Corporate and Agency GSE Bond DEALS and NEW ISSUES

[imbatman]

[Mod Edit] I was hoping we could potentially just share new issue or well priced secondary market Corporate Bonds and Agency GSE Bonds here? Please no economic theory or prediction discussions so we can keep this alive.

There are separate threads for TREASURIES and CDs/MMs/Savings Accounts.

Here is a good reference on Agency/ GSEs and how these may be useful for those with high local / state tax rates. Make sure you do your due diligence on bond ratings and your risk tolerance.

Please always include the CUSIP / Coupon Rate / Term / Call Date

To start, here are a couple of new agency that were posted today:

3130AWLM0 FHLB 6.14% 7-Year, callable 6-months (Jan 2024) - was on Fido
3130AWLN8 FHLB 6.30% 20-Year, callable 6-months (Jan 2024)

[imbatman]

Thanks for bringing this back mods!! Just to round out the links above for investment product threads, we also have separate posts for PREFERRED STOCKS and MUNICIPAL BONDS.

Back to the topic at hand............

I will say the above 6.14% sold out on Fido in less than 4 hours, and on Friday I purchased another agency/gse new issue that day (3130AWMM9 FHLB 6.15% 10-year, callable 6-months Jan 2024)...and it also sold out in about 3 hours. So these are going quick.

On Thursday I picked up this corporate on on Fido secondary market at $83.41 (about 6.35%), it has gone up a little but still in the same range. I buy corporates in my IRAs so don't sweat the tax treatment on discount purchase but do appreciate the discount / pre-payment of my interest so I have more funds to play with now:

91159HHW3 USB (A3/A) 10-Year (2029) 3.00% callable 04/30/2029

[PhotoAviation61]

I have been buying Agency bonds since last fall and there is a new issue FHLB bond that has a call provision I have never seen before.

3130AWL24 FHLB 6.15% 5-Year, callable 1-month (Aug 2023)

I have never seen such a call provision. Callable one month after issue and every month thereafter.

[gauss]

I have purchased Farm Credit Bank agency bonds on several occasions at Vanguard.

Here is a FHLB currently available on Vanguard.
Federal Home Loan Bank 6.25% due 7/24/2028 Callable 08/23
3130AWLE8

-gauss

[COcheesehead]

I own about 8-10 agency bonds in amounts of $5,000 to $110,000 all with coupons just below 6% to as high as 6.61%. All the ones within their call window have not been called.

[gauss]

Quote:

Originally Posted by COcheesehead I own about 8-10 agency bonds in amounts of $5,000 to $110,000 all with coupons just below 6% to as high as 6.61%. All the ones within their call window have not been called.

COcheesehead,

You might be in a good position to comment on a question of mine.

I was curious how much do market rates need to go below the stated coupon rates and/or for how long before an Agency bond is called.

I really like my Agency bonds but fear that it may be temporary due to call provisions.

Thanks for any insight that you may be able to provide.

-gauss

[COcheesehead]

Quote:

Originally Posted by gauss COcheesehead, You might be in a good position to comment on a question of mine. I was curious how much do market rates need to go below the stated coupon rates and/or for how long before an Agency bond is called. I really like my Agency bonds but fear that it may be temporary due to call provisions. Thanks for any insight that you may be able to provide. -gauss

I think it depends on more than just the coupon. It also depends on how much of the loans are repaid in the short term as well. The short answer is it’s hard to predict.
I buy new agencies based on them being called, but at a high enough coupon that if not, I can live with it.
If you want dependable income, I would look elsewhere or buy below par agencies at CD ish coupons on the secondary market. They might hold up longer and you are buying at discount.

[aja8888]

Quote:

Originally Posted by gauss COcheesehead, You might be in a good position to comment on a question of mine. I was curious how much do market rates need to go below the stated coupon rates and/or for how long before an Agency bond is called. I really like my Agency bonds but fear that it may be temporary due to call provisions. Thanks for any insight that you may be able to provide. -gauss

I had a FHLB 5.5% note bought late last year called in June. Then they immediately issued new notes with higher coupons. Go figure.

[dobig]

Quote:

Originally Posted by COcheesehead I own about 8-10 agency bonds in amounts of $5,000 to $110,000 all with coupons just below 6% to as high as 6.61%. All the ones within their call window have not been called.

I bought $400k of 2038 agency bonds with coupons of 6.23% to 6.375% certain they would be called in 3 months. I would be ecstatic if they didn't get called. Cusips 3133EPKT1, 3133EPMD4 and 3133EPNE1

[pb4uski]

Quote:

Originally Posted by PhotoAviation61 I have been buying Agency bonds since last fall and there is a new issue FHLB bond that has a call provision I have never seen before. 3130AWL24 FHLB 6.15% 5-Year, callable 1-month (Aug 2023) I have never seen such a call provision. Callable one month after issue and every month thereafter.

Callable a month after issue isn't totally uncommon. In fact, about 6 months ago I actually had one called about a month after issue, but it is rare in my experience. Stuff happens.

[MarieIG]

Quote:

Originally Posted by aja8888 I had a FHLB 5.5% note bought late last year called in June. Then they immediately issued new notes with higher coupons. Go figure.

Gotta wonder who made that decision!

[aja8888]

Quote:

Originally Posted by MarieIG Gotta wonder who made that decision!

Totally surprised me too!

[COcheesehead]

Quote:

Originally Posted by MarieIG Gotta wonder who made that decision!

As I mentioned up thread, the decision to call is based on more than just the coupon.

[imbatman]

78014RPB0 RBC (A1/A) 5.7% 10-Yr (first call 5-years in 2028) on Fido

I'm not pulling the trigger yet on this as interest rate likely a little low once Fed increases, but if you aren't a cheap b8stard scrounging for every penny (guilty as charged), the idea of locking in 5.7% for 5-years from a top rated bank is pretty appealing

[COcheesehead]

I just did a quick scan this morning and all the highest yielding investment grade bonds are BDCs, banks and REITs. Pretty easy to identify what the market views as risky.

[pb4uski]

BDCs and REITs I totally get, but banks? or are the banks that you are referring to regional banks and not the big guys?

[COcheesehead]

Quote:

Originally Posted by pb4uski BDCs and REITs I totally get, but banks? or are the banks that you are referring to regional banks and not the big guys?

Regionals mostly like Key, Valley Bank, Ally, but some former big players like Deutsche are some that I remember that are near the top of the yields.

[MrEd]

3130AWLM0 FHLB 6.14% 7-Year, callable 6-months (Jan 2024) - was on Fido
3130AWLN8 FHLB 6.30% 20-Year, callable 6-months (Jan 2024)

These bonds seemingly offer good rates for long periods of time. However, these bonds are CALLABLE which means they can be retired in six months by the issuer.

Imo, NOT a good deal.

[MrEd]

I really like my Agency bonds but fear that it may be temporary due to call provisions.

Someone here is thinking.

You should look for NON CALLABLE bonds at attractive rates otherwise you are holding a short-term Cd at best.

[COcheesehead]

Quote:

Originally Posted by MrEd I really like my Agency bonds but fear that it may be temporary due to call provisions. Someone here is thinking. You should look for NON CALLABLE bonds at attractive rates otherwise you are holding a short-term Cd at best.

And some people buy agency bonds as such.