Corporate Bonds, (not bond funds) buys and sells.

[Tacitus]

So periodically, though more so in past, am buyer of individual corporate bonds. Did not see a specific thread devoted to such. If there is one will delete this one, or try to, and repost there.

So on Monday plan to place limit order at last market price to buy bonds for MAIN. MAIN is strong BDC been around for long time, paid dividends throughout 2008, history of increasing dividends, solid financial history, The bond offers yield to worst of 6.219% at current price, matures 3/11/29, earliest call date 2/1/29, is make whole call, no Moodys but S&P rates as last could tell as BBB-, so still investment grade. I plan to hold till matures or called so do not need to predict interest rate movements or changes even in credit rating. Can't place order until market opens. Cusip 56035LAH7. Basically like the idea of locking in almost 6.3% for next 4 years, absent default. Will hold in IRA.

Am posting for do not know if others have any interest in individual corporate bonds. Guess will see. This bond trades at premium but historically this is a good price for it, imo.

 

[Texas Proud]

It sounds interesting to me.... might be like the preferred share thread... I got a lot out of the one... heck, moved 15% or more of my portfolio due to it..

 

[Mr._Graybeard]

As a holder of individual bonds (a few corporate) I like to see this thread established.

 

[aja8888]

As a holder of individual bonds (a few corporate) I like to see this thread established.

Ditto!

 

[COcheesehead]

I own a lot of individual bonds. Will chime in as needed.
My advice:
Always look at the equity behind the bond and take that into consideration
Ladder to minimize interest rate risk
Judge on YTW

 

[Tacitus]

Seems like its a BINGO!

 

[Tacitus]

Not sure if sufficient interest to warrant further posts, but for what it is worth, considering for Monday as way to park cash a Bank of America bond, matures 8/1/25, yield 4.62%, in IRA, Moodys rating A1 (even if was not don't think any real likelihood of Bank of America going bust in 3 mos.). Only proviso must wait till bond market opens before can place trade and review effective yield on preview page to confirm yield is as represented on Fidelity's bond screen. Cusip 06051GFS3. If so a safe 4.62% seems good to me. Trading too a bit below par so less money outlay.

 

[YellowSubmarine]

Good thread. I own a near even split of Corporates and munis (both tax free and taxable). In addition, I hold Agency paper. Each have their special analysis benchmarks. For corporates, I look at the underlying company per equity analysis. Most important are financial strength, PE ratio and overall sentiment. I avoid negative earning or missed earning for four quarters. Also, check the Events log. I own a couple Main issues. I feel comfortable with Main.

 

[aja8888]

Good thread. I own a near even split of Corporates and munis (both tax free and taxable). In addition, I hold Agency paper. Each have their special analysis benchmarks. For corporates, I look at the underlying company per equity analysis. Most important are financial strength, PE ratio and overall sentiment. I avoid negative earning or missed earning for four quarters. Also, check the Events log. I own a couple Main issues. I feel comfortable with Main.

YS, just curious, but isn't Main a BDC company? What investments would qualify as bond investments with them?

 

[Tacitus]

f

YS, just curious, but isn't Main a BDC company? What investments would qualify as bond investments with them?

MAIN is a BDC but they also issue bonds if am understanding your question. My Fidelity filter lists three in inventory, Here is one cusip 56035LAH7 as an example, matures 3/1/29, yield to worst 6.71%.

 

[aja8888]

f
MAIN is a BDC but they also issue bonds if am understanding your question. My Fidelity filter lists three in inventory, Here is one cusip 56035LAH7 as an example, matures 3/1/29, yield to worst 6.71%.

Thanks, I'll look it up.

 

[YellowSubmarine]

YS, just curious, but isn't Main a BDC company? What investments would qualify as bond investments with them?

Indeed. Many of the BDC issue signature corporate bonds and some issue preferred shares just like many corporations. Most of the BDC bonds do not payout interest to the same level as their stock dividend...fwiw.

