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.
Not exactly an investing post, but did anyone get caught up in the airline disaster resulting from Crowdstrike? I flew into Newark from North Carolina, rented a car, and traveled up to the Hudson Valley for a long weekend. Checked Sunday Morning and Delta had the return flight showing scheduled and on time, so headed for the airport. Before turning in the rental checked again and all still well. Got to the assigned gate and the flight was cancelled 2 hours before takeoff! Wound up getting a one way rental (hard due to demand!) and started driving back to NC around 230 PM. Spent the night just south of DC and drove the rest of the way Monday morning. What a end to a lovely weekend. Guess I was better off than others though. If I could have found a hotel room near the Newark airport the next day flight I would have been re-booked on was first delayed and then cancelled again at 7 PM that evening. I could have spent all day at the airport and had to either spend the night in the airport or found another room. I have requested a reimbursement for my return ticket on the Delta website. What a nightmare for so many and I am lucky to be home now. I would not schedule any time off if I was a lawyer for Crowdstrike. They may be busy for a while over this, but they just might be an opportunity as their stock price plummeted.
CLT/BNA last weekend. Scheduled flight time is 1.5 hours each way. 3-hour delay outbound and 5-hour delay on return leg. Tier-2 problem was getting a buzz off the chocolate covered raisins in the lounge and making the exact same mistake on the return.
Have made that EWR/Hudson Valley trip many times – north of Kingston.
Alpha, Went to the port of Kingston down on the creek, had lunch, did a 90 minute river cruise, and went through the maritime museum. Nice old town! Another highlight was dinner at the Culinary Institute on the opposite bank.
What a place and meal! also toured the Vanderbilt mansion in hyde Park. Was visiting my son in Beacon. We do this trip periodically.
In early Feb ‘24 I posted in the Sandbox section my reasons for purchasing several thousand shares of TELL at just under .50/share. These reasons included, 1) change in management (removal of the CEO and his team), 2) U.S. suspension of permitting for new LNG export facilities (TELL is fully permitted), and 3) TELL’s plan to sell their upstream business. As the post received negligible interest (one comment that was OBE) I did not post further management changes in mid March (replacement CEO moved to advisory position) nor the sale of the upstream business to Aethon Energy in late May (sale closed July 1). In addition to the upstream purchase Aethon Energy announced a Heads of Agreement to purchase two million tons per annum of LNG upon completion of Driftwood. These further management changes by TELL prompted my purchase of over a thousand shares of TELZ (8.25% Senior Notes due 2028) for 12.4x/share at the end of March.
On July 21, 2024 Tell announced they will be acquired by Woodside (see July 22 Reader Initiated Alerts by various III posters for additional info). On July 22 I sold all of my TELL shares at .95/share, over 90% capital gain. I retain all TELZ shares purchased at 12.4x, yielding over 16 percent (at purchase price), and a potential capital gain of over 100% upon maturity or call. (TELZ closed up 45 percent on the acquisition announcement)
Natural gas has historically been good to me. I made substantial profits on CQP (Cheniere Energy Partners) when their facility, originally completed as an import (regasification) facility, was converted to an export (LNG) facility. Somewhere between 25-30 years ago I purchased a considerable position in a royalty trust (WTI if memory serves me correctly). This royalty trust paid a variable dividend but more importantly issued IRS section 29 FNS credits (Fuel from a Nonconventional Source). As I am sure you are aware, a credit is more valuable than a deduction, in essence it’s cash. These credits significantly lowered my tax burden for many years . Sadly this credit was sunset in 2005.
It is truly amazing how sources of income change over time. CQP and WTI were plays on the supposition U.S domestic production of natural gas had peaked while TELL is a play on the current position of the U.S. as the world’s premier LNG supplier.
Regards from Thailand.
Congrats on the gamble with TELL. I avoid penny stocks, and I also thought they would be taken to the woodshed vs woodside. Glad that many parties were happy after experiencing a ton of stress for the failures and many changes and hurdles along the way. A couple of days of happiness for a success in a trade doesn’t equate for me months of stress and sweaty stressful nights.
great move. Question: On a royalty trust do you look at PV(10) as a key indicator?
i’m sure PV10 has value on estimating the value of oil or whatever in the ground ; but the reason I stopped investing in this class and the reason i think PV10 doesn’t mean much is
the operator ; company that removes the assets from the ground, determines how much or little drilling they do ; royalty holders have no control over that ;
is this blog turning into a penny stock tout sheet?
I am a long term holder of TELZ and although I never had interest in the common, I am grateful for the discussion of the common here, because that discussion informed my decision to stay invested in the baby bonds.
A little time perusing the Yahoo message boards for any penny stock should be enough to make it crystal clear that the sort of discussion we’ve had here on III is nothing like those.
Troll, probably no more that it being a requiem for chart astrology.
There is a lot of interest in Prefs/Babys/Terms that are fixed to float, reset or variable with upcoming change dates. This was the impetus for my friend Preferred Stock Trader (PST) recommending WTFCP. This prompts the question about other issues with upcoming change dates that MIGHT be worthy candidates. I have put together a list of all issues that I show that have NOT reached their change dates. I have excluded issues that are NOT currently paying out, even if they are cumulative preferreds which might eventually catch up. I show 74 issues but it is not straightforward due to the phase out of Libor. There was not a universal conversion from Libor to SOFR like we would hope. In four cases that I know about, the conversion was to fixed. In many other cases, the issuer has not formally said what the conversion will be. Say it converts in 2029, the issuer might want to defer judgement to see if the Libor-SOFR plan sticks. So, this list has a reasonable amount of uncertainty. Not to mention that I have likely have some numbers wrong, so you MUST absolutely, positively, double check everything before making any investment decision.
Another complicating factor is trying to convey a gazillion pieces of information into an eastly readable format. Plus, you have to assume what future interest rates will be on the conversion date which is up to 5 years in the future. Good luck with that. For better or worse, I have assumed SOFR3 month at 4.261% and US Treasury 5 year at 4.0%. I have included a data point for current price/par. Obviously if the issue is called on the conversion date, this would indicate a capital gain or loss potential.
I am posting the data as a “CSV file” for direct input into a Google Sheet or Excel spreadsheet.
The data is sorted from nearest to farthest conversion date.
Format is: ticker, conversion date, current price/par, Interest type AFTER Libor was discontinued, new base for interest rate, new margin to be added to base interest rate, projected coupon yield after conversion
“?SOFR” is used for Libor issues where I have NOT confirmed they will transition to SOFR. Maybe they will, maybe they want, but it is a reasonable assumption for today.
