I am going to re-date a few Gateway posts that I constantly update, such as the ones about Floaters, Trust Certificates and Lottery Tickets, so that I will not have to find them from their original dates back in May and June. This will bring about 11 gateway type posts together in one place.
Friday, September 25, 2009
Floaters: Links in One Post
I am spending about an hour today grouping together links to posts on a particular subject. I have previously done what I call gateway posts for Dynamic v. Static Asset Allocation theory and the VIX Asset Allocation Model. This is a gateway post for floating rate securities. The purpose of this post and other gateway posts is not to explain the topic in any detail but simply to group links to the prior posts in one post for anyone interested in that particular topic.
The floating rate securities are a frequent topic in this blog. There might be over a 100 pages of discussion devoted to them, and I view them as important in my asset allocation scheme. They can be divided into the following general categories:
1. EQUITY (Traditional) Floating Rate Preferred Stocks (qualified dividends) and Synthetic Floaters (taxed as interest)
2. Floaters with minimum guarantees and those with no guarantee
3. Floaters tied to the CPI with no guarantee
THERE ARE MORE DISTINCTIONS INCLUDING CUMULATIVE V. NON-CUMULATIVE, MATURITY DATE OR NO MATURITY DATE, ETC, BUT I AM JUST KEEPING IT SIMPLE IN THOSE GENERAL CATEGORIES
All of these securities can be found at the QuantumOnline site, QuantumOnline Credit Ratings - QuantumOnline.comwhich contains links to the prospectuses and is free but requires registration:
[AS OF 12/18/2009: I own the following equity preferred floating rate securities that pay the greater of a guarantee or a percentage above a short term rate such as the 3 month T Bill or Libor: METPRA, MSPRA, ZBPRA, STIPRA, STDPRB, USBPRH, HBAPRD & BMLPRH. I have sold my positions in the following equity preferred stocks which also have guarantees and floats: GSPRA, BACPRE, HBAPRF & BMLPRG. I own the following equity preferred stocks that have a float provision but no guarantee: ORHPRA and SCEDN. I own the CPI floaters OSM and PFK, and have sold ISM. I still own all of the shares of the Aegon hybrid floater AEB that I have bought. For the synthetics floaters that have a guarantee, I currently own: GJN, GJP, GYB, GYC, PYT, & GJL. I have sold GJK & PYV as they approached par value. Of the synthetic floaters that do not have a guarantee, I have sold my positions in GJS, GJO and GJR, and have pared a position in GJT though I currently own 50 shares of GJT. I have bought and sold GJS several times, based on the kind of analysis that I do comparing floating rate securities from a single issuer. An example of that kind of analysis can be found at Analysis of Prior Question about Goldman Sach's Floaters.
The following are links to examples of how I evaluate equity preferred floaters from the same issuer, or compare synthetic floaters to equity preferred floaters involving securities from the same issuer: Analysis of Prior Question about Goldman Sach's Floaters BMLPRH vs. BMLPRJ /GJS VS. PYT As of 10/8/09 Analysis of Prior Question: ZBPRA vs. ZBPRC OR ZBPRB
Two posts explaining why I view these securities to be important now:
Some of the links to my posts on the equity preferred floaters:
METPRA: 4% or 1% over 3 month LIBOR METLIFE INC
AEB: 4% or 7/8% over 3 month LIBOR www.sec.gov
ZBPRA: 4% or .52% over 3 month LIBOR www.sec.gov
BMLPRG 3% or .75% over 3 month LIBOR Prospectus Supplement
BMLPRJ 4% or .75% over 3 month LIBOR Final Prospectus Supplement
BMLPRH 3% or .65% over 3 month LIBOR Final Prospectus Supplement
BMLPRL 4% or .50% over 3 month LIBOR Term Sheet
BACPRE 4% or .35% over 3 month LIBOR Bank of America Corporation
GSPRA 3.75% or .75% over 3 month LIBOR 424(B)(2)
GSPRC 4% or .75% over 3 month LIBOR 424B2
GSPRD 4% or .67% over 3 month LIBOR 424B2
HBAPRF 3.5% or .75% over 3 month LIBOR Form 424(b)(5)