 

[jazz4cash]

So periodically, though more so in past, am buyer of individual corporate bonds. Did not see a specific thread devoted to such. If there is one will delete this one, or try to, and repost there.

So on Monday plan to place limit order at last market price to buy bonds for MAIN. MAIN is strong BDC been around for long time, paid dividends throughout 2008, history of increasing dividends, solid financial history, The bond offers yield to worst of 6.219% at current price, matures 3/11/29, earliest call date 2/1/29, is make whole call, no Moodys but S&P rates as last could tell as BBB-, so still investment grade. I plan to hold till matures or called so do not need to predict interest rate movements or changes even in credit rating. Can't place order until market opens. Cusip 56035LAH7. Basically like the idea of locking in almost 6.3% for next 4 years, absent default. Will hold in IRA.

Am posting for do not know if others have any interest in individual corporate bonds. Guess will see. This bond trades at premium but historically this is a good price for it, imo.

Yes we already have one. It does not specify corporate but Treasuries have a dedicated thread. We had a really great one for fixed income that was shut down and the replacement(s) haven’t really gained traction. Perhaps a merger is in order?

Fixed Income Investing II

We are starting a new version of the long running thread "We Are Entering a Golden Period for Fixed Income Investing", wherein the topic - OF FIXED INCOME INVESTING - may be thoroughly, thoughtfully and respectfully explored by the ER membership. Here is the link to the initial thread as a...

www.early-retirement.org

 

[Tacitus]

Yes we already have one. It does not specify corporate but Treasuries have a dedicated thread. We had a really great one for fixed income that was shut down and the replacement(s) haven’t really gained traction. Perhaps a merger is in order?

Fixed Income Investing II

We are starting a new version of the long running thread "We Are Entering a Golden Period for Fixed Income Investing", wherein the topic - OF FIXED INCOME INVESTING - may be thoroughly, thoughtfully and respectfully explored by the ER membership. Here is the link to the initial thread as a...

www.early-retirement.org

I think a good breakdown as a reader for fixed income might be "Individual Bonds"( inclusive of corporates, agencies, munis and treasuries); "Individual Preferreds and Baby Bonds" (latter fits better with preferreds and listed on other sites that list preferreds, such as innovative income investor, quantomonline.)
"Mutual Bond Funds" (open and closed ended, might be especially interesting having both on one, or alternatively split if not workable); BDCs ; General Equity Income" such as dividend stocks; and " CDs and MM, which already exists. There are other lesser discussed entities but above seems good. Was wondering why both income investing and income investing II both there. Just all above my opinion.

 

[aja8888]

I think a good breakdown as a reader for fixed income might be "Individual Bonds"( inclusive of corporates,agencies, munis and treasuries), "Individual Preferreds and Baby Bonds" (latter fits better with preferreds and listed on other sites that list preferreds, such as innovative income investor, quantomonline.) "Mutual Bond Funds" (open and closed), "Equity Income" such as dividend stocks, BDCs and " Cash Equivalent Income" including CDs and MM, which already exists. There are other lesser discussed entities but above seems good. Was wondering why both income investing and income investing II both there. Just all my opinion.

Thread No 1 ended when the person leading it decided to move on to another venue. The thread sat for a while, with little or no interest, and then a new one was started.

 

[Texas Proud]

Indeed. Many of the BDC issue signature corporate bonds and some issue preferred shares just like many corporations. Most of the BDC bonds do not payout interest to the same level as their stock dividend...fwiw.

As you know, it is riskier.... if for some reason they have a bad loan or something else go wrong they might not make as much money or even lose money... which would really hurt the stock dividend or eliminate it completely... but as long as they do not declare BK they will be paying out on the bonds and more than likely pref shares...

 

[COcheesehead]

Yes we already have one. It does not specify corporate but Treasuries have a dedicated thread. We had a really great one for fixed income that was shut down and the replacement(s) haven’t really gained traction. Perhaps a merger is in order?

