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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.

2,568 thoughts on “Sandbox Page”

  1. added to Spire Pfd A SR-A today goes xd 4/24, 24.22; also a little ESGRO added at 24.10. While I am in the higher for longer camp, I am ok juicing my cash yields a little in these. Cash up to 54% so will do some nibbling in the ever present volatility. B2Gold BTG my largest holding yielding a well covered 6.3% in RothIRA. DYODD. Bea

    1. Had to take the profits in the Gold trade last week Bea. AEM went nuts. Would love to get back in at some point, but I saw a squirrel and must go chase that now!!!!

      1. yes miners were extended for sure cut my allocation in half there, my ‘alt investment’ % ..FCF should be very strong tho on the ‘fundamental’ side of things w most having all in costs under $1400 and gold over 2,000

    1. After hitting a debt maturity wall. Creditors granted significant concessions through the recent TSA term loan extensions. Without this they would be in chapter 11.

      https://ir.lumen.com/news/news-details/2024/Lumen-Technologies-Completes-TSA-Transactions-Enabling-Transformation-Strategy/default.aspx

      Will have to execute their turn around, of the turn around strategy perfectly before next debt wall in 2029.

      Last presentation showed an expected cash flow of (-200 to -300 M)

      In short risk is still elevated.

  2. Since rhe Nustar preferreds all generate K1s any chance UBTI will be generated when they are called because of the merger with Sunoco? I’ve owned other preferreds that generated K1s and don’t recall any UBTI being generated, but I can always find something to worry about!

  3. Have we discussed STT-G? STT-D was redeemed on its recent call date before it could float. STT-D oscillated around par for its last two years.

    STT-G (5.35% non-cum IG pfd, last 23.74, CY 5.63%) floats at 3mL+3.709% on its 3/15/26 call date. I suspect it will be called then.

    Assuming a call, what would the annualized bonus above the YOC be for holding STT-G from now until the call date (693 days according to Siri)?
    (25 – price) * 365/693 / price
    At 23.74 – 2.8%
    At 23.00 – 4.6%
    At 22.00 – 7.2%
    These annualized bonus yields should be discounted for the almost two years of waiting to actually receive the bonus.

    WARNING: All of the above might be invalidated by this June 2023 announcement from State Street, which I don’t understand.
    https://investors.statestreet.com/investor-news-events/press-releases/news-details/2023/State-Street-Corporation-Announces-Transition-Information-for-Outstanding-U.S.-Dollar-LIBOR-Linked-Instruments/default.aspx
    “Each series of State Street’s Preferred Stock listed in Annex 3 to this press release is governed by the terms of a certificate of designation (each, a “Certificate”) and will not transition to Three-month CME Term SOFR by operation of law or otherwise. The Certificate for each such series specifies a fixed dividend rate (the “Dividend Rate”) for a dividend period beginning on a specified date (the “Commencement Date”), in each case as shown for each series in Annex 3 to this press release, if Three-Month USD LIBOR cannot otherwise be determined as provided in the applicable Certificate. Given that the Commencement Date for each such series follows the LIBOR Replacement Date, the Dividend Rate for each series after the applicable Commencement Date will be the applicable fixed rate specified in Annex 3 to this press release.”

    1. Thanks for sharing this. Very nice framework. The article on MLPs is helpful as well.

      1. Assuming shareholders approve, merger with Sunoco will be completed. They have already stated they will be calling all of the NS preferred and NSS. NSS has been a nice income producer. It will be missed.

  4. Ahhhhhhh nuts! 3130AXGD4 FEDERAL FARM CR BKS 7.000% 10/26/38 getting called on 4/26…… At least I got an extra 3 months out of it beyond original expectations it would be called on the first call date of 1/26/24… Bot in October…

    1. Yeah, I got my notice on that one too. It was good while it lasted. I don’t think we will see one like that again this cycle but you never know with the way the government is stimulus spending. Between the spending and the fed tightening it is like running the AC with the doors and windows all open.

    2. I’m amazed that two of my low-6s agencies haven’t been called. Combined, the YOC of all my CDs, CUSIPs and 25s is 5.9%. That’s 99% of my portfolio, which I mainly bought throughout late 2022 and 2023. Having a steady income that pays the bills and more works great for me. I never liked stocks, just my quirk; I can live with that. The biggest surprise is that a recession and rate cuts never came to call my CUSIPs away.

