Ok–it has been a week or so in which I have been fixated on the banking issues and I am tiring of it. I hold a number of regional and community bank preferreds–all in modest position sizes. I have Customers Bancorp (CUBI) preferreds F (CUBI-F) and their debt issue (CUBB). I also have some Merchants Bancorp (MBIN) preferred (MBINO) and Bridgewater Bank preferred (BWBBP) and even in modest sizes they have been painful.
I am full to the gills in CDs and treasury notes and with rates now coming off I am hesitant to add to these areas–of course we all know this could change with further banking and economic news in the weeks ahead.
Its time to start focusing elsewhere. For me that is in the utilities and in the closed end fund (CEF) preferreds (I am not interested now in any of the specialty finance CEF preferreds–i.e. Oxford Lane, Eagle Point etc) . I hold positions in many, many issues in these segments and I see they are getting hammered today (the utilities in particular), but certainly they have outperformed the banking issues by a long way. In addition I may even add a REIT position or two–not sure.
Over the course of the next week or two I will post what I own and any nibbles I make during this time. I likely will add to some of my current positions, but I certainly will start some positions which are new to me.
Here is the master listing of utility preferreds and baby bonds. Here is the listing of CEF preferreds.
Anyone knows why Qwest/Lumen baby bonds collapsed to $10 or 16% Yield the last days while the common stock remained firm? It doesn’t really make sense…
What do you guys think the chances are of some of these non-cumulative bank preferred getting suspended? MBINO, AUBAP, HTLFP, HBANP, FGBIP, CUBI-F, etc. They’re all trading like it.
Uncertain how this will play out so they are priced for some risk of default but not a large risk. If the banking crisis calms down they are bargains, if not there could be a wave of defaults. Do you feel lucky?
Fed action and customer withdraws are wild cards here. Fed seems determined to bail out the big banks but not the small banks. If customers stay put the banks survive, but panic bank runs can be deadly while rates are high. Then it depends on whether struggling banks are acquired or allowed to fail.
Speaking about feeling lucky, if anyone’s in the nickel stacking game (or picking up pennies in front of a steam roller as some might call it in this case), there’s still some pennies to be made on the tenders for PSBXP, YP and ZP issues even though you no longer qualify for the dividend…. Tender closes on 3/29 (but a day earlier at some online brokers) at prices of 15.29, 15.33 and 14.34 for X, Y and P…. They closed at 15.12, 15.21 and 14.17 on Friday…. I expect the shares will be paid on 3/31…. I’ve not bot any post – x div date, but at these levels you’re locking in better than 1% return for less than 2 week’s hold on X and P given a successful completion of the tender. Y is the least attractive.
IMHO, it might be a little dangerous to scalp a half point here or there under current market conditions. Better to be safe than sorry. Better to take slightly less yield once conditions stabilize. We are on the edge of a serious banking crisis world wide. CS will either go under or be bought out by Monday. FRC is still in a lot of danger. One bank failure leads to another as depositors look to the safety of TBTF banks. The administration (Yellen) and the Fed are scared to death that things will get out of hand. They’re like the little dutchman putting his fingers in the holes that are springing in the dikes.
Be careful when our financial heads are speaking optimistically that things are fine and there is no need to worry—that there is light at the end of the tunnel. Who knows—that light might be an oncoming train. JM2C
For banks that didn’t get stupid like SVB or crypto’d like Silvergate doesn’t the Fed’s open window and unlimited deposit guarantees relieve the immediate risk of collapse? Also, doesn’t the sharp decrease in mid to long-term interest rates help the sector?
GRJ asked: “For banks that didn’t get stupid like SVB or crypto’d like Silvergate doesn’t the Fed’s open window and unlimited deposit guarantees relieve the immediate risk of collapse?”
