Markets have gotten a lot of milage out of inflation numbers that were ‘not too hot’ and ‘not to cold’ and now the S&P500 is just 1-1.5% off of all time highs–quite remarkable given the circumstances. The old saying of ‘markets climb a wall of worry’ is certainly true right now.
The push higher in stocks and the now 20 basis point drop in the 10 year treasury has certainly been productive for our portfolios, which have moved to a modest all time high (remember my wife and I do not withdraw any funds from accounts–at least we haven’t thus far). If I wouldn’t have chickened out holding many perpetuals gains would have been better this week–hind sight is 20/20.
Next week we start off the week with a holiday on Monday so there is no trading. Then the week has very little economic news of consequence–by all rights it should be kind of a quiet week–we’ll just have to wait and see whether that plays out.
When I think (whether I am right or wrong) that interest rates are stabilized and maybe moving lower here are some perpetuals I would like to own.
Federal Agricultural Mortgage (AGM) Issues. Rock solid financials and good current yields.
AGM-F | 5.250% | $20.44 | $0.09 | 6.46% |
AGM-D | 5.700% | $22.40 | $0.19 | 6.36% |
AGM-G | 4.875% | $19.14 | -$0.05 | 6.27% |
AGM-E | 5.750% | $22.61 | $0.17 | 6.37% |
Lodging REIT Pebblebrook Hotels (PEB) offers mid level quality with darned good current yields. PEB has quite a few California properties and I am not aware of an update being released relative to wild fires.
PEB-E | 6.375% | $19.59 | $0.03 | 8.14% |
PEB-F | 6.300% | $19.85 | $0.00 | 7.93% |
PEB-G | 6.375% | $19.99 | $0.19 | 8.00% |
PEB-H | 5.700% | $18.41 | -$0.29 | 7.82% |
National Storage Affiliates (NSA) has a good mid level quality perpetual outstanding which is down $3/share in the last 4 months and could provide some nice capital gains IF rates move lower.
NSA-A | 6.000% | $22.17 | $0.04 | 6.77% |
These are not recommendations of course, but issues that should move high and provide some capital gains if the 10 year treasury can begin a long and sustained move lower in yield.
No bubbles as far as the eye can see
https://cointelegraph.com/news/melania-trump-memecoin-launches-notches-4-b-market-cap
> Then the week has very little economic news of consequence–by all rights it should be kind of a quiet week–we’ll just have to wait and see whether that plays out.
Other than, I dunno, a presidential transition and possible day-one executive orders? That’s not a political comment at all; it just seems that there has been a lot of talk of dramatic transition things, so the market might be a tad volatile depending on what gets signed and what doesn’t in the first couple days.
What a crazy couple of weeks.
My holdings are up over 2.5% net this year already.
Mostly dumb luck, but I just wanted to get that out there before his Trumpness gets inaugurated and whatever that means starts to happen.
*nothing political intended – pundits from all sides are making predictions of disaster or boon, and they are probably all wrong
Which of your holdings is up the most in 2025 and when did you buy it?
Private, I enjoyed your updates from behind the silk curtain.
The pundits have talked about another axis country and speculated N. Korea did an exchange with Russia for resources like oil and food for weapons and recently soldiers.
I wonder how China will deal with some of the problems they are having.
I own a boatload of the AGM+E. Have had many conversations with their I R MGR who is a very knowledgeable and wonderful young lady. If they call it in July it will be a nice gain. If not thats ok too. Another slam dunker you could buy is WTFCP. Yes, it will get called on July 15th, 2025 but in the mean time you get paid 2 more times with their nice coupon of 6.875%. Almost a no brainer in my opinion. Right now its at $25.10.
Thanks ChuckP for your comment. The only problem I have with the AGM issues is it moves around too much–even with fair volume being traded. Of course if it would move sharply higher I wouldn’t complain 🙂
Chuck, How do you know it will be redeemed on July 15th and not be perpetual (left outstanding)?