      These are my CUSIPs with 7% or better fixed coupons. I’d have bought more agencies, but I didn’t have much cash when they were at 7%. Some are a little scary, LOL, but sized small. Some might outlive me. Mostly bought at par.
      Issuer, CUSIP, coupon, days to first call or maturity if uncallable.
      CAG, 205887AX0, 8.25%, 2339
      BAC, 06055JCQ0, 7.0%, 560
      FFCB, 3133EPZJ7, 6.95%, 193
      PSEC, 74348GQL7, 7.75%, 56
      SYF, 87165BAU7, 7.25%, 3118
      PTEN, 703481AD3, 7.15%, 3359
      Oaktree, 67401PAD0, 7.1%, 1731
      JWM, 655664AH3, 6.95%, 1425
      JEF, 47233WCT4, 7.0%, 239

      1. syf has 2 exchange traded issues ; SPFpA and SYFpB that offer liquidity and daily pricing ; fyi

  5. Escalating war in the middle – east , sticky inflation, rising interest rates, ballooning Federal deficits and a market that is still very toppy chart wise. The wife just got back from visiting family in Poland and her brother said Poland will be at war with Belarus soon. I’ve been increasingly nervous about having only 60% safe holdings. The wife’s comment last night was the final straw. Although it was hard to do, I slashed my holdings that I think will get creamed in a crash today. Now I’m 85% safe (i.e. cd’s, treasuries, short to midterm corporate IG and agency bonds). My port is up 18% in the past 2 1/4 years while the market is up less than 5%. In this risky environment I don’t want to be chasing a couple points and end up losing my recent gains and a sizable portion of our nest egg in a big crash.

    1. Right there with you. I have one risk account and the rest is CDs and MMFs. Just doesn’t seem like the best risk/reward time period right now. And with the Fed seemingly on hold (unless SHTF), you get paid to be cautious.

      BTW – Love Poland, definitely could live in Krakow.

      1. Love Poland

        I did a big study in the 90s (just after the wall came down) on putting hi-tech manufacturing in Eastern Europe, and spent a lot of time in Poland.

        Loved it. Polish is easier than Hungarian.

        Spent a lot of days crisscrossing the country. Czestochowa, Gdansk, Cracow, all around Warsaw and out to the eastern borders – all over to let provincial/local development authorities present to us why we should consider them.

        Kind of weird for me because in grad school, I was hired by a library to catalog a big donated collection from Germany, Poland and Czechoslovakia from the early 20th century (I had the right language skills), but the geography I had to use was all wrong compared to the modern maps (Cities were called German names like Posen, Danzig, Breslau…). Caused a few raised eyebrows when I used the old (German) names by accident.

        Funny thing was that a lot of the highways had been built to facilitate trade pretty quickly after the economy freed up, but the bridges took longer. So, we would roar down a wide, modern divided highway for five minutes, then slow to a crawl to cross a tiny 2 lane bridge (with new bridges under construction along side), then roar along for another 5 minutes…. Traffic jams of trucks hauling western goods from Germany to Ukraine would start 40 miles before the border. Quite something.

    2. Always nervous, but not selling stocks as such. Have been steadily increasing less risky assets (CDs, Treasuries, agencies, MMFs) by not immediately reinvesting dividends or payouts from called securities, which was the rule for me. This keeps me in the market long term. I am not an in-and-out timer.

      I benchmark a retirement-standard 4% withdrawal rate. When interest rates are around 4% or less, I get panicky and start stretching for yield, speculating, with varying degrees of (un) success. At current interest rate levels, risk- reward has changed for investing new money, so 5% steady and sleep well at night looks better than 8% greedy and losing 2-3% in a day on a bad earnings report or 20% overnight on a gone-dark PE-sunk preferred.

      As to the existing portfolio, it is painful but I am starting to clear out the garbage and replace it with higher quality issues. I have learned that high yield does not always compensate for declining principal. I have enough dogs to fill a kennel and they all started to bite in 2023. JMO, DYODD.

    3. Joelh; You post obviously got folk’s “attention”. My question to you goes like this. Russia attacks Ukraine and it drags on and on and on. Hamas attacks Israel murders 1,200, then Israel invades Gaza killing in the neighborhood of over 30,000. Now Iran and Israel are fighting back and forth in a tit for tat. So my question is WHY would Poland going to war with Belarus do anything different to “rattle the markets”??? The markets sold off pretty good last week but nothing like other sell downs that I have lived thru including the meltdown in 2020. So not sure why you seem to think this will rattle our markets here???