ACR-C, 7/30/24, 0.99, FixFloat, ?SOFR3, 5.93%, 10.19%
RITM-A, 8/15/24, 1, FixFloat, ?SOFR3, 5.8%, 10.06%
RITM-B, 8/15/24, 1, FixFloat, ?SOFR3, 5.64%, 9.9%
FTAIP, 9/15/24, 1.01, FixFloat, ?SOFR3, 6.89%, 11.15%
RF-B, 9/15/24, 1, FixFloat, SOFR3, 3.54%, 7.8%
MITT-C, 9/17/24, 0.98, FixFloat, ?SOFR3, 6.48%, 10.74%
CHSCM, 9/30/24, 1, Fixed, NA, 0%, 6.75%
MBINO, 10/1/24, 0.99, FixFloat, ?SOFR3, 4.57%, 8.83%
AGNCO, 10/15/24, 1, FixFloat, SOFR3, 4.99%, 9.25%
MS-I, 10/15/24, 1, Fixed, NA, 0%, 6.38%
EFC-A, 10/30/24, 0.99, FixFloat, ?SOFR3, 5.2%, 9.46%
ANG-A, 12/1/24, 0.98, Reset, UST5YR, 4.32%, 8.32%
FTAIO, 12/15/24, 1.01, FixFloat, ?SOFR3, 6.45%, 10.71%
IVR-B, 12/27/24, 0.98, FixFloat, ?SOFR3, 5.18%, 9.44%
CKNQP, 1/1/25, 1, FixFloat, ?SOFR3, 3.74%, 8.01%
NYMTM, 1/15/25, 0.96, FixFloat, SOFR3, 6.43%, 10.69%
TWO-C, 1/27/25, 0.97, FixFloat, ?SOFR3, 5.01%, 9.27%
RITM-C, 2/15/25, 0.95, FixFloat, ?SOFR3, 4.97%, 9.23%
MFA-C, 3/21/25, 0.95, FixFloat, SOFR3, 5.35%, 9.61%
MBNKP, 4/1/25, 1, FixFloat, ?SOFR3, 6.46%, 10.72%
AGNCP, 4/15/25, 0.97, FixFloat, SOFR3, 4.7%, 8.96%
OCFCP, 5/15/25, 1, FixFloat, ?SOFR3, 6.85%, 11.11%
VLYPP, 6/30/25, 0.88, FixFloat, ?SOFR3, 3.85%, 8.11%
WTFCM, 7/15/25, 0.97, FixFloat, SOFR3, 4.06%, 8.32%
WTFCP, 7/15/25, 0.99, Reset, UST5YR, 6.51%, 10.51%
HTLFP, 7/25/25, 1.01, Reset, UST5YR, 6.68%, 10.68%
FHN-B, 8/1/25, 0.99, FixFloat, SOFR3, 4.26%, 8.52%
ANG-B, 9/1/25, 1, Reset, UST5YR, 6.3%, 10.3%
ARGO-A, 9/15/25, 1, Reset, UST5YR, 6.71%, 10.71%
SCE-J, 9/15/25, 0.96, FixFloat, SOFR3, 3.13%, 7.39%
ATH-C, 9/30/25, 1.01, Reset, UST5YR, 5.97%, 9.97%
CIM-C, 9/30/25, 0.9, FixFloat, ?SOFR3, 4.74%, 9%
WSBCP, 11/25/25, 1, Reset, UST5YR, 6.56%, 10.56%
SCE-K, 3/15/26, 0.98, FixFloat, SOFR3, 3.79%, 8.05%
STT-G, 3/15/26, 0.98, Fixed, NA, 0%, 5.35%
FHN-C, 5/1/26, 0.96, FixFloat, SOFR3, 4.92%, 9.18%
FTAIN, 6/15/26, 1.02, Reset, UST5YR, 7.38%, 11.38%
RJF-B, 7/1/26, 1.01, FixFloat, SOFR3, 4.09%, 8.35%
CNOBP, 9/1/26, 0.83, Reset, UST5YR, 4.42%, 8.42%
NYMTL, 10/15/26, 0.82, FixFloat, ?SOFR3, 6.13%, 10.39%
RITM-D, 11/15/26, 0.93, Reset, UST5YR, 6.22%, 10.22%
KEY-I, 12/15/26, 0.93, FixFloat, ?SOFR3, 3.89%, 8.15%
MTB-H, 12/15/26, 0.99, FixFloat, SOFR3, 4.02%, 8.28%
GPMT-A, 1/15/27, 0.65, FixFloat, ?SOFR3, 5.83%, 10.09%
EFC-B, 1/30/27, 0.87, Reset, UST5YR, 4.99%, 8.99%
KMPB, 3/15/27, 0.91, Reset, UST5YR, 4.14%, 8.14%
MS-K, 4/15/27, 0.99, Fixed, NA, 0%, 5.85%
TWO-A, 4/27/27, 0.95, FixFloat, ?SOFR3, 5.66%, 9.92%
TNP-E, 5/28/27, 1.06, FixFloat, ?SOFR3, 6.88%, 11.14%
GLOP-A, 6/15/27, 1.01, FixFloat, ?SOFR3, 6.31%, 10.57%
TWO-B, 7/27/27, 0.92, FixFloat, ?SOFR3, 5.35%, 9.61%
BANC-F, 9/1/27, 0.96, Reset, UST5YR, 4.82%, 8.82%
IVR-C, 9/27/27, 0.93, FixFloat, ?SOFR3, 5.29%, 9.55%
MSBIP, 9/30/27, 1.01, Reset, UST5YR, 4.71%, 8.71%
MBINM, 10/1/27, 1.03, Reset, UST5YR, 4.34%, 8.34%
AGNCL, 10/15/27, 0.96, Reset, UST5YR, 4.39%, 8.39%
NYMTN, 10/15/27, 0.85, FixFloat, SOFR3, 5.6%, 9.86%
SEAL-B, 10/15/27, 1.03, FixFloat, ?SOFR3, 6.24%, 10.5%
RZC, 10/17/27, 1.04, Reset, UST5YR, 3.46%, 7.46%
KEY-L, 12/15/27, 0.92, Reset, UST5YR, 3.13%, 7.13%
ATH-E, 12/30/27, 1.06, Reset, UST5YR, 3.96%, 7.96%
ASBA, 3/1/28, 0.95, Reset, UST5YR, 2.81%, 6.81%
RWT-A, 4/15/28, 1, Reset, UST5YR, 6.28%, 10.28%
EFC-C, 4/30/28, 0.99, Reset, UST5YR, 5.13%, 9.13%
FTAIM, 6/15/28, 1.05, Reset, UST5YR, 5.16%, 9.16%
ESGRP, 9/1/28, 1.02, FixFloat, SOFR3, 4.02%, 8.28%
APOS, 9/15/28, 1.06, Reset, UST5YR, 3.23%, 7.23%
ATHS, 3/30/29, 1.01, Reset, UST5YR, 2.99%, 6.99%
SYF-B, 5/15/29, 1.03, Reset, UST5YR, 4.04%, 8.04%
SYF-B, 5/15/29, 1.03, Reset, UST5YR, 4.04%, 8.04%
ATH-A, 6/30/29, 0.99, FixFloat, SOFR3, 4.25%, 8.51%
AQNB, 7/1/29, 1.02, FixFloat, ?SOFR3, 5.01%, 9.27%
RF-C, 8/15/29, 0.95, FixFloat, SOFR3, 3.15%, 7.41%
VOYA-B, 9/15/29, 1, Reset, UST5YR, 3.21%, 7.21%
Regarding WTF preferred issues which are both callable on 7/15/25 otherwise their new interest rates kick in.
