thanks Martin G, Bill S, and Gridbird…appreciate everyone’s advice!

        Grid…the assymetric risk of preferreds you mentioned does concern me when market sentiment is growing negative and rates will be rising throughout 2022.

  29. I’m wondering why the symbol TECTP is used for both the parent company and the 9% f-2-f preferred?
    Their site has this: Tectonic Financial, Inc. (Nasdaq: TECTP) as a description of the company itself. Seems like it would be TECT or TF TFIN, etc — Don’t seem to be used by any US company

    1. Gary, there is no public common stock float. If TECTP wasnt issued there would be no reason for them to file. They could delist this if they ever wanted to, and then not report anything, and it would go to expert market. Considering the float is tiny at about $15 million, I wonder why they went to the expense to make it exchange traded to begin with.

  30. RE: BRG-C, BRG-D
    BRG would normally declare a quarterly dividend for BRG-C and BRG-D on June 14 or June 15. I do not expect a regular dividend declaration next week. Would the absence of a dividend declaration by the Board be an indication that BRG believes it is getting very close to the “Effective Time” of the Merger?
    Did the notice of redemption for BRG-C/D necessarily preempt a regular full quarterly dividend or does BRG go along on a normal regular path until the “Effective Time”?

  31. Preferred Stock Trader recently recommended CODI-C and PRIF-L on SA. PRIF has been mentioned on this site many times but does anyone have any knowledge about CODI and the level of risk involved in that company?

    On a separate note, I just bought some RZA at these levels.

  32. I wonder if some of the capital deployment will include redeeming the series F & G preferreds?

    For the first two months of Q2, demand remains very robust, said Chief Financial Officer Tom Boyle. Move-in volume is up 3% from a year ago and rental rates rose 12.6%. In a business update posted on Monday, annual contract rent per square foot increased 17.2% in the first two months of Q2 vs. a year ago. Square footage increased 2.8% Y/Y in that same period.

    PSA’s balance sheet is in “very good shape,” Boyle said with ~$1B in cash. “We have cash coming to us from the sale of PSB (PS Business Parks). We’re looking for opportunities to deploy that capital,” he said.

    From another article….

    Public Storage expects to receive approximately $2.7 billion of cash proceeds and recognize a $2.3 billion tax gain on sale upon consummation of the transaction. Public Storage expects to distribute the $2.3 billion gain to its shareholders.

  33. What can we expect in the bond / preferred market when Fed Reserve raises interest rates another 50 basis points next week? Do we feel this increase is already baked into current preferred share prices or do we expect serious pricing pressure on bond/preferred instruments?

    1. I spent a lot of time watching CNBC and Bloomberg Markets while working from home over the past two years, and one thing I learned was that no matter how many times someone says the possibility of situation X is baked into the market, the market still reacts when that situation actually happens.

      If you have available funds and are hoping to buy more preferreds if rates go up and prices drop, don’t let your guard down because someone says they don’t expect much of a change because a rate hike is baked into current prices. Watch with your own eyes. Maybe it is baked in and maybe it’s not.

      1. NewToThis2015—generally agree with you—some is probably baked in, but there is always a reaction. When you think it is baked in the market will tell you otherwise.

    2. IMO

      It’s baked into the cake. In the press conference when asked if 75 bips were under consideration he said no and thought 50 bips was the path for the next two meetings I think.

      Inflation numbers this week are expected to remain about the same as the last reading. So not rising but remain elevated.
      The GDP for the second quarter may be the next thing to move prices. Another -1.4% or a .9% growth to push off a recession.
      We shall see.

  34. UMH-C and UMH-D – UMH just published an Investor Presentation Slideshow in conjunction with their participating in tomorrow, June 8th’s, Nareit’s REITweek 2022 Conference….. P 25 reconfirms what they’ve been saying for a long long time – that they still plan to call both ASAP despite the runup in interest rates to take advantage of “The Compelling FFO Accretion Opportunity From Redemption of Preferred Stock.” … UMH-C becomes callable 7/26/22 and UMH-C 1/22/23. Given they’ve already raised the funds to do these calls, I would doubt they’d let UMH-C remain outstanding until Jan ’23 so they could do both at the same time…. Look for call notice on C before June 27.

    1. 2WR:

      “Given they’ve already raised the funds to do these calls”

      I don’t think UMH has yet raised the funds to call the 8.6 million shares of 6.375% UMH+D in January 2023. That may be more wishful thinking on the company’s part.

      But the 10 million shares of 6.75% UMH+C will be called this Summer for sure, especially with the $292M in cash on UMH’s balance sheet as of 3/31/22.

      1. You could be right… my focus has been mostly on C’s anyway. Seller in the market right now on C’s at $25…. seems like a good opportunity. How can C be worth $25 with D bid at 24.95? I bot more C at 24.99 even though I’m full up already….

        1. 2WR – I have owned the UMH-C for a while. But if buying today I would buy the UMH-D (actually I did buy some today)

          The difference in return is negligible if you assume both will be called on their call date. For a full quarter the C has a .4219 dividend while the D has a .3984 dividend. So we are talking a difference of .0235 per quarter

          Let’s ignore the fact that there is less than 2 months of a dividend remaining on the C before being called on 7/26. The difference in price between the C and D make up the difference (25.03 close for C, 24.94 close for D). Even if you can buy C at $25 flat, getting D for 6 cents cheaper gives you virtually the same total return – plus you get if for 8 months instead of 2 months

          1. IMHO the difference between owning the two is the added risk involved in owning D if you are looking for something you expect to be called…. UMH has been absolutely straight forward on their intentions to call both, so that’s a plus. However, my thinking would be that if UMH were to issue a comparable preferred today, they most likely could not do one a rate much better than C’s 6.75%. So with maybe 150 basis of FED tightening or more on the table between now and January, I can’t help but think that perhaps there is an absolute level of interest rates out there that could make UMH change its thoughts in January… So to me, the downside is appreciably higher on owning D if you think you would not be comfortable holding it forever if market conditions in Jan made UMH change their minds….

            But that’s just me….. Im just much more comfortable betting on what might happen in the next 3 weeks than I am on what will happen in the next 6 months, especially when I have a 6 3/4% which is probably close to fairly priced vs no call, vs 6.375% which should probably be trading lower were it not for the call talk….

            You’ll probably do quite fine with D… Personally, I’ll revisit after C’s call is actually announced.

            1. 2WR, Your boy RCA dipped into the 25.20s today, so I doubled down and made it a full position now. Just dont go bankrupt on me next 14 months and that is a decent little short term position to hold.

              1. Was another outside day for me most of the day, so didn’t see it… I confess to not delving deeply into RCs’s numbers these days, but what I do believe is they are a much stronger company today than they were when I first got involved…. me no worry about no 14 months…

            2. I’ve just listened to UMH’s June 10 Investor Presentation At about the 22’23’ mark they definitively say “We are going to redeem $272 million in preferred stock in July where we already have the money on hand. So that swing will be $270 million earning nothing to reducing the cost 6.75%. That amounts to 14 cents in FFO per share…” And yet UMH-C closed on Friday at 24.98, when on July 26 at call, you’ll receive approx 25.30, essentially now theoretically unquestionably. If purchased for settlement date 6/15 (for simplification sake since June 15 is div payment date), if I figure correctly a buy of UMH-C at 24.98 on Monday provides approx 9.80% YTC.

              I stopped listening at that point but there was no mention of D at this section of the presentation…. More – they do go on to mention D at about the 36′ mark with expectations to call

              1. Hi 2WR,

                Sorry if you’ve covered this before, but how are you calculating $25.30 as the 7/26 redemption amount?

                  1. My apologies…. I have no idea what I did this last time but you guys are right… It should be $25.26ish. I hate screwing up but glad you guys are paying attention to correct me…….. That being said, what do you get for an accurate YTC? I think my 9.80% approx was right despite being wrong when reporting the total payout amount……

                    I calculated YTC using I figure there are two ways to try to get the yield to call for this special situation. One would be to set the MATURITY to June 1 of any year beyond ’22 then set the call date at 7/26/22 with call price $25… Using 6/15 settlement, you’d subtract .065 accrued from 24.98 and you’d get 9.679%. The second way would be to use 6/15/any year as maturity and calculate an estimate of 15 days of accrued and set the call price at that premium over 25… I used 7 cents and call price 25.07. Now the calculation will show no accrued and the YTC calculates to be 9.829%…. What do you guys think?

                    1. Yeah, I had meant to add that the $25.26 gave a YTC about what you said. I get the YTC by taking the $0.28 profit, dividing by $24.98 and annualizing by 365/41 days. Comes out around 9.9%.
                      Also, 4 cents isn’t a screw up, it’s a rounding error.

                    2. No worries 2WR. Was just confirming I wasn’t doing something wrong. Appreciate your insights!

  35. NEWTL and NEWTZ – I did get to speak with NEWT management very briefly today regarding the 2 notes. It was quite obvious that they were quite cognizant of not wanting to say anything that could be construed as non-public information, so not much new news to talk about….. What I did confirm is that what we thought will happen will happen and these two will be redeemed on or before the closing of the bank deal as required and that the timing for the closing of the bank deal remains anticipated to be “in the third quarter.” They were not about to pin that timing down any closer than that even though I got the sense that they thought they could. As I had thought, since redeeming is a pre-condition to closing the bank purchase, NEWT will have to announce a call 30 days in advance of an anticipated closing date… Regarding NEWTZ specifically, that does mean a make-whole call price will be in play. As it was obvious he was pressed for time, we didn’t even attempt to get into the minutia of how to properly calculate the present value given the language in the prospectus, but I’m sure they’ve got lawyers and investment bankers making sure that gets calculated properly at the time. Hopefully those who have pointed out the present value discount is supposed to be applied only to the interest, not principal and interest, turn out to be right.

    Pure speculation on my part, I will guess the bank deal will close around August 1 or in the early part of the third quarter rather than that later part. Having said that, given the timing is essentially in the hands of regulators, one never knows for sure until they do. However, if my guess is correct, we should see call notices announced on NEWTZ and NEWTL sometime around the end of June.