      1. Chuck P…Poland is a NATO member while Ukraine & Israel are not members. Poland & Belarus entanglement would trigger US & NATO allies involvement.

        1. NATO involvement huh. Good to know we are not involved in the Ukraine/Israeli conflicts now.

        2. Poland is also armed to the teeth with modern weapons because their government has been on a spending spree. (Given Poland’s history, is something I completely agree with)
          And
          Meanwhile, Belarus has a very weak army (which is what you do in a dictatorship, remove the possibility of a military coup)
          If he is right, and Belarus attacks Poland, the Poles would wipe them out within hours or days, and the Lukashenko government would fall.
          Putin probably had designs on re-forming the Warsaw pact and Soviet vassal states like the Baltics.
          That idea is laughable now after what happened to their military in Ukraine.

      1. Since January 1, 2022, the S&P 500 is up 3.47% annualized and the NASDAQ is down 0.12% annualized. This is using the numbers from the Schwab “portfolio performance” function.

        Common stocks (at the index level) have basically done nothing since the past market high at the end of 2021/beginning of 2022.

        1. With volatility of stocks the numbers are very dependent on when a buy was made. I just checked two funds I own. The growth fund was up 3.9% over 3yrs and 40% over 1 yr. The value fund was up 3.9% also over 3yrs and 21% over 1 yr. Those are April to April yrs.

          I need to analyze my success or failure with individual stocks. They are like going to a casino. I’m happy the Uber up 130% over 2 yrs. Not happy with Lumen Technologies down 70% since I bought it (luckily a very small amount knowing it was high risk).

          1. How’s your income? Are you old enough to start worrying about it? That’s ultimately a key question for all of us. You can trust me on that.

            I was late to that realization, early 40s, in my BMW, on my way to another decadent weekend in the Alsace, when a bolt of lightning hit me with “You better start saving some effing money or you will never be able to retire.”

            Better late than never. Plus, it’s worked out better than I would have ever guessed.

            JMO

            1. nice – I was 50 with a net worth of -$75K (yes, negative). I’ll be 65 in September and am well over the 7 figure range now and just retired in January. A good paying job, fortuitus investments and living within my means and paying off debt saved me.

              I also began building a dividend and income portfolio to “practice” being retired starting in 2016. Also, a nice pension helps. I probably would have made 8 digits had I started in my 30s doing that! I tell my kids daily that story – i hope they listen!

        2. You have just given a perfect example of why I focus solely on income. And try to make sure that income will continue for as long as I need or want it.

          That effort is what concentrates my mind. So far so good.

          JMO

  6. If you enter an order on Schwab for ATHS, the following is one of the warnings:
    “This security is callable at 6.25 on 03/30/2029 and has a yield to worst of -12.834%. (DO3098)”
    I must be missing something. I know it is callable on 3/30/29 supposedly at par ( been trading for less than par the last few days) as far as I can see. Also don’t know where the 6.25 (assuming this is a percentage) and the YTW number comes from. I have read the prospectus in some detail and didn’t find any thing similar. Anyone understand this warning message and what I am missing?

    1. I just entered an order on Schwab for 1 share. No warning. A normal order was placed. I cancelled it.

      1. SteveA – This warning doesn’t show unless you click on the warning line, then it shows. The warning line is at the bottom of the order review page.

        1. I see it now. I have no idea what they are saying. My suggestion. Do and cut and paste into a message and ask them.

  7. If anyone bought Mgre, it is up again to 25.5 while mgr is down to now selling for a 6.7 yield. I swapped.

  8. Well folks, we’re heading to Italy on Sunday for a couple of weeks. I trust you all will take care of the markets and our fav income investments for me. Ciao!

  9. Tim, et al – was curious as to the amount of damage done to GNT-A (GAMCO). As a perpetual 5.2% CEF holding (perceived higher quality), I can understand the susceptibility to higher rates. It just seems to have taken a bigger hit than similar issues that I hold. Any insights?