GR, my answer is NO. Any bank, other than the TBTF can be put out of business in a few hours with a bank run. No bank could survive the 25% of deposits being withdrawn within a few hours like happened at SIVB. NONE! And in a run like that, the underlying assets are irrelevant. We all understand that banks do not have instant access to 100% of their deposits, but that is also immaterial when people use their iPhone to withdraw 100% of their holdings at the drop of a switch. And no way the banks that “deposited” $30 Billion into First Republic would do that for the next 100 banks that have a problem. BTW, I assure you the Fed’s backstopped the $30 billion telling the givers they would get 100% reimbursed if First Republic ends up failing.
Janet made it very clear in her Senate testimony that they WOULD let other banks fail. We just don’t know how/where they would draw the line on which ones to save. The Fed/FDIC/Treasury are clueless on how to stop all of this. They thought they had it solved several times only to see bank stocks continue to spiral down.
And even on ones where they backstop depositors 100% beyond the $250k FDIC limit, preferred/baby/term holders appear to be wiped out or at least significantly impaired.
I exaggerate slightly and say: “Why would anybody/company in their right mind keep more than $250k in banks less than the top five TBTF? Look at upside versus downside risk.
Where O where is Jimmy Stewart when you need him?
https://www.youtube.com/watch?v=iPkJH6BT7dM
I hear you Tim, this is not a fun time for bank preferreds, but doesn’t that just mean it might be time to buy them?
The 1st quarter 10-Qs will be especially interesting this year. Looking forward to seeing which banks got whacked.
knowing the bank preferreds are not cumulative keeps me sitting on the sidelines.
Looking at filled orders, my other areas lately include looking north to various Brookfield and Enbridge bonds and preferred.
Tim….don’t forget about CENEX…..they have held pretty steady in all of this….I own L,N,O
Craig, are you talking about the CHS preferreds CHSCL,CHSCN, and CHSCO ?
I own CHSCN, which is now trading at $24.65; a great buy under par, in my opinion.
Looking to add CHSCL and/or CHSCO if they ever go below par
Thanks to all those wishing me well in my stroke recovery; achieved a milestone today – was able to open ( and close ) the refrigerator door with my paralyzed left hand!
Thanks for the update on your health, Inspy. Congrats on the progress being made and keep plowing forward!
I can’t figure out how to say what I want to say, Inspy. How cool it is to hear you brag about what’s really important! Love to hear it………..
yep, I’m thrilled that after 7 months, i could do that!
fingers still very weak, but with practice things should improve.
With CHS, I would pay attn to O and P? have call dates in 2023…I think I have those two right…see what CHS does with that
Craig– I own a lot of them—CHSCN,CHSCM,CHSCL. If CHSCO gets down to par, I’ll buy that one too. All seem to hold up quite well.
I have been adding to cheap well rated preferreds on sale due to the current market panic and extra sale as they just go ex-divd.
eg. ATH-E the 7.75% coupon traded in $23s Thu/Fri and yields 9.69% on Fri close.
Is there something I am missing in terms of why so much negativity in APO? Their preferreds seem to getting an extra haircut in this current sell-off – even their other preferreds such as Fix-to-Float with 6.6%+ coupons such as ATH-A and ATH-C seems to trading more below par than other almost-IG bank preferreds
I have been buying WFC-L and BAC-L (both yielding around 6.5%). I figure rates will eventually come down and these two will soar since they cannot be called. I also have acquired NLY-F and AGNCL. I figure they are safe enough and the current yields are enticing (10% and 9%). NLY-F is tied to 3 month Libor which has remained elevated at 5.0% even though treasury rates have dropped this week. NLY-F resets on March 31.
Tex. I’m with you, with rates falling, locking in a L (WFC and bac) seems very logical. Just sit back and coll ct your qualified dividend.
Tex, I swapped AGNCL for AGNCP with over a $2 difference in price P looked better long term. The difference was under $1 a couple weeks ago, I’ll swap back if there is a big correction though an expected decline in rates may be a factor.
Ha, I can l’t help but feasting on these new “bargains.” Hopefully the feast doesn’t upset my stomach!
Have so much of:
JXNFL
FHN-D
ABR-E
Now with the lower rates, isn’t it time to rethink i-bonds ?
