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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.

1,839 thoughts on “Sandbox Page”

  1. I bot ang.pra (formerly ael.pra) at 24.23 …5.95 coupon reset 12/1/2024 at 5yr plus 4.32 …American Equity life was recently purchased by Brookfield Reinsurance ..I assume either it being called or it trading near 25 on the call date ..if it is/does ytc is 12.72..good article on S/A titled AEL.PRA and OTHER 20%+ Yield to call preferred stock opportunities

  2. More drama at C. Schlub. After being down for most of Tues, today there is a message : “Opening account balances and day change values may be inaccurate for some securities. As we work to resolve the issue this may impact your buying power. Balances and day change values are expected to be corrected overnight and before market open Friday.”

    Not having the correct buying power is breaking this camel’s back- I hate to have to move back to Fido, but it looks like a must. And will cost $150…grr.
    At least one of my stocks was negative, but it shows a gain. And the 3.47% gain so far today, that’s wrong. They still have not corrected the NEWTG snafu- although they got rid of the $25 commission, they still do not show the actual cost in the portfolio list.

  3. Fed Funds Futures @ CME ….. Last Four Thursdays indicated FF Rates…..
    Thurs Date …. Sept Contract …. Dec Contract
    Jun 13 ………. 5.25% ……………. 4.99%
    Jun 06 ………. 5.22% …………… .4.94%
    May 30 ………. 5.26% …………… 5.08%
    May 23 ……….. 5.24% …………… 5.01%
    Seems that with all the Fed Ease talk, the FF contacts for past month indicate that December Ease is what the trade desks like.

  4. (Posting this because it is income related and IS pertinent if you hold any muni bonds.)

    Muni bond holders can breathe a sigh of relief today because the bonds they hold are MORE secure. Executive summary:

    Puerto Rico government and subsidiaries were not legally allowed to go bankrupt.

    PR finally hit a wall going Mach1 when buyers became reluctant to buy their bonds without much higher interest rates.

    PR got the US congress to pass a law, PROMESA, in 2017 that allowed them to go ~BK. PROMESA appointed a control board to manage the island’s finances, kind of similar to the board that fixed New York City in the 1970’s when it was headed for BK.

    Part of the BK was the island electric utility, PREPA, which also was put into bankruptcy.

    The PR board claimed that PREPA bond holders did NOT have a lien on future revenues, in contrast to existing standard on ~ all revenue backed muni bonds in the US. This was promoted by board head and BK lawyer, David Skeel. He also advocates that all municipalities should be able to declare BK and void all debts, including general obligation bonds.

    A single BK judge based in NYC, Laura Swain, agreed with the board that PREPA did NOT have a lien on future revenues.

    Today the 1st circuit appeals court REVERSED Judge Swain’s opinion and said that bondholders did have a lien on future revenues. I cannot overstate the importance of this ruling. Had it NOT been reversed, it would encourage other municipalities to void their debts.

    So here we are 7 years into this BK with no end in sight. In the meantime, a lot of BK lawyers are really happy. The ones I know are very happy to have this judge on the case, she has been a titan of billable hours. Partnership earnings are looking good!

    For the record, we have held and continue to hold substantial amounts of PR/PREPA bonds. EXCEPT and it is material, all of the ones we have/held are insured by money good insurers. As long as the insurers stay solvent, we will be made whole. OTOH, if you held any of the tens of billion $’s of uninsured bonds, then lord knows how/when it will work out.

    Link to Appeals Court Ruling if you are interested:

    https://drive.google.com/file/d/1_flc1L1tbxHi4Iy3K46T1Uygk8AxScDP/view

    1. Thanks for posting, Tex. I used to own/follow AGO, Assured Guarantee. It made me sick to follow the ups and down of the PR debt debacle, so I divorced myself of AGO (probably a mistake) and munis in general.

      1. RMH, thank goodness for Assured Guaranty (AGM/AGMC) insured munis! We own a lot of them. There are only two main insurers still writing new policies, AGMC and Build America Mutual (BAM.) All of the other insurers were crushed in the GFC and are in runoff or already wound down.

        IMO, PR is the precursor to what is likely to happen in many other mainland municipalities. We know the feds can have ever increasing debt levels, but states do not have the UST printing press. My poster children for the problem are Chicago Schools, City of Chicago and the state of Illinois. Snowballs chance in hades they can pay off their cumulative debt. Under current law, none of the three can declare Chapter 9 BK. Will congress change the law so that states can go BK? Unknowable how it will get resolved, but as we saw in PR, a LOT of investors lost literally billion’s of $’s holding PR munis. Aside from owning a lot of PR munis, this is why we follow it so closely.

  5. What is the difference between Eagle Point Income EICC and Eagle Point Credit Company ECCF? They both have 8% coupons but EICC’s price is usually .25 to .30 higher.