    1. The Notes are about $150mm in total, so I am pretty sure they need to do some kind of capital raise before calling the Notes. I don’t think they would even want to announce the call before having the funding in place, or they would be leaving themselves wide open to getting jammed with poor terms on the new notes. Also, Late July and August are not favorable times to do any kind of capital markets transaction. So they might try to get the funding raised soon while markets are in relatively good shape and then give 30 day notice for the call.

      1. Points taken regarding potential need to do a refinancing… FWIW, last quarterly says there’s $115 mil outstanding of the ’26 note but that doesn’t change anything…. It makes sense that Step 1 should probably be an announcement of a new issue, but I wonder how difficult that might be to raise money now acting as the BDC they are when they won’t be one in the future? I guess figuring that out is what investment bankers are for…

        One way or another, the point is that redeeming of the notes must be completed before the bank deal can be closed, so I would think NEWT would not want the closing to be sitting around unaccomplished simply waiting for the 30 day notice of call period to pass for the two notes to be redeemed

        1. in case anyone wants to take a crack at the interest amount.
          2) the sum of the present value of the scheduled payments of interest (exclusive of accrued and unpaid interest to the date of redemption) on the Notes to be redeemed from the redemption date until February 1, 2023, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points.
          I am guessing the Treasury rate is the AFR, which is about 2.20%, so present value of 6 months of interest comes out to $.63-0.65 or so.

          1. J – not sure what you mean “AFR,” but how it works is dependent upon the date of call… In other words, if it’s called on 8/1, then the applicable Treasury rate would be the 6 month Treasury rate PLUS 50 basis. If it’s 9/1 then it’s the 5 month Treas etc… So if today was 8/1 (or the actual calculation date in front of 8/1) then the discount rate would be today’s 6 month rate of 1.772 + 50 basis or 2.272. So what you’re saying and I’m saying is probably the same thing. I’ll buy your calc of net present value because I’d have to get out my HP12c handbook and figure out how to do it… I know it’s easy, but because of the language it differs from what a bond calculator would figure as has been discussed, and you guys use the net present value way much more easily than I know how. ha

              1. J You will not see any reference to any specific time period of T-bill or T-note. That’s because of the nature of a make whole call…. The term they use what should be a defined term, the capitalized, “applicable Treasury Rate, but a quick search for the definition within the prospectus failed…. I think they use “Treasury Rate,” to take in both T-bills and T-notes because it could be either depending upon the amount of time left between the call date and the maturity, or in NEWTZ’s case, the first call date at par.

                So if NEWTZ had been called on 2/1/22, then the applicable Treasury rate would have been the prevailing yield on the 1 year Treasury note with maturity closest to 2/1/23. That’s why you don’t see a specific reference to a 6 month T-bill because a 6 month T-bill, as opposed to a 5 month or a 7 month, for example, is only applicable within a small window of days around 8/1/22. The “applicable Treasury Rate” is always a moving target, not a fixed time period depending upon when the note is called.

  36. A couple comments on a few 2 White Roses “blasts from the past (or current too)”. CUBI-E is in a narrow range but has drifted back towards $25 par. For those that dont know and are hunting, its a live floater paying 5.14% plus Libor. So expect a decent divi jump next cycle. They can only redeem on divi payout so next divi is good to go….His love affair with RCA has led me in and out of it, and today I got back in at 25.43. It has 5 more payment cycles until mandatory redemption 8/23. So a roughly 5.5% ish clip to maturity at that price if I hold until maturity. Of course one must deem RC trustworthy to pay to invest. I dont like these companies, but it is what it is as some of it is emotional.
    ….For anyone hypnotized under the utility debt spell, this one may bear worth watching if it sags more. It has came down about 20% already and ~30% down would will really excite me…. The 5.75% 2033 Peco subordinated trust debt (A3/BBB-) issued in 2003.
    Its basically KTH without the maturity quirkiness and has a 5 year longer duration. The allure to watch is one will get 100 bps more from the subordinated deferrable status it has. And it has a make whole type feature and 11 year duration as opposed to a 2070 type duration others currently have. Plus of course a benefit is its subsidiary debt not parent debt. So one gets paid before parent Exelon can get paid. I bought a few more today to plug a hole, not for endearing value. But if it drops under par it will become more of a play for me and not just a dike hole filler.

    1. interesting you should mention CUBI-E right now… I was outside all day and had forgotten I had left open orders in on E so I bot more at 25.12 and 25.07. Being surprised to see the dip to a close at 25.03 I double checked to see if something funny was happening with LIBOR today… nada…. I also had just recently checked the exacts for formulating the next floater dividend. It says, “For any dividend period during the floating rate period, three-month LIBOR (the London interbank offered rate) shall be determined by the calculation agent on the second London business day immediately preceding the first day of such dividend period (which we refer to as the “dividend determination date”) …” That’ll mean it gets locked in on June 17 or maybe June 20. Right now, 3 month LIBOR = 1.63, so if today was the 17th, the Sept coupon payment would be locked in at 6.76% right? Then again, the Fed meeting is June 14, so maybe there’s even the possibility of an immediate upward bump after that, but 6.76% looks pretty solid and certainly works for me..

      Incidentally Grid, speaking about old blasts from the past, I’ve been trying unsuccessfully to add to the ENB USD preferreds, specifically EBBGF, but have had no luck working only the US market, not… I’ve been the highest bidder for weeks, even bidding against myself and haven’t come close, I guess mostly because my bid still was noticeably below where it was trading on TSX…. EBBGF seemed way underpriced vs EBBNF in particular as EBBNF ran up because ENB announced a call on May 4 of Series J which has the same float rate premium over 5 yr US Treas as EBBNF has when it next becomes callable….. EBBGF lagged behind and yet it has a current coupon of 5.949% with float premium of 3.14 vs EBBNF’s 3.15.. it seemed a no brainer to try to buy below 23.50 but I just couldn’t get it executed…. It seemed the best of the three EBGEF, EBBNF and EBBGF. Did you get involved in that oldie but goodie??? EBGEF has lagged behind, but now, as opposed to way back then, that makes sense as the other two , if not called, will be going to higher coupons while EBGEF will remain at 5.3753 until 3/1/24.

      1. EBBNF I got lucky on. I was able to get 600 at $22.40 in early May again and was looking to add even more. Then 2 days later I saw it popped and sold them all at $24.50 on the golf course. I didnt know at the time why it popped until I got home and read here what caused it. I havent looked at it since then.
        Thanks for the color on CUBI-E next payment. I assumed it may get set early, but was just guessing. It will be comfortably over 7% the following cycle assuming its not too painful for them and they redeem it.
        I bought 100 more at $25.06 today. I already own too much and had no business buying these.

      2. From the prospectus:
        “On or after June 15, 2021, the Series E Preferred Stock may be redeemed at our option on any dividend payment date, in whole or in part, from time to time, at a redemption price equal to $25.00 per share, plus the per share amount of any declared and unpaid dividends, without regard to any undeclared dividends.”
        It looks to me that the security could be called on the June 15th dividend date as I don’t see any requirement for prior notification by X number of days. Am I missing something? Regards.

        1. Bob – Assuming you’re talking about CUBI-E, that call, as any call for the series, is subject to a 30 day minimum advanced notification. Therefore, the June 15 call opportunity for CUBI to exercise a call on June 15 came and went already and CUBI-E is good to go until at least Sept 15.

          “If shares of the Series E Preferred Stock are to be redeemed, the notice of redemption shall be given to the holders of record of the Series E Preferred Stock to be redeemed, either by first class mail, postage prepaid, addressed to the holders of record of such shares to be redeemed at their respective last addresses appearing on our stock register not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the shares of Series E Preferred Stock are held in book-entry form through The Depository Trust Company, or DTC, we may give such notice in any manner permitted by DTC).”

          1. Thank you for the speedy reply. I didn’t read down far enough in the prospectus. I read the first couple of hits for a search on “redemption” but needed to look deeper. Regards.

            1. The 6.76% looks pretty solid, but if you assume a call date of 9/15/2022 and buy now at price above $25, you don’t get close to that. Your holding period is greater than one quarter and any excess above $25 comes right off the top. For example, at a price of $25.06 (last I saw), I get a YTC of about 5.4%. Not bad, but not exceptional these days. Of course, along with the 5.4%, there is also protection against further increases in interest rates.

              1. nhc – Bear in mind what your comparisons should be if your talking about a 5.40% YTC. It’s tough to come across a 3 month piece of paper that will yield 5.40%, isn’t it? You can get it right now betting on UMH-C being called, for example, but imho, in that case your downside risk should that call not happen is greater than it is on CUBI-E so maybe that makes sense. (BTW, I’m full up and more on UMH-C) Obviously. trying to buy a straight forward 3 month piece of paper that yields 5.40% is nigh on impossible.. Point is, if you’re considering YTC yields, you should compare what’s available with yields available on securities with actual maturities comparable to the call. This all also assumes you’d be in the market for something with a 3 month maturity and willing to accept the best risk adjusted yield you can get to get one

                1. No dispute there. Just saying that I think that the YTC is more relevant than the current yield.

          2. CUBI-E is tied to LIBOR, as of 6/30/23 the rate will no longer be published. I haven’t followed LIBOR priced securities as I don’t hold any currently. But last I knew SOFR was selected as replacement, and why I stepped away from LIBOR priced securities. SOFR seems to fall short of LIBOR. SOFR currently at .78% vs 3 month LIBOR of 1.61%. SOFR is lower than 1 month Treasury. Seems this has some short legs (1 year) to it in regards to favorable rate with repricing. Am I overlooking something?

            1. What happens if/when LIBOR goes away is essentially determined on a case by case basis on each floating rate issue that relies on LIBOR for its pricing. In the case of CUBI-E:

              “Three-month LIBOR will be the rate for deposits in U.S. dollars having an index maturity of three months in amounts of at least $1,000,000, as that rate appears on Reuters screen page “LIBOR01”, or any successor page, as of 11:00 a.m., London time, on that dividend determination date.