Of course he doesn’t know for sure, but the real question is what happens if it doesn’t get called, Mr. C? If it’s not called then it resets for 5 years (and is not callable for another 5 years after 7/15) at the formula of 5 year treas + 6.507%. Let’s be conservative, hopefully, and say the 5 Year is 4% on reset date…. WTFCP will become a 10.507% coupon for the next 5 years….. I think it’s a pretty safe bet WTFC will not want that on their books but if they do, what happens to the price of WTFCP as it approaches 7/15? Unless there’s a total credit meltdown on WTFC, the price of WTFCP should at the very least hold today’s price and likely be higher…. So if they call or if they don’t, the real risk is credit risk only…….. Famous last words????????
BTW, Wintrust Financial has BBB+ Fitch rated senior unsecured rating.
Your answer is exactly why I said they will call it in July. I own 10,900 shares so if they decide not to I will be quite happy.
There are a few of these types out there that have been discussed here before… The most direct comparison I suppose would be WSBCP, however it doesn’t first set until 11/15…. Depending upon what you’re angle is in playing these, meaning if you WANT the call to happen or you want the reset to. one of these that I think has the highest likelihood of being called has been slowly dropping back into a viable purchase range and that’s HTLFP. It’s another 7/15/25 reset, has a 7% coupon and a +6.675% reset rate + 5 year Treas rate. So an even higher coupon and a higher + rate than WTFCP and if that’s not enough reason to believe it’s going to be called, they HTLF is being acquired by UMB Financial whom I believe will be assuming HTLFP going by memory. As a corp, I don’t believe they use preferred in their structure at all so what are the odds they’ll want to start using preferreds by keeping this one outstanding? I’ll vote slim and none….. And if that’s not enough, Fitch rates UMB even higher than they do WSBC. A- for their unsecured, so HTLFP’s credit quality will end up higher than it is as a standalone.
I missed this one when it was cheap and first discussed around here, but it began to drop into range yesterday I believe… I began buying today… Personally, I have room in my portfolio for a 6% YTC money market alternative that I feel very confident about being called, even if it’s just for 6 months.. It’s always nice to buy something that has a decent YTC, and most likely will most likely be a better performer if I am wrong than if I’m right and it remains outstanding…..
See also OCFCP (floats 5/15/25 at 6.845% spread, IRR 6.08% assuming redemption on first float date);
ARGO-A (resets 9/15/25 at 6.712% spread over 5YT, IRR 7.49% assuming redemption on 9/15/25);
NYMTL (floats 12/15/26 at 6.130% spread, IRR 13.64% if redeemed on first float date);
TEN-E (floats 5/28/27 at 6.881% spread, IRR 8.36% if redeemed on first float date;
GLOP-A, SEAL-B, and TEN-F…
All calculations used closing prices 1/17/25 as reported by MarketWatch.
Disclosure: long OCFCP and NYMTL, no position in the others. DYODD and don’t take financial advice from retired sailors!
I forgot who (thank you again) posted a list of 5-year resets, going out to 2029 for the first reset date. I copied it to a spreadsheet.
Here are the ones scheduled to reset this year and in 2026. Just resets, not floaters:
Ticker Pref/BB Spread Reset Date
WCC-A Pref 10.325% 6/22/2025
WTFCP Pref 6.507% 7/15/2025
HTLFP Pref 6.675% 7/25/2025
ANG-B Pref 6.297% 9/1/2025
ARGO-A Pref 6.712% 9/15/2025
ATH-C Pref 5.970% 9/30/2025
WSBCP Pref 6.557% 11/15/2025
SPNT-B Pref 7.298% 2/26/2026
FTAIN Pref 7.378% 6/15/2026
CNOBP Pref 4.420% 9/1/2026
RITM-D Pref 6.223% 11/15/2026
It was Tex 2 who of course did the work for us all originally but thanks for refining and resending.. I own 6 of them.. Anyone do any work on ARGO? Don’t know why I have trouble getting comfortable with them.