      1. Going deepr, EIC focusses on low rated CLO debt, while ECC focusses on CLO equity. The way CLO’s work is that they have different tranches of debt (AAA through B) and then equity. The debt holders get paid first (in order) and then if there is anything left over the remainder divided among the equity holders. The result is that the debt fund (EIC) earns less in good times but is less risky, while the equity (ECC) earns more when times are good but may drop fast if there are defaults. The price of the preferred stock for each of these reflects the riskiness of these income streams, with EIC being a little less risky, and hence a little lower yield.

  6. I bot EiCB 7.75 7/31/2028 term preferred stock at 24.70 (24.40 stripped) for a current yield near 7.90 …this is on back of the EICB/SJNK pair trading at bottom of six month range. several articles on S/A discussing this security and the company

  7. I bot FTAIP at 25.14 for current yield of near 8.15 …ex date was 6/3 so stripped price near 25.09 ..if called .51 dividend will be paid through 9/15 call date..if not called it floats at sofr plus 6.88%

    1. If I read you right on FTAIP, there is no stripped price in this case…. If you bot today at 25.14, the “stripped price” is essentially 25.14 because you’re not going to get the 6/15 payment and accrued goes from payment date to payment date, not x-date to x-date… Technically speaking you could even argue your “stripped price” is negative because you own this for a few days where you’re actually not earning anything and have not accrued anything either…

      1. good comment ..of course unlike bonds preferred trade flat (without accrued)..as an owner with settlement 6/13 I am entitled to received the next dividend of .51 cents for period 6/13 through 9/15

        1. mjtroll and 2WR,

          I believe the “pay date to pay date” accruing period for upcoming dividends begins on the prior dividend’s pay date.

          mj, if this is correct, then the upcoming div accrues from 6/14 through 9/14 (not 6/13 through 9/15).

          By the way, 9/15 is a Sunday.
          According to the prospectus, for any div before 9/15/24, when a div pay date is not a business day, then:
          1. the pay date will be the next business day, and
          2. we don’t get an extra day’s accrual for the one extra day before getting paid.
          In this case, we’ll get paid on Monday, 9/16 (not Sunday, 9/15) but the accrual period is still 6/14 through 9/14 (not 9/15).

          Once FTAIP begins floating (assuming it’s not called), however, any floating divs with a non-business day WILL accrue to that later pay date.

          Here’s the text in the prospectus (I bolded a few words for emphasis):
          If any Distribution Payment Date on or prior to September 15, 2024 is a day that is not a business day, then declared distributions with respect to that Distribution Payment Date will instead be paid on the immediately succeeding business day (as defined herein), WITHOUT interest or other payment in respect of such delayed payment. If any Distribution Payment Date after September 15, 2024 is a day that is not a business day, then declared distributions with respect to that Distribution Payment Date will instead be paid on the immediately succeeding business day, and distributions WILL ACCRUE to the Distribution Payment Date.

          1. Mbg – thanks – I wasn’t really trying to dig into the weeds for exact dates only to point out that accrued is not from x-div date…. And mjtroll’s reply was right, too, in that what he said was he will get the full coupon amount on next dividend date even though he bot for a settlement date the day before accrual begins. 9/14 is the last day of accrual, not 9/15.

            1. Sure, 2wr. I knew I was taking things beyond mjtroll’s point. When I read the prospectus about what they do on pay dates that fall on a weekend was news to me, so I thought I’d share that. I didn’t mean to imply that I disagree with mjtroll’s reply.

    2. Although Assets in Russia are not substantial…..fear of confiscation seems a real risk
      FTAI operates through two segments, Aviation Leasing and Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers. As of December 31, 2023, this segment owned and managed 363 aviation assets consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were located in Russia. The Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components for aircraft engines.

    3. I was at a FTAI presentation today in NY where I asked specifically about FTAIO and FTAIP and the company rep stated in no uncertain terms that they were going to refinance both preferreds and expected to pay around 7.5%.
      Given the recent debt refinancing and the over $8BN equity market cap it was not a surprise.

      1. Could you share any more color on the ftai presentation that you attended.
        Would value anything else that they said. The parts portion of the company is quite important as it takes advantage of the fact that aircraft engines are in short supply. thanks in advance your help. SC

    1. GUM ; that is a poser? it doesn’t trade on Schwab or Wells Trade; Quantum doesn’t show it ; and there are no articles on SA ; the parent GLNG is doing great and serves a growing need; Floating Liquefied natural gas terminals

    2. Gum – check your account now. Earlier today FIDO debited my acct for the 6/3 payment, then just a bit ago credited it for a slightly lower amount.