WTFCM, Fix to Float, based on 3M Libor + 4.06%
7/19 Close @ 24.23
IRR to 7/15/25= 10.44%
WTFCP, Fix to Float, based on UST 5 year + 6.51%
7/19 Close @ 24.76
IRR to 7/15/25 close= 8.31%
An III’er was told by WTF management that CP would be called. I do not recall seeing any comments on whether CM will be called or not, but if it is called, it will have a higher total return.
Tex, are you an RIA and if so do you take new clients? Fellow Texan, thanks.
amazing and helpful Tex thanx. B
Thanks, Tex. I only track the ones where the spread is above 5%, and you listed seven that I didn’t have on my spreadsheet.
Here are two I’m tracking that I didn’t see in your list: DX.PRC (floats 4/15/2025) and ABR.PRF (floats 10/30/2026). Also, I think AQNB started floating on 7/1/2024.
There’s also the Enbridge USD resets and I think a few other USD Cdn issues as well
EBGEF
EBBGF
EBBNF
Tex,
Much appreciated.
re AQNB, it’s actually a reset, not a fix/float. Offhand, the only one I know that resets off the 3monthLIBOR (SOFR?), not the UST5YR.
Retired,
Yes, AQNB did reset (not float) on 7/1/24. It next resets on 7/1/29.
“From 7/1/2029, on every Interest Reset Date until 7/1/2049, the interest rate on the Notes will be reset on each Interest Reset Date at an interest rate per annum equal to the three month LIBOR plus 4.26%.”
AQN has approx. 1 billion in CASH coming in 4th qtr 2024 or 1st qtr 2025. They expect to use the proceeds to pay down debt. Will that include AQNB? I expect the reset to be around 9.5% or so. I would think it would at least be a candidate. So, I would not pay up. Naturally, I could be wrong.
https://www.prnewswire.com/news-releases/algonquin-power–utilities-corp-announces-its-support-for-energy-capital-partners-proposed-acquisition-of-atlantica-302156437.html
Regarding AQNB ‘s reset, does the interest amount change every quarter based on changes to the 3-month SOFR or is it locked intill 7/1/2029? I was under the impression that the rate floated every three months.
it is locked for the next 5 years but tjhe issue can now be called at any time.
I think you’re reading the provision wrong, mbg….. They call it a “reset” but it actually floats quarterly. What’s set until 7/1/29 is the FORMULA for the “reset” amount. The SOFR plus rate increases after 7/1/29 and then twice more before maturity if it remains outstanding… However, AQN is on record as saying they will not leave it outstanding that long. The “Interest Reset Date” is a day most likely just prior to the next interest payment date every quarter now.
“Starting on July 1, 2024, and QUARTERLY on every January 1, April 1, July 1, October 1 of each year during which the Notes are outstanding thereafter until July 1, 2079 (each such date, an “Interest Reset Date”), the interest rate on the Notes will be reset to an interest rate per annum equal to (i) starting on July 1, 2024, on every Interest Reset Date until July 1, 2029, the three month LIBOR (as hereinafter defined) plus 4.01%, payable in arrears, (ii) starting on July 1, 2029, on every Interest Reset Date until July 1, 2049, the three month LIBOR plus 4.26%, payable in arrears and (iii) starting on July 1, 2049, on every Interest Reset Date until July 1, 2079, the three month LIBOR plus 5.01%…”
In rereading, you are probably correct.
Plus, almost every reset issue I have seen resets off the 5-Year Treasury. It would probably have been very foolish to reset off 3-month libor (or SOFR) and get locked to that rate for 5 years.
2wr thank you!
By the way, re “The SOFR plus rate increases after 7/1/29 and then twice more before maturity if it remains outstanding…”:
a. After the 7/1/24 rate increase, it increases twice more (7/1/29 and 7/1/49).
b. After the 7/1/29 (3mS + 4.26% + 0.26161%), it resets only ONCE more (3mS + 5.01% + 0.26161%) until it matures.
Ha! See what happens when you think some long off possibilities ain’t never gonna happen because the bond will be long gone before they get there? You (meaning I) get sloppy with the details and can’t count straight… lol
I’m right there with you, 2wr. You’ve got company.
Thanks Tex- I own quite a few, but now, many more to review.
Took a few minutes, had to research how to, but I got it transferred to an Excel File. Thanks for all the hard work and time you put in! I still have about 15k left to reinvest from losing all my Nustar preferreds, and this will speed up the time to find another home for that money.
Don’t have a subscription to Barron’s, but they posted an article yesterday how the customers don’t like being shoved in low yielding money markets and cash sweeps (as everyone on this site is well aware of) and the customers have been complaining and having their investible cash head for the exits in search for higher yield.
It was on Marketwatch’s front page. I don’t subscribe so I can’t provide the full article, but it probably parrots what has been on this message board for months.
https://www.barrons.com/articles/schwab-lpl-cash-sweep-b60827f5
Such a good point and same goes for low yielding checking/savings plans–and high yielding ones like my Discover 4.25%, when I can get .75-1% more w a ‘click!’
Fidelity’s SPAXX still gives the highest sweep, w even instant trading access if you move from a stock to buy something and there is not enough in SPAXX. Of course Interactive Brokers runs ads all the time alerting people to their sweep ac rates…but…they leave off SPAXX!
Even w the ‘high’ fee .42% Ms Johnson takes for a cash mmkt SPAXX does ok for my needs. I like having ‘cash’ earn as an investment. Is the coming decade like 1972-1982 era where rolling Tbills gives us the best returns? we’ll see!
best personal example besides me moving out of Discover Savings was Mom in Jan. A ‘CD’ safety saver, most of hers were locked in a few more years at under .50%. I showed her a simple rollover to the new offerings w/o switching banks meant thousands of dollars a year.
She said ‘I don’t need that money, can’t be bothered.’ I said I can do it as POA and maybe we just donate the extra if you want to..well thousands to the food bank in 2024. Have to believe so many others have had these conversations with themselves and friends/family given we can earn something for being savers again!!
Interesting conundrum, I received a statement on an inherited IRA I rolled over at Met Life. They pay a variable interest rate, the last statement saying it was 3% for the month of June! I pulled about a 1/3rd out around Dec. and added the cash to my traditional IRA and with that I purchased BHFAL and now getting 7.1% on cost. I was going to continue to draw my MET account down and use it to fund IRA contributions for several more years but I am re-thinking that.
BHF is a spin off of MET and is still 20% owned by them I believe.
The preferred price has been relatively steady past few months so this may be a candidate to sell on upcoming dividend date and re-buy later.
Charles, the IRS finally delivered finalized rules for RMD’s for inherited IRA’s this past week. It has been in a state of flux since the IRS announced it several years ago and it caused a huge uproar from AICPA organization and other tax groups, so the IRS has been waiving penalties every year. The rules are out and you might want to see if the changes apply to your inherited IRA.
https://www.kiplinger.com/taxes/inherited-ira-four-things-beneficiaries-should-know
Thanks Steve
In light of the US Supreme Court overturning the Chevron deference (doctrine), I wonder what becomes of any agency ruling including this one.