              If no offered rate appears on Reuters screen page “LIBOR01″ [which I assume also means ‘If LIBOR is no longer published’] on the relevant dividend determination date at approximately 11:00 a.m., London time, then the calculation agent, after consultation with us, will select four major banks in the London interbank market and will request each of their principal London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time, that is representative of single transactions at that time. If at least two quotations are provided, three-month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, the calculation agent will select three major banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the dividend determination date for loans in U.S. dollars to leading European banks having an index maturity of three months for the applicable dividend period in an amount of at least $1,000,000 that is representative of single transactions at that time. If three quotations are provided, three-month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, three-month LIBOR for the next dividend period will be equal to three-month LIBOR in effect for the then-current dividend period.”

              So that means to me that SOFR does not replace LIBOR in CUBI-E’s case.

              1. 2wr – appreciate the fallback specifics on CUBI-E, now my head hurts – LOL. As they say that’s now clear as mud. Definitely makes the future rates less transparent.

                I was referencing information that ETrade had shared on LIBOR replacement in the US -> “To address concerns about LIBOR, the US Federal Reserve established the Alternative Reference Rates Committee (ARRC) with the goal of finding alternative rates for LIBOR in the US. After extensive investigation and review, the ARRC selected SOFR (the Secured Overnight Financing Rate) as its recommended alternative.”

                Anyways, it would be interesting to know what that IF/THEN/ELSE fallback logic would equate to today. Or maybe CUBI redeems within the next year and then it really doesn’t matter. Thanks again.

                1. Not sure if this was posted previously but LIBOR fallback has been addressed by the US congress. On March 10 a law was signed (the Consolidated Appropriations Act, 2022) allowing LIBOR to SOFR switches as a matter of law. Here is the relevant part for the above OC language (This is Subdivision U Section 104 as found here: or wherever you get your government documents) (you may also wish to look at the ARRC announcement of this event at

                  SEC. 104. LIBOR CONTRACTS.
                  (a) In General.–On the LIBOR replacement date, the Board-selected
                  benchmark replacement shall be the benchmark replacement for any LIBOR contract that, after giving any effect to subsection (b)–
                  (1) contains no fallback provisions; or
                  (2) contains fallback provisions that identify neither–
                  (A) a specific benchmark replacement; nor
                  (B) a determining person.
                  (b) Fallback Provisions.–On the LIBOR replacement date, any
                  reference in the fallback provisions of a LIBOR contract to–
                  (1) a benchmark replacement that is based in any way on any
                  LIBOR value, except to account for the difference between LIBOR and
                  the benchmark replacement; or
                  (2) a requirement that a person (other than a benchmark
                  administrator) conduct a poll, survey, or inquiries for quotes or
                  information concerning interbank lending or deposit rates;
                  shall be disregarded as if not included in the fallback provisions of
                  such LIBOR contract and shall be deemed null and void and without any
                  force or effect.

                  1. When no fallback is specified, will the applicable index that replaces 3 month LIBOR generally be the so-called 3 month SOFR (more formally “the rate for Term SOFR for a tenor of three months”)? If I understand correctly, this 3 month SOFR is presently about 1.5%. But if this is not correct, can someone correct it and provide a good citation for where to find the 3 month SOFR?

                  2. I read an article in SA a few months ago that there may be a spread adjustment added also. 26 bps was mentioned which aligned with the study below. For me I am not worried about Libor transition because either the spread is already so compelling, I will take my chances with a little potential softer yield….Or like WTREP no reason to worry because I cant do anything about it, ha.

                    The ARRC obtained and studied input from various sources as to the methodologies for determining the spread adjustment. The ARRC settled on using the five-year historical median difference between LIBOR and SOFR, set on March 5, 2021, which includes the following recommended spreads:

                    11.448 basis points for one-month tenor
                    26.161 basis points for three-month tenor
                    42.826 basis points for six-month tenor
                    While LIBOR and SOFR have historically trended together, in times of market disruption, the difference between the two rates may widen or narrow. For example, during the 2008 financial crisis, the gap was as wide as 100 basis points. With current interest rates historically low, the spot spread for three-month LIBOR and Term SOFR is only approximately seven basis points. For new loans or amendments, borrowers may object to the ARRC-recommended spread given that it currently is considerably higher than the spot spread. While market experts predict that the spot spread

  37. Has GJH changed to the expert market now? I tried to purchase some share from FIDO and message said they no longer allows opening trades.

    1. Interesting. I don’t own GJH but tried a trade to buy below market at Fido. Rejected as your trade was. Fortunately, Fido allows most trades now. You might call the bond desk to see if they will handle the order over the phone.

      1. I bought 100 shares of GJH in my eTrade account no problem. I only see 100 shares of GJH traded for the day. That doesn’t seem right. Is something going on with GJH?

  38. Chasing yield loses again

    In case you have not heard, a digital “stablecoin” called TerraUSD collapsed in May and wiped out many investors. Luna was an “algorithmically” created stablecoin. It was designed to be constantly worth one US dollar. The software was setup to arbitrage one coin (Luna) versus TerraUSD. It was supposed to work much like the ETF creation/redemption mechanism. Long story short, it got into a death spiral and lost 95% of its value in about one week. At the top, TerraUSD was worth ~ $60 BILLION. So the losses were catastrophic.

    The reason I post about it here on III is that the creators offered investors 20% annual interest to entice them to sign up. Apparently many of these digital created coins offer promises of high interest rates simultaneously with stable principal values. Obviously we need to ditch these 4% to 7% coupon preferreds and earn some real money with “stablecoins.”

    There are many stories about the TerraUSD/Luna collapse. Here is Bloomberg’s writeup:

    Other investors also say they were prepared for ups and downs, but never imagined such a rapid collapse. Senior Bernier, 24, a flooring contractor in Montreal, says he lost about $250,000.

    1. Tex2:

      Thanks for the link. Although I do believe that bitcoin and the blockchain will be a survivor, it is obvious that so many of these crypto investments are really just ponzi schemes in “stablecoin” wrappers. 20% interest rates?

      All of these actors and superstar athletes (Matt Damon, Lebron James, Tom Brady, etc.) ought to be ashamed of themselves for promoting this junk. The truly sad thing in the article is that the investor who lost his life savings continues to hunt for another crypto coin to ‘get his money back”.

      “Iyamuosa, the Nigerian investor, says he’s spent the days since the crash in disbelief. Down to his last $20, he’s still on Twitter and the chat app Discord, hunting for a crypto project that will make his money back. ”

      It should be a chapter in the School of Hard Knocks – but I guess some old habits truly die hard.

    2. What an incredible story. The stupidity and greed of many people never ceases to amaze me. A favorite show of mine is “American Greed” narrarated by Stacy Keach. Many of the episodes are fraudulent ponzi schemes “guarantying” 10 – 20% annual yields and people flock to their investment seminars with some investing their life’s savings to these utter strangers. Why would one do this when there are reputable investment managers available like Vanguard, Fidelity, etc… I’m confounded how one could believe 20% interest is safe. Is it that greed overwhelms a person’s common sense?

  39. The ICE Exchange-Listed Preferred & Hybrid Securities Index (PHGY) which $PFF uses as its base index was released publicly an hour or so ago. It explains a few unusual share movements / volume spikes noted over the last couple of days. For example, the weighting of the Altera preferred shares within the PHGY index was increased substantially. The % weighting of $ALINpA nearly doubled. Odd that they’d include a non-paying preferred in the base index, but, as the kids would say, “Whatever!”

    June, 2022 PHGY Components:

    May, 2022 PHGY Components:–HiP0cJD5JsnL/view?usp=sharing

    The “Fat Brands” 8.25% preferred shares were added to PHGY.

    1. Interesting, maybe they expect the cumulative dividends for ALIN to be reinstated soon.

      Are you feeling lucky?

    2. ESW3:

      Amazing that ICE added FATBP to its PHGY index. FAT continues to lose gobs of money, its leverage is off the charts, the CEO is under SEC investigation, and the preferred was brought public by an investment bank that seems like a boiler room.

      Remember JT Marlin from the “Boiler Room” movie?

      1. What exactly is amazing about it? PHGY is a rule based index, they buy names that match their criteria.

        “FAT continues to lose gobs of money, its leverage is off the charts, the CEO is under SEC investigation, and the preferred was brought public by an investment bank that seems like a boiler room.”

        None of these items are part of their investment criteria.

        1. Now I have not read the criteria but I did a quick google search. I am too lazy to create a limited access account at ICE.

 (For PFF)
          “The Fund seeks to track the investment results of the ICE Exchange-Listed Preferred & Hybrid Securities Transition Index (the “Underlying Index”), which measures the performance of a select group of exchange-listed, U.S. dollar-denominated preferred securities, hybrid securities and convertible preferred securities listed on the New York Stock Exchange (“NYSE”) or NASDAQ Capital Market (“NASDAQ”). The Underlying Index includes issuances of preferred stocks with amounts outstanding over $100 million, convertible preferred stock with at least $50 million face amount outstanding, and hybrid securities with at least $250 million face amount outstanding, that meet minimum price, liquidity, trading volume, maturity and other requirements, as applicable, as determined by ICE Data Indices (the “Index Provider” or “ICE Data”).”

          Does that mean FAT has over a 100 million in preferred shares out there? Their whole market cap is just above 100 million. The original release of preferred was only about 10 million.

          Now perhaps that blurb above does not tell the whole story.. but it does seem odd it got added.

          1. I’m still not sure what is odd? FATBP has 10m shares outstanding easy to check..

            “As of the date of this prospectus, there were a total of 9,158,109 shares of our Series B Cumulative Preferred Stock issued and outstanding”

            1. Jeez louise. 9 million plus preferred shares outstanding. 200 million plus. I should have checked. I know they sold more but that much more. Dang. What a stinker which they dont consider. Yea.. that was the only reason I said odd.

