We are entering a "Golden Period" for fixed income investing

[Freedom56]

First thing Monday! What would be a reasonable bid?

The recent trade history is shown below:

https://finra-markets.morningstar.c...64408&startdate=08/05/2021&enddate=08/05/2022

As you can see it does not trade that often and in relatively low dollar value trades. Don't expect to snag large dollar amounts. $4K-10K lots are reasonable expectations for this particular note. Also if you buy before the 15th of August, you have to pay the buyer the accrued interest for the last six months but on the 15th t of August the interest is payed back to you. I would say that a bid of $99.70 is reasonable.

 

[lawman]

The recent trade history is shown below:

https://finra-markets.morningstar.c...64408&startdate=08/05/2021&enddate=08/05/2022

As you can see it does not trade that often and in relatively low dollar value trades. Don't expect to snag large dollar amounts. $4K-10K lots are reasonable expectations for this particular note. Also if you buy before the 15th of August, you have to pay the buyer the accrued interest for the last six months but on the 15th t of August the interest is payed back to you. I would say that a bid of $99.70 is reasonable.

Thanks!!

 

[stevelb]

Freedom56 - How are you able to find a note such as the Bank of America one. When I search on both Fidelity and Vanguard it does not come up. But when I search by the cusip on both platforms the note appears. Is there some other search engine that you use to find interesting notes such as this one. Thanks for all of the information that you share.

 

[Freedom56]

Try this link. All bond trades are tracked by FINRA.

https://finra-markets.morningstar.com/BondCenter/

Select the "search" tab.
Look for "Advanced Search" and click on "show"

Then fill out the information as follows:

Under "Issuer / Bond Type" , select Corporate for "sub-product type"

Under "Maturity Date" select 8/1/2023 and 8/31/2023 (looking for one year maturities)

Under "Ratings and Credit"

For investment grade select Baa3 to Aaa for Moody's Rating and BBB- to AAA for S&P Rating.

Under "Trade Parameters"

Set the dates if you want to limit the search to recently traded notes.

Then click "Show Results" and agree to the terms

You will see the results and then sort the results by "yield" by clicking on yield twice to get descending yield.

The Bank of America note will appear near the top of the descending sort.

You can play around with the search parameters as you want.

 

[stevelb]

Can't thank you enough for those instructions. Worked fine. Will be very useful in the future.

 

[Freedom56]

Can't thank you enough for those instructions. Worked fine. Will be very useful in the future.

No problem... Just keep in mind that Fidelity and other brokerages impose minimum buy quantities on certain bonds (i.e. $50K, $100K, $200K, $250K etc... rather than the minimum of $1K). The bond details page at your broker will indicate the minimum buy quantity.

 

[Freedom56]

Here is an example of how you can turn misery into opportunity. I normally don't buy low coupon bonds/notes that funds buy and sell without hesitation. But in these times one could make a compelling argument to do so. Goldman Sachs issued these 30 month corporate notes with a whopping coupon of 0.4% and it's also callable (but that won't happen).

https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C965171&symbol=GS5136464

Investors and funds are feeling the misery of holding these and are often forced to sell. Looking at the recent sales of this note, you can clearly see some of the desperation to sell. Some large orders filled last week at a YTM over 10% and that's on a one year note with a zero probability of default. Talk about an inflation busting deal. You can see good till cancel orders lined up to snag a deal and the ask price is clearly too high given where treasury and CD yields are. As we move into tax loss selling season we will see more and more of these opportunities. Let's not outbid each other on these deals.

 

[Born2Fish]

Here is an example of how you can turn misery into opportunity. I normally don't buy low coupon bonds/notes that funds buy and sell without hesitation. But in these times one could make a compelling argument to do so. Goldman Sachs issued these 30 month corporate notes with a whopping coupon of 0.4% and it's also callable (but that won't happen).

https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C965171&symbol=GS5136464

Investors and funds are feeling the misery of holding these and are often forced to sell. Looking at the recent sales of this note, you can clearly see some of the desperation to sell. Some large orders filled last week at a YTM over 10% and that's on a one year note with a zero probability of default. Talk about an inflation busting deal. You can see good till cancel orders lined up to snag a deal and the ask price is clearly too high given where treasury and CD yields are. As we move into tax loss selling season we will see more and more of these opportunities. Let's not outbid each other on these deals.

I looked up CUSIP 38150AF26 on my TDAmeritrade tIRA account and can find the GS corporate note but I do not see an option to select a Buy limit.

Shows a fixed price of $97.150 with accrued interest of $1.80 for a total of $97.3.

Is there any way to make an offer at a lower price?

 

[Dash man]

Citigroup has a 3 year new issue at 4.1% coupon that is A rated. CUSIP 17330PY29

 

[Freedom56]

I looked up CUSIP 38150AF26 on my TDAmeritrade tIRA account and can find the GS corporate note but I do not see an option to select a Buy limit.

Shows a fixed price of $97.150 with accrued interest of $1.80 for a total of $97.3.

Is there any way to make an offer at a lower price?

You can't place a buy limit online with TDA or Schwab. You have to phone in the order to their fixed income trading desk. With Fidelity you can but it's only good for the day. You have to phone in a good till cancelled order. My order for this one is in. I just need a fund to dump it.

