COcheesehead
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Or search yield to worst. It will show the yield to the first call date.
We are entering a "Golden Period" for fixed income investing
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Or search yield to worst. It will show the yield to the first call date.
ya.. i did sort through them all before i posted... i didnt see any that i would consider better than what i sent in the thread. Ill be waiting... besides i just sent them out because the previous person said they had not looked around. Thanks for the suggestions
COcheesehead
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Search beyond the new issues.
Is the prospect of a U.S. default technical or otherwise impacting interest rates short or long? Or is the prospect too remote to affect price? Seems like longer term rates would go up to compensate investors for the added perceived risk of a potential credit downgrade. I’m sure the self preservation gene will kick in & all parties wil realize a scorched earth policy would leave no one unscathed. Most likely they’ll kick the can. Bottom line does anyone think a buying opportunity will result? Maybe some 6% CDs in the 3-5 year range?? Anyone wanna dust off their crystal ball
Montecfo
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In 2011 Treasuries paradoxically rallied during debt ceiling standoff. Perhaps this time will be different.
Freedom56
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All of those are fine. You will likely be able to buy them for less on the secondary market after they close. The reality is that the financial sector is the largest issuer in the corporate bond market. Fixed income investors are going to crowd into the largest and safest banks which will not change until the market adjusts itself back to normal interest rates. This will take several years.
Freedom56
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A credit downgrade is all but inevitable. The deficit is projected to reach $53T by 2033 unless something is done. Many corporate bonds are trading at lower yields than treasury bonds and notes with the same duration.
To anyone. I suppose the US treasury debt is a TINA trade category. No matter how dysfunctional our media makes things look in the US their really isn’t anywhere else to go to or safety. I know I’ve been lured into watching too much TV that’s entertainment masquerading as news or useful information. This forum has helped me make a little scratch. I thank each & everyone one of you for being generous with your thoughts & collective knowledge.
pb4uski
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Recently, I have bought some callable issues on the secondary market that have 3-5 years left to maturity but have lower coupons... 4% or lower. Admittedly, they don't yield as much as new issues, but I'm thinking that the call risk is a lot lower so I'll get a yield in-between recent issue callables which have a higher risk of getting called and non-callables. I'm using these to fill the 3-5 year rungs on my ladder. Make sense?
Was thinking of taking a half position on some 36 month credit union CDs yielding 4.5% today. My spidey sense is sending conflicting signals on which way rates will break once earnings are reported. But then we have another CPI report & Fed meeting. Will they be hawks or doves when they move their lips? Pretty dead around here. Too early for happy hour. Must be on the golf course.
sounds like similar logic to what i would/am using.
i keep watching the keybank one you had mentioned previously .. its moved into some decent yield territory a couple of times on the secondary market. I have also become a fan of seagate and wd due to their greater movement
COcheesehead
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These must be call protected because I am seeing 4.95% on 3 year CDs.
jazz4cash
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COcheesehead
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All the CDs I see specify whether they are call protected or not. I don’t think there is an assumption. I could be wrong, but I always see call
protection or lack there of as an attribute of the CD. At the 4.5%, which is below current rates, I am guessing they include some call protection.
RetiredAndLovingIt
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I locked in 5.35% on a Promotional 22 Month savings CD and also in a 22 Month IRA CD at Langley FCU website. Took ages to get the account opened with the $5 opening deposit. They don't take Discover Credit or Debit and I kept retrying the cards using the same secure link and by doing so locked my new account and no one seemed to be able to fix it for over a week. I was so sure the deal would expire before we got it sorted. Anyway done deal now, the rate is locked in, funds are in the process of being transferred. 180 day EWP penalty and they are the nicest people to deal with once you actually get to talk to the correct people.
Freedom56
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I sold out of my position in Seagate 4.875% 2024 notes just over par back in February. I mentioned in previous posts a few months ago that the yield was moving below treasuries of the same duration which did not make sense. I rolled the proceeds from the sale into RBC and CIBC notes at higher coupons. I had been holding those notes since March 2020. The Seagate notes have a maturity of March 2024 but a call date of January 2024. I assumed depending on where rates are that Seagate will call these January 2024 as they have for their prior notes that I held. Also consider that these Seagate Notes have debt covenants from their latest report:
"The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio, and (3) a minimum liquidity amount. Seagate was in compliance with the covenants as of March 31,
2023. We continue to evaluate our debt portfolio and structure to comply with our financial debt covenants."
If the debt covenants are triggered, they are forced to call the notes and with a "make whole call provision" and benchmark treasury yields where they are, there would be no premium above par for an early call. These covenants are designed to protect the bond holder but they can backfire for anyone buying securities over par.
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jazz4cash
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Those sound like brokered CDs. I don’t ever recall a brokered CD from a credit Union. I only see them listed at the CU website or depositaccounts. I don’t see any reference to call/no call. So this is something I refuse to worry about.
COcheesehead
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I introduced it as question because I see call protection related to a CD every time I research a CD. It not something to worry about. It is something to be aware of.
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I like this idea. I wonder if there is a rule of thumb for the delta interest rate where calling a bond makes clear sense. I recognize that it depends upon whether the company has the cash to pay it off or can re-finance, but considering all of the costs, I would think a 4% coupon would be in pretty good shape for a year or longer if not the entire period.
i agree. I've bought some callable notes with 3 1/2 and 4 yr duration and in that same range of coupons.
Freedom56
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This TD Bank 6% 5 year note was filed yesterday. It has one year call protection.
For those worried about early calls, keep in mind that banks need liquidity now and just like those bonus rate CDs that we saw a few weeks ago, they will need to raise coupons on notes to entice investors. With short term rates at 5%, it's unlikely that banks are going to call notes with coupons 5%-6% unless short term rates drop dramatically. Also consider that the commissions for these notes are 2.35%, which implies that a bank would want to amortize the commission over several years.
https://www.sec.gov/Archives/edgar/data/947263/000114036123019308/brhc20051655_424b2.htm
For those worried about early calls, keep in mind that banks need liquidity now and just like those bonus rate CDs that we saw a few weeks ago, they will need to raise coupons on notes to entice investors. With short term rates at 5%, it's unlikely that banks are going to call notes with coupons 5%-6% unless short term rates drop dramatically. Also consider that the commissions for these notes are 2.35%, which implies that a bank would want to amortize the commission over several years.
https://www.sec.gov/Archives/edgar/data/947263/000114036123019308/brhc20051655_424b2.htm
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