  40. GRjoel: I still work, but I have enough stored PTO time to where I started taking every Friday off, figuring I could practice being home when the market opens and perhaps do some trading as I will be retiring next year. Long story short, my wife decided to change her grocery shopping and Wal-Mart shopping day from Thursdays to Fridays so we could go together. Worst part is she is an early bird, likes to get there at 6:30am(PDT) when they open, which is exactly the time NYSE starts trading 🙁 But I guess putting up with me for 45 years, it is a small price I have to pay 🙂

    1. Bill – you’re a lucky couple who likes to go shopping together. I can’t stand to go shopping with my wife – it’s a source of friction in our relationship. I’m an “in and out” shopper and my wife could spend all day at Home Goods and TJ Maxx. She drives me crazy. In the past 12 years I bet I’ve waited for her in the parking lot over 100 hours.

      1. GRjoel – But you waited in the parking lot for her, so you’re still a good guy. I just go so I can sneak a box of cookies into the cart under the vegetables when she isn’t looking 🙂

  41. Hard to believe this was a real interview.
    And yet, she is still in a position to influence economic policy.
    (heavy sigh …… shakes head)

  42. Memorial day always makes me think about the need to give back, so with all the volatility in the market, I just wanted to put in a plug for giving to charity.

    While lots of issues are down, some are up dramatically (esp. energy) and may be good candidates for donation.

    For most US taxpayers, donating appreciated assets is the best tax deal going.

    For example, today I donated some XOM to a charity for which I will receive a tax deduction of about $99 per share. I paid just over $30/share for it just over two years ago and I will never have to pay tax on the over $65/share in gains. More importantly, the charity can do some good with it.

  43. Guys—it’s not been a great week for me. Even though I had 2 Moderna shots plus the booster, I came down with Covid last Monday or Tuesday. I’m in my late 70’s and this is by far the sickest I’ve ever been. I’m only now coming off the bottom on Friday night. I can finally eat solid food because my swollen/sore throat has finally allowed me to swallow. There is also a new (limited supply) med that the federal government is dispensing, by prescription and without cost, to older people or those with health issues. It is supposed to be very effective against the latest Covid variant. I definitely think it helped me. I encourage all of you, even if you’ve had all the shots, to still remain vigilant. Trust me, you do not want to personally go through my experience.

    1. Randy; Glad your over the worst and feeling a bit better. I am 73 and I know recoveries just take longer be it illness or injury. Thank you for the heads-up and hope your 100% soon.

      1. PAXLOVID—3 tablets 2x a day for 5 days—I’m half way though. The first 2x, I could barely get them down because of my swollen throat, but I was determined come hell or high water to succeed.

        1. That’s the PFE pill and it’s the best by far of everything approved so far. Anyone older or slightly overweight or with any of a large list of health problems are eligible. Sure PFE is making billions off it, but you might as well get your (medical) share in case you get sick. Here’s a quick rundown on the best FDA options.

          If you want the best generics that look promising, you can check out these guys, both for early treatment and long covid.

        2. Hang in there Randy, hopefully the corner has turned for you and normal health will return very quickly!

        3. Asked my go to write me a script for it so I could take it with me on a quick trip overseas but he wouldn’t unless I had symptoms. Been back a couple of days and seem to be OK, but too soon to tell – nine hours airborne with a mask, not pleasant. Wish you a swift and complete recovery Randy, be careful everyone, the fat lady has yet to sing.

        4. Asked my doc to write me a script for it so I could take it with me on a quick trip overseas but he wouldn’t unless I had symptoms. Been back a couple of days and seem to be OK, but too soon to tell – nine hours airborne with a mask, not pleasant. Wish you a swift and complete recovery Randy, be careful everyone, the fat lady has yet to sing.

          1. You can probably find a doc who will, but the PFE pill isn’t technically EUA’ed for prevention or in advance. I’ve heard that’s a common request and many people are getting scripts for it.

        5. Hang in there Randy. The Paxlovid led to rebound covid for me — i’m in my 4th week (vaxed and boosted), but the Paxlovid helped my wife get over the vid in just a few days. I hear the earlier you take it when u first develop symptoms the better it works.

    2. Sorry to hear it, Randy. Glad you’re coming back up for air, and thanks for sharing your experience. Where in the country (or out of it;-) are you located?

    3. Glad you’re getting thru this relatively quickly… So good to hear… I’m a member of the late 70’s Club as well and also a Moderna jab person, but never followed thru after the first one…. Will keep Paxlovid on the “just in case” list thanks for you…. IN the meantime, will continue living a hermit’s life I guess……..

      1. Two PFE and double boosted. 75. All the cases I had been hearing about recently were mild. I thought we might be getting to the other side, but this is a cautionary. ATB for a continuing recovery.

    4. Randy;
      Glad to hear you have turned the corner and are starting to feel better. As I recall we are pretty close just one county apart. Have been watching the case counts and hospitalizations slowly clime the past few weeks in our area. Get well soon I enjoy reading your comments.

    5. Randy: wish you a swift recovery. Covid is a funny one. Have a friend that has caught it twice. lucky no ill effects.

      First time he flew through and the second time it put him down for 2 weeks his voice still has a crackle.

    6. hang in there Randy — I get my 4th shot tomorrow (Pfizer) at 66 been healthy thru out and now seeing grandkids on regular basis. Life goes on

    7. Randy-
      I hope you have a full recovery soon.
      Me- soon to be 78, PFE x4, have to be careful. Will keep that med in mind too.
      Looking like a geezer club here 😉

    8. My wife came down sick last Friday eve. A home test was positive for Covid Sat. am. Being late 70s and diabetic, we went to the ER (only place open on the weekend) where they also confirmed Covid. Doc there would not prescribe Paxloivd as he said there were adverse interactions with her Lovastatin and Metformin drugs. She had all 4 shots, 2 original and 2 boosters.

    9. Wife tested positive on 5/21. Luckily I was negative. She quarantined upstairs and I slept in the basement. I just got my 2nd Pfizer booster on 5/2 so maybe that helped me. She took the pavloxid — finished it last night. Today is day 10, so we can sit on the couch together tonight! Get well soon. Covid is still nothing to mess with. Everyone can do what they want, but I am still masking in indoor public places.


    Wednesday 9 AM is the scheduled shareholder meeting to vote on NEWT’s plan to convert from a BDC to a BHC. Assuming the proposal passes, it should be interesting to see how quickly NEWT acts on NEWTL and NEWTZ as it is a precondition of their purchase of National Bank of New York City that makes the conversion to BHC happen that these two be redeemed or in some other way NEWT gets out from under the BDC Investment Company Act language in their prospectuses.

      1. Thanks, 730. Was just going to post that It still remains to be seen what will happen and when for NEWTL and NEWTZ, especially NEWTZ with its funky “make whole” call in place. Right now, assuming an 8/1/22 call, approximate call price on NEWTZ would be 25.42. says, “The Company’s Board of Directors will not seek to discontinue the Company’s election as a BDC under the 1940 Act until after the Company receives the necessary regulatory approvals of the Transaction and after Transaction closing conditions are met. Any discontinuance of the Company’s BDC election will become effective upon receipt by the SEC of a Form N-54C. After the Form N-54C is filed with the SEC, the Company will no longer be subject to the regulatory provisions of the 1940 Act applicable to BDCs. The Company anticipates the Transaction to be completed during the third quarter of 2022.” p28 of spells out the precondition : “(f) the Company having completed a refinancing of its outstanding notes, including the elimination of any provisions relating to the Company’s election to be treated as a business development company under the 1940 Act,”

        1. I think you mean $0.42 for the make whole, plus the full period accrued dividend of $0.34?

          But I’m not sure I agree with your calculation of the makewhole.

          1. Yes… What I was figuring was the theoretical call price for NEWTZ if the call was on 8/1 and 6 month Treas yield was about the same as it is now…. This is all probably pyrric as short term rates will probably be materially higher after Fed meeting thus lowering the expected number, but I used 1.60% as 6 mos Treas rate + 50 basis premium for yield of 2.10%. Make whole provision is calculated to 2/1/23, not maturity. 5.50% due in 6 months at YTM of 2.10% = 25.4217. Yes, for total consideration you would add the .34375 qrtly assuming bot before the 7/15 x-div date.

            1. Yes, but I don’t think you need to discount the $25 principal back to the redemption date. Just the 2 remaining coupons. So on 8/31 if the 6M T rate is 2.0%, the make-whole is the PV of the 2 coupons which is ~ $0.68

              Will be interesting to see how they sequence things. They have a 30 day notice requirement for the call and I doubt they want to have a gun to their heads to refinance the notes as the last thing remaining to close the deal. I would think they would try to get the new financing in place soon, before Dimon’s hurricane

              1. 730 – What I’m doing is using fidelity’s bond calculator to figure out the dollar price of a 5.50% bond due in exactly 6 months at a YTM of 2.10%…. That’s where 25.42 comes from…. But to test that for accuracy, I googled how to calculate a make whole provision and first thing I came up with was To verify, I put their example of an exactly 5 year annual pay 5% coupon with a Reference Treasury yield of 1% and a make whole spread of .5% into the Fidelity calculator – They come up with 1167.40 and the Fidelity calculator shows 1167.393.

                Actually we may be saying the same thing, I’m not sure…..It would make sense that the present value of .68 discounted at 2% approx for six months could be about .42, but I’m more comfortable with bond math used as bond math than I am at using present value per se to figure bond prices. I do agree they most likely will not want to wait until the last moment and then have to wait some more for the 30 day notification to kick in, so I’m guessing they’ll act some time in June to announce a call for July… I should have more insight next Tuesday..

                1. The prospectus for NEWTZ is pretty specific about how the make-whole will be calculated. We will get the $25 (undiscounted) plus the remaining coupons discounted at T+50bps:

                  Since the 2 remaining coupons will only be 3 mos and 6 mos out (assuming 8/31 call), there won’t be much discounting to be applied to them. Should be about $0.68

                  I’m a little surprised we didn’t see any jump in the notes today. I bought more NEWTZ at $25.30. Thanks again for highlighting the make whole awhile back.