If you haven’t bought your i-bonds in 2023, an i-bond bought before May will pay 3.24% (plus 0.4%/2 fixed rate) the first 6 months plus another 1 or 2% (depending on the next cpi-u reading – now at 1.36% for the last 5 months) plus whatever the new fixed rate will be, likely >0%. That is, it will yield around 5% in the first year.
Just saw similar comments in the i-bond section. It seems some IIIs will be buying or gifting i-bonds before May, especially if 1) last month inflation reading continues to go up and 2) the new fixed rate will be >>0%.
Also a good idea is to sell older i-bonds with 0% fixed rate when they finish their 6 months higher rate and replace with the new ones with some fixed rate >0%.
My blasphemous comment of the day: maybe ~all preferreds are not investable at this time?
a) Non TBTF IG bank issues are at risk of bank runs/shutdowns
b) If and it is big if, inflation does NOT asymptotically approach 2% and stays higher for longer, principal values might be impaired for a long time.
c) Default risk for many other asset classes beyond bank preferreds cause spreads to widen, even if UST 10yr yields fall
None of these are issues if you do not mind capital depreciation and the payer continues paying dividends. . .
Obviously this path is not 100% certain, but it sure it not 0% either. . .
I doubt most would say your thought is blasphemous, Tex. The drop in the 2 year is breathtaking. It was 5.06% just 10 days ago. Now its 3.85%. Atypical violent movements.
….A widening credit spread with lowering treasury yields is certainly not unusual. December 2018 proved that in spades. And in a recession that is very typical also.
Ha, maybe not “blasphemous” but I can go with “ludicrous.”
We all know the best times to invest are when you get compensated the most. That most investors sell first during panics and ask questions later.
So go and “hold your nose” and start buying! Take a shower after if it makes you feel better.
Maine, maybe a bit tough? How about “too conservative for my taste”, ha.
Emotions definitely come into play and can be a hinderance. I likewise have started nibbling on some things. Likely because I am just coming off a bit from my years highs reached Thursday and feel I have some room to gamble a bit.
And another reason why I am just nibbling is because there really is no bargains in the preferred sector areas I like most to invest in. I would love some more panic that causes preferred funds to start liquidating the kitchen sink and get the ones I prefer at a discount price too.
Maine, your friend “ludicrous” T2 here
I hope your are correct that preferreds are still investable at the present time. We do continue to have a substantial allocation to them so we are in the same boat.
I have posted many times that I attempt to consider a range of outcomes as opposed to a single “point” forecast. Since you are a buyer here, you are essentially forecasting positive total returns over some period of time. Definitely is a reasonable chance of that occurring. With me not buying here, I am essentially forecasting better total returns in other areas, like the much discussed CD’s/UST’s. Over different time frames we might both be right. Over a specific time frame, likely one of us is right and one is wrong. Unknowable at this point.
Ha Grid and Tex.
Yeah, we all having fun.
Let’s be honest, I am on the far end of the spectrum, the “risk” portion.
Call me a wannabe Howard marks.
I am basically programmed to buy credit when it sells off and spreads are above average. It almost always works, assuming the hold period is 2+ years and you avoid blowup risk by spreading it around.
it is scary out there though!
Maine, we also like to buy credit when the spreads widen. We bought >50 new CUSIPS this week and ZERO preferreds/babys/terms. Every single one of them had “blown out spreads” relative to a few weeks ago.
Just a different way to play widened spreads. . .
🤣
Yeah, last week there were a lot of bonds on offer. Some bonds even offered better spread than the prefs! So I get you point.
Congrats! I’m sure your clients will be happy. Just keep that powder dry.
I remember a lot of folks talking about “dry powder” in the spring of 2020…
Last October there were all sorts of IG senior unsecured bonds that had yields considerably higher than preferreds of same sector and I bought several. The bonds I look at to buy have not moved anywhere near an ear shout to the lows of last fall. I look daily but they dont budge at all for me.
Yeah, I see it with banks, insurance companies and financial ilk. Basically, any leveraged financial widget is under stress now. This includes banks, insurance, REITS, BDCs, etc. but there are def some solid companies in the rubble.
