Friday, May 25, 2012

Sold 3 TIP Bonds Maturing in 2019 at 120.45/Sold 50 NPBCO at $26.17 and Bought 100 HTGZ at $24.6-ROTH IRA

Financial Institutions (FISI) raised its quarterly dividend to 14 cents per share from 13 cents. Bought 50 FISI at $15.55Regional Bank Basket Strategy

Valley National Bancorp declared a quarterly dividend of $.1625 per share, "relatively" unchanged from the prior dividend payment after adjusting for the 5% stock dividend scheduled to be paid today.

Markit's Eurozone PMI composite index fell to 45.9 in May, the lowest reading since June 2009 and the fourth consecutive monthly decline. The preliminary PMI manufacturing index for China, prepared by HSBC, declined to 48.7 in May from 49.3 in April. That index has had seven consecutive readings below 50.

The German two year note is nearing a negative yield. The German ten year bonds fell to a record low yield of 1.35% yesterday. 10YR_GER Bond Quote - (ICAPSD)Reuters

Earlier this week, the U.S. sold five year notes to yield .748%.

Yesterday, the U.S. auctioned 7 year notes with a yield of 1.203%.

According to Freddie Mac, the average rate on a 30 year mortgage was 3.79%, as of 3/17/12. The ten year mortgage rate was 3.04%.

1. Sold 3 Treasury Inflation Protected Bonds at 120.45 Last Tuesday-ROTH IRA (see Disclaimer): My realized gain on these three bonds will be greater than the total amount of interest paid by them until maturity. I am currently receiving slightly less than $60 in annual interest payments. The accrued interest, which will be paid to me by the buyer, is  only $21.37 for 129 days. Those bonds mature on 7/15/2019. At Vanguard, I am able to place online sell orders for U.S. treasuries without being charged a commission. The following are snapshots of my order and confirmation pages: 

Confirmation Excerpt

Please note that these bonds have a negative yield of -.89 at the $120.45 price. I bought those three TIPs at auction back in 2009: Item # 4  10 Year TIP Auction  I realized a profit of $838.87:

While I receive an inflation accretion to the principal amount of the bonds, that amount would be small compared to the realized gain received now by selling the bonds. The principal amount would be adjusted down for deflation which is not out of the question. Individual - TIPS:; PIMCO | Investment Basics - Inflation-Linked Bonds

Advantages and Disadvantages of Treasury Inflation Protected Securities:

2. Sold 50 NPBCO at $26.17 Yesterday-ROTH IRA (see Disclaimer):  NPBCO is a Trust Preferred security with a 7.85% coupon on a $25 par value and a 2032 maturity date. This security may be redeemed now at par value plus accrued interest. For TPs subject to call and purchased near their par value, I will simply try to clip a few coupons and to sell the security at any profit.

50 NPBCO Total Cost Per Share $25.05

This purchase was discussed in Item # 4  Bought 100 NPBCO at 24.91 (April 2011 Post)

I no longer have a position in this TP.

Trust Preferred Securities: Links in One Post

NPB Capital Trust II 7.85% Cum. Trust Pfd. Secs. (NPBCO) closed at $26.24 yesterday.

3. Bought 100 HTGZ at $24.6 Yesterday-ROTH IRA (see Disclaimer): HTGZ is an exchange traded senior bond issued by the BDC Hercules Technology Growth Capital. This bond has a 7% coupon on a $25 par value and matures in 2019. Prospectus

I now own 200 shares. Item # 4 Bought 100 HTGZ at $24.63 (5/4/12 Post).

I also own 100 shares of the common stock which has a higher yield. Bought 100 HTGC @ $9.7 (1/26/12 Post)

Hercules Technology Growth Capital Inc. 7% Sr. Notes due 2019 (HTGZ) rose ten cents in trading yesterday to close at $24.8. The daily range was $24.47 to $24.85. My order was a limit order at $24.6. 


  1. Why did you buy HDGZ? I can find no useful information either about HDGZ or HDGC.


  2. You have incorrect symbols. HTGC and HTGZ are the correct symbols.

    The reasons for purchasing these securities can be found in my blog by following the pertinent links. HTGZ was purchased primarily for its income generation. It is a 7% senior bond with a $25 par value maturing in 2019.

    Please note that HTGC was sold as indicated in the 5/29/12 Post.