Yes and it represents about a .75 spread to Goldman Sachs other notes on the secondary market.
What is the significance of the GS .75% spread?
Is the 0.75% spread due to the expected Fed rate increase in November?
Yes and it represents about a .75 spread to Goldman Sachs other notes on the secondary market.
I am buying in my TDA IRA. I am seeing more of Goldman Sachs (GS) corporate notes (bonds) at higher rates (so far) vs. other banks.
I am interested in the 7.0% GS Note above, but already have 2.5 % of my total portfolio in GS bonds.
GS rating is A2/BBB+.
Toronto Dominion bank (Canada) is rated A1/A.
What limit do you have for max % of portfolio allocated to a single bank?
Would the difference in credit rating between GS and TD banks influence your percent allocation?
Just saw a Goldman Sachs 10-year bond at Fidelity at 7.0%
CUSIP - 38150APU3
Issues on 10/27
What is the significance of the GS .75% spread?
Is the 0.75% spread due to the expected Fed rate increase in November?
Doesn't seem like a great deal to me. For an extra 0.25% per year, versus their 5 year offer, you are effectively selling them an option to keep you locked in at 7% for years 6-10 if rates go higher.
The 5 year is a much better offer in my view. 5 years from now, if rates have dropped, both issues will likely have been called. If rates are higher, the 5 year will mature - freeing up your capital to buy a higher yield instrument.
Just saw a Goldman Sachs 10-year bond at ..... 7.0% CUSIP - 38150APU3
I'm wondering how much of a spread does it take for a company, example: GS bond at 7% to be called ?
The other factor is I'm not even sure what they would compare to even consider calling the bond ?
Remember the rule of 72 in fixed income investing. At 6.75% it will take 72/6.75 or 10.67 years to double your money. This assumes you re-invest the money at the same and higher yields and your capital is returned. It works well in tax sheltered accounts where your money continues to grow without tax liability until you withdraw.
I'm trying to make most bond purchases in IRA/Roth accounts.
Did do a goof and purchase a 5 year TIP in the regular account, so will have more fun doing taxes for the next 5 years.
I'm sure I do small potatoes compared to most folks, as the largest single purchase of interest bearing things has been $20K in a Treasury.
Love this thread and learning so much. I appreciate Freedom and all the other helpful posters on this thread. Just bought the 3 year Goldman Sachs and 5 year Bank of America.
New 5 year note listed at TDA at 6.35%
***Bank Of America Corp. Callable Fixed Rate Notes
CUSIP:
06048WZ86
Final Prospectus
Bond Details
Offering Period
10/21/2022 - 10/26/2022
Maturity Range
2027-2027
Tax Status
Taxable
Ratings
A2/A-
Callable
Maturity
10/28/2027
Coupon & Yield
Coupon
6.350
Pay Months
N/A
Current Yield
N/A
Frequency
Semi-Annually
First Coupon
04/28/2023
Yield to Maturity
6.350
Yield to Worst
N/A
Offer & Pricing Information
Quantity
Price
100.000
Principal
$1,000.00
Min. Qty
Settlement Date
10/28/2022
Accrued Interest
$0.00
First post here. Appreciating all the sage advise here, esp Freedom, thank you.
This bond says the note will price on Oct 26, is there a reason to wait until then to buy then or is Oct 25 viable for the 6.35% at 100%?
1 Bk Of America Corp
Moody's Outlook Stable | Conditional Call | Financials | Subordinated | BAC | Floating: 3M LIBOR + 65BP | Quarterly Reset | Quarterly Pay FLT 12/01/2026 94.468
92 6.566
Baa1
4 year subordinated debt resets quarterly, LIBOR+65BP
I'm buying the GS 5 year and the BOA 5 year notes and also the TD 5 year notes. For some reason investment advisors will have you believe that buying GS and BOA stock is okay but buying their bonds is risky. In reality the opposite is true. Bond interest payments and return of capital at maturity or call are contractual obligations. Companies have no obligation to pay dividends and there is no par value for stocks.
How do I find the TD bank 5 year note? A search of FINRA came up with nothing.
How do I find the TD bank 5 year note? A search of FINRA came up with nothing.
It is at TDA not Fidelity. In fact, TDA as usual, has far more selection of new issues including several from from JP Morgan,
The Toronto-Dominion Bank (“TD” or “we”) is offering the Callable Fixed Rate Notes due October 31, 2027 (the “Notes”) described below.
CUSIP / ISIN: 89114X4J9 / US89114X4J92
The Notes will accrue interest at a fixed rate of 6.25% per annum from and including the Issue Date to but excluding the Maturity Date.
TD will pay interest on the Notes on the last calendar day of each January, April, July and October (each, an “Interest Payment Date”),
commencing on January 31, 2023 and ending on the Maturity Date or Optional Call Date (if applicable).
TD may, at its option, elect to redeem the Notes in whole, but not in part, on the last calendar day of each January, April, July and October (each,
an “Optional Call Date”), upon five Business Days’ prior written notice, commencing on October 31, 2023 and ending on the Interest Payment
Date immediately preceding the Maturity Date.
Thanks for the update. Appreciate it. I have been following the yields closely myself. the 10 yr has pulled back from 4.3% just last Friday to around 4.02 today.All corporate notes with coupons 6% and higher have been sold out at TDA as bond yields have pulled back and the spreads have narrowed. I think we can count on Powell to say something next week to spook the markets again so we can get those 6%+ yields again. Hopefully my orders for GS and BOA will execute tomorrow. The Wells Fargo 6% 3 year note is pending execution. The secondary markets are littered with a lot of low coupon notes from banks and other companies. High grade notes from technology companies (A rated) are trading with very narrow spreads to treasuries and not worth buying at this point. It appears that fixed income investors are crowding into the stronger sectors in fixed income and bidding those securities up. In any case, I have no plans to buy any more new issues until I see a "6" or higher as the leading digit. I'm pretty confident that we will see better yields this tax loss selling season.