Corporate and Agency GSE Bond DEALS and NEW ISSUES

[COcheesehead]

Neither of those are available to me on Schwab. Not sure why.

I use Fidelity.

 

[jldavid47]

For those that have no problem with callable GSEs:

CUSIP: 3130AXPZ5
Issuer: FHLB
Coupon Rate: 6.9%
Settlement date: 11/06/2023
Maturity date: 11/06/2043
Call provision: Callable in whole or part Daily beginning 05/06/2024 with 5 days notice.
Minimum purchase (on Schwab): $10,000

 

[Bruno]

Everyone go on vacation? Tbill matured and looking for something to invest it into. Next rung in ladder is june 24 so might leave in FZDXX 5.2% for a month.

 

[imbatman]

ha ha it has been a significant recovery in bond prices/ lowering of yields in the last 2 weeks........so can't speak for others, but I have been on the sideline waiting to get a better guess-feel on direction

 

[COcheesehead]

ha ha it has been a significant recovery in bond prices/ lowering of yields in the last 2 weeks........so can't speak for others, but I have been on the sideline waiting to get a better guess-feel on direction

I am all in.
Good coupons, durations went up significantly in the last week or so. So that’s good. If rates continue up, what I bought/own makes my plan work anyway so that’s good. If I have a clunker or two, so be it. I at least get my money back at the end.

 

[pb4uski]

+1 I don't really try to time bonds. If I have powder available then if I can find something that is reasonably attractive then I'll buy.

At this point, if I can fill out my ladder and increase the weighted average term to maturity towards my target at a yield that exceeds what I'm earning on SWVXX then I'll do it.

Could yields drift up from here, plateau and then retreat later... probably but I'm not concerned with capturing every possible basis point of yield.

 

[copyright1997reloaded]

Today's 30-year auction was not good. You can't see that from the rate (down from last month) but instead from the difference between the when issued trading and actual results (5.3 basis points). This is a big delta.

Foreign bidders were also down, as was direct. That means that more of the auction went to dealers (aka banks) who will not want to hold these long dated assets for long.

That is why we are now seeing a sell off in bonds (lower prices, higher yields). As I type this, the 30yr is up 0.123% in yield, and even the 7-year up 0.084% in yield.

 

[Bruno]

ha ha I have been on the sideline waiting to get a better guess-feel on direction

Thanks for the reply, that is what i also notice. Will also hold off to see where its headed.

 

[imbatman]

Fidelity bond selling question. I notice that other sellers in the market are able to sell their bonds and set a minimum sale quantity. If I try to sell say, 50 bonds, I can only get Fidelity to sell those 50 and they set a minimum sale size of 50 too.....which excludes a lot of small buyers.

Is there a way to set a smaller sale quantity than your lot size on Fidelity online (not interested in calling)?

 

[COcheesehead]

Fidelity bond selling question. I notice that other sellers in the market are able to sell their bonds and set a minimum sale quantity. If I try to sell say, 50 bonds, I can only get Fidelity to sell those 50 and they set a minimum sale size of 50 too.....which excludes a lot of small buyers.

Is there a way to set a smaller sale quantity than your lot size on Fidelity online (not interested in calling)?

I would do 5 sales of 10 or some combination of 10/20. That is how I have done it. I alter the ask price accordingly so they don’t all appear the same. It has worked for me.

 

[flyingaway]

Today's 30-year auction was not good. You can't see that from the rate (down from last month) but instead from the difference between the when issued trading and actual results (5.3 basis points). This is a big delta.

Foreign bidders were also down, as was direct. That means that more of the auction went to dealers (aka banks) who will not want to hold these long dated assets for long.

That is why we are now seeing a sell off in bonds (lower prices, higher yields). As I type this, the 30yr is up 0.123% in yield, and even the 7-year up 0.084% in yield.

Can you buy the auction on Fidelity? I only see the 1, 3, 6 month new issues.

 

[copyright1997reloaded]

Can you buy the auction on Fidelity? I only see the 1, 3, 6 month new issues.

