Still Out of Office

I am still out of the office–will be back in Wednesday evening. I think it has been at least 20 years since I have been out of the office for 8 days–and honestly think I am more cut out for 4-6 days of vacation–8 days seems too long.

I haven’t bought or sold anything all week as I haven’t been at the computer during market hours, but I had done a few trades last week which I had not reported.

I sold the Fortress Transportation and Infrastructure 8.25% preferred (FTAI-A), which I had bought for a flip. I had paid $25.15 and sold it for $25.90 so that worked out well as I was targeting $25.80 for a sale.

Also last week I had added MORE Highland Income Fund 5.375% (HFRO-A) simply to ‘capture’ the partial dividend. I paid $25.10 for the added shares and they went ex-dividend Friday for .2326 cents – a partial 1st dividend. Shares now are at $25.11 so I likely will trim back a bit as I am overweight, but given the A1 Moodys rating I am in no hurry–maybe folks will wake up to this bargain and drive the price higher, but as Grid has pointed out ‘names’ matter (if this was a Gabelli CEF it would be trading at $26.00–but Highland is somewhat unrecognizable).

Lastly I am watching the New Residential Investment 7.125% preferred (NRZ-B) which I had bought on 8/9 for a flip. I see it slowly creeping higher and now at $25.27–it will go ex-dividend on 10/11 for 44 cents so I may simply go ahead and hold the issue through ex-dividend and then re-evaluate.

11 thoughts on “Still Out of Office”

  1. Here’s something to think about. Many of us hold fixed to floating issues based on LIBOR which has come under attack as too easy to manipulate and ‘probably’ due to be replaced. The number one replacement candidate seems to be the secured overnight financing rate or SOFR. Well the repo volatility last week drove the SOFR rate from ~2% to ~5% and back again almost overnight. How’s that for instability?

    1. This is not a new item and periodically pricing sags on F2Flts accordingly. They are still printing libor floaters too. I’ve seen when desks say only buy them…. to when few want em.

    2. JerseyVinny,

      I too am concerned about the dissolution of LIBOR at the end of 2021. It will be interesting to see what becomes of all the preferred bonds that are tied to that particular rate. I’ve read a few articles that say companies may lock-in the last Libor number thus creating a fixed rate bond. If that happens my hope would be that in 2021 Libor rates will be higher than they are now. That’s wishful thinking because who knows where rates will be at that time.

      As you state SOFR may be a worse choice. I’m sure there will be plenty of discussions in the coming months and years.

      Leslie J

  2. I think the problem with Highland might go beyond name recognition.

    Looks like they have had a pretty consistent decline in AUM over the past 7 years.

    1. I agree. I can’t quite figure out if Highland is just incompetent or also corrupt. They took at big stake in RAIT Financial as an activist. I think that was just incompetent. The massively dilutive rights offerings they’ve done at their CEF NHF (nexpoint is a sub) falls more in the corruption bucket.

  3. Hi Tim,
    Re NRZ-B Per Quantum “… will be paid quarterly on 2/15, 5/15, 8/15 & 11/15 to holders of record on the record date that will be the first day of the calendar month prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date).”
    It seems the exdiv date is Sept. 30th?

    1. According to Doug Le Du’s subscription WEB “engine”, ex div date is October 11, 2019. No info on Fidelity.com or Schwab.com on Ex Div date.

      1. Mr. Tim McPartland is correct on the ex div date.
        Tim, I picked up some HFRO.A. Then went back to make a total of 400 shares. Schwab.com Fixed income cannot verify the QOL.com on the QDI. Schwab.com rated HFRO as “F” for ‘sentiment’. Morningstar gave HFRO 2 star. Seems like it has unusual bond positions. I agree totally that the dividends are perfectly safe. Thanks again for your WEB, the best of them all IMHO.

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