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.
SCE-J (5.375% cum perp IG preferred) is in the home stretch to its Sep 15 call date, after which it floats at 3mL+3.132%. The price behavior of SCE-J (rising) and SCE-M (falling) suggests to me that the approaching call date for SCE-J is affecting price behavior, but at 22.56 price is nowhere near par.
Will SCE-J be called? SCE-H was called in Nov, preventing it from floating at 3mL+2.99%. SCE-J has a bigger spread. If not called, the floating rate would be about 7.7%, well above the current coupon.
With the fire liability still hanging over EIX, the market doesn’t appear to be willing to bet on SCE-J being called on Sep 15. I bought some here and I’ll be happy with the floating rate should that happen. Perhaps price will continue up.
EIX 5.375 perpetual (1000 structure) similar but with conversion/call 3.15.26 at 5yr tsy +4.70 current trading ~92 cusip 281020AS6 At today’s 5yr tsy that would be ~9.45 current on today’s cost. fwiw
good comment.. SCE-J/SJNK pair has seen SCE-J underperform since january… as you point out we are not seeing the pull to par
SCE-M/VCLT PAIR trading near all time low (underperform since 12/23)
I don’t like RC (terrible chart) and so will continue to avoid RCB and RCC, but…
RCC (5.75% senior BB, callable now) is due on 2/15/26, 238 days from now. At Friday’s closing price of 24.54, my spreadsheet says the annualized YTM is 10%. The next ex-div is July 15. Does anyone expect RC to default on senior debt?
DYODD
There’s a peculiarity here. Interest payment dates are 7/30/25, 10/30/25 and 1/30/26, but the payoff is 16 days later on 2/15/26. I don’t expect you would be paid for those extra days, but I think my spreadsheet assumes you would be, making the YTM overstated.
If you bought on Monday at 24.54 and received $0.36 x 3 = $1.08 in interest and $0.46 in cap gain, total $1.54, over 237 days
YTM = 1.54/24.54 = 6.3%
annualized YTM = 6.3 x (365/237) = 9.7%
A 9.7% YTM is correct if there is no interest paid for the extra 16 days.
“The notes will bear interest at the rate per annum set forth on the cover page of this prospectus supplement from, and including, February 10, 2021, and the subsequent interest periods will be the periods from, and including, an interest payment date to, but excluding, the next interest payment date OR THE STATED MATURITY DATE…” P S-18
2wr-
If I understand that correctly, the YTM is the lower number. Thanks.
One could avoid the whole issue by selling just prior to the final ex-date at, hopefully, par+interest payment, or selling just after at par…theoretically.
By the way I would use https://digital.fidelity.com/prgw/digital/priceyieldcalc/ to calculate a 5.75% due 2/15/26 with payment dates of 1/30, 4/30, 7/30, & 10/30, I’d come up with a YTM of 10.149% for a purchase at 24.54 for settlement 6/24. I would put a phony maturity date of 4/30/26 in to get the calc to use the correct amount of accrued and then use 2/15/26 as the CALL DATE, then look at the calculated YTC to be the actual YTM.
I also think it’s worth people’s time, assuming they have MS Excel, to get acquainted with the XIRR function.
It’s a lot easier to directly input the cash flows, no matter how weird they get, without having to bash your head against the wall of some website.
Looking for an annuity in an ETF wrapper? Stumbled onto a family of ETFs that might interest you. These ETF’s give a fixed monthly payout over their term with the express goal of achieving a zero NAV at maturity. This is as opposed to annuities offered by insurance company multi-year guaranteed annuity (MYGA) that return your principal in full at the end of the term. These are more similar to immediate annuities. The ETF monthly payouts include a substantial amount of return of capital (ROC) as you would expect. The ones being offered at present only offer US Treasuries as their underlying assets. So, they are as good as buying individual US Treasuries. The difference is once again, if you buy a UST you will receive periodic interest payouts but have to wait until they mature before you get your principal back. Because the underlying assets are UST’s, the returns are low relative to what III’ers are usually aiming for, but these might fit the bill for an extreme risk-averse investor. You have the choice of either holding fixed rates UST’s or TIPS which is kind of interesting. One major advantage of these compared to insurance company annuities is that you can immediately liquidate them on a moment’s notice without an early withdrawal penalty. Obviously, since their NAV is dropping every month, you would take a capital loss.
The company, LifeXfunds dot com, offers a range of maturities from 10 years up to 40 years. The only caveat I see is that most of the funds do not have enough assets to be viable long term. Only one fund, LDDR, the 10 year maturing in 2035 ,currently has enough assets to survive the full 10 years. It is not clear what will happen to the other funds, which in many cases have less than Grid pocket change, aka $1 Million. Will they keep them open with expense ratios capped for the next 40 years? Unknowable, but clearly, they are counting on them to keep growing in assets.
We do not own any of these funds in any account, nor have any relationship with the fund company.
Thanks for the heads up on that. It’s a clever idea and I hope it works.
Tex, aren’t these subject to rate fluctuations?
Corebridge (AIG) MYGA’s (American Pathway Advisory annuity product) can be liquidated without a surrender charge at any time. It’s subject to a market value adjustment due to changes in rates—either up or down.
https://crbgdoc.jaggedpeak.com/getDocument/?email=defalt%40crbg.com&Source=default&catalogID=AGL14480
No kidding. An non-leveraged ETF that went through a reverse split…
You don’t see that every day..