HBAPRD 4.5% (with a 10 1/2% cap) or .81% of the highest of T Bill, 10 Year Constant Maturity Treasury Rate or 30 Year Constant Treasury Ratewww.sec.gov
HBAPRG 4% or .75% over 3 month LIBOR www.sec.gov
UBSPRD 1% over 1 month LIBOR (no guarantee) www.sec.gov
MSPRA 4% or .7% over 3 month LIBOR www.sec.gov
USBPRH 3.5% or .6% over 3 month LIBOR e424b2
STIPRA 4% or .53% over 3 month LIBOR Final Prospectus Supplement
SANPRB 4% or .52% over 3 month LIBOR www.sec.gov
ORHPRB 3.25% over 3 month Libor) e424b5 CALLED Oct 2010
SCEDN (floating rate, effective 4/30/2010) 1.45% over the highest of 3 Month LIBOR; 10 year or 30 U.S. Treasury CMT Prospectus Supplement
Added To METPRA at 12.5 Sold 50 METPRA at 23.27 in Regular IRA-Total Cost Per Share $13.26 Sold 100 METPRA at $24.95 Avg Cost per share $12.03
Buy of 50 AEB at 4.8 (February 2009) Added to AEB at $5.5 (Oct. 2008)
Goldman Sachs Synthetic Floaters and Floating Rate Non-Cumulative Preferred
Bought: 50 GSPRC at $19.95; Equity Preferred Floating Rate Stocks: Added 50 GSPRC At $19.63 - South Gent | Seeking Alpha; Sold 50 of 100 GSPRC at $20.89
Sold 100 GSPRA at $21.9 Bought 50 GSPRA at 18.8 Sold 50 GSPRA at 20.03
Bought 50 GSPRA at 21 (Dec 2010) Sold 50 GSPRA at 22.44 Bought 50 GSPRA at 20.86 Sold 50 GSPRA at $21.73
Bought: 50 GSPRC at $19.95; Equity Preferred Floating Rate Stocks: Added 50 GSPRC At $19.63 - South Gent | Seeking Alpha; Sold 50 of 100 GSPRC at $20.89
Sold 100 GSPRA at $21.9 Bought 50 GSPRA at 18.8 Sold 50 GSPRA at 20.03
Bought 50 GSPRA at 21 (Dec 2010) Sold 50 GSPRA at 22.44 Bought 50 GSPRA at 20.86 Sold 50 GSPRA at $21.73
Analysis of Prior Question: ZBPRA vs. ZBPRC OR ZBPRB
Item # 6 Bought Roth IRA: 50 GSPRD at $21.65 (July 2013); Item # 1 Bought 50 GSPRD at $20.6 December 2012
Item # 5 Sold 100 GSPRD at $23.71-Roth IRA (April 2013)(contains snapshot of gain=$219.25)-Item # 4 Bought 100 GSPRD at $21.38 (February 2013); Item # 6 Sold 100 GSPRD @ $23.89 (4/23/13 Post)(snapshot of realized gain $257.24)-Bought 100 GSPRD at $21.18 January 2013; Item # 6 Sold 50 GSPRD at $20.03 July 2012 (snapshot of profit $42.47)-Item # 1 Bought Back GSPRD at $18.9 July 2012; Item #2 Sold 50 GSPRD at $20.47 (March 2012)(snapshot of gain=$79.48)-Item # 1 Bought 50 GSPRD at $18.6 (September 2011 Post);Item # 1 Sold 50 GSPRD @ $22.72 (April 2011)-Item # 2 Bought 50 GSPRD at 21.58 (January 2011)
Item # 6 Bought Roth IRA: 50 GSPRD at $21.65 (July 2013); Item # 1 Bought 50 GSPRD at $20.6 December 2012
Item # 5 Sold 100 GSPRD at $23.71-Roth IRA (April 2013)(contains snapshot of gain=$219.25)-Item # 4 Bought 100 GSPRD at $21.38 (February 2013); Item # 6 Sold 100 GSPRD @ $23.89 (4/23/13 Post)(snapshot of realized gain $257.24)-Bought 100 GSPRD at $21.18 January 2013; Item # 6 Sold 50 GSPRD at $20.03 July 2012 (snapshot of profit $42.47)-Item # 1 Bought Back GSPRD at $18.9 July 2012; Item #2 Sold 50 GSPRD at $20.47 (March 2012)(snapshot of gain=$79.48)-Item # 1 Bought 50 GSPRD at $18.6 (September 2011 Post);Item # 1 Sold 50 GSPRD @ $22.72 (April 2011)-Item # 2 Bought 50 GSPRD at 21.58 (January 2011)
Bought 100 MSPRA at 12.88 in May 2009 SOLD 100 MSPRA at 21.43 Bought 50 MSPRA at 15.7 Sold MSPRA at 18.50
Bought 50 MSPRA at 19.71 (December 2010)-Pared 50 of 250 MSPRA at $20.8
Bought 50 MSPRA @ 19.57 in IRA (January 2011 ) Sold 50 MSPRA at 21.03 in Roth IRA (March 2011)
Added 50 MSPRA at 19.54 (January 2011)-Sold 50 of 200 MSPRA at $22.04
Bought 50 MSPRA at $16.6 (September 2011)
Equity Preferred Floating Rate Stocks: Added To MSPRA At $19.87 - South Gent | Seeking Alpha
Added 100 MSPRA at $18.9 (March 2012) Sold 100 MSPRA at $20.21 April 2014
Bought 50 MSPRA at $19.25-ROTH IRA (September 2013)- Sold 50 MSPRA at $20.22 April 2014
Sold 100 of 200 MSPRA at $20.91 (3/2/15 Post)Item # 3 Bought Back 100 MSPRA at $20.24 (10/4/14 Post)