                  1. It looks like 2WR is applying the 2% discount to the principal + 2 interest payments to get the 25.42. But that’s not how I read it either. It seems that the 2% annual discount rate should only be applied to the 2 remaining interest payments, which is a discount of less than a penny. Am I missing something? (It wouldn’t be the first time.)

                    1. I would certainly welcome being wrong on the calculation and have the amount to be paid more in line with what you guys are thinking but I believe that for that to happen the language in NEWTZ prospectus would have to be out of the ordinary as to how to define a make whole provision and I just do not believe that to be the case. I will readily admit that make whole provision was just coming into vogue when I was leaving the bond world, so I did not have any real professional experience in how they worked in practice, however, over the past 8 years or so I have had bonds I own called under a make whole call and I’m pretty sure the method I am suggesting is the normal way it would be calculated. You betcha I could be wrong, but when you compare what is saying vs the NEWTZ language, I think the formula used would be accurate… Of course, the actual will depend on the specifics of the rate fro the comparable Treas at the time of the call, AND when they figure it… Nomally, it’s figured based on rates in place at a date very close to the actual call date, not one nearer the call announcement 30 days prior, so it’s always a moving target.. It is interesting that NEWTZ is figured on a SEMI-ANNUAL basis although it’s paid quarterly but I don’t think that makes a material difference in the final number….

                      Here’s hoping you’re right, I’m wrong, and that NEWTZ does not putz around in getting this done. Since it’s a precondition to close the bank purchase, I wouldn’t think they have much wiggle room to delay in order to get the call premium down to zero on 2/1/23.

                    2. 2WR
                      Your knowledge of and experience with these matters are vastly greater than mine. But this is what the prospectus says:

                      The Notes may be redeemed in whole or in part at any time or from time to time at our option on or after February 1, 2022, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price equal to the following amounts, plus accrued and unpaid interest to, but excluding, the redemption date:

                      • 100% of the principal amount of the Notes to be redeemed; plus

                      • the sum of the present value of the scheduled payments of interest (exclusive of accrued and unpaid interest to the date of redemption) on the Notes to be redeemed from the redemption date until February 1, 2023, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points

                      I can’t see how they get around that to apply the discount rate to the principal, even if that’s the general practice.

                    3. nhc – The first recent make whole call provision baby bond I could think of to compare the languages was that of RILYG…. Interestingly (OK, “interestingly” is a stretch) their language DOES seem to differ from NEWTZ. says, “As used herein: “Make-Whole Amount” means, in connection with any optional redemption of any Note, the excess, if any, of (i) the sum of the present values, as of the date of such redemption, of the remaining scheduled payments of PRINCIPAL OF AND INTEREST [emphasis added] (exclusive of interest accrued to, but excluding, the date of redemption) on, such Note, assuming such Note matured on, and that accrued and unpaid interest on such Note was payable through, the Notes Par Call Date, determined by discounting, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), such principal and interest at the Reinvestment Rate (as defined below) (determined on the third business day preceding the date of redemption) over (ii) the aggregate principal amount of such Notes being redeemed.”

                      That seemingly supports your case I would think when you compare the 2 languages…. Theoretically, I have a scheduled phonecall early next week with NEWT to discuss all this, so I will see if we can get a clarification at that time.

  45. 2WR, here is why I bag on the bond market. Remember everything is relative and not absolute in my thinking. For example, I have pronounced thinning receding hairline. Put me in the middle with 2 Kojaks and suddenly I am identified as the guy with the hair.
    3 bps skim, is horrible! Most of my trades would never occur if that was the threshold to generate a penny of profit. I cant set a bid in Vanguard and TD gives me .0125 leeway. Which usually is worse than Vanguards take it or leave it. Also bulk bond trades get discounts to what peon me can get. It works the opposite getting bonds and preferreds on exchange. The little man can squeeze in. For example I snatched several hundred KTH around 29.60 on a couple small market orders yesterday. Im rebuilding the herd after dumping some over 30.10 last week. Try putting a 3000 share market order on KTH and see what happens, ha.
    Even though the 2033 USM bond moved up in yield, there is no profit to sell. Unlike the stock exchange. Thus when I buy a bond, I know its a marriage. When I buy an ETD or preferred, I can rest in comfort knowing its just a girl friend…. It is what it is, I just like to gripe, and razz you a bit knowing you come from the other side of the tracks with your perspective. 🙂

    1. 2WR, clarification as I got off tangent and skipped some thoughts thinking ahead. From my experience if everything was just 3 bps, then I wouldnt complain. Its more like 3% to what I encounter between what I can buy and what I can sell for.

      1. Yes, I suppose that’s true, Grid – it does depend on where you’re coming from…. then again, you’re describing an ability on listed preferreds etc. that only came into existence less than 3 years ago when free trades began when you talk about 3 basis points being horrible…. Surely the Grid Method did not go into practice merely 3 years ago did it???? … so yeah, I get it… It’s not that I’m recommending trading bonds as an easy substitute for what we all do or want to be able to do by having an ability to flip a position for a dime or a quarter.. No question it’s not…. But I guess what I’m saying is that with a broker who charges commission, not as a principal, and one who shows you accurate best bid and asks in the market dynamically, the bond market can offer trading opportunities….. that being said, for the most part I don’t use it that way either…. marriage, not dating is a good description most of time…. Hmmmm. somehow this reminds me of one of my favorite TV talk shows interviews of all time when Dick Cavett interviewed Janis Joplin in 1970 and ended up feeling like he had to defend the entire male sex only I feel like I’m defending the entire bond market system…. lol The whole interview is worth watching, but this part begins at 2’25” or so – such an odd chemistry between the two also –

    2. Grid—regarding your admission that you have a pronounced thinning receding hairline and since you are a basically optimistic person, does that mean that you have about 7 hairs that are each probably 7 inches long? I have the opposite problem, more hair than I know what to do with and I hate getting haircuts. After about 4-5 months, my wife usually informs me that, if I want to continue getting my hot dinners, I need to get my hair cut to what she considers a reasonable length for an old man. Otherwise, it’s sandwiches, cereals and salads. Since I like my hot dinners, it’s off to the barber for me.

        1. Is trading stocks a real job? I do it at home so it’s Get a Wardrobe and Get a Real Job.

          1. I research and trade stocks at home often not in a wardrobe but in a bathrobe. I’m on the fence as to whether its a real job or not. I tell my wife it is so I can do less housework, but she generally doesn’t buy it. It feels like a real job when things are going south or when I’m searching for investment ideas ’cause my cash is 40%. Overall, I very much enjoy this and I’ve never enjoyed a “real” job – Friday afternoon was always better than Monday morning. I’ll end by saying I think its a 50% real job.

        2. 2WR

          Thanks for sharing the you tube with George.

          It made me LOL and brought back some good memories as I went to school at U of Delaware in the late 70’s when George and the Delaware Destroyers were regional stars and just beginning to make the big time.

          1. I was a reporter for the paper at the university of Scranton, scored two tickets to see George Thorogood in DE in 1979. Great concert, small venue, been a fan ever since. Had a scotch, a bourbon, and a beer. Haven’t drank alone since 😏

      1. Randy, I have a little more than that. But we went to see Top Gun Maverick today and I can 100% assure you Tom Cruise would never trade his hair for mine, ha. At least you have the option to behave and get a hot meal for your obedience. My lady wont cook anything! So yes I eat a lot of sandwiches and soup. As I dont like to cook either.
        2WR, I watched the video. She beat to her own drum that is for sure. Dick Cavett….Does anybody under the age of 50 even know his name? Those 70s talk shows are a blast from the past. I remember he was on the network our tv couldnt always pull in…But I got a huge dose of Mike Douglass though growing up!

        1. Grid, we have a family member that pilots a F18 on an aircraft carrier. They fly lots of training missions but I don’t think they have tried to take out a nuclear facility like the movie does. Their name is painted on the plane under the cockpit just like in the movie. The 6.5G+ stuff you see in the movie is real. All of them have pushed it to their blackout point. If you exceed some specific G point, they have to ground the plane and do a thorough inspection to make sure nothing is damaged.

          A now deceased relative used to fly off a carrier in WW2. Lots of his squadron did not make it home. His plane was hit and had many bullet holes in it but was able to limp back to the carrier. In the 1980’s I offered to pay for him to ride in a restored model of his plane. He politely declined saying he saw enough of it in the war. . .

          Not your typical job for sure. . .

  46. Last week I bought FSUTX – Fidelity Select Utilities mutual fund. This is the first fund I’ve bought in years. Unlike the vast majority of funds which are down this year FSUTX is up 6.87% and has averaged an annual return of 11.18% over the past 10 years. I get so much from this site. Hopefully, one or more of you will appreciate this “heads up.” If thinking about buying, I suggest waiting for a big down day as FSUTX has recently been quite volatile with daily swings of up to 2%.

  47. Searching for a broker that might allow retail investors to buy 144 debt issues (after the holding period has expired) via their fixed income desk. Any recommendations? Thanks.

  48. Either a fat finger trade or someone took advantage of a market order….HTLFP up 14% to 30.32.

    1. >someone took advantage of a market order

      what does this even mean? there are two sides to every transaction for someone to take advantage of it (ie the maker), the taker had to have put in an aggressive order and the maker would already need to have orders in the book.

      1. >someone took advantage of a market order

        what does this even mean?

        When the shares traded at 30.32, the bid ask on HTLFP was so big you could drive a truck through it. Fidelity has the spread for that time at 28.00 bid and 42.16 (!!!!) ask. So if someone placed a market order, they COULD have been charged 42.16, but the selling firm was “kind” and filled the order at “only” 30.32. Of course, reality soon set in and the shares have come back down to a more realistic price.