 

[lawman]

Citigroup has a 3 year new issue at 4.1% coupon that is A rated. CUSIP 17330PY29

Just placed an order but has not been filled.

 

[lawman]

Citigroup has a 3 year new issue at 4.1% coupon that is A rated. CUSIP 17330PY29

I placed an order to buy this but it was submitted as a day only....Schwab just told me on the phone that it would definitely fill but that it would be another week before doing so..Something to do with it being a new issue..Will the order cancel today or is Schwab correct?

 

[aja8888]

I placed an order to buy this but it was submitted as a day only....Schwab just told me on the phone that it would definitely fill but that it would be another week before doing so..Something to do with it being a new issue..Will the order cancel today or is Schwab correct?

If you read the security description and/or trade details, it stated the notes won't be available until 8/15 to trade.

 

[lawman]

If you read the security description and/or trade details, it stated the notes won't be available until 8/15 to trade.

So will my order fill then or will it cancel today?

 

[Freedom56]

I placed an order to buy this but it was submitted as a day only....Schwab just told me on the phone that it would definitely fill but that it would be another week before doing so..Something to do with it being a new issue..Will the order cancel today or is Schwab correct?

It's a new issue so it defaults to a Good Till Cancel order and won't execute until the settlement date. They won't grab your money until it executes.

 

[lawman]

It's a new issue so it defaults to a Good Till Cancel order and won't execute until the settlement date. They won't grab your money until it executes.

Gotcha! thanks!

 

[Born2Fish]

Citigroup has a 3 year new issue at 4.1% coupon that is A rated. CUSIP 17330PY29

Thanks - I put in an order!

 

[Dash man]

So will my order fill then or will it cancel today?

You’re good, it’ll still be in your open orders until it fills.

 

[aja8888]

For those of you that want a laugh!

Goldman Sachs and Chase helped this company sell $600 million in new debt (bonds) a month before the walls caved in. You mean we have to believe GS and Chase had NO IDEA this was going to crater?

https://wolfstreet.com/2022/08/09/f...-five-years-after-it-emerged-from-bankruptcy/

Back on June 27, the company announced a $600-million private-placement debt sale, that had been “upsized from previously announced $500 million due to robust demand.” It consisted of $350 million in Senior Secured Term Loans and $250 million in Exchangeable Senior Secured Notes. The sale was arranged by Goldman Sachs and JP Morgan Chase.

This morning, the company confirmed the previously warned-about plunging revenues and a gigantic loss 2.4 times the size of its revenues. In addition, it disclosed an investigation into its financial reporting. And it warned, that it might not be able to pay off its bonds due in June 2023, though it had just raised $600 million by selling new debt in order to pay off these bonds, and that as a consequence of all of this, “there is substantial doubt about the Company’s ability to continue as a going concern.”

So, this is a bankruptcy candidate. If it files for bankruptcy, it would be the second time.

The already imploded shares collapsed another 42% to $0.64 at the moment, down by 98% from their high in February 2021 – yes that infamous February when it all started coming apart.

What fools bought these new bonds?

 

[lawman]

Goldman Sachs and Chase helped this company sell $600 million in new debt (bonds) a month before the walls caved in. You mean we have to believe GS and Chase had NO IDEA this was going to crater?

https://wolfstreet.com/2022/08/09/f...-five-years-after-it-emerged-from-bankruptcy/




What fools bought these new bonds?

Could this be a problem for J.P.Morgan Chase? I have c.d's from them.

 

[Freedom56]

What fools bought these new bonds?

I have never heard of this company until today. These fools bought the new debt, but they lost other people's money so it's okay:

https://stockzoa.com/cusip/05351xab7/

Vanguard was a major holder of Avaya (with other people's money).

https://fintel.io/so/us/avya

 

[Freedom56]

Could this be a problem for J.P.Morgan Chase? I have c.d's from them.

It won't matter to JPM or GS. CDs are FDIC insured.

 

[lawman]

It won't matter to JPM or GS. CDs are FDIC insured.

I'm over the amount that is insured.

 

[aja8888]

I have never heard of this company until today. These fools bought the new debt, but they lost other people's money so it's okay:

https://stockzoa.com/cusip/05351xab7/

Vanguard was a major holder of Avaya (with other people's money).

https://fintel.io/so/us/avya

That was one of the Lucent spin off's years ago. They were pretty profitable until Private Equity got their jaws into them. That caused the first BK. Now they are heading for #2 right after GS and Chase helped them get $600 million to pay off $350 million in bonds coming due next year, which they already said that the payoff is doubtful. If you haven't read the article, the history is all in there.

 

[Freedom56]

That was one of the Lucent spin off's years ago. They were pretty profitable until Private Equity got their jaws into them. That caused the first BK. Now they are heading for #2 right after GS and Chase helped them get $600 million to pay off $350 million in bonds coming due next year, which they already said that the payoff is doubtful. If you haven't read the article, the history is all in there.

I read the report on Bloomberg. I doubt there will be any consequence for JP Morgan and Goldman Sachs. I the end, investors who buy funds get burned. Those funds continue collect fees. Their fund managers get their big bonuses and life goes on...