Sold 50 BMLPRJ at $21.14 (3/5/15 Post)-Item # 2 Bought 50 BMLPRJ at $20.25 (1/19/2015 Post); Sold 50 BMLPRJ at $21.05 April 2014-Bought: 50 BMLPRJ at $19.93 (October 2012); Sold 100 BMLPRJ at $19.55 (February 2012)(no snapshot since the gain was less than $30; Profit =)- Item # 4 Bought 100 BMLPRJ @ 19.32 (February 2011); Item # 5 Sold 50 BMLPRJ @ 18.73 (October 2010)-Item # 4 Added 50 BMLPRJ at $17.74 (August 2010); Item # 2 Sold 50 BMLPRJ at $19.25 (September 2010)-Item # 7 Bought 50 BMLPRJ at 18.50 (August 2010); Item # 1 Sold 50 BMLPRJ at $18.9 (February 2012)- Added 50 BMLPRJ at $16.8 (February 2012)
Bought 50 BMLPRH at $13.25 Bought 50 BMLPRH at 13.83 Sold 100 BMLPRH AT 17.42 Bought: 50 BMLPRH at 16.2 Sold 50 BMLPRH at 17.64 BOUGHT 50 BMLPRH at 16.27 Sold 50 BMLPRH at 16.8
Item # 5 BOUGHT 50 USBPRH at 17.47 Sold USHPRH at 20.35 Bought: USBPRH at 18.12 SOLD 30 USBPRH AT 21.84 Bought 50 USBPRH at $18.83
Item # 1 Sold 100 STDPRB at $18.11 (8/26/2010)(profit snapshot=$265.01)-Item # 4 Bought 100 STDPRB at $15.3 (9/25/2009); Item # 3 Sold 50 STDPRB at 19.64 in the Roth IRA (2/28/11 Post)-Item # 8 Added to STDPRB at 18.6 (3/10/2010 Post); Item # 2 Sold 50 STDPRB at $20.2 (3/14/11 Post)-Fidelity Corrects Odd Lot Trade on STDPRB to $18.5 from $18.85 (April 1/2010 Post); Item # 2 Sold 50 STDPRD at $20.34 (5/24/11 Post)(snapshot of profit includes previous trade= $143.16)-Item # 1 Added 50 STDPRD at $18.54 (3/9/2010 Post); Item # 4 Sold 50 of 230 SANPRB at $20.77 (1/13/13 Post)(snapshot of profit=$124.58)-(no write up on the buy); Item # 7 Sold 50 SANPRA at $21.72-ROTH IRA (4/23/13 Post)(profit snapshot=$225.47)-Item # 2 Bought 50 SANPRB at $16.93-Roth IRA (10/41/12); Item # 1 Sold 50 SANPRB at $19.8 (1/28/14 Post)-Item # 6 Bought Roth IRA: 50 SANPRB at $19.35 (7/20/13 Post); Item # 4 Sold Roth IRA: 50 SANPRB at $20.41 (4/18/14 Post)(snapshot of profit=$105.01)-Item # 4 Added 50 SANPRB at $18.24 (9/14/13 Post)
Item # 1 Sold 100 STDPRB at $18.11 (8/26/2010)(profit snapshot=$265.01)-Item # 4 Bought 100 STDPRB at $15.3 (9/25/2009); Item # 3 Sold 50 STDPRB at 19.64 in the Roth IRA (2/28/11 Post)-Item # 8 Added to STDPRB at 18.6 (3/10/2010 Post); Item # 2 Sold 50 STDPRB at $20.2 (3/14/11 Post)-Fidelity Corrects Odd Lot Trade on STDPRB to $18.5 from $18.85 (April 1/2010 Post); Item # 2 Sold 50 STDPRD at $20.34 (5/24/11 Post)(snapshot of profit includes previous trade= $143.16)-Item # 1 Added 50 STDPRD at $18.54 (3/9/2010 Post); Item # 4 Sold 50 of 230 SANPRB at $20.77 (1/13/13 Post)(snapshot of profit=$124.58)-(no write up on the buy); Item # 7 Sold 50 SANPRA at $21.72-ROTH IRA (4/23/13 Post)(profit snapshot=$225.47)-Item # 2 Bought 50 SANPRB at $16.93-Roth IRA (10/41/12); Item # 1 Sold 50 SANPRB at $19.8 (1/28/14 Post)-Item # 6 Bought Roth IRA: 50 SANPRB at $19.35 (7/20/13 Post); Item # 4 Sold Roth IRA: 50 SANPRB at $20.41 (4/18/14 Post)(snapshot of profit=$105.01)-Item # 4 Added 50 SANPRB at $18.24 (9/14/13 Post)
Item # 5 Bought 50 STIPRA at $17.2 (September 2009); Item # 1 Sold 50 STIPRA at $20.90 (March 2010); Item # 4 Bought 50 STIPRA @ $19.75 (October 2010); Item # 3 Sold 50 STIPRA @ $21.24 (December 2010); Item # 2 BOUGHT 50 STIPRA at $19.85 (December 2010)-Item # 1 Sold 50 STIPRA at $20.9 (February 2011); Item # 4 50 STIPRA at $18.99 (January 2014)
Bought 50 HBAPRG at 23.31 (January 2011)- Item # 4 Sold 50 HBAPRG at $24.02 (April 2011); Item # 1 Bought Back 50 HBAPRG at $19.29 (September 2011)-Sold 50 of 100 HBAPRG at $20.09 (November 2011); Item # 3 Bought 50 HBAPRG at $16.8 (October 2011)-Item # 3 SOLD 50 HBAPRG at $20.64 (February 2012); Bought50 HBAPRG at $23.61 (August 2013)
Item # 1 Bought 50 HBAPRF at 20.69 (January 2011)-Sold 50 HBAPRF at 22.44 (May 2011); and (2) Bought 50 HBAPRF at $19.89 (August 2011)-Sold 50 HBAPRF at $20.65 (March 2012; Bought 50 HBAPRF at $20.95 (August 2013) Bought 50 HBAPRF at $18.53 September 2013
Bought 50 SCEDN AT $84
Item # 1 Bought 50 HBAPRF at 20.69 (January 2011)-Sold 50 HBAPRF at 22.44 (May 2011); and (2) Bought 50 HBAPRF at $19.89 (August 2011)-Sold 50 HBAPRF at $20.65 (March 2012; Bought 50 HBAPRF at $20.95 (August 2013) Bought 50 HBAPRF at $18.53 September 2013