It’s especially interesting to see the insurance companies drop so drastically. I wish I was a good insurance company analyst, now is a perfect time to sift through the names. And the positive with insurance companies is that their funding is generally locked in, unlike the banks.
Heck, even the MREITs have done a better job of securing their funding.
One of my largest positions is MITT-c, one of the most hated MREITs judging by the common price to book. But many don’t realize they locked up most of their funding by securitizing the majority of their loans ..and their collateral is residential housing, much better fundamentals than most of CRE at this stage.
Don’t get me wrong. Mitt is the riskiest of the risky, I just think the risk/return is compelling.
And with all that said, there continue to be areas that are “don’t touch no matter what” category, especially anything related to leverage office, or other parts of CRE. We are going to see a massive wave of defaults in this sector unless rates miraculously go back down.
Maine, I tell you its not fair at all. There is an insurer I would put a lot of money in a bond with…Allstate. But there certainly arent any deals there. I wish that would get thrown in the rubble too, but that is not going to happen unfortunately.
Maine, I have owned MITT-A and MITT-B since 2014, when I bought them for around for $22 per share. It has been one heck of a ride including that period where MITT suspended dividends. I thought they were toast and headed for BK, but the MITT management somehow dug their way out of that hole and resumed dividends, catching me up since they are cumulative. I calculate they have paid me in dividends about what they are worth per share at this point. They are still risky, but have hope they will continue to survive and meet the quarterly dividends! My other worry is CUBI-E, which I had a almost two month old GTC order in to buy some at what I thought was a ridiculous low price and had somewhat forgotten about. Well, it hit that Friday when SVB was cratering and the banks all swooned. Who would have thunk…… I was on vacation and got the email from Vanguard that I was the proud owner of CUBI-E. Ii continued to crater all the way down to $10 or 11 per share. I am still underwater but it is now back to $20 per share. Hoping too it survives, but we shall see I guess. Lesson learned to not forget GTC orders.
Comments such as “maybe ~all preferreds are not investable at this time?” are often good indicators of bottoms forming…I’ve seen many of these types of comments over the last 3 years.
Dick, I personally view the “preferred” market as at least trifurcated and certainly fractionalized with no blanket statement necessarily applicable. You got the “scared” segment of regionals and some Mreit ilks, you have what I call “market appropriate” yields, and then the snoozefest live floaters trading around par.
Example of what I mean as “market appropriate”. Take ALL-H which is a 5.1% perpetual trading around $21 and 6%. I dont see a discount here. As market yields are higher now. It would be expected it should trade under par. And 250 bps above 10 year is certainly a reasonable spread. But that is just today. Tomorrow other factors could come in… lower yields, higher yields, market selloff, market euphoria, credit spreads widening…or contracting. All based on
ones risk/reward profile and base expectations.
In fairness to Tex, he was just throwing out a bit of red meat to consume. As he stated he had preferreds. Which leads to a seperate expectation and perspective.. For example, one largely out and looking to get in, and one with say a fully committed allotment. This alone helps frames ones attitudes going forward…Just like Tim stated as an example. His belly is full of CDs and Tbills and is going to go hunting for some different meat. Im largely in that camp myself for FWIW which isnt much.
Grid and Maine ( Sounds like standing at a intersection ) I looked at CUSIPS Friday offered by FIDO. Started out at about 120 offerings in the morning and about 180 by the end of the day with me setting a range starting from 5.4% and starting out at 2023 and going to 2034. Almost all banks and maybe BDC with low coupons. I did find a few oil related companies and there was also REITS
Just nothing I was interested in.
I even looked at buying more of what I already own, but the spread wasn’t worth it. As you have mentioned Grid, my account shows I am down a little on value yet if I was to try to buy more of the same the offers are higher than what I had paid prior.
So unless things change, I guess I will stick with dry powder and continue looking at preferred’s
Charles, do you habe interactive brokers? I find they have more on offer than Fido, and Fido is pretty good.
Maine, I have Fidelity, TD and Schwab soon to be just Schwab in 30 days. I also did a few through T Rowe but Pershing makes you call in. Not sure if I want another broker.