    1. gnt.pra/pff pair has seen gnt underperform from may 2023 to the present …prior to that gnt outperformed from jan 2022 to may 23… the pair went from 2 sigma rich to now cheap and appears to be bottoming ..fwiw gnt has outperform since inception in nov 2017 ..i would be a buyer if not for what is relatively low current yield near 6%

  10. More data to ponder…….
    Do you want to be short or long duration on your CD’s/T Bills ?

    Treasury Ten Year Constant Maturity Minus Treasury Three Month Constant Maturity:

    2015 240 bps [10 year higher by 240 bps]
    2019 Minus 50 bps [3 month higher by 50 bps]
    2022 210 bps
    2023 Minus 200 bps
    April 2024 Minus 80 bps
    2025 ????
    2030 ????

      1. good comment.. fsk/bizd pair plummeted from 2 sigma rich on 1/5 to near 2 sigma cheap on 3/14 apparently on back of this situation.. current trading 1 sigma cheap

  11. I bot TWO.PRC at 23.05 18% ytc 1/27/2025 FTF libor +5%
    S/A article SELL ANNALY AND AGNC PREFERREDS AND BUY TWO HARBORS PREFERRED STOCKS

  12. This is a ThinkorSwim question for anyone who had a TDA account move to Schwab in September.

    If you did drawings on your ToS charts while at TDA, did those drawings survive the transition to Schwab?

    1. rocks2stocks

      I bet there is a way to do it. Those charts are saved in a profile and I bet it is in a local config file rather than on their server. I find the support people that you get directly from TOS rather than the website are next level more capable and helpful.

      Do you have your old installation that was connected to TDA?

      1. In Too Deep-
        My experience with ToS is that I see the same thing no matter what computer I log in from. That fact implies that all of my data are stored on ToS servers, including all of the text notes, lines, etc. that I’ve drawn on the charts over the years.

        My margin account and the associated ToS account move to Schwab next month.

        1. r2s,

          Did Schwab inform you of the move for next month?
          I ask because I also use SSE and have not yet received any emails or texts regarding the move to ToS. Not looking forward to it, as I like SSE.

          1. Inspbudget-
            I use ToS now with TDA and will continue to use it with Schwab. I’m not familiar with SSE.

  13. I bot RITM.PRC as 22.24 ytc 2/15/2025 20.82 FTF 3 mo libor + 4.97
    several articles on Seeking alpha
    Rithm Capital: Four of Kind 9% yielding preferreds Ryan Bowen

    1. mj-
      With less than a year to the call, it’s interesting that RITM-C at 22.22 (CY 7.2%) is still well below par, even though the post-call yield is likely to be high enough to anticipate a call. RITM-C has been in a solid uptrend since October. The chart projects nicely to 25, although projection targets are not reliably predictive. I see RITM is a REIT.

  14. Great Ajax Corp. 7.25% Convertible Senior Notes due 4/30/2024

    I am holding a full position in AJXA. It is maturing in 12 days. If I do nothing, will I receive cash for my shares or will it be converted to shares of Great Ajax. I’ve never held a convertible to maturity before.

    1. Just an educated guess.
      You will get par back plus any accrued interest since the last ex date of March 31st. I think you will get accrued since it is a bond, unlike prefs which don’t accrue the last few days approaching maturity.
      Ajax sold bonds AND Ritm provided a loan so I deem default as very low.

      1. Maine ; I think these trade flat ; like all the other exchange traded Baby Bonds and preferreds do. the accrued interest is baked into the purchase price.
        Ordinarily Quantam tells you if an issue trade flats ; in this case there is no
        reference to it . If one were to wade thru the Prospectus , it’s in there somewhere !
        ps ;anyone who has time to read the whole prospectus needs to listen to
        the Statler Brothers song “Counting Flowers on the Wall” haha

  15. Some facts to give you pause ……

    – The current average interest rate of the U.S. debt is 3.27%,.
    – It’s the highest since 2008 when the U.S. debt was $10 trillion.
    – Today it is over $34 trillion.
    – Current annual interest on the debt now tops $1 trillion-overtaking defense spending and on par with Medicare.

    – $9 trillion matures within the next year.
    – The current average yield curve cost is @5%
    – 9 TR X 1.8% increase = $162 billion additional cost

    How are we going to pay that increased cost?
    Time to rethink interest/yield/tax/economic expansion expectations

      1. Holding some physical silver and gold bullion. Not a ton but at least what I would consider an emergency amount. It would be nice to purchase some property or land that generates something useful. Be it farm land, timber, orchard, etc…

        Otherwise.. are we talking total chaos situation or just rampant inflation for a decade?

      2. camroc and fc
        I wrote an earlier post about trying to avoid specific expectations in the near term market. 2023 and early 24 have seen dramatic shifts in what investors were expecting and what eventually turned out. Nonethless, I do think the equity markets are due for a correction.