Bought 50 SCEDN AT $84
SYNTHETIC FLOATERS: All in Trust Certificate Form
The floating rate is created by a swap agreement
Stocks, Bonds & Politics: The Egregious Swap Termination Fee Paid to the GJN Swap Counterparty (7/19/12 Post)
Symbols for Floaters and the Name of the Company Issuing the Linked Bond
GYB GJJ JBK & GJS=Goldman Sachs
GYR=Proctor & Gamble
GJO=Wal Mart
GJP=Dominion Resources
GJT= Allstate
GYC= SBC Communications (now AT & T)
Synthetic Floaters: Gateway Post
Dominion Resources: GJP Min 3 % Max 8% or 1.15% over 3 month Treasury (mat: 6/15/2035) www.sec.gov
Goldman Sachs: GJJ Min 3% or .65% over 3 month Treasury Max 6.5% (MAT: 10/15/2013) www.sec.gov
Goldman Sachs: PYT Min 3% or .85 over 3 month Libor Max 8% (MAT: 2/15/2034) www.sec.gov
Goldman Sachs: GYB Min 3.25% or .85% over 3 month Libor Max 8.25% (Mat: 2/15/2034) www.sec.gov
SBC (now AT & T) GYC Min 3.25% or .65% over 3 month Libor Max 8% (Mat: 6/15/2034) www.sec.gov
IBM : GJI Min 3% or .5% over 3 month Treasury Bill Max 6% (Mat: 11/29/2012) www.sec.gov
J P Morgan GJK Min 3% or .7% over 3 month Treasury Max 6.75% (Mat: 3/15/2014) www.sec.gov
J P Morgan PYV Min 3.25% or .83% of 10 year treasury (cmt) MAX 9.25% (mat:3/15/2014) www.sec.gov
J P Morgan GJN Min 3% or 1% over 3 month Treasury Max 8% (Mat: 8/1/2035) www.sec.gov
Daimler North America (guaranteed by Daimler AG) GJL Min 3 or 1.25% over 3 month Treasury (Maturity 11/15/2013) www.sec.gov
No Minimum Guarantee but with a Maximum:
Proctor & Gamble GJR .7% over 3 month treasury bill MAX 7.5% (mat: 8/15/2034) www.sec.gov
Allstate: GJT .8% over 3 month treasury bill Max 8% (Mat: 4/1/2036www.sec.gov
Goldman Sachs GJS .9% over 3 month treasury bill MAX 7.5% ( Mat: 2/15/2033) www.sec.gov
Wal Mart GJO .5% over 3 month Libor MAX 7.5% (Mat: 2/15/2030)www.sec.gov
Bought 100 GYB at 10.95 /Will Hold Synthetic Floaters In Retirement Account Added 30 GYB in IRA at 17.97 Pared Trades in Roth: Sold 100 PYT at 19.25 & Bought 100 GYB at 18.98
Tiptoed Back into the Exchange Traded Synthetic Floater GYB (2/21/15 Post)
Tiptoed Back into the Exchange Traded Synthetic Floater GYB (2/21/15 Post)
Bought 100 GJR at $11.29 Sold GJR, Trimmed GJT Bought 50 of the TC GJR at 19.31 Sold 50 GJR at $20.48 -ROTH IRA
BUY 50 GJN at $12 Sold 50 GJN at 22.08 in the Regular IRA Bought 50 GJN at 21.95 Bought 50 GJN at 19 In Roth IRA Added 50 of the Synthetic Floater GJN at $19.1-Roth IRA Sold 150 of the Synthetic Floater GJN at $23.02-ROTH IRA
Bought 50 PYT at 11.2 Bought 50 PYT at 13.34 Sold 100 PYT at 19.25 Bought 50 PYT at 18.06 Sold 50 PYT @ 19.54
Bought 100 GYB at 10.95 /Will Hold Synthetic Floaters In Retirement Account (April 2009); Sold 100 GYB at 18.09 (May 2010); Bought 70 GYB at 18.49 in Regular IRA (March 2010); Added 30 GYB in IRA at $17.97 (July 2010); Sold 100 GYB @ $19.4 (October 2010); Bought 50 GYB @ $19.07 (October 2010); Bought 50 GYB at 18.63 in the Roth IRA (January 2011); Sold 100 GYB at $19.7 in Roth IRA (May 2011); Bought 50 GYB at $16.95 in Roth IRA August 2011; Added 50 of the Synthetic Floater GYB at $15.56-ROTH IRA (December 2011); Sold 100 GYB at $17.09 January 2012-Roth IRA; Bought Back 100 of GYB at 17.2-Roth IRA March 2012; Sold 100 of 150 GYB at $18.03 December 2012-Roth IRA; Added 50 of the Synthetic Floater GYB at $19.6-Roth IRA (August 2013)
Bought 50 GJS at 16.9 in Roth IRA July 2011
Bought Roth IRA: 50 GJS at $13.77 December 2012-Sold 50 GJS at $17.14-Roth IRA June 2013
Added 50 of the Synthetic Floater GJS at 13.25-Roth IRA-Sold 100 GJS at $14.9
Bought Roth IRA: 50 GJS at $13.77 December 2012-Sold 50 GJS at $17.14-Roth IRA June 2013
Added 50 of the Synthetic Floater GJS at 13.25-Roth IRA-Sold 100 GJS at $14.9
BOUGHT GJT at 8.3 (April 2009) Trimmed 1/2 GJT at $13 (July 2009) Sold 50 GJT at $15.5-Some Details about Managing My Two IRA Accounts (December 2009)
Bought 50 GJP at 20.55 Sold: 50 GJP at 23.31