Gunfighter, I am just a leaf floating on the river of life going whichever way the flow takes me. This article was posted on Yahoo finance and commentators pointed out you have to be rich to pay for the lawyers to fight the IRS and probably take it all the way to the same Supreme court.
Charles, your comment made me chuckle. Because I have a similar phrase I go by. “I’m just kelp in the sea, wherever the waves take me that is where I will go”
Yup- amazing what can be found to increase savings outside of brokerages.
I am moving to mybankingdirect.com ( Flagstar / NYCB) now paying 5.45%
( had been 5.55% a wk ago). I had been with Western Alliance thru RAISIN.com paying 5.26%, BUT- they became a true pain in the arse when they instituted a new process to transfer out– you now have to move money from the paying part to the cash acct- takes two days, then you can send it to your bank, etc another two or more days. Screw that–I emailed what I thought of that, along with my recommendation to friends to do the same. The new online bank doesn’t do that.
I like FZDXX even better than SPAXX. it yields 5.15% right now. I have them both. The bank accounts are a joke. No excuse for getting those low rates.
Just switch. Not that hard.
Kingcash
Did you mean FZFXX? That seems to be the only option along with SPAXX for sweep mutual funds.
If you can use it, do you have to manually move cash from the cash acct to FZDXX? Lot of work.
thx
This link may work.
https://www.msn.com/en-us/money/savingandinvesting/schwab-and-lpl-short-changed-clients-cash-for-years-now-they-re-paying-for-it/ar-BB1qebij
Justin
You might be able to get free remote access to Barron’s and Wall Street Journal through your local library’s website. All the libraries in my area have 24-hour access to online resources. You will need a library card and your account password to access their online resources. If you search the list of resources look for “ProQuest Central”.
Once you are in ProQuest Central, select the “Publications” tab.
On the Publication Search page enter “Barron’s” or “Wall-Street Journal” and ensure the selection option is “In Title” and select the search button. Make sure that you use the apostrophe on Barrons and dash in wall street or you will get lots of publications that you don’t want. There should be 6 different pubs for WSJ and 4 for Barrons. If you have lots more you aren’t doing the search right.
The publications that you want to read are:
Barron’s (Online); New York
Wall Street Journal (Online); New York, N.Y.
Good Luck
I read that and think it’s BS. Everybody has a system permitting mm purchases in open end funds. Like Federated.
And all the remaining brokers have 0% checking accounts too. It’s industry wise affliction. IMO it’s a rate fixing conspiracy. And for a lot of reasons I completely disagree with it.
But hey their all doing it.
Looking through $25 stocks owned or on my watch list, here are those with CY >=9% and last price <=par
MITT-B CY=9.76% last=20.50 (REIT)
RWTN CY=9.12% last=24.97 (REIT)
ABR-D CY=8.99% last=17.75 (REIT)
All three fixed.
Some REITs have very high current yields, some don't. Does the market know which are the riskiest or are there other factors?
Please excuse the following non-investment quote. (I think it is on our currency)
The central social issue in our country (world?) today
e pluribus unum
“This longheld motto of the United States supposedly derives from the Roman Cicero, who paraphrased Pythagoras, who said the strength of society depends on the devotion of all its members to each other before self. He said, “When each person loves the other as much as himself, it makes one out of many (unum fiat ex pluribus).”
Friday Jly 19 7am ( NY ) …. Schwab StreetSmart …. any posters,still on SSE…
I am getting a ” Cannot Log In at this time, Try again “.
I’m still on the SSE until Sept 15.
Interested if others getting the same , or my account. TIA, Jim
Global equities struggled on Friday as worldwide computer systems outages hit travel, trading and banking services, threatening to exacerbate a pullback in technology stocks.
Cybersecurity firm Crowdstrike Inc. plunged as much as 21% in US premarket trading after warning its software was causing computer systems to crash. Its chief executive later said the issue had been identified and “a fix was being deployed.” Microsoft Corp. shares dropped 2%, though it said it had resolved an earlier cloud-services outage.
I am getting the same message. Schwab is full of hubris.
a little unclear on the concept ; Hubris by definition – arrogant and presumptuous; ( being a Schwab account holder)
they reported the outage of the trading platform (Edge) explained the reason for the outage ( not Schwab ) and said they are working as diligently as possible to restore functionality ;
Jim ; its 10;15 PDT and my Edge is still down ;i just got a notification that my Edge mandatory switchover date to TOS is Sept 13th
I have been a StreetSmart Edge user for a while too and disappointed that they are forcibly getting rid of it. Also, in past year or so there have been many outages and problems with it – mostly with this platform than Schwab.com web interface. .
Are you considering to move your account from Schwab to elsewhere? Where? Suggestions welcome…
Anyone seeing something like this for TRINZ from Fidelity?
Jul-18-2024 ROTH IRA ***
CORP INT ADJUSTMENT as of Jun-30-2024 TRINITY CAP INC CAL NT 2029 7.87500%… (TRINZ) (Cash) -$5.41
It’s a debit of interest, not a credit.
Nope- the correct $ was paid at Schlub before I transferred to Fideity- nothing clawed back – so far.
Yes, Showed interest paid as of June 30th 87.04 then a Corp int adjustment of 85.15 Whole $1.89 ahead.
Fidelity seems to pay dividends and interest before they actually receive them. This looks like an adjustment on what they paid.
I called Fidelity to ask what was going on.
They said TRINZ had a “rate adjustment”, and I should see a new credit to my account from TRINZ within three business days;
Here is what I see this morning:
Jul-18-2024
ROTH IRA *** INTEREST as of Jun-30-2024 TRINITY CAP INC CAL NT 2029 7.87500%… (TRINZ) (Cash) +$5.53
So, a few more cents more.
If I had procrastinated as I usually do, I would have (possibly) noted the credit and dismissed the whole thing instead of making the fixed income specialist jump through hoops.
The rep did a good job tracking this down for me. FYI 800 476 4589 takes you directly to fixed income.
Does anyone happen to know the parameters of MTB-J’s float? Thank you.
What, specifically, are you asking? There are 30,000,000 MTB-J outstanding.
Stephen-
If thinking of a floater- the only one is MTBPP ($1000), but you won’t find a quote online.
On and after 2/15/2024 distributions will be paid at a floating rate equal to three-month LIBOR 3-month CME Term SOFR rate plus a spread adjustment of 0.26161% plus a spread of 3.610% per annum,
Thanks for the information. However, when I look it up on quantumonline it shows a $25 preferred with a 7.5% coupon and no mention of a float in the description. Yet at the same time it gives today’s price as $26.42 with a 9.64% dividend rate. In addition, when I look it up on my broker’s site it gives the first payout on 16 September at $.635425 or 9.6234%.
It’s a brand new issue and based on timing, the first payment is larger than the rest will be. Prospectus is here: https://www.sec.gov/Archives/edgar/data/36270/000119312524133536/d794425d424b5.htm#supptx794425_9
See page S-12.