Charles ….In addition to Maine’s comment, one can run the same scan on Schwab as on Fido and there will sometimes be, along with the overlap, a few additional issues shown. Then, if you put that cusip on Fido, you can buy it
I still like preferreds because fixed income doesn’t offer trading profits. If I can boost my return with trades then preferreds may be worth the risk. Default risk is the real concern. If they keep paying dividends I’m making money long term no matter what the underlying price does. Trading one loser for another loser can be a profitable trade if you catch the price swings.
Most people are inclined to hold on to a preferred if they are underwater. For me, swapping a loser for a same issuer issue that yields more and is at a lower price is a no brainer. It bumps up yield and in long run, cap gains as well.
I got lucky on HFRO-A. It got hammered so I picked up 135 shares and sold it within a couple of minutes for a $1 more.
I have been trading PSLV, SPPP, and PHYS as well. First sell silver for gold then sell gold and buy a little platinum.
I also bought 135 shares of TFINP, but only squeezed $10 out of it. wah wah wah (Charlie Brown funny voice).
Well the Q is are we willing to risk principal to get 9, when over 5 is with no P risk? Doesn’t sound like a slam dunk to me. And…..I heard Jim Grant cautioning about going long when the fed is fighting inflation.
Looks like we are setting up for a severe test of the big banks both common and bonds. FRC’s equity to asset ratio really looking dangerous. And at these depressed bank stock levels not many takers left.
Then there is this consortium of 11 banks lending 30 large to FRC. WTF…..IMO this make janet yellen look like a fool.
PS robot clicks can be completely wrong.
“Then there is this consortium of 11 banks lending 30 large to FRC”
There is a HUGE difference between a loan of 30 Billion versus a bank deposit of 30 billion.
Holding my CUBI-F, ONBPP, and MBINP. Doubled down on WFC-Q. This doesn’t feel like 2008, so I’m optimistic, perhaps naively so. Lots of red today in my portfolio for sure.
Hi Tim,
So are you going to hold your bank preferreds, or are you planning to sell at a loss? What are others’ thoughts on here?
I guess for the meantime, I am going to just hold on, except for some FCNCP that I jettisoned the other day for a couple hundred loss. It’s super tempting to add at these lower levels, but also rather scary since I can’t see into the future. I’m still holding out hope that the CUBI’s get redeemed, but that may well be off the table at this point.
I tried looking up some “call reports” on FDIC the other day to try and figure out which banks had high percentages of uninsured deposits, but my “know nothing” brain wasn’t absorbing all the info, so I just sit tight and watch….
I suppose as long as the FDIC is showing a willingness to backstop deposits greater that $250K, then maybe that can quell the panic, but that kind of seems like a fool’s errand too.
Finger’s crossed doesn’t seem to be a very good investment strategy, but I guess that’s where I am at the moment. Luckily I don’t have a ton of bank preferreds, but if they go KABOOM, then the rest of my portfolio is going to go with it anyway…..
Well, good luck to all (and I’ll keep my fingers crossed for you too)
Mark, I zagged on the zig here a bit with banks, though Im keeping it small. I didnt own any before the selloff as I have a general distaste for them anyways. Got in NYCB-U a few days ago and thanks to today, Im under water a small amount. Bought WAFDP around $15.10 yesterday. Added TFINP today at $20. Mostly because one analyst said their book was shorter duration unlike some others. Tried to snag 300 FRMEP at 23.78, but only got 98 puny shares. Probably just leave at that, and sell them off some point. So I just nibbled off lows a bit. Wont do more. Sold off some other things this morning on little bumps, and have more cash. Im not and havent been too optimistic for a while. Thus why I am stuffed with CDs, TBills, bonds, and IBonds.
S&P Global has a report on the Top US Banks by Proportion of Uninsured Deposits. You should be able to find it by Googling around. I previously posted a link to a similar S&P report, though I can’t find it right now.