Bought 100 GJP at 21.95 Sold 100 GJP @ 23.52
Bought Back Synthetic Floater GJP at 22.25-ROTH IRA March 2011 Sold 100 of the Synthetic Floater GJP at $23.2: ROTH IRA
Bought 100 GJP at 21.95 Sold 100 GJP @ 23.52
Bought Back Synthetic Floater GJP at 22.25-ROTH IRA March 2011 Sold 100 of the Synthetic Floater GJP at $23.2: ROTH IRA
Item # 2 Bought GYC at $15.5: Synthetic Floating Rate Bond (May 2009); Added 50 GYC at $21.60 in Roth IRA (February 2011); Item # 1 Stocks, Bonds & Politics: Sold 100 GYC at $22.22 (July 2012).
Bought 40 of the TC GYC at $21 (September 2010)- Item # 4 Sold GYC at $22.3 in regular IRA (November 2010).
Added 50 GYC at $18.66 -Roth IRA Bought Roth IRA: 50 GYC at $20
Added 50 GYC at $18.66 -Roth IRA Bought Roth IRA: 50 GYC at $20
CPI Floaters:
Recent discussions on how to compute the monthly interest rate payments of the Prudential (PFK) and Sallie Mae (OSM, ISM) CPI FLOATERS can be found in a post from December 2010 at Item # 1. Stocks & Politics: OSM and Item # 3 PFK
*************************
Added 50 PFK in Roth at 20.88-Averaged UP
Sold 100 PFK at $28.25
Comparing Prudential Floating Rate Bonds Tied to CPI and Fixed Rate Coupon Bonds Maturing in 2018
Sold 100 PFK at $28.25
Comparing Prudential Floating Rate Bonds Tied to CPI and Fixed Rate Coupon Bonds Maturing in 2018
Item # 4 Bought 50 ISM in IRA at $11.85 (August 2009)- Sold 50 ISM at $12.25 (October 2009); Item # 4 Bought 50 of the CPI Floater ISM at $20.62-Item # 1 Sold 50 ISM at $23.4 (9/27/12 Post); Item # 1 Bought 50 ISM at $19.5 (October 2011)- Item # 1 Sold 50 ISM at $23.84 (11/2/12 Post); Bought 100 ISM at $22.8 (9/7/13)
Sold 100 OSM at $23.34 (March 2012)-Item # 9 Bought 50 OSM at $15.74
Item # 4 Bought 100 OSM at 15.75-Regular IRA (June 2010)- Item # 4 Sold 100 OSM at $16.87 (July 2010); Item # 3 Bought 50 OSM at $11.8 (June 2009)- Item # 3 Sold 50 OSM at $16.01 (January 2010)
Another 100 shares were bought on 7/31/2008, prior to the commencement of this blog, and were sold 10/22/2010: SOLD 100 of 200 OSM at $18.18
Item # 1 Sold 50 OSM at $21.06 (March 2011)-Added to OSM at $18.47 (December 2010)
Bought 100 OSM at $23.12-Roth IRA (August 2013)
Another 100 shares were bought on 7/31/2008, prior to the commencement of this blog, and were sold 10/22/2010: SOLD 100 of 200 OSM at $18.18
Item # 1 Sold 50 OSM at $21.06 (March 2011)-Added to OSM at $18.47 (December 2010)
Bought 100 OSM at $23.12-Roth IRA (August 2013)
See Disclaimer
Advantages and Disadvantages of Equity Preferred Floating Rate Securities
I have discussed floating rate equity preferred securities throughout this blog. I thought that it would be helpful to summarize what I view as their primary advantages and disadvantages. Of the ones that I am about to discuss, I currently own, as of 10/13/2011, METPRA, GSPRA, GSPRD, BMLPRH, BMLPRJ, SCEDN, STDPRB, MSPRA, HBAPRF, HBAPRG AND ZBPRA. All of the securities listed below have a $25 par value. First I will list the basic float provision and guarantee for each of these securities. The first figure is the guarantee and the second number is the float provision, and the firm pays whatever rate is the highest of those two numbers (prospectus links highlighted in Blue) :
METPRA: 4% or 1% over 3 month LIBOR METLIFE INC
AEB: 4% or 7/8% over 3 month LIBOR www.sec.gov (called 2021)
ZBPRA: 4% or .52% over 3 month LIBOR www.sec.gov (symbol changed to ZIONP)
BMLPRG 3% or .75% over 3 month LIBOR Prospectus Supplement
BMLPRJ 4% or .75% over 3 month LIBOR Final Prospectus Supplement
BMLPRH 3% or .65% over 3 month LIBOR Final Prospectus Supplement
BMLPRL 4% or .50% over 3 month LIBOR Term Sheet
BACPRE 4% or .35% over 3 month LIBOR Bank of America Corporation
GSPRA 3.75% or .75% over 3 month LIBOR 424(B)(2)
GSPRC 4% or .75% over 3 month LIBOR 424B2
GSPRD 4% or .67% over 3 month LIBOR 424B2
HBA Prefix Has Been Changed to HUSI
HUSIPRF 3.5% or .75% over 3 month LIBOR Form 424(b)(5) (Called June 2016)
HUSIPRF 3.5% or .75% over 3 month LIBOR Form 424(b)(5) (Called June 2016)
