Spreadsheet Listing Changes

I have made to 2 changes to the spreadsheet listings lately.

1st I totally eliminated the “master listing of near new highs and new lows” spreadsheet. This included all preferreds and baby bonds. As seems to happen on a regular basis the quote provider for the 52 week highs and lows became totally erratic on the baby bonds—if 20% of the data is missing there simply is no reason to try to provide the data.

2ndly while looking at all the 52 week highs a couple days ago on one of our non published sheets we decided to merge the “Near 52 Week Low” into the “Near 52 Week High” sheet and publish as 1 sheet—you can toggle between new high and new lows.

This newly expanded sheet can be seen here and is it linked on the “preferred stock” page.

26 thoughts on “Spreadsheet Listing Changes”

  1. Tim,
    The 5 securities (IPWLG, IPWLK, IPWLN, IPWLO, and IPWLP) have the same parent (AES) and the same credit ratings (BB / Baa3). These are the “III” ratings for each of these:
    1. No rating –> IPWLG, IPWLN
    2. B rating –> IPWLK, IPWLP
    3. C rating –> IPWLO
    What makes for these differences? I thought the same parent and credit ratings translate to the same “III” rating for each.

    Thanks for running this useful site. An excellent resource for newbies.

    1. MBG, that is just the haphazardness of stone tablet issued preferreds. They ALL ARE equal standing with various redemption prices based on issuance dates that span 6 decades ending with IPWLK issuance in late 1990s. Indianapolis Power and Light preferreds are subsidiary preferreds. IPALCO is the do nothing holding company that owns the original IPL common stock. AES a couple years ago sold about a 15% stake in IPALCO to a Canadian equity fund. Moodys rates IPL senior unsecured Baa1 and the preferreds Baa3.
      Due to certain ring fencing mechanisms Indianapolis Power and Light has its own separate debt and preferred ratings from AES and even hold co IPALCO.
      The unique characteristic of IPL preferreds is they actually get to take over majority ownership of IPL board on a 4 quarter suspension. They could in theory take control of the company forever at that point by not issuing preferred dividends enough to release control. Due to need of AES to extract dividends from IPALCO (which would be choked off at IPL level) to fund their operations, that would never be allowed to happen. Largely a theoretical thought anyways since some of these preferreds are approaching 80 years old with uninterrupted payments.

    2. mbg – Welcome to the fray. Not knowing how much of a newbie you are, I have a couple of suggestions I hope you find helpful… First of all, note that when it comes to utes those you’re asking about you’ll find it hard to duplicate anywhere else the history lessons you can get here as offered by III’s resident ute historian, Mr. Grid. Secondly, though I know nothing about these particular issues, I noticed that you’ve come up with some wrong starting points on your assumptions because not all of 5 of these are rated the same, a few are not rated at all and some are rated better than you know. So my suggestion is that if you’ve never visited the websites of Moody’s and Standard & Poor’s there’s always an ability open you to verify an actual rating and in many cases gain a little background perspective and rationales by reviewing the info they make available to the public for free. Having said that, you’re much more likely to get more info from Moody’s than S&P on these oldies but goodies because if S&P hasn’t updated their rating on an issue lately, they won’t tell you anything much at all other than the existing rating…. The second suggestion is that if you have CUSIP numbers available to you on any particular issue, it’s a more accurate way to search each agency’s site to find out whether or not they rate the specific issue as opposed to just going by the issuer’s name…. I believe on both sites you’ll also be able to see the various parentage/families of each issuer’s subs and the differentiated ratings for each level of issue such as secured debt, unsecured debt, preferred etc…. It’s always a good way to gain a little more background, but if that doesn’t work and it has to do with a ute, especially an old ute, ask Professor Grid.

      1. 2WR and Grid, thanks for your lessons. 2WR, as you stated, the best source for these is the rating companies themselves. QOL probably has the cusip for each of these 5 preferreds and then check on S&P and Moody’s. Grid, given your expertise with utes, what do you think of changing your nickname to “PowerGridbird”?

        1. mbg – I was thinking the same thing – that the “Grid” part must have something to do with the power grid…. Just don’t get him started on 100 year old railroad issues……..lol

          1. 2WR, its just a coincidence about Grid and being a Ute nut. It actually is homage to the St. Louis Football Cardinals. They were nicked Gridbirds and BigRed since baseball is Cardinals also.

    3. Thanks again mbg–got them all them all at b now (for dividend safety). Glad you find the site useful—stick around the smart folks (not me–all the others) and we all learn together.

  2. Hi Grid,

    You wrote:
    “For example one tweak was selling most of my IPWLK and having IPWLO instead.”

    Am I correct in assuming that while IPWLO is technically callable, it is callable at $103 and it now trades at $83 making it a bit ‘busted’ ….or if they did call it, that would be one heck of a nice cap gain…..?

    Do I have your reasoning for switching out of IPWLK for IPWLO correct?

    I note that the CY is only 5.09% for IPWLO but the CY is 5.49% for IPWLK. So you are scarificing CY for essentially an issue with very low call probability?