    3. Yup, original interest paid was wrong. As I recall there was discussion here a couple weeks back that the dividend/interest shown to be paid looked heavy. So looks like they corrected, reversing the original payment and credit on same day for correct payment.

      1. Yes, this correction was for CGBDL’s 2nd-ever payment.

        The first payment was for more than a full quarter, so the rate was $0.575139 per share instead of the normal $0.5125 rate.
        Fido gave us the 2nd payment based on the $0.575139 rate, but it should have been based on the $0.5125 rate.

        1st-ever payment (2/14 ex, 3/1 pay) = $0.575139 per share.
        2nd payment (5/14 ex, 6/3 pay) = $0.5125 per share.
        https://www.nasdaq.com/market-activity/stocks/cgbdl/dividend-history

  8. Thought I post this as I have like others bought a number of brokage CD’s.
    But this individual said he did the research and you are not protected as one would think.
    Here is how he said the brokage CD’s work:
    Your broker is FDIC insured up to $250,000 per bank CD. If you invest in a brokerage CD, it is only FDIC insured up to $250,000 TOTAL no matter how many individual investors or how much was invested in the one CD.

    Example: Charles Schwab offers a good rate CD and multiple investors, including you, invest a total of $100 million in that one CD. The bank folds. FDIC gives Charles Schwab $250,000. Each investor loses their investment but gets back $1 for every $400 that they invested.

    1. Uh, what??
      Oy vey, another one doing their own research…

      For one thing, there is no such thing as a “Brokerage CD”.
      CD’s HAVE to be sold by banking institutions, brokerED CD’s are ones that can be transferred between brokers like a security, but are otherwise still bank CD’s.
      e.g. Here is the offering document from one issued by JP Morgan in the last week that lays out that the buyer of the CD is capped by funds HELD at JP Morgan Chase Bank, so your FDIC insurance could be less than the $250,000 on the CD if the investor has other FDIC insured deposits at JP Morgan Bank, but otherwise does not impact FDIC insurance at all.

      In the example, the amount sold to the public was $561,000, so even if one investor bought $1000.00, they could be on the hook for a loss if they have more than $250,000 in JPM Morgan Chase, and if they bought the entire issue, they could lose up to $311,000 (561,000-250,000) if this was their only deposit at JP Morgan Chase Bank.

      http://sp.jpmorgan.com/document/cusip/46655WYS3/doctype/Product_Prospectus/document.pdf
      Page DS-6

      LIMITATIONS ON FDIC INSURANCE —
      As a general matter, a holder who purchases a principal amount of CDs, together with other deposits that it maintains at JPMorgan
      Chase Bank in the same ownership capacity, that is greater than the applicable limits set by federal law and regulation will not be
      insured by the FDIC for the principal amount exceeding such limit. In addition, under FDIC interpretations, the return on the CDs,
      which is reflected in the form of the Additional Amount, is not insured by the FDIC until the Observation Date. Any amounts due on
      the CDs in excess of the applicable FDIC insurance limits will be subject to the credit risk of JPMorgan Chase Bank.

      1. Tim
        Just trying to find out if the person that told me the CD bought at the Schwab and Merrill has real risk.
        I was thinking he was wrong all along but knew that there are people much smarter than me that could clarify it.

        1. Basically, he seems to be pitching the idea that CDs are fraudulent as far as getting your money if stuff hits the fan at the bank. Didn’t stop full payment in the recent bank crisis / closings.

    1. It’s gray market- not sure you can buy-(espec at Schlub)- usually sell only if you have had it.
      Seems like someone said they could buy it.

      1. Update-
        To sell at Schlub, you have to call them. Day’s range is 11.00 -11.45 off 3¢
        Sheesh- screw job by NFE

    2. John–the primary risk is that Golar LNG Partners were bought by New Fortress Energy and there is a fear (real or not) that New Fortress will discontinue paying the dividend–that is why it trades where it trades.

      1. NFE posts the quarterly financial statements for GMLP on their website and they have been deteriorating at an exponential pace. As of the beginning of the year, there was only $1.5 million in cash left (down from $38.4 million at the beginning of 2023). Total equity has gone from nearly half a billion to less than $160 million during that time frame as well. It seems NFE is pushing losses to GMLP and I think they will discontinue the distribution at some point. I would stay away.

        https://ir.newfortressenergy.com/gmlp

        Good news is you can swap GMLPF into HMLPF (which has a great balance sheet and also trades at a significant discount).