The report is interesting reading. The uninsured deposit base (i.e. $250,000+) at most of the $50+ billion asset banks (45/50) exceeds 50%. This is not necessarily a cause for panic. As a practical matter, I would guess that many “real world” company payroll accounts exceed insured limits. I have yet to see that reported amongst the panicky news about hot money venture caps and bitcoin buddies pulling money out.
Just my opinion.
How about a Dummy Penalty? The fools who ignored FDIC insurance and want their funds get a portion of the supposedly IG ‘good collateral’ on a MTM at maturity. The penalty is the lost time/duration.
Sounds plausible to me. Will THAT happen?
May be okay for depositors, but Fractional Banking does not work on this premise/freeze up though. I hope the Fed has figured out that lending is going to lock up , probably for a good spell.
Recession odds have gone WAAY up because of this.
This is the patience game and answer to the Q of whether to hold IG perps, bonds or prefs. Go fishing, trout season has begun, morel mushrooms are popping all over the place.
I’m heavily overweighted in bank preferreds and I continue to add more as they drop. I’m not that concerned because I have short positions in a ratio of 1/4 to 1/2 the number of long shares owned and I swap the big short losers (my gain) for issues that haven’t dropped as much. The short shares are higher priced issues. It works and I’m ahead for the year.
This past year’s drop is the exact opposite of 2008-2009 (and other major preferred corrections since) when shorting low yield against buying high year was the money maker. This time, duration is the issue.
BDC baby bonds are getting killed and many yielding 8-9% now for 3-4 year maturities. No BDC has ever gone bankrupt. With permanent capital there are not issues related to banking sector liquidity, etc. With asset coverages it would take 30-40% default rates to begin impairing debt, even in the worst cases default rates at BDC were in the 10-12% range. Issues like FCRX, HTFC and SAT look good now.
Your SAT from SUR small but agile BDC is quite attractive along with its other baby notes issued later with higher coupon. Got gun shy because of the small cap of SUR. I own lots of legacy ARCC, consistently blessed by Scott Kennedy (partner of Colorado Wealth Mgm). His SLRC is lackluster. Still holding just to collect the dividends. Sold one of my best eREIT, IRM (Iron Mountain) to buy Tim’s CUBI-E and his HTLFP. In recent days including today bought SR-A (SR/PA). Not the best price but still good thinking long term. Glad to have sold some of the lackluster SBUX (legacy shares and small stupid dividend re invested shares) to finance the purchases. Eliminated some BX old shares taking profit too. Still holding the decent shippers (sold all my GLOP except holding the higher level of GLOG-A, which the retired founder had loads. Tim or Gridbird’s recommended or praised GSL-B which I picked up some just above par is doing well along with the best or most honest and ethical shipper Safe Bulkers C and D and CMRE’s (reliable with very long history and niche). TNP seems to be doing better, after COO and owner realized that he must equip his ships with environmental scrubber as required by European standards as long recognized by Safe Bulkers. I thank Tim for his up to the hours of info in this troublesome time. Appaently most banks got smashed including my Asian bank, EWBC, from mid $75 to mid $55, Another 6% slight today and looks like more decline coming.
John
I did look at SUR which has baby bonds SAT and some other higher yield ones issued later. Got gun shy because of SUR small size but agile BDC. I own legacy shares of ARCC, one of the best DPC according to Scott Kennedy, perhaps one of the best BDC writers in SA. His SLRC however is lackluster, still holding, presumably conservative first lots of first level loaners, unlikely to file for Bankruptcy. Sold lots of my IRM to finance purchase of Tim’s CUBI-E
I
John, Im sure you know this, but keep an eye on shipping if assumption is a recession. These in recessionary or threats of recessionary past fall off like community banks have. Of course their individual balance sheets and specific shipping rates and contracts will factor in also.
I also reentered SR-A for the zillionth time today ave of around 23.40. It was only just a few days ago I round tripped these. Except I had a lot more the last time I sold a few days back over $24.