I've never done so (no interest in going 30-year fixed w/no inflation hedge). But I believe it is like other issues and avialable on Fidelity: The 30-year is only monthly. The next tenative auction is annouce on Thursday 12/7, auction on Tuesday 12/12, issue on Friday 12/15. I believe this is a reissue of the November 30 year, CUSIP 912810TV0, bonds maturity November 2053).

You could call Fidelity to confrm.

ETA: Since this (the November auction) is the most recent auctioned 30-year, you can easily track trading (in the secondary market) on it on CNBC:
https://www.cnbc.com/quotes/US30Y

 

[COcheesehead]

Can you buy the auction on Fidelity? I only see the 1, 3, 6 month new issues.

You can buy them on the secondary market. The yield right now is just under 4.8%.

 

[olyveoil]

Dumb question: Corporate bonds for CAD companies. US person gets paid coupons in CAD converted to USD or just USD?
IE BMO corporate bond that pays 6.5% coupon twice per year. Will the $10,000 bond holder receive $325 twice per year?

 

[jazz4cash]

Dumb question: Corporate bonds for CAD companies. US person gets paid coupons in CAD converted to USD or just USD?
IE BMO corporate bond that pays 6.5% coupon twice per year. Will the $10,000 bond holder receive $325 twice per year?

Got a CUSIP? What is CAD? Canada? I have several bonds from Canadien Banks that pay in USD.

 

[olyveoil]

got a cusip? What is cad? Canada? I have several bonds from canadien banks that pay in usd.

cusip 06375mg74

 

[jldavid47]

Got a CUSIP? What is CAD? Canada? I have several bonds from Canadien Banks that pay in USD.

CAD is Canadian Dollars

 

[jazz4cash]

The CUSIP is for Bank of Montral (BMO). They do have US subsidiaries. I own BMO bonds and mine pay interest in USD. I haven’t found a prospectus yet to verify currency for interest payments of a specific bond.

 

[jldavid47]

I got notice of call on this GSE bond I have in my IRA: FFCB 5.875% 07/17/2026

It settled on 7/17, has been callable since 10/17 and will actually be called on 12/7 (which is when Schwab says the funds should be credited to my account). This is the first GSE I own that has been called since February. I suspect more will follow.

This one is actually convenient for me as I wanted to do a Roth conversion for close to the called amount before the end of the year so I will use those funds for that (including the estimated tax hit).

No regrets.

 

[imbatman]

Very interesting they are calling 5.875% as I have numerous 6+% that have been callable (but not called) since summer. Not like they could easily replace that 5.875% at a substantially lower rate today.

 

[Montecfo]

My rungs are full as far as individual bonds in my big ladder.

My step ladder needs a few rungs but may keep that in MM for now.

As far as other strategies I'm thinking of moving my variable rate (bank loan) fund money to high yield or to a preferred stock closed-end fund trading at a discount.

Owning the variable rate funds has worked out so well I have been reluctant to change but the closed-end funds look very interesting and this seems like a good time.

 

[pb4uski]

Can you elaborate on the step ladder vs the ladder?... new concept for me.

I've been finding what I believe are good quality floating rate preferred stocks yield 6-9%+ and have been adding those a little at a time with GTC limit orders.

• ALL/PRB Allstate 8.71% yield BBB-
• ATH/PRE Athene (Apollo subsidiary) 7.58% yield BBB
• C/PRJ Citigroup 9.34% yield BB+
• JXN/PRA Jackson Financial 7.91% yield BB+
• MET/PRA MetLife 6.81% yield BBB-
• RZC Reinsurance Corporation of America 6.77% yield BBB+

Keep in mind that preferred stock ratings are typically two full notches below debt ratings (which I personally think is too much).

 

[COcheesehead]

I have been adding to two bond CEFs, PAXS and WDI. Both paying 12% plus. Both in the black for me YTD, both earning more than their distribution and earnings are increasing. These are less than 5% of my fixed income, but generate about 15% of my cashflow.

 

[imbatman]

I know I am supposed to keep the big picture in mind but I just can never pull the trigger on expense ratios over 1%......

 

[COcheesehead]

I know I am supposed to keep the big picture in mind but I just can never pull the trigger on expense ratios over 1%......

That’s the nature of leveraged CEFs. They are what they are. Keep in mind returns are quoted after expenses are paid.