    1. Amy, it mostly because in time I can get a eventual cap gain play here if I ever want to. IPWLK is basically capped out here above par. While IPWLK is mostly basic at its highs, I bought IPWLO a couple months back at 5 year lows in the $80s. Preferreds dont price off yield alone, but liquidity, and relationship to par with call-ability. Though under no illusion of a call at $103, there is a certain anchor protection the further below par it is and less likeliness of a call due to low par yield. So it serves dual purpose for me.
      For most others I would suggest this type shouldn’t be bought…Blind grey market trading coupled with extreme illiquidity of about 19,000 shares. Most of which are largely institutionalized and entombed somewhere. Traded less than 2000 shares in past year.

      1. Grid, you are truly a gentleman and a scholar! Professor Grid could be your handle for sure.

        1. Mikeo, I resemble more of a research parrot, than scholar. Due to the small RAM/ROM features of my cranial processing unit, I try to know a lot about very little, while foregoing knowing anything about a lot. 🙂
          I know most here are older looking for income and total returns isnt a real focus, but IPWLO shows this in a very stark manner. This thing was issued in about 1945. So if one bought at par issuance and held, the annual income would have been 4.2% . If that isnt bad enough based on last trade that I bought, you would be sitting on top of a 17% capital loss too.
          Some food for thought for younger ones who are presently looking at lower yielding preferred issues in a low rate environment.

  3. After saving and looking into ArbTrader’s article written last week on SA, regarding Baby Bonds: I saw a couple of symbols that looked interesting to me since they represented shorter term, near par and a few not on my Watchlist. I chose at random and plodded thru Hercules prospectus as a model to try to really explore the Asset Coverage Issue. I know there seems to be a distinction or prejudice between CEF and BDCs. It appears that BOTH are under the same 1940 Act rules, but there is usually a different opinion stated.
    I want to believe that both are equal and right now some of these Babys would fill my needs, BUT…
    I see that the asset coverage refers to ‘taking on MORE debt’, also ‘no payment of capital stock (common and prefs) if coverages are broken”…so Babys look pretty good.
    Who polices and marks-to-market as a checkstop?
    I am seeking a truly experienced opinion on this. Any Knowers out there?

    1. Joel A. – Your request for a truly experienced opinion should exclude me from commenting but my big mouth is telling me differently.. You’ve asked some good questions and of course, when it comes to BDCs as with any other asset class the first responder police in the case you make are of course the management of the particular BDC itself, so trust does have a lot to do with it. Beyond that there are of course added caveats when looking into the actual coverage afforded you by the 1940 Act and the recent revisions under the SBCAA which has allowed them to increase their leverage. First there are a few exclusions to the Act that the BDCs have that are not counted against the coverage ratio – stuff like their SBIC related debt. In addition to that, there’s their use of investments in “Joint Ventures” that somehow skirts inclusion as well…… So bottom line, when investing in BDCs there’s no getting around you’re investing in highly leveraged companies that are investing in highly leveraged or lower grade entities themselves… If that as a starting point doesn’t scare you away, then going the baby bond route to participate in the field might be the way to go depending on your risk tolerance…. It’s what I’ve been doing. It’s contra-intuitive to consider myself a relatively conservative investor and yet be in this space, but I have been invested in BDC baby bonds for a few years now… To be honest, I’ve stopped investing since the SBCAA, but so far, I’m allowing my BDC baby bonds to run off rather than sell them… They’re all of the shorter maturity types nowadays with some, such as SAB expected to only last to the first call later this year……… Hope this helps but keep in mind it’s not a truly experienced opinion… BTW, if you’re truly interested in getting some valuable and always up to date info within the field, I’d suggest following BDCreporter. That’s different than SA’s BDC Buzz, who’s not bad, most definitely not Rida bad, but BDCReporter’s coverage of the field goes well beyond BDCBuzz imho and includes in depth up to the minute coverage of the goings on in even the companies BDCs themselves are investing in and it is all at the elite and experienced opinion level you seek with Nicholas Marshi at BDCReporter.

  4. Thanks Tim!

    Weekend question to ponder (for me anyway) and all viewpoints welcome:
    If one thinks that the Fed is going to be lowering interest rates in the near and foreseeable future what does a Innovative Income Investor do in her/his portfolio in regards to . . .
    1) Sectors?
    2) Risk?
    3) Duration?

    1. mikeo
      I suggest doing nothing. you cannot keep altering your portfolio each time the FEd makes a change in rates. They make changes according to the data ( supposedly ) and they can make many changes over a period of time if conditions warrant . I have close to 150 holdings and it takes over 3 months of changes to make a noticable difference. I am STILL
      making changes to my portfolio, having started in late Dec 2018,
      even changing some of the prior changes which I noted were poor decisions. Best go slow and not make any knee jerk reactions. Just my thoughts. Thanks

      1. Howard, I tend to agree…. To paraphrase a financial guru of biblical proportions whom I’m sure we all know and blindly follow, “there’s always an income opportunity somewhere and we will share what we find with the III community in any Fed created environment.” And I’m not referring to Pendragon.