Thanks for the solution.
good comment…mtb.prj price at 26.42 is 6.17 ytc 6/15/2029
Just looking for some ideas. Scenario is, you have an account that you can’t trade any CDs, nor individual fixed income, nor preferreds, nor open-end mutual funds.
Just individual stocks, ETFs, or CEFs. What are you buying?
Some ideas:
Stocks: ENB, TRP
ETFs: SCHD
CEFs: BDJ
I hold them all, so after you do your due diligence, am curious what you think of them.
I own FRA, GGN and BIZD. Bought them for the steady income, so far so good.
Bill S. – I do like BIZD and have that right now.
I will take a good look at GGN. At first glance, it’s been trading in a tight range now for over 4 years and the distribution has not been changed in that duration as well.
Other than 2020, FRA been trading in a decent range since 2015. And distributions got a big increase in 2023 but even if you plug in the previous distributions when interest rates were lower, that still lands at 7% vs. current trading price. I’ll take a closer look.
Gumfighter – ENB is presently on my watch list. I like that one for several reasons. Will have to take a closer look at TRP.
SCHD just doesn’t quite fit my investment profile currently. Although I would consider this if I could sell an in the money call against it to spike up effective yield providing some insurance for market downside as well.
BDJ looks very promising. Not much leverage if any and been paying out the same distribution since 2018. Thanks.
USFR, CLIP, SGOV in that order for parking cash (beyond Fidelity’s SPAXX cash) -and can change if much variance.
Have bought at lower prices & might get more:
ARCC,NBXG, OBDC, PFFA, GBDC, ETY, BANX, UTG, EIC, DPG,
Not recommending any- do the usual due.
Gary – I hear you on the lower prices entry. I do like ARCC and UTG allot. Thanks for the grocery list. Will take a look at those shortly.
If you don’t have the time, interest or aptitude to follow the market then just buy a total market ETF such as ITOT or SPLG and forget about it until you can move the money to a better account.
Martin G – I like the part of waiting/forgetting about it until you can move it. I would be hesitant here timing wise to step into any broad stock themed vehicles given how top heavy we are now. You could probably make the argument for allot of the bond/fixed ETF/CEF themes as well.
I did find two interesting ones from Blackrock which are interest rate hedged and trading in a very tight 52 week trading range pumping out 8% yields (HYGH and LQDH.)
As opposed to say a growth/equities based ETF that’s up 25% in the 52 week or a levered high yielder that’s also trading up big right now. The only thing I do think is favorable for the more fixed income based themes is as the rate cut landscape plays out in the next 6-9 months with yields coming down, you would think these ETF/CEF plays have more upside ahead. I just don’t know how much is already caked in at this point. We’ve seen quite a rally now since the Oct/Nov 23 yield mania panic lows.
Martin-
Not sure why income investors would buy either of those almost identical stocks paying 1.28% –unless one can be confident in a continued rise in the market ( mainly S&P 500 and tech ) allowing withdrawal of cap gains- or lack thereof. Much better places to park money are available.
I wouldn’t buy them because I’m an active follower of the markets. Assumed the poster wasn’t but his response suggested otherwise. No you don’t buy them for the dividend you buy for the long term capital appreciation.
Theta, impossible to give an accurate answer to your question without having more information. Let me illustrate by going through two extreme but actual cases we manage.
1) 14 year old teenager working a summer job with some extra funds that they are not going to spend. Our answer: ROTH IRA to get tax free withdrawal in 60+ years. ~100% allocation to equities.
2) 99 year old with substantial financial assets, but might need 24 hour around the clock private care at their home, starting TODAY. Have to be able to immediately fund ~ $150k/year for an indefinite period of time. High allocation to short term CDS/bonds/UST’s/MMF without the risk of significant draw-down which rules out equities.
Giving any detailed recommendations without more information would not be a fiduciary like response.
Tex the 2nd – Same mindset objective or theme for this great website; solely income driven with no constraints with respect to time horizon. Not interested in growth etc.
Pretend today you were searching for an individual corp or agency bond or perpetual preferred or baby bond etc. but those were not available to you on the trading platform. What ETF/CEF or even equities would you buy instead?
I started a small position in GBDC having never owned these and never thought I would because I got slammed in the ‘loan’ biz by Capital Source in 2008-9 w their ‘great loans’ ..this went to another ‘fine’ name PacWest Banc..which is now part of Bank of California!! oh the memories.. but I looked at what they have and how they operate w Golubs in charge, Karen Finerman’s husband is one of them, usually very conservative people w their pulse on the financial market workings, bot some of that.
Also just bot tiny bit of NewLake Cap Partners NLCP. Both in my RothIRA to give max ummph to the returns of the divs (no k-1s here.) DYODD of course. Might add to NLCP we’ll see.
That said I have trimmed around the edges here all week and ‘cash’ is up to 40% again from 36%.. and I did add to SLG-I, sold the AXS pfds not enough yield for me but collected 1 div w tiny gains in taxable/Roth.
Freehold Royalties has been mentioned here, hold in Roth, FRHLF, C.09/divs monthly pretty well covered, conservative to me w leases spread thru Canada and US collecting the roy’s. No tax on CA divs in Roth. I like it a little more than KRP similar US royco also mentioned here a lot. Woodside the huge AUS ng/lng/oil WDS us exchange ADR, semi divs, lots of diverse production, div w be declared in Aug., ‘fully franked’ which means no tax to US or any folks on AUS divs paid. WDS, Freehold, FLNG and Whitecap make up my US Energy holdings now, SPGYF, again CA mo div payer so best held in Roth, lots written on all these at SA for DD. I guess this should all go in Common Stock discussion but hey we are all friends right??!! lol.. Bea
All adding to cash flow for reinvesting. Again just some ideas, DYODD. Bea
MO — 7.93% yield
VZ — 6.39% (attractive entry point around 39 or 40)
(i own both)
Holy Cow !
A first…
Every single holding is Green
The investment grade non-tech (don’t hold any tech) are the greenest
quick , get a screen shot for the wall!
Too late……….
No longer true
Rats
From Interactive Brokers:
“Every so often a news report really gets me thinking. Today I read a Bloomberg article that noted that the S&P 500 (SPX) has gone 350 sessions without a 2% drop. That would put it on pace for its best streak since 2007. The prior peak of 351 sessions occurred in early 2018. Those dates should give some pause to those of us with a sense of market history.”
Westie,
Party like it’s 1999 even after the Savings & Loan scandal earlier the market was climbing. The one day drop in the market was a scare but the market still climbed. Even when Opec tried to crush the oil industry and we saw prices below 30.00 a barrel and numerous companies went bankrupt it kept going. Only when the tech bubble popped did it collapse. Then what did the Fed’s do? they pumped money into the economy.
Right now as Tim said we have 6 trillion in MM funds and wages bringing in thousands of dollars income to people. Even on the radio today they said Twitter was moving out of San Francisco and up to now had laid off about 6,000 people and I still hear and see Freeways jammed with commuter traffic.