Fixed Income Investing II

We are starting a new version of the long running thread "We Are Entering a Golden Period for Fixed Income Investing", wherein the topic - OF FIXED INCOME INVESTING - may be thoroughly, thoughtfully and respectfully explored by the ER membership. Here is the link to the initial thread as a...

www.early-retirement.org

Those were the “golden days” of fixed income for those that remember the original thread. If you followed it some money was made. Then things got ugly and the thread went away.

 

[pb4uski]

As you know, it is riskier.... if for some reason they have a bad loan or something else go wrong they might not make as much money or even lose money... which would really hurt the stock dividend or eliminate it completely... but as long as they do not declare BK they will be paying out on the bonds and more than likely pref shares...

In order to default paying debt interest or preferred dividends a BDC would have to first suspend common share dividends and I don't see that as being anywhere near likely unless they made some horribly bad investments.

 

[Texas Proud]

In order to default paying debt interest or preferred dividends a BDC would have to first suspend common share dividends and I don't see that as being anywhere near likely unless they made some horribly bad investments.

I think that is what I said... which is why the common has a higher yield as it is riskier.... it takes the hit first...

And they can make some horrible investments that bring down the yield of the common but does not do anything to the debt except maybe lower their rating (if they have one)...

 

[ERhoosier]

Personally, I do not find the risk premium of corporate bonds (or BDCs) attractive here- especially with the uncertainty of tariffs & threat of a potential significant recession looming. I view #1 goal for my FI AA as stability of principle & income (inflation-adjusted) so sticking to T-bills & Govt Agencies (long with ~1yr call dates) for now.
YMMV.

 

[Semi-Retyrd]

As posted on the preferred thread I run a concentrated portfolio based on ideas borrowed from others and researched to check for suitability and safety. Thusly I have one bond (baby bonds the name kept in my IRA since the interest is fully taxable. The winner is .... ATLCZ, a 9.25% five year senior note issued Jan 2024 and maturing Jan 31, 2029. It is callable earlier with additional interest paid for early calling (see Quantumonline for details).
One reason I like this bond is that the only risk is if the company Atlanticus goes bankrupt and they have survived since 1999 including the GFC and Covid recessions. You can think of the company as a cross between an AI and a loan shark in that their major business is issuing credit cards to folks with relatively low credit scores who live paycheck to paycheck. For those interested I suggest visiting the Atlanticus website and reading the Q4 2024 presentation.
Another reason I like the bond is that it trades on the Nasdaq with an average volume of 28K/day making it liquid enough for my portfolio.
The company had a headwind until recently as the CFPB was planning to cap late fees for credit card issuers. However, now that the CFPB has had their activities mostly shut down and with the prospect of even greater deregulation for the next four years, the headwind has now become a tailwind.
Finally the maturity date of 1/31/2029 coincides with a new administration which may not be so favorable to finance companies.

 

[YellowSubmarine]

ATLCZ...I own that one as well since January 2025. Nice return and a stable price vs overall market. It is my only preferred that I own outside of PFFA fund.

 

[Semi-Retyrd]

For some reason baby bonds are often included in preferred discussions. Two big differences are that many preferred stocks offer qualified dividends making them suitable for taxable accounts while baby bonds pay fully taxable interest making them more suitable for TIRAs or ROTHs. Also baby bonds sit higher in the capital stack and have a better chance of being worth something in case of bankruptcy. Thus in many cases they are lower risk than preferred stocks. For these two reasons I consider them to be quite different types of securities. Finally baby bonds often have relatively short maturities while many preferred stocks are perpetual giving them longer duration on average with higher interest rate sensitivity.

 

[Texas Proud]

Thanks... I think I will sell my ATLCL which is in the low 6% range and buy some... my invested yield is higher but I can sell and up the yield...

Probably will keep my ATLCP @8.35% as it does not mature...

 

[Montecfo]

I think that is what I said... which is why the common has a higher yield as it is riskier.... it takes the hit first...

And they can make some horrible investments that bring down the yield of the common but does not do anything to the debt except maybe lower their rating (if they have one)...

Of course their loans are far riskier than a typical bank. Main St is well regarded but there is a good deal of risk by the nature of what they do.