    2. The 30.32 HTLFP trade is interesting. I don’t think it will be busted as it was a valid trade. When it went through the ask was 42.16, so the 30.32 was well inside that. About one minute earlier, it appears that one market buy order went through that basically cleaned out all of the reasonable ask prices, which is why the best ask was 42.16. The 30.32 ask was either a “hidden” order or a dark pool order. Dark pool orders are by definition hidden. So you cannot tell if it was a “standing” aka open order or somebody like the internalizer saw a market buy order come in and decided to take the other side. Recall that internalizers are allowed to do naked shorting. Usually the internalizer orders are sub-penny, and this one was not, which might indicate it was somebody else doing the trade. Might be a naked short, a regular short or somebody selling shares they owned. No way to tell for sure.

      We were not involved on either side of any of these trades in any account.

      1. >somebody like the internalizer saw a market buy order come in and decided to take the other side

        Internalizers don’t see all orders coming through the market, they only see orders that are routed to them. The way you are phrasing this is quite conspiratorial. It is also not much of a decision, they have to fill orders that are routed to them. The price that it gets filled at is a question (but always better than nbbo)

        >internalizers are allowed to do naked shorting

        This is also problematic phrasing. Yes, internalizers (bona-fide market makers) are exempt from the locate requirement but are still bound by close-out requirements. They have to deliver stock on T+4 (instead of T+2) and if they can’t, they are bought in. Its not like they can short a stock without a locate and hold it forever.

        and as a disclosure I was involved in parts of this trade.

        1. MCG, my apologies if I sounded conspiratorial. We both agree that an internalizers involvement depends on how an order is routed. And we probably agree that most retail orders do go through an internalizer like Citadel or Virtu. And we have talked in the past on orders we suspected were filled by the internalizer before getting routed out. So I don’t think it is conspiratorial that the first area to look at in fill like this is an internalzier. But like I mentioned, those are usually sub penny trades and this one was not, which I why I suggested it was not an internalizer fill.

        2. Wow – missed another fun day in the market doing yard work. Glad I had been making moves the past 2 weeks

          Anyway – MCG since you noted “and as a disclosure I was involved in parts of this trade.” – hope you were on the winning side ! Nice opportunity indeed

  49. I was hoping someone knows how the appreciation on a 2 year treasury would be taxed if the bond is bought under par and it’s held to maturity. Would it be taxed as a long term capital gain? Or would it be considered interest income?

    I’ve asked several accountants and brokerages and keep getting conflicting answers. I’m hoping someone has experience with this and knows the correct answer.


    1. I am no authority, but it cant be taxed as interest because it wasnt interest you earned. Its a capital gain on price difference. I cant imagine why any accountant would think otherwise. Of course other factors such as annual income and if held in say a retirement account come into play also.
      This article addresses capital gains and losses on short term Tbills which dont meet yearly threshold for LTCG.

      Interest earnings from T-bills are subject to federal income taxes but are exempt from state or local income taxes.
      Any capital gain or loss realized from T-bills is short term. This is because all T-bills mature in less than one year, which is not long enough to qualify as long-term capital gains.

      1. Thanks, I meant T Notes which have longer terms. They’re being bought in a taxable account. So I guess the same logic applies and if bought under par and held to maturity the price difference should be a long term capital gain, right? One accountant said that I would be issued an OID for the gain which would then be taxed as ordinary income.

        He provided this link to explain the OID issue:

        1. Ok, now I can see an OID issue as being a potential problem. I have had several OID issues with some trust preferreds, but that issue was inside the trust itself. Brokerage took care of that issue though on the 1099s though. If you are buying directly from source, under par that is a possibility. Now that I know the two options of concern, I see why you have conflicting advise.

          1. It seems like this issue must’ve been dealt with by many people in the past and there would be a clear answer. Hopefully, someone who’s had to deal with this on their taxes can give us a definitive answer.

            There are large tax advantages to it being taxed as a capital gain especially if you have carryover losses.

            I’ve also called Schwab’s tax department several times and keep getting conflicting answers.

  50. TFSA – Terra Income Fund 6 Due 3/2026 -7% coupon
    TPTA – Terra Property Trust Due 6/2026 – 6% coupon

    Just wondering if anyone holds or has been buying either of above issues while trading at/under par here or has any input.

    Think their fund has originated a little over $1B in loans on nearly 400 properties vs. appraised value just under $8B tangible assets.

    The above tickers I denoted are for notes/baby bonds. Over the years I have had many people ask me to take a look at their portfolio and I’ve noticed consistently for higher networth folks who hold private equity; I always would see a Terra direct fund-side holding in there. Thought this was a unique chance to participate for a fixed defined amount of time on the debt side.

    1. @ theta

      FWIW – Mr. McPartland has a “D” rating on TFSA.

      I am long the TPTA and looking to exit the last few shares I own. Tim has a “C” rating on that one.

  51. Finally!!!!

    Markets are waking up and giving high quality prefs some love.

    That’s all I got to say 😉

    1. Hopefully one of the many smart people here can help me understand something. If preferreds are currently rising because long term rates have pulled back, what happens when short term rates continue to rise and reach a point where a safe short term bond fund is paying 3-4%. Won’t that drive preferred prices back down?
      Secondly, once the Fed begins QT won’t that raise long term rates and also drive preferred pricing down?

      1. It’s a good question. The markets are tricky, but generally speaking, excellent predictors of what will happen.. they tend to reflect pricing of events way before they are actually experienced, except for the complete unexpected like COVID.

        To be more direct, current pricing should already reflect QT. And when short term rates finally rise, the thinking is that they will eventually drift back down to more normal levels like ~2% once this bout of inflation subsides.

        So if you think inflation will stay elevated for years to come , 5%+, you should definitely sell any type of bond and most stocks.

        Does this help?

      2. yeah but no …
        correction: no but yeah
        well maybe its a yeah but no ………….

        From an objective 30,000 Ft. perspective the answer to your questions is nobody really knows.
        I would make that point because where or when have we ever been in this situation before?
        This is a total mess.

        I’m picking up qualified IG yields
        ignoring the paper loss that may or may not arrive – as long as they keep paying I’m content.
        If there is another down draft I may pick up some higher yield unrated issues by the end of the year
        Yields on some solid BDC are looking sweet
        Not a recommendation, just what I’m doing.

        1. Pickle, that is as good as answer as I read! Just like you said nobody knows. Really all a concerned investor can do is try to protect the blindside where your biggest investing fears may lie if one does…
          Even Jamie Dimon isnt a very good forecaster, but he certainly is more informed than me. He is very cautious and concerned about QT which is about to happen…

          I have enjoyed the trading ride the past week or two. Almost feels like the good old days. But Im still a bit chicken and covered some quick pops and rotated back into more anchored ones that even sagged a bit for me.

          1. Grid, my biggest investment fears are missing out on a good deal. Lol, Sounds crazy, I know. Bear markets are hard to come by so I get excited when they come, esp for Preferreds where the main worry is default of some sort of skipped dividend payment which is not too common for most companies. Being able to get 6%+ from the likes of BofA is just too good to pass up for me. Or take a peek at some of the MREIT prefs trading at 9%+ yields. I much rather load up on a MREIT than a junky credit like QVC. MREITs are a bag of cash/investments levered up and the managers are incentivized to keep the trains running.

            There will always be something to worry about. Could my holdings get cheaper? Yes , definitely. Could they default, highly unlikely. So I keep buying.

          2. Yup

            If I noodle over things I think the same as Jamie, only I do not get paid millions a year, lol.

      3. 2Chin, I am not one of the “smart people” but have done a little work in the area of interest rates-preferred stock pricing. Most people that model preferred prices use corporate Baa rates as their baseline. This is significant because Baa rates do NOT perfectly correlate with either short term US treasury rates OR long term US treasury rates. So even if you can perfectly forecast what the Fed will do to short term rates, it will NOT necessarily forecast preferred rates. Same for QE/QT action by the Fed.

        So the question is what drives Baa rates? And the answer is long term US treasury rates, typically the UST 10 year plus a “spread” that compensates for the default risk of Baa’s. And it is the default risk component which is the key to forecasting preferred rates.

        In your proposed scenario: short term UST rates rise, long term UST rates rise due to QT, my highest probability guess is that Baa rates also rise, hence preferred rates rise/prices fall. One of the popular views is that the Fed will increase rates enough to cause a recession. If and it is a big if, we do go into a recession, default risk will go up which is why Baa rates would also go up.

        These arguments apply to the general preferred case. Obviously, there are other preferreds that will not fit this mold. Things like issues likely to be called, convertibles, illiquids, etc.

        My broken record forecast is for preferreds to fall further. Might be 100% wrong on this. There is some PHD level research (not mine) that backs this up.

        1. Thanks for all the viewpoints. I’m in the camp of expecting higher long and short term rates at least until the end of the year.. Hard to see how trillions of dollars can be printed without some kind of consequence.

  52. SLMNP just traded 12 shares at 785. Guess we will now have to look at that tender option….

  53. This maybe an obvious Q, but I am wondering if I buy a note/preferred at a discount, then use a YTW/YTM calculator, besides using the coupon and reinvestment of the divs, does it also figure-in the discount if it is called or redeemed at maturity? I’ve fiddled around with the numbers for this RILYG, as an example, but have difficulty getting really close to the calc figure:
    RILYG 5%, price 23.15 $25 par , so $1.85 price gain (ignore make whole if called) Can be called anytime, Maturity: 12/31/26
    — the 1.85/23.15 = 7.99%, or 1.6169% per yr to maturity ( if separated from the coupon amount)
    YTM: 4.9425yrs manually compounded for 5yrs vs 4.9425 =29.5459 divided by cost of 23.15 = 6.3959 % Which is shy of the calc’d 6.77% This is without the cap gain.
    coupon 5%
    — Calculator YTW M = 6.77%
    It seems like the calculator is not considering the cap gain, but it knows the discount. What am I missing? Thanks-

    1. Gary, The Tiger reference you asked me about was just a throw away comment about me making a $600 bet to win $500 Tiger Woods made the cut at the PGA Championship last week which he did.