HUSIPRD 4.5% (with a 10 1/2% cap) or .81% of the highest of T Bill, 10 Year Constant Maturity Treasury Rate or 30 Year Constant Treasury Rate www.sec.gov (Called June 2015)
HUSIPRG 4% or .75% over 3 month LIBOR www.sec.gov (called June 2016)
UBSPRD 1% over 1 month LIBOR (no guarantee) www.sec.gov (called 2016)
MSPRA 4% or .7% over 3 month LIBOR www.sec.gov
USBPRH 3.5% or .6% over 3 month LIBOR e424b2
STIPRA 4% or .53% over 3 month LIBOR Final Prospectus Supplement (converted to TFCPRI due to merger)
SANPRB 4% or .52% over 3 month LIBOR www.sec.gov (Symbol changed from STDPRB)(called 2020)
ORHPRB 3.25% over 3 month Libor) e424b5 CALLED Oct 2010
SCEDN (floating rate, effective 4/30/2010) 1.45% over the highest of 3 Month LIBOR; 10 year or 30 U.S. Treasury CMT Prospectus Supplement (partially called June 2012 and fully called in September 2015: Item # 1: Partial Redemption SCEDN)
The securities that start with the symbol BML were originally issued by Merrill Lynch and are now Bank of America obligations. MSPRA is from Morgan Stanley. GS is Goldman Sachs.
The prospectuses of all of these securities are linked at the free site, registration required, QuantumOnline, which also lists the current ratings. Preferreds eligible for the 15% Tax Rate Table - QuantumOnline.com
Advantages:
1. Qualified Dividends: According to QuantumOnline, the dividends paid by all of these floaters currently qualify as qualified dividends. The benefit of that classification to wealthy Americans may change under the current Administration. My 2008 1099 did list the entire dividend paid by AEB, METPRA, and GSPRA, all that I owned in 2008, as qualified subject to the maximum 15% for a U.S. taxpayer.
2. Inflation and Deflation Protection: The guarantee provides a measure of protection against deflation or low inflation afforded by a fixed-rate coupon bond, whereas the float tied to 3 month LIBOR affords some inflation protection. Inflation or Deflation: Bond Alternatives/ Inflation, the primary enemy of a fixed coupon bond, will cause short rates to rise. With a rise in the short-term LIBOR rate, the interest paid by the floaters will rise. These securities became very attractive during the 4th quarter of 2008 when their prices were marked down to extreme discounts to par value. Since the dividend is calculated based on the constant $25 par value, the dividend yield increases to the investor as their purchase price goes down, and many of these securities traded near, or in some cases, below 75% discounts to par value during one or more of their recent meltdowns. I have noted in this blog a couple of times when AEB fell below $3 a share. By purchasing at a discount to par value, the investor juices both the guaranteed and floating rate yield. At a $3 purchase cost, by way of an example, AEB would have had a guaranteed yield of 33.33%. If 3 month LIBOR increased to 5% during the applicable period, then the yield at that cost would be 48.96%. A 5% LIBOR, historically speaking, is not unusual.
Many of these securities have risen in value over the past few months. Anyone reading this blog would have seen those opportunities discussed frequently.
3. Cumulative: AEB and HBFPRD are the only ones listed above with cumulative dividend features, so that is a plus just for those two.
4. No Cap on the Dividend: Unlike the synthetic floaters, another frequent topic of discussion, the equity preferred floaters do not cap the dividend at a certain interest rate (typically 7.5% to 8% for Synthetic Floaters), except that HBAPRD does have a 10 1/2% cap. Thus, if 3 month LIBOR rose to 15% then they would have to pay that rate plus the applicable percentage over that rate. I say this with the following caveat. I have yet to find a cap provision in one of the prospectuses. The absence of a cap would make these securities more sensitive in hyperinflationary environments, such as experienced in the U.S. in the late 1970s and early 1980s.
