Born, TNCAF would not be a good Roth choice. Mainly because Canada will most likely withhold 15% foreign dividend tax even though we have a tax treaty. And being there is an extra intermediary involved in the purchase everybody blames the other person. The 15% can be recaptured at tax filing but only in a taxable account. So I never put CAD issues in my Roth. I fought that battle several years ago and wont do it again.
Also another consideration is issues like TNCAF and SLMBP have very low adjustments attached to Libor. So the reason why they are high yielding now is because prices are well below par, and Libor is very high. If Fed ever starts cutting these could drop like a rock, so you have to stay on top of these.
If your Roth is “sacred” like I am with mine, you may consider a safer play. PLDGP is the only preferred from number 1 power house Prologis. It was issued in 1996, and its first call date is November 2026. Being its an 8.54% BBB+ rated preferred and Prologis has never ever issued another preferred this is likely a goner then. So at todays purchase of $54.90 and back out the $1.06 divi as it goes exD next week, this is about a 6.2% YTC. Technically its a perpetual but they will redeem it. They have bought back half the $100 million issuance over the years so there isnt but $50 million left. And it doesnt trade much but some entity is selling it off at that price.
Prologis has A rated debt and it has a small 13% debt to capitalization. Quality upon quality here. I have personally maxed out my position here. Its not a cap gain play really, just suck the yield out of it until they redeem it.