Thanks Gridbird. I should. Then the yield and “relative performance” to bank “SWANS” made me hesitant to decrease my shipping exposure. I probably still should even if I assume Powell should wake up. Even some of the CNBC pundits including the bond man has been hinting ENOUGH is enough. Plenty of geopolitical risks. Emperor of People’s Republic of China meeting Emperor of Russia Putain…. I believe SREA is safe and sound I kicked myself for failing to buy DUK-A and DUKB and unloading some CREM Preferreds and that TSAKO with daredevil Antonio COO and founder kept on buying new ships. Or some of my Diana shipping in my IRA accounts. Actually PRU is quite safe being a baby bond and Wall Street consider the common PRU, a solid dividend payer a heck of safer than the old or new tech giants. Thank youi for your comment, Grid. My dumbest recent mistakes: bought that new HBANL Huntington Bankshare at IPO with whopping 16.8% probably more on the downside. Saw someone posted question on old Doug Le Du website and bought highly rated BNJ. This one: probably with low yield coupon and name Brookfield Finance Inc. probably does not add confidence. Way back, I thought these private equity firms were “genius” (in a way they are somewhere between Rida and his only worthwhile collaborator Preferred Stock Investing or Investor. These days, whatever they recommend it takes only two weeks to show that Rida Morwa is so wrong with his PendyDraggon lacky. I even bough some shares of ATD preferreds. It quickly down 2% after one fake up day. Old IncomeInvestor.com HLMPL seems to be holding. Ditto for FRGAP and ATCO-H (shipper possibly going private). I would like think that most people are honest. Actaully Karfunkel IMHO was a daredevil but not a crook. Its British ally Maiden was simply incompetent…. Actually the old AmTrust handing on with AM Best insurance rating stays solid during the current turmoil. Non cumulative preferred and baby bonds still paying nice dividends or interests. LOL.
Yes. I kicked myself for not buying DUK-A and DUKB with proceeds to be generated by selling some of my shippers, be it CMRE preferreds or Antonio Tsako preferreds or even Diana Shipping in my IRA (presumably solid balance sheet these days). I will look at SREA (San Diego, CA gas utility) and PRUH (the common PRU often considered solid insurer (I am guessing that they don’t the old semi toxic Long Term Care insurance, which was so stupidly miscalculated by the actuaries nearly took GE down (they sold it to some other company which I had some and sold..), I looked at baby bonds of SAR (Saratoga) very attractive BDC. With so much recession talk coupled with Jay Powell lacking intelligence of his own, I got gun shy. ATCO-H prices seem to suggest not going dark (private), ditto for FRGAP or even HMLPF price seems to suggest owner will pay if he has money. Next div in May. Best time to unload may have passed when Dow and SP dropping with STUPID hawkish talk from any of the Fed’s silly talks or comments to CNBC,
Seems you are correct Tim. I placed an order at 8.0 yield on Oct 2025, KEY BBB+ this AM, went to the gym. I thought I may supply a bit of liquidity for someone in a panicky mode.
I looked before I left , yields were walking away from me, BUT the order stayed in place. Just got home and the order had hit. 2.5 years, 8%? Now’ I’m gonna find out with whom I’m in bed. (sounds more polite). Trades now back in the 6.5%s. Appareently, Banks are NOT going to be competing with the Commoners who can hold duration (even though 2.5 years is LOW). Maybe the playing field is being leveled to a small degree?
What would an ETF or CEF bond manager be doing for me right now? Rescuing me with Safety? Really? That is the chance I take.
Tim
I feel the pain. That said, to buy cef funds seems a bit agressive as most of them are leveraged more than I’m comfortable with. Seems like the uts or sitting with cds for a bit might be more suitable. I’m not as experienced as some so perhaps I’m missing something. In all events, good luck. SC
Tim, only 3 or 4 REITs I have been following for different reasons. I held EQC pfD I sold before it dropped with a small profit but would buy again considering it’s Sam Zell and the cash they hold. I just bought REXR PB and it could go lower, but the LA area they are well positioned close to the sea ports and rail and with cities starting to restrict growth of new warehouses. UBP PH has good holdings and not worried about coverage of the dividend at this point. KIM PM is close to it’s buy area KIM just converted to a new business model UPREIT, this will allow shopping center owners to exchange their holdings to ownership in KIM and allow tax deferral.