I think it’s going to take a lot to slow this market down.
pd 25.26 (25.01 stripped price) for mficl 7.99 ytc 12/15/2025 12/15/2028 maturity as the mficl/sjnk pair is trading near bottom of range since issuance in december 2023..good article on S/A by Jeremy LaKosh
Quick question.
Are there municipal bonds that pay interest and principal back on a schedule?
if there are, is there a term for it?
all the times I look for it, I get asset backed securities like mortgaged backed.
it is related to new rule G-47.
https://www.msrb.org/sites/default/files/2024-07/2024-10.pdf
In my experience, muni’s either pay in full at maturity, or make multiple payments from a sinking fund over time.
Justin, there are several different types of munis that pay interest and principal back on a schedule, as opposed to paying all principal at maturity.
Here are three examples:
Illinois State CUSIP 452151LE1 matured 6/1/23
Illinois Muni Power CUSIP 452024HJ4 matures 2/1/25
New York City CUSIP 64966HTY6 matures 12/1/24
Sometimes these are called “factor” bonds and other times they are bonds with a sink feature. The most common type of sinks are where full quantities of munis are chosen by lottery and called @ par. Say, a single CUSIP has $100 million face outstanding, you might have $50 million sunk one year before the maturity date. Individual holders might own 100 bonds and will have roughly 50 of them after the sink occurs. Each remaining bond will be redeemed at $1k/per.
The much less common form of sinks is where all of the outstanding quantities are proportionally sunk. So everybody’s bonds are proportionally sunk instead of some being sunk in full. You held $100k face and were paid $50k principal and you still have 100 bonds but they have a “factor” of 0.5 so each one now will be worth $500/bond instead of $1k/bond.
Proportional sinks are NOT common, maybe 1% or 2% of overall sinkables. There is a least one other type that is even rarer. I will see if still have example CUSIPS.
Unfortunately, the guy you need to talk to, Mr Muni Bond, Joe Mysak, retired from Bloomberg last month. You can probably still get a hold of him though.
that is what I thought. They are super rare, which is why I never heard of them before. I knew about the sinking fund calls that are done by a or proportional where a fixed part of the position is redeemed.
And thanks for the live examples.
2WR = MuniKing! Bea
Bea, you are 110% correct. Inexcusable for me NOT to refer the question to III’s own MUNI BOND KING 2WRRRRRRRRRRRRRRRRRRRRRR!!!!!!!!!!
My apologies to the KING, III’ers and everyone else.
Epic fail on my part, have to do better. . .
no problem, just being silly. He’s a special person for sure. Appreciate all that you and others contribute.
Justin ; there are Target Maturity Funds that terminate on a specific Date ;
although they do not pay back principal and interest over time .
Thanks you to all that informed and educated me on MSEXP!!!
This was one of my best pref trades ever, and a story I will always remember.
I was one of the people who missed the initial prices, but was able to buy in the 400 range a few days after. I received education from this site and then did my own due diligence to confirm. Just finished selling a batch in the 635 range today and the rest are in the process of being converted.
I wish they were all that easy! 🙂
Dang. I should have waited to sell out. Still a great transaction for me.
That’s great Maine. Congrats!
I bought and sold a few, too, Maine.
Time for me to hit the [donate] button. Thanks Tim!
B.RILEY
Conn’s Inc. is teetering near bankruptcy, and B. Riley is potentially on the hook for about $148 million, around a third of its entire loan portfolio. Much of that stems from a loan B. Riley made in December to help Conn’s buy a troubled rival, W.S. Badcock.
RILY CONN – That quote conflates the equity in CONN (owned 50% by FRG, which in turn is owned 30-50% by RILY) with a bunch of secured furniture receivables still owned by FRG that are related to CONN customers.
The CONN stock is rumored to be headed for bankruptcy, but is only worth $15-20M for the whole company at this point, so any loss to FRG and RILY stakes would be quite small from here.
The receivables are more, $75M worth or so (I forget the exact number) and are secured by the customers. hence these won’t be impacted by a potential CONN bankruptcy, but of course might not be collected in full in a bad recession or similar.
I’m wondering why CDs can’t be for a full 30 or 90 days, etc. I had one mature on the 15th that I purchased on 6/10 with a settlement a wk later on 6/17, resulting in earning for 28 days.
I do see one 3mo issue 7/17 & settles 7/17, pays 10/17 : 93 days, and one 3 mo for 7/26 , 7/26, 10/28: 95 days Quite varied.
I’m sure most folks here know & accept what is offered, but it just seems odd and chafes a little. Maybe it doesn’t matter- not sure.
thanks
The description of my SCHWAB AQNB preferred is now
ALGONQUIN POW 9.6032%PFD DUE 07/01/79SUBJ TO XTRO REDEMPTION
So, I assume the rate is officially 9.6032% until it resets again.
yes the floating rate is about 9.56% as of 7/1 ; it was originally 6.20%
I find it very unusual for the description of a floater to change when it starts floating . i wonder if it’s just schwab doing that ?
Thoughts on this Energy Transfer bond as a “very long term” buy & hold??
* 29278NAE3
* 6% Coupon, Senior, BBB/Baa2, Semi-annual, Price 99.378
* YTM…6/15/48…6.049%
* YTC…12/15/47..6.049%
I own something like that. I’ll be dust before it matures, LOL. Over that timespan the oil industry is likely to gyrate. Will it matter to ET senior debt? And there’s a possible secular trend away from crude consumption to consider. Even if true, I think nat gas holds up.
Agree r2s, my family will be spending the money. Oil is going to gyrate as it goes into its twilight. I think like you, natural gas is going to be around for a long time. Even if you tell people its bad for them and at the same time it offers so much to keep you warm in the winter and cool in the summer by converting its energy into electricity to cool you. Like telling a smoker tobacco is bad for them and they are still lighting up after being told they have cancer.
Bigger problems with infrastructure companies is maintaining pipelines and over time some becoming obsolete. KMI comes to mind. It kept expanding and shoveling money into growth projects and growing its debt. Ended up selling its Canadian projects to pay down debt. 25 yrs from now is a long time.
Newbie, There is a lot in the news lately about ET but here is an option to consider for the yield and capitol appreciation if your going to look at holding that long.
Cusip 494550BP0
Thanks Charles M & R2S….
Newbie, ET bond: 29273VAH3, 9.6 coupon, perp, currently trading at par …own a sliver bot last Oct when I saw I could set up an annuity portfolio to just crank yield. Callable, but I bot way below par. Own four securities in that bucket all double digit my yield. I would guess there may be a time when they are that cheap again and perps are trash….again.
Good skill in your arrangements. Able to compund the payments right now. I think of that bucket as Sock Drawer and Don’t Blink.
This ET bond has not had a trade since 6/18/24 and doesn’t appear to trade very often. Watching.
IB shows this bond as being called on 6/21/24
https://ir.energytransfer.com/preferred-equity
Series A
This was called 6/21.
Fidelity site indicates minimum order 250 bonds, so if you have $250K no problem.
WAFD (the common) is up 16% since the mid-June lows, perhaps indicating that the market has shrugged off concerns about high levels of CRE loans. WAFDP (I own) has risen off the late June ex-div low.