Disadvantages:
1. NON-CUMULATIVE: Except for AEB and HBFPRD, all of these securities listed above are non-cumulative. If the company fails to pay a dividend, and its actions are legal under the prospectus, the dividend is just gone forever. In that respect, the preferred shareholder is in the same position as a common shareholder who has their dividend eliminated by the company. The main limitation preventing an elimination of the preferred dividend is the payment of a dividend on a junior security. The only security junior to an equity preferred is common stock. As soon as the company eliminates the common stock dividend, the preferred shareholder is in an enhanced danger of losing their dividend too. This may or may not happen. I own shares in AEB, a floating rate preferred issue from Aegon. Since Aegon announced the elimination of a common dividend last year, it has continued to pay its preferred dividends. Moreover, as I interpret the prospectus, Aegon could not eliminate the dividend on one equity preferred and pay another. All securities within the same class have to be treated the same. This is relevant where the government has taken a stake in an equity preferred issue.
2. Low Priority: In the event of a bankruptcy, it is unlikely that an equity preferred security will have any value. The most recent equity preferred floating rate security to go to zero was LEHPRG, a preferred stock issued from the now-bankrupt Lehman Brothers. The failure of Lehman Brothers, and the annihilation of the Fannie and Freddie equity preferred shareholders, placed a strong downside bias to virtually all equity preferred securities for months. Nothing strikes fear into investors more than starting to worry about a security going to zero.
Generally, I prefer to hold these securities in a taxable account, and I now intend to hold the synthetic floaters in retirement accounts. The synthetic floaters pay interest.
The Aegon floater is unique in its cumulative feature and the obligation to pay interest on any optional deferral (see p. S-4: www.sec.gov However, it has eliminated its common dividend, which places payment of the preferred dividend in an enhanced danger of deferral. My last add of AEB was in a retirement account, though my larger position is in a taxable account.
3. No Maturity Date: I view this as the main disadvantage. These securities are perpetual obligations. I much prefer buying bonds with a fixed maturity at a discount to par value, so that I can make money by receiving the interest payments and by capturing the spread between my cost and par value at maturity. It is conceivable that one of the equity preferred securities might be called at par value, but I view such a chance as remote. It most likely would occur when there was a huge and prolonged spike in short rates at a time of an inverted yield curve.
This discussion is not intended to be a substitute for my earlier, far more detailed discussions of these securities. Those discussions are linked in my Gateway Post for floating rate securities.
Floaters: Links in One Post
SNAPSHOTS OF REALIZED GAINS AND LOSSES IN EXCESS OF $30 FOR SECURITIES MENTIONED ABOVE, 2008 TO DATE:
2008:
2009
SNAPSHOTS OF REALIZED GAINS AND LOSSES IN EXCESS OF $30 FOR SECURITIES MENTIONED ABOVE, 2008 TO DATE:
2008:
 |
| 2008 HBAPRF +$232.99 |
 |
| 2009 GSPRC 100 Shares +$74.66 |
 |
| 2009 MSPRA 50 Shares +$214.09 |
 |
| 2009 BMLPRG 50 SHARES + $166.48 |
 |
| 2009 BACPRE 40 SHARES +$137.18 |
 |
| 2009 METPRA 50 Shares +$14.72 |
 |
| 2010 AEB 150 SHARES +$772.04 |
 |
| 2010 AEB +81.11 |
 |
| 2010 BMLPRH +$363.48 AND BMLPRJ +$50.16 |
 |
| 2010 GSPRA 50 SHARES +$45.58 |
 |
| 2010 HBAPRD 50 SHARES +$153.03 |
 |
2010 REGULAR IRA METPRA 50 SHARES +$492.52
|
 |
| 2010 MSPRA 150 SHARES +$962.87 |
 |
| 2010 ORHPRB REDEEMED 50 SHARES +$137.52 |
 |
