Sojourner
Thinks s/he gets paid by the post
- Joined
- Jan 8, 2012
- Messages
- 2,618
I received an email from my brokerage today that said they're participating in a callable step-up note offering. Here are the details:
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Ratings: Aa3/A
Coupon: 3.50% to 11/30/2020; 4.50% to 11/30/2022; 5.00% to 11/30/2023
Maturity: 11/30/2023
Payment Frequency: Semi-Annual
Call Status: Callable 11/30/2019 @100, Semi-Annually-thereafter
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I've read up on the basics of callable step-ups, so I get the general idea. My question is, does this seem like a good place to park some idle cash that otherwise would be sitting in a money-market savings account earning 1.90%? I have no immediate or short-term need for the cash in question, so it would be fine with me if the note wasn't called early and I ended up earning 3.50 - 5.00% over the 5 years till maturity. Any downsides to this that I'm not seeing?
----------------------------------------------------------
Ratings: Aa3/A
Coupon: 3.50% to 11/30/2020; 4.50% to 11/30/2022; 5.00% to 11/30/2023
Maturity: 11/30/2023
Payment Frequency: Semi-Annual
Call Status: Callable 11/30/2019 @100, Semi-Annually-thereafter
----------------------------------------------------------
I've read up on the basics of callable step-ups, so I get the general idea. My question is, does this seem like a good place to park some idle cash that otherwise would be sitting in a money-market savings account earning 1.90%? I have no immediate or short-term need for the cash in question, so it would be fine with me if the note wasn't called early and I ended up earning 3.50 - 5.00% over the 5 years till maturity. Any downsides to this that I'm not seeing?