Preferred Stock Investing-The Good , The Bad and The In Between 2021

Well.... did not see anything on this (I do not go out to look so there is that)...

But WCC-A was called... a slug of money hit my account today... not sure why I bought but at least I did not lose... just a small gain on the divi... bought slightly over par so not great there...
 
Tacitus said:
RNR-F, Renaissance Holdings, a tax qualified distribution of 6.84%, especially like the length, consistency and steadily increasing dividend hx. of the common. If the common pays its dividend, then the preferred must pay its distribution. Also can buy below par.
Dividend Hx of RNR
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^^^ +1 In my portfolio.
 
Mulligan said:
Anyone here own ARGD, a 2042 senior note (issued in 2012) from insurer Argo, that Brookfield bought a few years ago?

AM Best Revises Outlooks to Stable for Argo Group International Holdings, Inc. and Its Subsidiaries

AM Best has revised outlooks to stable from positive and affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” (Good) and the associated Long-Term Issue Credit
news.ambest.com
S&P has it BBB- from their last rating review.
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NICE.... and a BBB... need to get some...

ETA... LOL, then it will get called!!!
 
Texas Proud said:
NICE.... and a BBB... need to get some...

ETA... LOL, then it will get called!!!
Click to expand...
A call would be sweet, but I am not holding my breath! Im not a big P&C insurer buyer, for reasons not totally understood. But I can say the same thing for banks, too, ha. But I recently acquired a modest position of 700 shares I wont increase. I suspect the reason it pays above market yield for its credit rating, is a market concern it could get delisted at some point. As it is now a subsidiary of Brookfield (actually Brookfield Reinsurance bought it) and not an independent company when the debt was issued. But its been almost two years since they bought ARGO and havent done it yet. Also P&C’s dont get the benefit of the doubt a to big to fail bank gets.
 
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Sooo, I was thinking today about my holdings.... and that we can see the writing on the wall that interest rates are going to drop later this year and maybe some more next year....

I have a number of variable holdings and was thinking about getting into fixed... anybody else thinking about this? If you look at interest rate cycles there is probably not going to be another big cycle of rising interest rates any time soon... locking in some good fixed seems like a smart move...

You can almost go back to the 1990s to get rates higher than today...

fred.stlouisfed.org

Federal Funds Effective Rate

View data of the Effective Federal Funds Rate, or the interest rate depository institutions charge each other for overnight loans of funds.
fred.stlouisfed.org
 
Texas Proud said:
Sooo, I was thinking today about my holdings.... and that we can see the writing on the wall that interest rates are going to drop later this year and maybe some more next year....

I have a number of variable holdings and was thinking about getting into fixed... anybody else thinking about this? If you look at interest rate cycles there is probably not going to be another big cycle of rising interest rates any time soon... locking in some good fixed seems like a smart move...

You can almost go back to the 1990s to get rates higher than today...

fred.stlouisfed.org

Federal Funds Effective Rate

View data of the Effective Federal Funds Rate, or the interest rate depository institutions charge each other for overnight loans of funds.
fred.stlouisfed.org
Click to expand...
Tex, my opinion is it depends on what you own, what you are wanting, and how you want to protect your capital. Different issues will react differently based on their upcoming reset yields. One with a low reset adjustment could get smacked pretty good. While one with a higher reset/adjustment could hold serve and maintain a higher yield than some fixed rate issues.
However the buyer always assumes the asymmetric risk. As even if adjustment is higher, company could mitigate that by simply redeeming the issue leaving you out in the cold.
The only real way you can stack the deck in your favor in terms of securing a yield for a long term is buying the fixed rate issues that were issued in a low rate environment. These are way under par and little chance of a call. If one were to occur one would cry all the way to the bank with big cap gains.
But just because short end may eventually lower, doesnt mean long end will follow suite. So one can lock in yields long term now by going fixed. But the capital risk of owning such issues still exists.
I rolled perfectly into adjustables several years ago and rode them up nicely. However, I got out of them a bit too early eager to lock in fixed yields. Todays yields could become tomorrows high prices…or bargains. Who knows. Im roughly 1/3 each in long duration, mid duration (4-8 ish years), and short low risk (CDs, IBonds, TBills).
 
Texas Proud said:
Sooo, I was thinking today about my holdings.... and that we can see the writing on the wall that interest rates are going to drop later this year and maybe some more next year....

I have a number of variable holdings and was thinking about getting into fixed... anybody else thinking about this? If you look at interest rate cycles there is probably not going to be another big cycle of rising interest rates any time soon... locking in some good fixed seems like a smart move...

You can almost go back to the 1990s to get rates higher than today...

fred.stlouisfed.org

Federal Funds Effective Rate

View data of the Effective Federal Funds Rate, or the interest rate depository institutions charge each other for overnight loans of funds.
fred.stlouisfed.org
Click to expand...

I have been thinking along the same lines. I have been collecting my 8.5% on EBGEF for some time but last week I decided to sell and take the capital gain. Bought some CHSCL at $25.4 with the proceeds.
 
One variable I will keep is SPNT-B that just hit variable... resets (IIRC) every 5 years and just did so... +7.298 over 5 year treasury... BB+...
 