        But, in answer to camroc
        – Weaning out less than investment grades. Be particularly careful to avoid BDC high yields.
        – Minimizing perpetual preferreds and long dated bonds
        – Increasing yield expectations
        – Increasing liquidity

        I want to be less exposed to damage in the event of major increases in interest rates and maximally prepared to take advantage if that happens.

        In the meantime, to receive over 5% for no-risk, totally liquid funds seems like a no-brainer.

        1. Westie-
          I hold small amounts of BDCs GLADZ (CY 7.7%) and SAY (CY 8.1%). When I look at the huge stock price moves made by many financial companies, I feel like those prices (and earnings) won’t be sustainable through the downside of the business cycle. Current conditions favor many such companies, including lenders of all stripes, just the kinds of companies that issue preferreds with attractive yields. Lots of honey for us flies.

        2. Further to camroc and fc:
          When today (Thursday) opened on a positive note, I pared down my lower yield holdings (below 6.1%).
          Sold a fair amount at acceptable prices before Williams (NY Fed) answered a question with: “Yes, if the data shows the need, we would increase rates.”

          Buyer interest departed..

          Mr. Market is really antsy about the possibility interest rates might stay high.
          Or even go higher.

          Me too.

    1. The $9 trillion rolling over in the next year won’t be going from 3.27% to 5%. An enormous amount of the debt is just in the form of Treasury bills, most of which would have already recycled to 5% or more over the last two years. So the weighted average rate on the $9 trillion will be a lot closer to 5% already. Need to get hands on statistics about that $9 trillion to know more precisely.

    2. Looks like last time America was over 100% debt to GDP was at the close of World War II (1946).

      US Federal Debt Trends Over Time, FY 1948 – 2023
      https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/

      Economic managers of the time used a combination of elevated inflation levels and a growing population to eventually reduce the ratio to a very modest 32% by 1982 (36 years).

      Seems like both strategies have been dusted off and put back into practice.

      Unfortunately will cross over before seeing the end of the current debt cycle.

    1. rocks—thanks for the input on wtfcp. All stocks have their pros and cons. Other than being a small bank with its industry inherent problems, are there any other issues with the parent company that could become problematic—such as commercial loan potential losses?

      1. Whidbey-
        I looked at some info that indicated Wintrust’s CRE exposure would not be problem. However, I have zero qualifications to make such a judgment. My main concern is that the dividend will be paid through thick and thin.

      2. For whatever it may be worth I have spoken to Wintrust’s CFO twice within the last 6 months. The last time just a month ago. He assured me that they are a very conservatively run bank and he did not see a problem with the commercial real estate loans. He made a point to me that they are very conservatively run. I own a pretty large position in this preferred (9,500 shares) so I do keep a watchful eye on it. I would suspect they will call it when it comes up.

    2. I bot WTFCP at 24.78…ytc 2/15/2025 at 25 is 7.87 …I reside in their service area and have a small banking relationship and it seems to be well run.. tks for show ..good article on S/A “Wintrust Financial: Banking on More Gains”
      the WTFC/KRE pair has seen WFTC outperform since 5/2021 ..tks for show

  16. Looking at ES and NQ index futures today, both hit 5% off ATH and both used the 0.236 Fibonacci retrace of the October rally for support. Both are daily oversold (as are t-bond futures) and below their 50-day moving averages. The October rally saw ES and NQ stay overbought for long periods. Will the oversold condition similarly continue?

    So far the impact on preferreds of the long-end yield rally and equity correction has been modest and idiosyncratic. What’s next?

  17. added to agncm at 24.59 as it just went floating
    from and including April 15, 2024, at a floating rate equal to three-month LIBOR plus a spread of 4.332% per annum of the $25,000 liquidation preference per share of the Series D Preferred Stock per annum.

  18. NLY-G … callable since March 2023 …. Sorry if missed any recent posts.
    Has been hanging on top of the $25. area. Any comments as to call coming soon. Thanks.

    1. just added to NLY-G ..paid 24.96
      including March 31, 2023, at a floating rate equal to three-month LIBOR plus a spread of 4.172% per annum of the $25.00 per share liquidation preference
      tks for show

      1. The I shares are not too shabby either here now under par. Spread on these is just under 5%! You pick up over 80 bps of protection vs. the G and the I floats soon end of June.