I own some senior CUSIPs from RBC. I liked the coupons when I bought them but was concerned about the risk of Canadian bank debt. Since then, the RBC common RY has been in a solid uptrend, much to my pleasant surprise.
American Airlines (AAL)
Stock down another 4% today…now at $10.66 and nearing its COVID low & way down from last high on 1/8/18 at $58.42. AMR’s last bankruptcy was 11/29/11 before re-emerging from Chapter 11. Wonder how their bonds are acting? Don’t own or plan to own AAL, just hoping future tickets are transferable in case things get worse for them. 🙂
For those wanting an update on the MSEXP conversion I just got this from Fidelity.
“I can confirm that the back office team is awaiting finalization from the transfer agent so that the instructions can be entered into our system. Once the terms are finalized, the system should update with instructions on converting the preferred shares. From there, you will be able to reach out by phone for assistance with the conversion of the shares from preferred to common stock. However, at this time, the notes indicate that information is still being finalized between the transfer agent and the company.
Once a corporate action becomes available for a position, you should receive notification of it through the Corporate Action page online.”
My worry here is that Fidelity is waiting for Broadridge or Middlesex to act, and Middlesex/Broadridge is waiting for Fidelity to act. It is hard to know if things are in progress or not from this. Any suggestions?
Thanks Scott.
I will be reaching out to IBKR sometime next week to start converting mine so maybe we can compare notes.
I used DRS this morning at IB. Takes 30 seconds. I then called Broadridge and was told they need instructions on conversion from their back office in order to proceed. I was told the rep emailed that department.
Is the back office where all the ugly people work?
That is same as what Fidelity said in what I posted above. Middlesex has to get Broadridge onboard with the proper instructions. FC has the best contacts with Middlesex so maybe he can shake the tree there a little to see if they know there is a hang-up and when it might be cleared. Middlesex has ignored all my e-mails and no one picked up the day I called.
Thanks losingtrader. So I guess Middlesex needs to get its act together. This is a lot murkier than it should be. (I guess if it wasn’t there wouldn’t be a 20% spread.)
I am going to see if I can track down the original docs from this preferred. As best I can tell, MSEXP was issued in 1992. Unfortunately the first MSEX filings on EDGAR are from 1995.
It would be pretty annoying if (as it sounds to be the case) they never actually registered the shares underlying MSEXP in the 32 years since its issue.
Thanks Losingtrader. I also hold at IBKR. Did you have to set up an account at broadridge first? Not really sure what I have to do except “drs” the shares to broadridge, so am assuming I need to set something up w broadridge first.
No, just go to account management and use DRS. They will automatically go to the transfer agent, and they will set up an account for you.
Middlesex IR said the shares would be registered during the conversion process
The given call date on baby bond NEWTG is incorrect. The webpage here says it is callable “anytime,” but in fact, according to the company webpage, “The Notes will mature on June 1, 2029, and may be redeemed by the Company, in whole or in part, at any time on or after June 1, 2027”
Thanks Charley–I’ll fix the error.
So…anyone willing to suggest taking a equity short here? Think of it as an ‘arbitrage’ or paired play?
I’ve got some July divs to allocate…somewhere.
Do you mean an index short in a raging (and weird) bull market? Plenty of stocks have had a bad time recently, including BDX and CVI which made new lows today. Good luck.
10 – Aug 16,’24 23 Calls at $.25 = total $250 at risk ?
What could happen in a month+ in this whacky market of delusion?
Oooops, forgot to mention the symbol: SDS with a trailing stop 3%, now the stop bumped up to 21.52 on a trailing basis after yesterday’s action.
I would never short, or double short naked! Basically, I’m long (call) a double short (SDS).
You know that the pros have cadres of traders watching all stops, volumes, contracts. Unless there is a real sell off I expect a game of head fakes, volitility and jawboning until the chumps have been washed out and gone. Gotta ask myself, “Who do I think I am?” This beats what they call ‘going to the boat’ here in StL.
don’t get the BF Saul BFS D-E s giving me 7.5% on my basis and sitting there, I have a chunk of both, while there is some minor ofc exposure its leased and mixed use, w Baltimore harbor back open their properties and the area should do well and a lot of grocery etc. Apparently 2 insiders made small buys of the pfds as well and Saul got 10k common end of March. oh well. Not adding I have my max 2% total in them but interesting here to me. Bea
BFS is a solid REIT but I’d be a little concerned about the potential for a buyout that leaves preferreds in the dark.
I own BFSpD, but at the first hint of buyout by private equity I am outta here.
That said, I haven’t gotten any hint of private equity trying to gain a controlling interest, or any other takeover attempt. Why the concern?
LI:
Why the concern that BFS-D will be hung out to dry if BFS is taken private? It would have to be at a price for the common below $29.32 and the Saul family would never, ever agree to sell anywhere near that price.
From the prospectus:
Upon the occurrence of a Change of Control or Delisting Event, each holder of depositary shares representing interests in the Series D preferred stock will have the right (unless, prior to the applicable conversion date, we have provided or provide notice of our election to redeem the Series D preferred stock) to direct the depositary, on such holder’s behalf, to convert some or all of the Series D preferred stock underlying the depositary shares held by such holder on the applicable conversion date into a number of shares of our common stock (or equivalent value of alternative consideration) per depositary share equal to the lesser of:
• the quotient obtained by dividing (1) the sum of the $25.00 per depositary share liquidation preference plus the amount of any accumulated and unpaid dividends to, but not including, the applicable conversion date (unless the applicable conversion date is after a record date for a Series D preferred stock dividend payment and prior to the corresponding Series D preferred stock dividend payment date, in which case no additional amount for such accumulated and unpaid dividend will be included in this sum) by (2) the Common Stock Price (as defined herein); and
• 0.85266 (i.e., the Share Cap), subject to certain adjustments;
Hey Papa- yeah, it would just depend on whether it triggered a COC. There are ways to get around it..
With that said, I think the BFS prefs offer good value here. The “cedar” risk is real but tends to get over used.
added to my BFS pfds today ..the Saul dynasty.. aint goin anywhere. https://bfsaul.com/about-us/affiliated-companies/ Saul Centers REIT, insurance, 5 star hotel, Chevy Chase Trust Co., Hospitality Group (more hotels, restaurants ) ..family for sure, would take a lot.. family owns at least 30% of the REIT shares, happy w that 7.5%ish loaded up!! DYODD not ‘pumping’ I could care less what people own or dont own in what I comment on..could care less.. just tryin to put out a ticker, you do the rest.. Bea https://en.wikipedia.org/wiki/Bernard_Saul_II
Picked up full position of EQC-D, 6.5% coupon at $24.93 with ex-dividend date at the end of the month. Thanks to @Bea I believe for pointing this one out recently.