2WR, maybe because it is Brookfield?
Could be. But it’s more than that… I’ve gotten over the BN involvement with ANG, but I think that’s because of them just having underwritten a new issue that they are listing and stated they “intend” to use the proceeds to call ANG-A with no other use of proceeds listed……
Thank you, mbg. Can you post the 2027-2029 data from the spreadsheet? thanks again
Thanks for reminding me who shared this with all, 2wr. Thank you, Tex 2!
Original D, here you go.
Ticker Pref / Baby Spread Reset Date
EFC-B Pref 4.990% 1/30/2027
KMPB Baby 4.140% 3/15/2027
EBBNF Pref 3.150% 9/1/2027
BANC-F Pref 4.820% 9/1/2027
MSBIP Pref 4.713% 9/30/2027
MBINM Pref 4.340% 10/1/2027
AGNCL Pref 4.390% 10/15/2027
RZC Baby 3.456% 10/15/2027
KEY-L Pref 3.132% 12/15/2027
ATH-E Pref 3.962% 12/30/2027
ASBA Baby 2.812% 3/1/2028
JXN-A Pref 3.728% 3/30/2028
HBANL Pref 2.704% 4/15/2028
RWT-A Pref 6.278% 4/15/2028
EFC-C Pref 5.130% 4/30/2028
EBBGF Pref 3.140% 6/1/2028
FTAIM Pref 5.162% 6/15/2028
APOS Baby 3.226% 12/15/2028
EBGEF Pref 2.820% 3/1/2029
ATHS Baby 2.986% 3/30/2029
SYF-B Pref 4.044% 5/15/2029
SNV-E Pref 4.127% 7/1/2029
RF-F Pref 2.771% 9/15/2029
VOYA-B Pref 3.210% 9/15/2029
VLYPN Pref 4.182% 9/30/2029
Thank you, mbg!
I personally think it’s a slam dunk these get called, no bank wants a 10% preferred out there, makes you look like a clown… but here’s what the CFO said on the last conference call:
> And then for the preferreds, we’ll just have to see what the market is like at the time. We most likely refinance them out at a lower spread. But there’s a lot of time between now and then. So we’ll see what happens, but we have our eye on that. And we can either swap them out and pay some of them down or — but we’ll have to make a decision at the time based upon what market conditions and rates are.
With the current state of affairs at nanny Fido be aware of the NSA trading volume. It might be enough to not have any problems. Speaking from experience.
spread no great, too. fido let me buy 50 of nsa. I looked at a lot mentioned here and also used wtfcp as a partial sgov substitute. agm.e had a rough spread too but said it wasn’t qualified and I hesitated.
Look forward to reading each of your varied thoughts during the week.
jbosch—I am going to check on qualified/not qualified–seems like it should be qualified, buy maybe I am wrong.
jbosch–here is a copy and paste on my eTrade account for them. I don’t own any in Fido accounts so can’t check them to see what they show on payments.
10/17/24 Qualified Dividend FED AGRC MRTG CRP 5.750% SER-E REC 10/17/24 PAY 10/17/24
thanks for the agm reference. I saw some comments about misidentified interest/dividends on other shares in the comments and knew that was a possibility. I have a 1000 preferred that fido calls interest but I think should be dividend. I guess I’ll call them and ask if they will identify it differently. I think I will find out which benchmark rate has to cross what spread to get agm to do a call, but I don’t know if it’s as exact a science as agency bonds or not. (current price seems not bad but if someone has a suggested entry or can identify which bid is getting filled let me know).
jbosh…I have owned AGM/PRF in my Schwab taxable account for over 2 years. On my quarterly statements as well as year end 1099 it classifies the actual dividends paid/received as qualified.
Charles–haven’t look at it from that angle–just on my potential buy list.
I know you get better treatment at E-Trade, just wanted to mention my experience lately with the NSA they let you buy 250 or 500 or 1000 shares but then try to sell it in the same quantity.