      2. Both NLY-F and -G are floating with high yields and trading near par. I can see on the charts that the possibility of a call has not glued the price of either to par, as both have had notable excursions below.

    2. I hold both F and G ; they are pinned to par since a call is possible at any time; either way if you bot under 25 , you can’t lose and enjoy the 9.8% yield
      while it lasts .

    1. Those rates are certainly going up. They’ve also got a 6.625 (3130B0YY9) but only protected until 7/24. Noncallable 3 month cds up to 5.4 at vanguard too.

      1. yes. 6.5% FHLB call protected until 10-25-24. CUSIP 3130B0ZC6. But trading at $100.10. I purchased the 6.3% because the YTW was slightly better

  19. this is offtrack but please indulge me; PAX (asset manager) i can’t understand
    what caused this big tank over the past 4 days; 14.66 to 13.43
    the Company has increasing earnings and distributions ; there is no obvious Dump ( volume has remained pretty consistent )Analyst have hold to positive rating ; variable dividend policy ; dividends never more than prior quarters earnings ; anyone have a clue as to what is going on? thanks

    1. Hi Ted
      Seeing the same thing across many of my holdings.
      Yesterday the largest overall down in a year and a half.
      Ouch! It hurt.

      Do not look for logic all the time.
      Mr Market has its own logic – a balance between greed and fear.
      It is transitioning from being sure that rate cuts were coming – initially six, then four, now two ……. maybe none…….gasp, maybe an increase.

      Everyone is on their own spectrum of the greed/fear spectrum.

      Many/most on this site are battle experienced.
      Remember two/three weeks ago when many were saying “things are too good….I feel uncomfortable” ?
      That storm we were sensing now feels closer.

      Nothing?
      Passing shower?
      Heavy rain?
      Serious thunderstorm?
      Hurricane with great destruction?
      No one knows, many are anticipating.

      Most anticipation has been wrong for the last year.
      I wouldn’t start now.

      Wise investors do their thinking/planning in calm markets, preparing for possible volatility in the future.
      When that volatility arrives, they stay the course earlier plotted.
      Trading from fear is almost always a bad idea.

    2. Ted
      One more relevant piece of info from Bloomberg:

      The broader Financial Select Sector SPDR Fund ETF lost 4.17% in the last six trading days.

      How does that compare to your portfolio?

      1. Westie; thanks for the input; think a good part of the drop is attributable to what you suggested;

  20. My definition of liquidity: the willingness and ability of market participants to invest in the thing you happen to own. 🙂 More broadly, which financial asset classes are getting the juice and which are not.

    Some recent trends may by pinching the willingness and ability: uncertainty about rate cuts; trending higher long rates, dollar, and oil; tax time.

    Lots of juice in the form of stimulatory deficit spending and the accompanying gobs of interest payments going to treasury buyers.

    I told all of this to my quant to get advice on investing, but Siri wasn’t a bit of help.

  21. Worth a look…

    REGCO, preferred of REG, a BBB+ rated premium shopping center owner/operator/developer.

    REGCO and REGCP, both unrated, are the only outstanding pfds of REG, which historically is a serial redeemer.

    REGCO is a 5.875% coupon perpetual with a 10/1/24 call date, currently trading with a yield circa 6.70% after a recent market beat down of price into 21s.

    Why REGCO and not the higher (6.25%) coupon REGCP? Though currently out-of-mind for this market, positioning against potential resurgence of call risk down the road.

    Good luck to all.

      1. What BBBs have a current yield over 8%?
        The highest I see right now are couple of Brookfield/Oak preferreds that are in the upper 7s.

        1. I suspect you’re thinking of fixed rate only but if not, ALL-B comes to mind immediately.

          1. Good one 2wr. ALL-B has a fabulous yield. But also that nagging overhang of trading about 1 1/2 dividend cycles over redemption price.

            All else being equal, if ALL-B were not called for another year, allowing the holder to collect a full four additional quarters of distributions, the effective TR/yield would be about 5.8%, or near 1% less than REGCO.

            Two additional bonuses:
            1) REGCO retains an additional $3+ in potential cap gains.

            2) REGCO dividends enjoy a 20% deduction under Section 199A at least through the end of 2025.

            1. Alpha, I thought you mentioned you hadnt bought preferreds in a long while. Are they starting to hit your buy point now with REGCO?

