Corporate and Agency GSE Bond DEALS and NEW ISSUES

[COcheesehead]

Any concerns with the safety of Goldman Sachs bonds rated BBB+

Not really, but duration adds risk too, so keep that in mind.

 

[jgman]

Not really, but duration adds risk too, so keep that in mind.

Got it thanks!

 

[Mulligan]

The downside to agency bonds is their lack of reliable income, meaning they are callable, which may or may not happen, which goes back to reliability. They are also fairly illiquid so you may or may not be able to sell them prior to maturity.

There are higher yielding, better liquidity out there with just a little more risk, but still investment grade. Investment grade bonds start at BBB- and higher.

I agree. Like you mentioned YTM, and current income arent the same so that makes individual preferences factor in. But bonds with “make whole” clauses provide one a more assured longer income stream from fear of call. I personally am eyeing a 2044 7.25% YTM (but present yield more around 6.5%) from a BBB+ that parent has delevered and where the senior unsecured resides at. Things sure change, company offered tender 2 plus years ago at $130 range and half accepted. The remaining half are now in the lower $70s despite a credit upgrade afterwards.

 

[olyveoil]

I thinking about GS 2 year bond -- not callable. 6.10% w/ semi annual coupon

38150AVE2

Thoughts?

 

[imbatman]

If it were me in the market for a new-issue taxable bond, today I would be buying 78014RRH5 RBC (A1) 7% 12-year with 2-year call protection......or secondarily 06055JCQ0 BOA (A1) 7% 12-year with 2-year call protection

 

[Montecfo]

I thinking about GS 2 year bond -- not callable. 6.10% w/ semi annual coupon

38150AVE2

Thoughts?

I do not know your objectives but in my opinion longer duration non-callables make the most sense right now.

 

[jgman]

I do not know your objectives but in my opinion longer duration non-callables make the most sense right now.

I have treasuries maturing from a 1-year ladder and am wondering whether to continue a one or five year treasury ladder vs investing in higher yielding 10+ year corporate bonds. Seems like a good time to lock in some longer term rates.

 

[COcheesehead]

I have treasuries maturing from a 1-year ladder and am wondering whether to continue a one or five year treasury ladder vs investing in higher yielding 10+ year corporate bonds. Seems like a good time to lock in some longer term rates.

I’ve been adding duration, non callables and flipping out of some lower coupon agency and muni bonds. I don’t have to be perfect, just in a better position than I was.

 

[pb4uski]

I do not know your objectives but in my opinion longer duration non-callables make the most sense right now.

In addition to non-callables I also look for callables with low coupons that IMO are unlikely to be called... for example this week I bought a couple A-rated corporates meturing in 2024 and 2029 with 3.6% and 3.5% coupon rates at a discount with 5.8% and 6.0% YTMs. I think it is highly unlikely that the 2024 maturity will be called and fairly unlikely that the 2029 maturity will be called.

To get them I screen for callables maturing in a certain year that are trading at less than a certain price... obviously the hurdle is lower for longer maturities and less low for nearer maturities.

 

[olyveoil]

I am looking for shorter duration Have a ladder with 6 month t bills with average north 0f 5.4%. want to extend duration to 1-5 years.

That 7% does look nice.

 

[pb4uski]

What 7%?

If you have a 5-year Treasury ladder you should be able to yield about 5%.

 

[olyveoil]

What 7%?

If you have a 5-year Treasury ladder you should be able to yield about 5%.

Post #280. 06055JCQ0

I stepped away from my screen then hit submit several minutes later

 

[JC888]

Let's keep the BOND cusp # coming that has great rate. Still if you found some decent rate thats none callable and long duration highly appreciate it if you share it here.

 

[pb4uski]

If it were me in the market for a new-issue taxable bond, today I would be buying 78014RRH5 RBC (A1) 7% 12-year with 2-year call protection......or secondarily 06055JCQ0 BOA (A1) 7% 12-year with 2-year call protection

I am looking for shorter duration Have a ladder with 6 month t bills with average north 0f 5.4%. want to extend duration to 1-5 years.

That 7% does look nice.

Post #280. 06055JCQ0

I stepped away from my screen then hit submit several minutes later

Yes, those do look interesting.

The RBC issue is no longer available at Schwab but because I limit the amount invested in any single corporate issuer I am full up on RBC at this point.

The BoA issue looks interesting and I may have room for that but I'll just need to figure out what I can sell in order to buy it.

 

[JC888]

Did recent market down turn brought down most of the Corp bond price?

 

[COcheesehead]

Did recent market down turn brought down most of the Corp bond price?

Rising longer term interest rates brought down a lot of bonds.

 

[Montecfo]

In addition to non-callables I also look for callables with low coupons that IMO are unlikely to be called... for example this week I bought a couple A-rated corporates meturing in 2024 and 2029 with 3.6% and 3.5% coupon rates at a discount with 5.8% and 6.0% YTMs. I think it is highly unlikely that the 2024 maturity will be called and fairly unlikely that the 2029 maturity will be called.



To get them I screen for callables maturing in a certain year that are trading at less than a certain price... obviously the hurdle is lower for longer maturities and less low for nearer maturities.

I also seek low coupon callables that by definition will trade at a discount. This is another way to get a better total return.

 

[COcheesehead]

Anybody else own 3133EPUM5, 6.65% agency bonds? It went magically to exactly par of 100 today, but I don’t see a call notice.

 

[pb4uski]

Yes, those do look interesting.

The RBC issue is no longer available at Schwab but because I limit the amount invested in any single corporate issuer I am full up on RBC at this point.

The BoA issue looks interesting and I may have room for that but I'll just need to figure out what I can sell in order to buy it.

Bought some of the BoA issue today... order is still open but that happens a lot with new issues that haven't yet closed. 7% is my highest yielding bond, though I have a few preferreds that are north of 7%.

 

[pb4uski]

Anybody else own 3133EPUM5, 6.65% agency bonds? It went magically to exactly par of 100 today, but I don’t see a call notice.

I don't own it but Schwab is currently showing 3 bids of 98.161 to 98.900 and one ask of 99.850 and an "evaluated price" of 99.3661.

 

[COcheesehead]

I don't own it but Schwab is currently showing 3 bids of 98.161 to 98.900 and one ask of 99.850 and an "evaluated price" of 99.3661.

The $100 was the mark to market price from yesterday. Fidelity is showing a bid right now of $99.
It just seemed odd for a mark to market to be exactly par.

 

[pb4uski]

Agree... very odd.

 

[olyveoil]

Goldman has a new issue. 7% coupon. callable in 1 year. 38150AV85

 

[COcheesehead]

RBC and Bank of America also have some new 7% coupons with 2 year calls. Then every 6 months after that.
78014RRH5
06055JCQ0
Tells me rates are going to continue to go up.

 

[olyveoil]

RBC and Bank of America also have some new 7% coupons with 2 year calls. Then every 6 months after that.
78014RRH5
06055JCQ0
Tells me rates are going to continue to go up.

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