Hi Gum, yes I have a slug, will be interesting to see what they do, either wind down and liquidate or merge the $2bil cash and 4 ofc bldgs into another REIT. I rounded out my SR-A w a little buy at 23.93 6.17% yield, the EQC, SR, GAM-B are my’ safer-boosting-yield-over-cash’ rates names. Good little payers. Not much else on my radar at the moment, good luck. Bea
Bea – Just looking into EQC for the first time while continuing excuses to be doing nothing: Considering their huge cash stash, Mr. Market is valuing their 4 bldgs at essentially zero????
well 2WR, one on earth rose and one in Heaven rose, Zell would have sold the other 4 but the pandemic hit and then no real buyers..not the best buildings etc. so they are holding on to them and you are correct, it is ‘cash’.. many remember Zell tried to buy Monmouth but lost that industrial buy, so they have just been earning 5%+ on that big cash pile, paying out required divs at year end and supposedly are looking for a deal or will liquidate.
Bringing 2bil to a decent REIT say growing grocery focused or other good areas would make for a strong combined company so to me in that case keeping the pfds outstanding would still be ‘quality’ not sure if it would be anchored at 25. If they liquidate you get 25. Meanwhile I collect the quarterlies. EQC common shareholders are not too happy about the structure and feel it exists for mgmt salaries and perks only. So there are two sides–but it is ‘cash’ to me paying me 6.5% the way I view it. Bea
I purchased common and prefs in this one when Corvex and Stephen Ross were filing 13Ds and going after it and before they named Sam Zell. The Portnoy story was interesting, and a great lesson to stay away from externally managed REITs. When they kicked out the Portnoys and when Zell ascended to CEO (or whatever) moved on. There is no reason to own the common and the prefs are like a bond at this point.
Bea:
“Bringing 2bil to a decent REIT say growing grocery focused or other good areas would make for a strong combined company so to me in that case keeping the pfds outstanding would still be ‘quality’ not sure if it would be anchored at 25.”
It likely won’t be a shopping center REIT that EQC buys with their $2.2B cash hoard. Management seems to have made it clear that it will be in the industrial sector or in single family rental housing, and those two sectors remain too pricey. They also recently stated that if they don’t find anything compelling by the end of this year, they will begin the process to liquidate EQC.
Will take some time, since the last building they sell will likely be their 1225 17th Street property in Denver, and that final sale will require shareholder approval. Then after that sale they will need shareholder approval for the wind-down. Assuming it is approved, that process will take another 6 months. So I’m thinking 4Q 2025 before it is complete, and we should get maybe 6 more quarterly preferred dividend payments before then.
You have activists now like Jon Litt at Land & Buildings really pushing for the liquidation, so I’d say very high chance it will happen.
Took some profits. Sold USB-A and picked up some illiquid utilities AILLO (Ameren) and CNPWP (Eversource, Connecticut L&P).
FHLB 6.625%
* 3130B1WQ6, 100.00, Semi-annual
* YTM 7/10/54 6.625%, YTC 10/10/24 6.625%
* 1st coupon 1/10/25
Never owned any agencies, any thoughts on pros/cons appreciated. I suspect this would get called early with rates trending down & may act like a 3mo T ??
What’s up with seeking alpha? Everything including Rida Morwa is behind a paid only fire wall?
Maybe I’ll just have to start tweeting!!
They do that from time to time to get people to sign up. Just wait a day or two and you can see articles again. If you click too many it might give that same message again. Frankly I rarely click main articles from the front page. I seem to type in a ticker symbol and perhaps then read the comments from an article.
Re: Seeking Alpha paywall, archive.is usually works.
Re: Agencies, if you do your own taxes, see whether your tax software of choice can handle them properly for your state. Turbotax is spotty at best.
Agencies often have the best balance of safety, yield and call protection. When I’m looking for no-risk fixed, I start with new issue CDs and agencies at one-year call or more. Then I compare with A-rated new issue senior corporates (big banks), which often have longer call protection but carry more risk.
— If you are happy having it called away and you are happy not having it called away, you should be fine.
– buying a high-coupon 30 year maturity bond with a short call in the expectation that it will act like an above-market 3-month CD is not in my travel plans. My agency comfort level is lower coupons, shorter maturity levels and HTM. Everybody is different. I’m not a trader.
– a 30 year bond with a call feature may not perform like a non-callable 30 year bond in a declining interest rate environment.
— Other: Possible state income tax advantages. Marginable.
JMO. DYODD.
regarding this statement
a 30 year bond with a call feature may not perform like a non-callable 30 year bond in a declining interest rate environment
can substitute the word WILL for MAY …negatively convex is fancy description
Thanks BearNJ, R2S, & mjtroll….just learning about agencies, still haven’t bought them, trying to learn more 🙂
can’t get em on vanguard as “we do not have any to sell”
Newbie; With that beautiful 6.625% coupon I can almost guarantee you they will call it. Its actually a little frustrating buying these Agencies as they always seem to have very short calls.
Newbie
I have many agencies
I look at the YTC as the most probable maturity in an expected declining interest rate environment. I choose among the similar interest rates for the Call date that fits my ladder plans.
Newbie FWIW I like agencies and prefer them to treasuries at current prices. With FHLB The primary difference is the callable feature. These issues will likely get called when (if?) rates finally move down, but I feel that one is compensated for that risk. FHLB and other agencies seem to call their notes almost at random using logic that we are not privvy to. If you are concerned about call risk, then they are not for you. I personally am not worried about the call risk, but I would never pay $.01 above par for one.
Some agencies – Fannie and Freddie (notes) are taxed at federal and state but FHLB is only taxed federally like a treasury. Federal Farm Credit Bank is in the same boat.
I also like agency MBS. Between agency MBS and notes I have a good sized allocation. Agency MBS is different as it pays interest and principle monthly. Best to stick with the agency notes which pay interest every 6 months like a corporate.
I consider these agency bonds and notes to be the top credit quality part of the portfolio.
Technically Agencies to have more credit risk than Treasuries, but not by much. If you still consider a treasury to be AAA then an agency note is AA+. More realistic treasury is AA+ and agencies are AA.
Hope it helps
There are comments about neg convexity on this thread. This is something to consider if you plan to sell the bonds. As noted above – these WILL NOT go up in value as much as a Treasury (non callable) in a declining rate environment.
It is like having a stock and a short out of the money call option, but for bonds. When I buy these I never expect to sell them and 100% expect to hold them to call or maturity. IMO your holding period is something to consider.
Thanks August West, Westie 18, & Chuck P!
going thru the pfd sort by gainers/losers here as I do every day…PW stood out..folks like me probably remember when it was a good little REIT that paid a steady div, was like a bond in a way, the old Pittsburgh/W.VA RR land rent. Ruined. Wow. A true ‘marijuana’ bust if I ever saw one. Bea
The Cannibals got the REIT. Pot stocks never appealed to me, No barriers to entry so anyone could jump in. Heavy taxes, when I heard celebrities were investing in pot farms I thought about all the restaurants opened by Celeb’s, open one day gone the next.
any advice on gsl-b hold or sale?
james–not really advice, but trading at $26.45 one has to wonder if you are vulnurable to a call since it has been redeemable since 2019.
https://innovativeincomeinvestor.com/security/global-ship-lease-8-75-dep-shares-cumulative-perpetual-preferred-series-b/