Monday, March 10, 2014

Received MOU Redemption Proceeds This Afternoon-28.4% Annual Coupon Confirmed

I mentioned in today's weekly post that the PPN MOU matured today. I received the $10 par value for 100 shares ($1,000) plus the final annual coupon payment this afternoon of $284.01 on that par value:

This is the second large coupon paid by MOU. I received a 27.93% annual coupon in 2011: see snapshot at MBC & MOU. I received a 10.48% annual coupon last year: see snapshot at Stocks, Bonds & Politics (3/5/13 post, introduction)

All of Citigroup Funding PPNs, which I own, mature this year.

The next ones to mature are MBC, MKN, MKZ and MTY.

I have hope for a decent payday for MBC which has an End Date of 6/2/2014. Like MOU, the coupon is tied to the performance of the Russell 2000. MBC's starting value is 998.78, with a Maximum Violation (MV) number of 1,298.41. There has not yet been a MV during the current coupon period, and the Russell 2000 was at 1,198.74 -4.58 (-0.38%) near the close today. I own 200 shares of MBC and will be content to let it play out. Bought 100 MBC at $9.84Bought 100 MBC at $9.78 I may change my mind when and if it looks like a MV is about to occur and the market price still reflects the possibility of a large coupon. 

I do not hold out much, if any, hope that MKN, which will mature on 4/7/2014, will pay more than its 3% minimum coupon. That one is tied to the DJ-UBS Commodity Index with a Starting Value of 136.36. Shortly before this post's publication, this commodity index was trading at 135.37. It would have to close above 140.45 to generate any increase in the minimum coupon on the End Date of 3/31/04. I own just 100 MKN. Bought 100 MKN at $9.85 So I am expecting either a 3% minimum payment or a less likely minuscule amount over 3%.

MTY is linked to the price of the London P.M. fix for gold, with a starting value of $1,329.75 per ounce, a MV of $1,795.16 and a 8/4/14 End Date. Final Pricing Supplement I do not view a MV as likely, but you never know with gold. The P.M. fix was 1,335.25 on 3/7/14, Kitco Inc. - Past Historical London Fix, so this one holds out some potential for a payday greater than the minimum 3% coupon.  

MKZ matures on 7/11/14. Pricing Supplement The coupon is tied to the DJ-UBS index as is MKN described above.  MKZ has some potential for a higher payday than its 3% coupon. The Starting Value is 126.42, a MV of 165.61 (not hit yet), and an End Date of 7/3/2014. I own 200 of that one too. Bought 100 MKZ at $9.96 December 2009; Bought 100 MKZ at $9.91 in the Roth IRA December 2009 If my memory is correct, and it is not what it use to be, I believe MKZ has paid its minimum coupon to me during my entire period of ownership. 

MKN, on the other hand, has been good in prior annual coupon periods, paying a 18%+ coupon in 2010 and a 25.56% coupon in 2011, (see snapshots in a dated 2012 post: Stocks, Bonds & Politics: Status of Citigroup Funding PPNs: MOU, MBC, MKN, MKZ

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