        1. Pendragon. Very obvious he is the designated hit-man of the gang. The Sundance Kid of Seeking Alpha. I’m actually quite entertained by his posts.

          1. Pen is incapable of discussion. Everything is debate, and seldom rises to high school level. He’s very invested in always being right.

      2. Howard and 2WR, thanks for your input. We share the starting dates of our portfolios Howard, but the sheer number of your holdings far outstrips mine situation. Like many here I’ve been selling into this rally and have funds to re-invest and my questions are more directed to what path to take as future buying opportunities (hopefully) appear.

    2. A lot of unknown variables Mikeo. Its just the short end yield curve. If they are intent on lowering and economy stays in a robust mode, the next headline you could see down the road is…”Inflationary pressures out as economy strengthens”. Then one could see fixed perpetuals drop. Although I am not a player one could say with lower rates and higher liquidity, zombie like companies could survive with higher yield by yield chasers looking for yield.
      1940s Fed manipulated and one had 2% ish 10 year and periods of 6% inflation at the same time. So personally I go with the unknowable. I dont change quality or sector for anything. But I tweak with same principle. Nothing earth shattering. For example one tweak was selling most of my IPWLK and having IPWLO instead. Getting a few perpetual noncallable or similar yield as callable ones. Looking to buy resets on opposite side of equation, especially if they drop more. Added a higher fixed floor below par issue to replace one that was well above par and lower yielding.
      So Im not really doing anything different other than minor tweaks. The major thing is understanding risk/rewards either way on various scenarios and be comfortable with it. If that means 2.1% short tbills and wait, that aint bad either. My no nothing opinion is “continued lower for longer”. But these ultimately are income issues even though goosing can occur. If my SR-A would suddenly drop a buck, I really dont care. I reinvest everything so my next tranche would be a higher yield….Capital gains, I win, lower prices and reinvest at higher divi I win… Morons HDO will be contacting me soon as I can put a spin on anything. I just have to learn how to lie with a straight face and say a B1 bond is a “high quality bond” before I can join though,lol.

      1. Sorry for overposting but on this topic, you have to love some of the comments Jim Grant has today in his Barrons interest rate column titled, “The Big Flaw in PhD-conomics.”

        “Naturally, to turn the policy dials correctly, one must forecast accurately, but who can do that consistently? Rates of inflation, employment, and growth go their merry way, as if for the exact purpose of confounding economists at the control panel. Still, the central bankers forecast, and on those forecasts they base their policy….“Adherents of the Bernanke doctrine are, in fact, disadvantaged in comparison to the average Charles Schwab customer,” a panelist remarked. “Practitioners whom Mr. Market has taken to school know better than to think they can predict the future. Rare is the Ph.D. with practical experience in the field of margin calls, client redemptions, or unsightly drawdowns. It is easier to believe that one can forecast coming events when one hasn’t been punished for trying.”

      2. Thanks again for your insight. I’m envious of all you folks that have experience with interest rate swings and income investing over long periods, Grid. I’m trying to avoid dumbass newbie mistakes but have discovered my crystal ball got busted in my last household move, and it’s too late to file the claim. ¯\_(ツ)_/¯

        1. Mikeo, I dont know anything either. I got started when an online friend directed me to look at high yield preferreds which many being shipping types. So I am looking at these 9%-11% issues and thinking, wow that is good enough for me. But it just smelled wrong. So I kept digging to understand capstack, 2008-09, issues that went under and such, and soon declared more thought was needed before buying. And then shortly after many of these issues crashed, some suspended, and one seen the true risk.
          Then I looked at what held up the best during 08-09 when many many $25 preferreds went all the way down to $4-$8… The ones that held up were utility preferreds. They lost around 25% while the general preferred market had 50-90% drops. So I finally figured out what best suited me in terms of personal risk, safety, and yield and have largely stuck with it. Other people have different thoughts that suite their needs. It definitely isnt a one size fits all model or a “best issue” for everybody.
          We loosely discuss perpetuals in relation to 10 year, but that technically is not correct. They really trade off the credit spreads of IG and junk spreads off 10 year. December 2018 is proof of that. 10 year was pretty stable while credit spreads blew out…Plus the fact that ultimately the market shows they really are equity issues and will follow market drops often also.
          But in general one can see effects of a 2%-%3%-4%-5% 10 year will have on a quality preferreds. Just pull up a chart of an old long standing veteran preferred chart and you will see the effects. CNLPL for example which is around $57 now (6.48% par $50) traded comfortably in the $30s when 10 year was in 5% range back when.

    3. MikeO thanks for posing this question…I would guess that lowering interest rates would make the dividend paying preferred shares I own more valuable, although the market may have already priced in a 0.25% cut. I’m having to make portfolio adjustments due to a number of full and partial calls (ECCA,KMPA,JMPB,TNP-B) only one of which was anticipated. Like many here I’ve also benefited from buying new issues that have rapidly priced higher and will continue to do that until it stops working. Hard to see how lower interest rates lead to a market downturn like the one we had in Q4 2018…at least in 2019. Poor earnings however may be a catalyst, so I’m paying attention to Q2 earnings reports on companies I own and/or am interested in owning.

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