      1. For those who own or track GJH for income you may consider looking at just buying the actual bond instead. GJH is solely the US Cellular 2033 senior note make whole bond. Its last trade was $10.07 which is 7 cents above redemption price and a yield of about 6.5% stripping out the interest payment. Meanwhile the actual bond has dropped a lot. One can buy the actual 2033 bond a bit over $97 at ~6.9% and ~7.05% YTM at TD for example. Not suggesting its a buy or not, just making people aware GJH doesnt really provide relative value anymore like it did last year compared to the actual bond.

        1. Thanks, Grid – I hadn’t noticed so I appreciate it….. Musing outloud, I wonder if someone owned these in a taxable account (I don’t) I wonder if one would run afoul of the IRS theoretically if you sold GJH and bot the underlying bond????

          1. I think there is a good argument that a wash sale shouldn’t apply, even though at first blush the “substantially identical” tag seems appropriate.

            GJH and the underlying bond are obviously similar, but not identical. They have different coupon rates. GJH is callable at par, while the underlying is callable only with a make whole payment. If you ask me (a person who is not your tax advisor), that’s enough to show they are distinct.

            The more interesting question is some of the other Third Party Trust Preferreds that are true pass-throughs – same coupon, call terms, etc. It would be hard to argue that those are not substantially identical.

            1. I agree, and my no nothing opinion is there is about a 0% chance this is tagged as a wash sale. Noting exactly what you said above and the title of the GJH alone would throw the scent off in the wrong direction anyways. Especially considering selling a preferred series of one company and buying another series of same company does not violate wash sale.
              I have been out of GJH for a shorter while and just entered a small position in the actual 2033 bond. It has came off well over 20% past year while GJH has barely budged downward in same time frame. Unlike the small float GJH there appears to be a large inventory of the 2033 bond available to buy.

              1. some brokers track the CUSIP of the underlying bond on those structured products to monitor the credit rating.

        2. Grid – Unless I miss my guess, I’m thinking you calculated GJH’s YTM as if it pays quarterly….. As a semi-annual payor, I’m getting about 6.67% YTM stripping out the accrued…….. Am I right???? Still, the arb is there, but I don’t think it’s as large as 50 basis……. Actually when I first did this I miscalculated and thought GJH stripped was 6.76% but I think 6.67% is accurate… So not that much difference from your calc, but still relatively significant and also still worth considering the trade..

          1. 2WR, I bet you are right. I stripped out the accrued but didnt on YTM. But, you know what, I didnt strip out any of the interest on the 2033 bond either. You have to pay accrued until now but have a few weeks left still to accumulate. I gave GJH the full 6 months on YTM even though its a few weeks away, and I didnt subtract any of what is left for the 2033 bond, so that would widen it back a smidge more. Too much math for me, ha.
            Remember GJH is 6.375% par, and the 2033 is 6.70%. I dont know if you factored that in. I didnt recheck the math, just going by your line of thinking.

            1. I just took what Fidelity said was YTM on the offered side on the bond… didn’t figure anything… Their offered side was 7.04% so that widen it a bit too… Bid side = 7.08%. Like I said, none of this minutia alters your premise… It’s an idea well worth exploring…. with the bond though, stated ytm is ytm, period…. so says bond math… lol.. This is the kind of thing Martin would be all over if these were both baby bonds, right, M?

              1. Who knows 2WR, just watchful waiting may see a better price too. I read today Biden administration said controlling inflation is job 1 and basically everyone should lay off the Fed and let them do their job to help get it under control.
                It makes me ponder that Fed may actually be as assertive as needed and take Funds rate higher than market assumes if needed. Gas has leaped forward again, so near term abatement of inflation may not be in cards. I definitely like my adjustables more. Libor already at 1.50%, our WTREP will be very juicy divi after this coming one payment next month.

                1. Grid, did you see what the “ethical” brokerage firm traders did with Phoenix late yesterday? I received the tender from my Merrill and Vanguard accounts at $20 today and I have concluded through my contacts that these traders may be working with someone on the inside of Phoenix to push the price down to scare the public to tender. Stay tuned, Azure

                  1. Lol, what? So 400 units supposedly traded at $8, which probably wasn’t a real trade price in the first place, and even if it was real the only investors who would know is those that watch TRACE on a daily basis. And you think this is some big conspiracy – a single dubious trade reported? I’m having a hard time imaging a more implausible trading conspiracy theory. How much time did you spend trying to crack this case?

                    1. The trades in question were inputted incorrectly without the leading 1. They were canceled and resubmitted 18.xx instead of 8.xx. No point in perpetuating conspiracy theories

                    2. MCG, so much for all the research he had talking to Wall Street insiders who obviously know a manipulated market when they see one.

                2. On 3/31/22 Apollo Tactical Income (AIF) values their 37,863 share position of WTREP at $25.375 per share. Surprised they did not have it lower.

    2. I am terrible at math, but I will give this a try:

      For 23.15, you get by 12/31/2026:

      $1.85 in capital gains
      18 quarterly payments of .3125 equaling $5.625
      Total $7.475
      I calculate your holding period as 4.61 years.
      Total per year $1.62
      Divided by your price of 23.15 results in annual yield of 7.00%

      As a quick check on my math, I took the current yield of 5.38%, reported by Marketwatch, and added your 1.6169% annualized price gain. That adds up to 7.00%

      I welcome a correction if I have made an error!

      1. Not so terrible at math. It’s a pretty good approximation.
        To get more anal, and take into account the place in the dividend cycle, average investment over the holding period, etc., you would get a YTM of 6.96%. I’m saying close enough.

      2. I’ve mentioned this link before – it’s the fidelity bond calculator which figures all this out for you automatically…. just be sure you fill in the input correctly for 100% accuracy…

        In the case of RILYG it’s a little complicated because if you fill in the maturity as 12/31/2026, you screw up the accrued because it’s paid on 1,4,7, and 10/15 so it’s best to use a bogus maturity of 1/15/27. That will provide you with a relatively accurate bond yield. Using 23.15 calculated today, The Magic Fidelity Bond Genie says YTM, stripping out .139 in accrued, is 7.024%.

        So your math is pretty darn good, but this is the easy way.

  54. There is a lot of what appears to be mispriced preferreds. In the current interest rate environment the working assumption is that low coupon yield preferreds will NOT be called. We are treating them essentially as “perpetuals” which means you do not have to consider the “yield to first call” in your analysis. I did an analysis using the assumptions that all issues with ~ the same coupon yield and Moody’s rating should have the same “current yield.” Despite that assumption, that is NOT what the data shows.

    Example 1: Coupon yield 3.75% to 4.25%, Baa2 rated

    Ticker, Moodys rating, coupon yield, current yield

    WFC-D Baa2 4.25% 6.03%
    RNR-G Baa2 4.2% 5.73%
    JPM-M Baa2 4.2% 5.58%
    CNLHN Baa2 3.9% 5.45%
    TFC-I Baa2 4% 5.13%
    CNPWP Baa2 4.08% 5.04%
    MET-A Baa2 4.04% 4.93%
    CNLPM Baa2 4.12% 4.9%
    CNLTN Baa2 4% 4.83%
    AILLP Baa2 4% 4.82%
    AILIH Baa2 4.08% 4.8%
    CNPWM Baa2 4.18% 4.75%
    CNLTL Baa2 3.8% 4.63%
    AILLO Baa2 4.25% 4.62%
    AILIP Baa2 4.2% 4.42%

    The current yields range from 4.42% to 6.03% which suggests at least to me that there is some mispricing. Maybe it is all due to the market assigning different default ratings to the issues as opposed to Moody’s rating them all the same. In any event, if I was looking to buy preferreds (which I am not), I would be considering the higher current yielders. OTOH, if I owned the lower current yielders, I would consider selling them with the thought they are overpriced relative to the market.

    Here is the data for ~ 4.0% Baa3’s

    COF-N Baa3 4.25% 6.56%
    FRC-L Baa3 4.25% 6.2%
    FRC-K Baa3 4.13% 6.18%
    FRC-M Baa3 4% 6.14%
    BAC-Q Baa3 4.25% 5.76%
    BAC-P Baa3 4.13% 5.55%
    BML-J Baa3 4.09% 5.21%
    BML-L Baa3 4.09% 5.18%
    BAC-E Baa3 4.09% 5.09%
    UEPEM Baa3 4% 5%
    ZIONP Baa3 4.04% 4.93%
    IPWLP Baa3 4% 4.01%

    Obviously you would have to repeat this for all coupon yields and all ratings to determine all “mispriced” preferreds. And yes, the better way to do this is to compare all of them at one time but it makes it more difficult to spot mispricing.

    1. Understanding the likelihood of any issues trading deeply below par being called would be interesting, that could provide a great short term returns. Thanks for sharing.

      1. Various factors come into play and are individual specific. But one really has to be careful comparing data of an illiquid to a liquid. Low yield illiquids still have buyers and seller strikes simutaniously occuring. Some of these could be just a 300 share trade away from a quick 5%-10% drop. Owning below market yielding illiquids now probably isnt probably the safest capital preservation play. I do watch for drops though.

        1. ditto the puzzlement about COF. After reviewing the 10-K, I pulled the trigger on a few COF-I at $18.65

        2. Agree with ya there GB – but most of those listed are pretty liquid. With the latest estimate for fed funds rate through Dec these may still have plenty of downside on the price. Worth creating a watchlist for future purchase opportunity.

          1. FL, I was looking at both lists Tex had, and combined almost half were illiquids that dont trade daily. The bottom list only had 2. But…each issue has their own story and must be analyzed that way. Take ZIONP. Though currently unappealing even at $20, there may be a price the trigger could be pulled for me, though $20 isnt it.
            on 3/1, 6/1, 9/1 & 12/1 respectively (NOTE: the ex-dividend date is one business day prior to the record date). The floating rate distributions will be the greater of the 3-month LIBOR rate plus 0.520% or $4.00%….)
            The minimum floors in general are unappealing now because they cant get off the floor from the low interest beat down of current era. And then you have Libor problems next year with this. But most every issue has a price that could eventually catch my eye.