According to Quantum online the first reset date is 2/26/2026 - next February. The next payment at the 8% annual rate is 8/31 followed by 11/30 this year. Assuming the 5 year treasury rate doesn't change much between now and next year, the first reset rate payment would be on 2/26/2026.
However, one can expect that to avoid this, SPNT-B will likely be called on that date. This is why the current price hovers close to the call price of $25.
I would avoid investing in SPNT-B at any price above $25 with the expectation that it will be called at $25 on 2/26/2026.
 
Semi-Retyrd said:
According to Quantum online the first reset date is 2/26/2026 - next February. The next payment at the 8% annual rate is 8/31 followed by 11/30 this year. Assuming the 5 year treasury rate doesn't change much between now and next year, the first reset rate payment would be on 2/26/2026.
However, one can expect that to avoid this, SPNT-B will likely be called on that date. This is why the current price hovers close to the call price of $25.
I would avoid investing in SPNT-B at any price above $25 with the expectation that it will be called at $25 on 2/26/2026.
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Your reason for avoiding is precisely the oppositie reason why many like it…over par too. At current stripped yield, it is very comfortable over 7% annualized YTC in Feb. ‘26. Over par is irrelevent if one is seeking short term above market yield that is relatively safe.
 
Free To Canoe said:
I have been thinking along the same lines. I have been collecting my 8.5% on EBGEF for some time but last week I decided to sell and take the capital gain. Bought some CHSCL at $25.4 with the proceeds.
Click to expand...
In case you didnt know, CHSCN is a fixed issue not a floating one as originally issued. It gives you another CHS option to compare to when purchasing the various CHS issues.
 
Semi-Retyrd said:
According to Quantum online the first reset date is 2/26/2026 - next February. The next payment at the 8% annual rate is 8/31 followed by 11/30 this year. Assuming the 5 year treasury rate doesn't change much between now and next year, the first reset rate payment would be on 2/26/2026.
However, one can expect that to avoid this, SPNT-B will likely be called on that date. This is why the current price hovers close to the call price of $25.
I would avoid investing in SPNT-B at any price above $25 with the expectation that it will be called at $25 on 2/26/2026.
Click to expand...
Opps... read it wrong... I will still hold just in case... got is at less than $22... They might or might not call... it matters what they can get to replace it... and since it is a 5 year reset... hope rates stay up a bit for another year...

BUT, did sell USB-A which is variable and going down... was yielding 7.08 and BBB... did buy the ARGD yield of 8.06 at BBB-... and fixed!!
 
Texas Proud said:
Opps... read it wrong... I will still hold just in case... got is at less than $22... They might or might not call... it matters what they can get to replace it... and since it is a 5 year reset... hope rates stay up a bit for another year...

BUT, did sell USB-A which is variable and going down... was yielding 7.08 and BBB... did buy the ARGD yield of 8.06 at BBB-... and fixed!!
Click to expand...
FWIW, SPNT-B for now is still a decent sized hold for me. But I am just using it largely as a hideout place to extract more short term yield than CDs (which I have plenty of). The market has basically decided this will be redeemed immediately at first call. And I assume it will be also. This was originally a private placed issue to insiders when it first was issued. And due to its decent strength in credit quality it almost is a certainty. If some of my more favorite fixed issues drop down the road, I likely would sell these shares to fund the purchases. I have a few fingers over the edge on the fixed rate chopping block, but I am not sticking my entire hand over it just yet, ha.
 
Mulligan said:
FWIW, SPNT-B for now is still a decent sized hold for me. But I am just using it largely as a hideout place to extract more short term yield than CDs (which I have plenty of). The market has basically decided this will be redeemed immediately at first call. And I assume it will be also. This was originally a private placed issue to insiders when it first was issued. And due to its decent strength in credit quality it almost is a certainty. If some of my more favorite fixed issues drop down the road, I likely would sell these shares to fund the purchases. I have a few fingers over the edge on the fixed rate chopping block, but I am not sticking my entire hand over it just yet, ha.
Click to expand...
SPNT seemed good, but 2/2026 is the call, so flips soon, 3 divvy, $1.50 less over par$. If I had more time with it I'd have dipped in. But good idea for quick park of $$ and seems a very safe prediction as to how it plays out. Would be cool if they don't happen to call it!! Too good, in fact. Hmmm, as I finished writing this, I might get some afterall.
 
Mulligan said:
FWIW, SPNT-B for now is still a decent sized hold for me. But I am just using it largely as a hideout place to extract more short term yield than CDs (which I have plenty of). The market has basically decided this will be redeemed immediately at first call. And I assume it will be also. This was originally a private placed issue to insiders when it first was issued. And due to its decent strength in credit quality it almost is a certainty. If some of my more favorite fixed issues drop down the road, I likely would sell these shares to fund the purchases. I have a few fingers over the edge on the fixed rate chopping block, but I am not sticking my entire hand over it just yet, ha.
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Yea.... I was thinking the same about a call... but like you will keep it unless I see something else come around... as I have said in the dry powder thread I have none... I have to sell in order to buy something else... or get called...

AND... we can all hope that they do not call.. it has a 5 year reset so if it does not get called it is good for 5 years if one of the other call features do not happen...

From the prospectus...
)

“Reset Date” means the First Reset Date and each date falling on the fifth anniversary of the preceding Reset Date, which, in each case, will not be adjusted for Business Days.
 
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SYF-A, Synchrony Financial, 7.3% yield, tax qualified. One thing I like is it long and upward divy history of the common stock, Graph of Dividend Hx of SYF
Probably last trade, except maybe index or adx tomorrow.

Have nice holiday weekend all.
 
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