              1. Grid, Have not bought (a pfd) since November instead selling very heavy across the board in Jan/Feb (when prices spiked because the market “knew for certain” rates were going to fall), but yes, now the math says time to dust off the buy button.

                Sold REGCO north of 24 in Feb and locked 10%+ gains into CD/Treasury-esque holdings. REGCO now priced back in mid-21s with yield north of 6.5% puts it back on the radar screen. Have not yet re-acquired though could be well-satisfied with a B&H at this price level for this company and never look back.

                I may still buy in next day or so though would see evidence of disorganized selling in the market as an optimal entry point.

                Fully invested with 6.20% overall on pfds with average A- rating (you know I’m a sucker for ratings), so the buy equation is always about improving the hand – otherwise do nothing.

                If we execute a trade on REGCO and it drops further – will buy more.

                1. Make no mistake, there is no “we execute a trade”. Not with the name Alpha! Its you making the trade for we, and she has no say in the matter, ha.

                  1. Well, we’re both in the office so I just shared that post with her, she laughed out loud and said “tell him he’s right!” Most of the time if I talk about the investments, her eyes, though attentive, say, “OK, how long do I have to pretend to be interested this time?” hahahaha

                2. REGCO excellent choice in my opinion. This is a tough one to get. Tougher than KIM-N. Popped briefly at $21.64 a few days ago. If it goes below $22 again I suspect there will be folks lined up to buy. Including me.

                  1. Pig, I love a good honest brokerage that at least admits to screwing you over. TD would always just post my CRLKP interest weeks late and act like it was supposed to be that way. Schwab posts my payment today as 4/17/24 as of 4/1/24. So at least they admit they sit on it for 17 days before paying me.

                    1. I’m not familiar with CRLKP. Do you mind sharing some background? Is this one going to mature in 2028 for $25?

                    2. Grid, I’m Schwabbed in 23 days. I’m so in denial that I ‘skip’ all the requests to set up the login. I’m the kid at the playground who’s pissed and taking my ball and going home. You think they will choke on my 3150 shares of CTGSP that went into the black hole that I will be taking to my grave? lol

                    3. Dick, we have enjoyed talking (mostly complaining about how late the payment is by the brokerage idiots who likely dont have it properly coded) about this one off and on for many years. Basically it was born as a private placed convertible with a 30 year maturity issued in 1998. And the issue (along with the company) has been passed around like a…whatever, I digress…. Anyways through various mergers/conversion over the years the convertible feature is long gone with an owner optional put at $19.18.
                      SP Plus which is presently the owner of this company and responsible for payment is now also being bought out by a private parking entity Metropolis Technologies. The government has yet to give its blessing for this to happen, asking for more information. So basically if denied its SP Plus’s obligation until 2028 maturity, gets redeemed at merger along with all other debt that is disclosed to being paid off this year. Or it wont with the other debt and stay outstanding with Metropolis being guaranteer of payment and likely going dark or expert market until 2028. It originally was well over a $100 million issuance, but through various owner tenders over the years, only about 40,000 shares or ~$1 million par outstanding it left.

                    4. Pig, I had a partial transfer last fall, the rest comes in May also. At least their bond desk knows what a $1000 preferred is and bought them for me. I called TD and they admitted they were idiots in this and just call Schwab if you want them so I did. Im ok with TD folding up now. Will just roll with Schwab and not worry for now.

            2. A – Still don’t have my head fully on… I was strictly answering the straight up question without consideration of nuances…. lol….. no comparison to REGCO in mind and wasn’t even paying attention to where ALL-B is currently trading……. Saw your REGCO post but hadn’t consider it one way or another…. same with your Armada Hoffler post a while back…. Mostly done nothing in market place recently – not even replaced most maturing Treas and CDs or reinvesting TGH call money…. not enough time available for me personally right now but still do try to keep reading here.

                1. Thanks, A….. Right now, if you’re looking for a live online auction of house contents totaling over 485 items so far, I’m your guy…other than that, not much time for much III stuff so far, but great to see some good new faces adding to the knowledge base of this great community.

  22. Deutsche Bank has a quirky non-callable 5 year corporate bond offering closing today. 7% fixed one year, then SOFR plus 1%. No cap. Rated A1/A. Non marginable. Issues of this type are offered fairly regularly, often by Canadian banks. IMHO, the slightly higher initial coupon and the slightly longer fixed term are a bit better than usual bank F2F bond offerings. May be of interest to some here. JMO. DYODD.

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