Right now as as I search for something to buy the best idea I have is to add to positions in the US Cellular (USM) or Telephone and Data Systems (TDS). Of course these are related companies as TDS owns most of USM.
Both companies have baby bonds outstanding–USM has 5 current issues outstanding which you can see here. Some of these just went ex-dividend and are trading at $25.15–both 7.25% issues. I expect the company will call some of these soon as they have mentioned the possibility. Assuming they give 30 days notice of a call (not guaranteed) there is no real call risk here. They recently sold 10 million shares of 5.50% baby bonds, but these two 7.25% baby bonds have over 23 million shares out–so whether they call them all or not is anyone’s guess.
Alternatively they have a 6.95% issue which goes ex in a couple of weeks and is trading at $25.48 which is a reasonable alternative to the 7.25%. This issue is currently callable.
TDS has 4 outstanding baby bonds which you can see here–they are all currently callable. All of them are trading at a relatively attractive price.
TDS also just sold a new preferred with a 6.625% coupon which is trading around $24.89 under OTC ticker TDSUP.
For those looking to reduced share price movements it is always helpful to keep your eye on the term preferreds and short maturity dated baby bonds. You can find that list here.
I have taken a coupon small ‘leg in’ positions in some of the USM issues today and I bought the TDS new preferred on issuance. I know that Gridbird and many others are already ‘working’ these issues–so this has been discussed–but for those that aren’t owners I think these are pretty decent issues for a fairly tasty dividend/interest payment.