            1. Yup, the bottom of his list is mostly the illiquid stuff. Definitely good for people to be aware of. There is still plenty of cream possible at the top though. Good list to keep as a watch to see where things settle as rates begin to stabilize. Been sitting mostly idle lately, plenty of time to start looking at future possibility. Good Investing to ya!

    2. The ones that really perplex me are the Capital One preferreds. They were issued at a low coupon, but are now trading in the 6.6-6.7% range.

      Does anyone know why they have fallen so much farther in price than the other big financial preferreds?

  55. I sold my SJIJ yesterday and took a $0.30 loss at $17.70. I’m still very interested in the stock, but think it might go a lot lower in the next couple of months. I’m not worried about its lack of liquidity in the future. I’ll just treat it as an annuity. I’ll just feel a lot better about owning it at $12-$15 than at $18. Hope I’m right because I just gave up a 7.83% yield on a BB+ issue.

    1. I think ALP-Q is going to be redeemed soon, but I could be mistaken. Look into it before buying.

      I would look at PSA-J first. As of Friday’s close, the I series was yielding 5.565% and the J series was yielding 5.574% so they are pretty much equal there, but if they were to ever trade near par again, the I series would have $3.10 in capital appreciation and the J series would have $3.92.

      I don’t know anthing about PRS.

  56. I have said it before and will say it again – this whole downgrade scare about PSB preferreds is overblown IMO. This is not some fly by night acquirer, it’s Blackrock. That gives me comfort. People buy much more riskier stuff on here all the time. I don’t view PSB to be that risky but that is just me.

    Now I started buying PSB-X too soon at $21 but offset that with some purchases slightly under $19 – so I am comfortable with my position at an average cost slightly under $20 yielding 6.6%

  57. Will the PSB preferreds suffer the same fate as SJIJ and SLMNP? I asssume they will. A chance to buy on the cheap as they get tranferred the the expert market?

    1. From what I understand:

      PSB – acquisition says it will delist the preferreds once the preferreds go below a certain dollar amount accumulative across the multiple preferreds. Some would have to be redeemed/purchased back to get to that dollar amount.

      SJIJ – After Closing: The notes are expected to remain outstanding as obligations of the buyer but “MAY” be delisted from the NYSE. The notes cannot be redeemed until 2024 unless there is a ratings change.

        1. Hopefully, I will luck out and the X series will be called on 9/1 or shortly thereafter. Not sure how likely that is.

    2. Be careful of the PSB preferreds. Moody’s has them on watch for downgrade -possibly several notches.

    1. No specifics but they issue a lot of credit cards to marginal borrowers. Maybe fear of an upcoming recession and increased charge offs has folks scared. Still, BB- and the common pays a dividend. Thanks for bringing it up, on my watchlist, maybe dive in if it gets to 8%. Not too keen on the noncumulative part.

  58. Picked up some baby bond SACC yesterday at $25 par, 6.875% coupon matures 12/24. Already own SCCC.

  59. Some investor had a “Terrible, Horrible, No Good, Very Bad Day” today. They had 900 shares of Amtrust 7.25% baby bonds maturing in 2055, AFFS. These went to the “dark” market in 2019 when the company delisted them. This predated the SEC’s rule 15C2-11 crackdown. AFFS closed on 5/13 @ 17.80, but traded the 900 shares today @ 12.00! A nice way to lose $5,220 in one fell swoop. We were NOT involved in the trade in any account.

    The question of the day if this foretells the future of SJIJ ?

    The other interesting trade of the day was DS-D. Closed yesterday @ 19.37, closed today @ 21.00 but a 1141 share went through @ 24.5. Sombody one the lottery

    1. I looked at SJIJ a couple of weeks ago after Gridbird enlightened me about it. I would not call SJIJ an investment, it is more like a gamble as there are factors in play you are just guessing at. Since I already had a couple of ones that went dark (LTSA is one, however, I would come out ahead if I sold it for the capital loss now because of the years of divy I have collected) I passed. I would use my gambling money for this one. Who knows? It just might work out, or you could be struck with it and let your heirs inherit it. I suspect that is what will happen to LTSA in my case. At least so far I can set my watch by when the divy rolls in!

      1. The gamble part is whether you can get out of it in an honorable manner if needed. The payment appears pretty secure. I personally view one needs to assume worst case scenario its an untradeable annuity. It appears market is foretelling its fate now, but I want to save the better part of my allocation to try to snag really low when entities are forced to dump for procedural reasons. I would love to snag a bunch at $12 for a lifetime annuity. Idiot fund PFF mass dumped LTSA all the way to $6 range because they had to. Even though they could have tendered at $25 like anyone with a brain would have before the acquisition took place.

        1. Speaking of untradeable and potentially leaving one for the heirs, I was wondering outloud to myself today what SLMNP ought actually be worth right now. Nevermind the last trades as brought to you courtesy of the “experts,” but what should it really be worth on a comparable basis to other near IG 6% issues? It’s always nice to know we have a put in hand at 804-ish or better, maybe 848-ish, but how close is the put number to being relevant? And for that matter, in a practical sense how would one go about putting them back if they wanted to? What are the odds of getting to the right people capable of properly determining what the actual put number ought to be?

          1. I spoke to Merrill about pink no info stocks recently because Merrill does not even allow sell orders on them and transferring is difficult/impossible. They said there was a note in their system about tendering SLMNP back to the company for 848 and implied that was my only option (and something they would take care of) if I didn’t want it to sit in perpetuity. The rep I spoke with could not provide any additional info as to how the number was calculated.

        2. Grid, I am in at $18.40/share now. Maybe I should put a limit order in to buy at $12/share and see what happens. It certainly can’t hurt. I don’t own a whole lot of shares of any one stock and this one seems to be one that warrants limited exposure for sure, but at $12/share it might be worth it.

          1. New, I suspect many funds havent dumped it yet. Lazy fund managers will dump only after it gets delisted and their charter mandates selling. Then they will dump, they dont care not their money, getting the afternoon tee time reserved is of higher importance anyways.

        3. Gridbird: Regarding the idiot PFF fund you mentioned, I would think imbecile (IQ of 26-50) or Moron (IQ 51-70) would be kinder than idiot (IQ 0-25) especially since I love to buy what they abandon. They may have self esteem issues if labeled idiots

          1. Follow, I guess its possible they are very bright but extremely lazy. Either way, they would have to agree they dont care one bit about other peoples money. They sure will never touch mine.

  60. QRTEP
    The regular $2 dividend was declared last night. I took profits yesterday. I regard this issue as tradable but not investable .

      1. $63….posted on this site when I purchased. It was a smallish purchase. Actually sold some the same day at 67, sold the rest yesterday.

  61. Ran across Gne-a today and it can be called below current bid but enjoyed the odd kicker that apparently they just passed the milestone of recently and thought someone would enjoy this oddball
    Holders will be entitled to receive an cumulative annual dividend per share equal to the sum of (i) $0.6375 plus (ii) seven and one-half percent (7.5%) of the quotient obtained by dividing (A) the amount by which the EBITDA for a fiscal year of our retail energy provider (“REP”) business exceeds $32 million by (B) 8,750,000, payable quarterly in cash on 2/15, 5/15, 8/15 & 11/15

    1. What an odd duck. Sounds like an incentive condition written for execs who were awarded shares of the pfd.

      I’m too lazy to look it up: have they ever exceeded EBITDA of $32M?

      1. Yes, just this past period apparently for the first time from what I can tell, boosted it by 8 cents, but the insiders don’t own it based on the proxy so it’s not for me above call price.

  62. Why is UMH-C under $25.00. Isn’t it being redeemed in July? Is it purely risk of not being redeemed at this point? ex div has recently pasted with pay-day of 6/30 – but still has partial July div left to be paid .

    1. i bought a small amount this morning. i suppose there is no guarantee of a call
      but still pretty likely i believe

    2. UMH has talked so much about this so consistently over the last few quarterly CCs that it seems like the call at this point is not particularly interest rate sensitive. Their interest rate spread was locked in months ago by an issue they did in Israel I believe. Nevertheless, we’ve still got one more Fed announcement before they can officially announce a call, so I imagine trading below $25 is a result of weighing the downside should they not follow through with what they’ve been saying. I continue to hold…. Landy imho has had a pretty good record of spelling out plans and then following them. FWIW I believe if they call for 7/26 total proceeds would be 25.19 approx.

      1. @2whiteroses I am surprised you have forgotten that Landy preferreds pay 15 days in arrears lol. The final UMH-C divvy accrues from June 1:

        Also, on April 1, 2022, the Board of Directors declared a quarterly dividend of $0.421875 per share for the period from March 1, 2022 through May 31, 2022, on the Company’s 6.75% Series C Cumulative Redeemable Preferred Stock payable June 15, 2022

        1. You are absolutely right, 730.. I knew that…… Score me a few new DUH points! I knew there was another reason why I originally got involved with this one…. Thanks for pointing this out, and being gentle on me at the same time…… lol

  63. PSA-L vs PSA-S

    Whis is better?….

    PSA-L with a yield of 5.556% as of yesterday’s close and the potential of a $4.19 capital gain if it gets redeemed or someday trades at $25 per share?

    Or PSA-S with a higher yield of 5.598% and needing to get back to $22.50 per share for the same capital gain as PSA-L?

    Neither because they don’t yield more than 6%?

    1. IMHO every time they raise interest rates (and we know they have a way to go) the lower interest rate stocks (<6%) get hit hardest. I have not looked at these but unless they are short maturity or fixed to floating I would wait.

    2. PSA-G. Accept a bit less yield for a shot to be redeemed and a cap gain. Won’t surprise me to see the three left above 5% issue yield disappear. With f and g being soon.

    3. S has the higher possible gain being in the $18s And called about 1.5yrs later.