        1. Chris, I agree the BS is strong. I don’t have a clear understanding of the entities though. Recent news include:

          “The owners of Höegh LNG Holdings are exploring a potential sale of the operator of floating liquefied natural gas terminals, people familiar with the matter said.
          Morgan Stanley Infrastructure Partners and Oslo-based Leif Höegh & Co. are speaking with an adviser about a range of strategic options for the company, according to the people.
          MSIP and Leif Höegh own the company through a joint venture called Larus Holding Ltd. In 2023, Höegh LNG reported earnings before interest, taxes, depreciation and amortization of about $338.1 million.”
          Where do the preferreds sit within these structures? While Hoegh states it will pay these perpetual preferreds what assurance does an investor have? TIA

        2. Chris – can you elaborate on what you mean by swapping between GMLPF and HMLPF. Do you mean just selling one and buying the other (if it were possible) or is there some mechanism that exists for making a swap through NFE? TIA

      2. It will be very difficult for Golar to pay the preferred dividend when Golar assets are actively being transferred to New Fortress.

      3. It is a curious situation. From https://ir.newfortressenergy.com/static-files/271be839-6cb0-413e-aed2-79bb47f83ba1

        Going concern

        In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Partnership has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Partnerships’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

        The ability of the Partnership to continue as a going concern is dependent upon the continued financial support from the ultimate parent undertaking, NFE. As of April 29, 2024, the issuance date of these consolidated financial statements, the F-9 Partnerships concluded that it is probable that its continued funding from NFE will be sufficient to fund dividends on the preferred stock, operating expenses, financial commitments, and other cash requirements for at least one year after the issuance date of these financial statements. NFE also provided an irrevocable letter of support whereby NFE has committed to fund such commitments.

    3. John, as stated by Tim GMLP is wholly owned by New Fortress Energy and dependant on NFE for paying the dividends on GMLPF. Read the April 24 2024 Financial Report on the link, specifically page 10 and 11 where it is discussed whether Golar can continue as a company amd the letter of support from NFE for at least another year. After that who knows?
      https://ir.newfortressenergy.com/gmlp/

  9. I own TRINZ but am wondering about Trinity Capital. Fidelity ranks the financial health of companies compared to peers at somewhere between 1 and 100, the best being 100. Trinity Capital is a 1. I have never seen a rating even close to being that low. There also was a negative SA article recently re non-performing loans. BDC or not, I’m concerned, especially with the growing chance of a recession. Anybody else in this boat? Any words of comfort? Thanks.

    1. From Google:
      Is Trinity Capital a good investment?
      Trinity Capital is a well-managed BDC with a dividend yield of over 13%. There has been a slight increase in the portion of the portfolio on the watch list, indicating potential default risks. However, the overall portfolio quality remains good, and the BDC has continued to grow its NII and dividend. 20 hours ago.
      I also own it.. since March of 2022, I am down 26%

    2. Wilson-
      Did you check ratings for similar BDC products? Maybe Fidelity puts them all in nearly the same low rated bucket.

        1. Interesting rank for MAIN. It is one of the most highly regarded BDC players in some circles. I hold some of the common.

    3. Wilson ; it might be OK ; but I think there are much better choices in the same space and risk profile; here are a few I have; CGBDL, OBDE or OBDC, and OCSL

    4. Wilson–just took a quick look/see and I don’t see issues to be overly concerned with (of course I am always concerned). Looks like they have almost a 1.8X asset coverage ratio on the senior securities. The number of bad loans actually decreased last quarter (although they put more in their ‘watch list’ category–which could portend issues ahead). All BDCs need to be watched at least quarterly. Like you I have concerns that if/when a recession hits BDCs could have issues–BUT I sure don’t lay awake night worrying about it. 1st of all you hold debt–2ndly the coverage ratio should provide a good margin of safety. I like to watch book value as a quick measure of health. TRINs book values moved from 13.19 to 12.88 the last quarter–not the direction I want to see, but actually a very small decrease. Relative to the FIDO data I would take it with a huge grain of salt–I looked at them and generally think it might be data that works on a plain vanilla C-corp–but not on ‘pass through’ companys like BDCs, MLPs etc.

      1. Tim, since my post, Scott Kennedy has announced that he is going to add coverage of another BDC. One of the two finalists in his choice is Trinity Capital. I don’t think it would be in the running unless generally in good shape, so I’m a little more comfortable. If TRIN ends up being his addition, I will let you know what he says about it. Thanks for your input, too.

  10. Diversificatiion……
    I have shared previously my “storm warning” concern, causing me to separate my portfolio into two segments:
    – Investments with maturities shorter than 2030. This includes T-Bills, CD’s, BB’s, and prefs.
    – All other.

    #1 yield is 5.8% with little cap appreciation;
    #2 yield 7.5% with 2.3% cap appreciation.

    Over the past month I have changed the %’s from 50%-50% to 65%-35% because of my concern about the future.
    This morning’s small downdraft has portfolio #1 up .02%; #2 down .03%.

    One day result of a strategy that I expect to be confirmed/tested over the next 6 months.

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