| 2010 STDPRB +265.01 |
 |
| 2010: STIPRA +227.61 |
 |
| 2010 USBPRH 50 SHARES +$128.08 |
 |
| 2010 ZBPRA 100 SHARES +1,099.21 |
 |
| 2010 IRA ZBPRA +$201.53 |
 |
| 2011 GSPRA 50 Shares +$49.2 |
 |
| 2011 TAXABLE ACCOUNT AEB 100 SHARES +$1,142.51 |
 |
| 2011 ROTH IRA AEB 100 SHARES +$1,213.76 |
 |
| 2011: BMLPRG +$51.58 BMLPH +$56.08 BMLPRL +$114.11 |
 |
| 2011 GSPRD 50 SHARES +$41.07 |
 |
| 2011 STDPRB +$143.16 |
 |
| 2011 STDPRB +$ 37.03 |
 |
| 2011 STIPRA +$36.57 |
 |
| 2011 USBPRH 30 SHARES +$95.68 |
 |
| 2012 BMLPRJ 50 Shares +$90.98 |
 |
| 2012 HBAPRG 50 Shares +$176.08 |
 |
| 2012 GSPRD 50 Shares +$79.58 |
 |
| 2012 SCEDN 9 Shares Partial Redemption +$142.56 |
 |
| 2012 METPRA 100 Shares +1,283.99 |
 |
| 2012 GSPRD 50 Shares +$42.47 |
2013
 |
| MSPRA (2 Transactions) Total Gain=$147.66 |
 |
| 2013 SANPRA 50 Shares +$124.58 |
 |
| 2013 Roth IRA 100 GSPRD $219.25 |
 |
| 2013 100 GSPRD +$257.24 |
 |
| 2013 ROTH IRA SANPRB 50 Shares +$225.47 |
2014
 |
| 2014 USBPRH 50 SHARES +$70.09 |
 |
| 2014 HUSIPRF 100 Shares $48.96 |
 |
| 2014 BMLPRJ 50 Shares +$40.08 |
 |
| 2014 STIPRA 50 Shares +$67.57 |
 |
| 2014 Roth IRA SANPRB 50 Shares +$105.01 |
 |
| 2014 MSPRA 50 Shares +$34.48 |
 |
| 2014 AEB 50 Shares $49.98 |
 |
| 2014 MSPRA 100 Shares +$116.98 |
 |
| 2014 Roth IRA MSPRA 100 Shares +$37.48 |
 |
| 2014 GSPRJ 50 Shares +$45.08 |
2015:
 |
| 2015 MSPRA 100 Shares +$53.03 |
 |
| 2015 BMLPRJ 50 Shares +$18.08 |
 |
| 2015 GSPRC 100 Shares +$74.66 |
 |
| 2015 HUSIPRG 50 Shares +$25.07 |
 |
| 2015 SANPRB +$561.77 |
 |
| 2015 SCEDN 41 SHARES +$678.72 |
 |
| 2015 MSPRA 50 Shares +$214.09 |
 |
| 2015 GSPRJ 50 Shares +$43.98 (fixed to floating) |
 |
| 2016 IBKCP 50 Shares +$18.48 (fixed to floating) |
|
| 2016 IBKCP 100 Shares +$17.77 |
 |
| 2016 AHLPRA 50 Shares +$15.47 |
 |
| 2016 ENBPRF:CA 100 Shares CAD +$196 |
 |
2016 GSPRD 100 Shares (2 50 Share Lots) +$44.05 |
 |
| 2016 EMAPRB:CA 100 shares +C$120 |
 |
| 2016 BMLPRG 50 shares $74.98 |
 |
| 2016 VRP ETF 272+ Shares $132.73 |
 |
| 2016 MSPRA 50 Shares +$30.07 |
 |
| 2016 GSPRD 150 Shares +$47.14 |
 |
| 2016 VRP ETF 100 Shares +$17.08 |
 |
| 2016 AZPRB 100 Shares +C$310 |
 |
| 2016 AHLPRA 100 Shares +$261.66 |
 |
| 2016 AHLPRA 50 Shares +$92.43 |
 |
| 2016 ENBPRF:CA 100 Shares +C$169 |
 |
| 2016 HSEPRA:CA 100 Shares +C$223 |
 |
| 2016 MSPRA 50 Shares +$185.47 |
 |
| 2016 MSPRA 100 Shares $281.45 |
 |
| 2016 GSPRD 50 Shares +$119.62 |
 |
| 2016 GSPRD 50 Shares +$132.86 |
 |
| 2016 CFPRC:CA 50 Shares +C$50.5 |
 |
| 2016 PPLPRE:CA 50 Shares +C$58 |
 |
| 2016 FFHPRG:CA 100 SHARES +C$ 112 |
 |
| 2016 PWTPRT:CA 50 SHARES +C$46.5 |
 |
| 2016 VSNPRC:CA 100 Shares +C$792 |
 |
| 2016 FTSPRM:CA 50 Shares +C$75 |
 |
| 2017 AHLPRA 30 SHARES +$50 (CALLED BY ISSUER) |
 |
| 2017 CPXPRC:CA 50 Shares +C$225 |
 |
| 2017 EMAPRF:CA 50 Shares +C$109 |
 |
| 2017 EMAPRC:CA 100 Shares +C$429 |
 |
| 2017 MFCPRN:CA 50 Shares +$C108 |
 |
| 2017 ENBPRP:CA 300 Shares +US$1,458.25/C$1,814 |
The profit snapshot for the 300 ENBPRP:CA is from my Fidelity account, where the CAD profit had already been converted into USDs.
 |
| 2017 USBPRH 50 Shares +$129.59 |
 |
| 2017 PWFPRT:CA 100 Shares +C$190.5 |
 |
| 2017 MFCPRM:CA 50 Shares +$C113 |
 |
| 2017 CFPRC:CA 50 Shares +C$173.5 |
 |
| 2017 DCPRD:CA 100 Shares +C$50.5 |
 |
| 2017 FFHPRG:CA 50 Shares +C$168.5 |
 |
2017 Roth IRA SCEPRJ 50 Shares +$90.97 |
 |
| 2017 RYPRZ:CA 100 Shares +C$367 |
 |
| 2017 SCEPRJ 30 Shares +$70.4 |
 |
| 2017 TRPPRH:CA 100 Shares +C$393 |
 |
| 2017 PPLPRG:CA 100 SHARES +C$507 |
 |
| 2017 TRPPRE:CA 100 Shares +C$476.5 |
 |
| 2017 ENBPRP:CA 200 Shares +C$963 |
 |
| 2017 FTSPRI:CA 100 Shares +C$479 |
 |
| 2017 PPLPRC:CA 100 SHARES +C$496 |
 |
| 2017 FFHPRD:CA 100 Shares +C$400 |
 |
| 2017 TRPPRD:CA 100 Shares +C$359 |
 |
| 2018 CPXPRA:CA 100 Shares +C$670 |
 |
| 2019 AEB 50 Shares +$168.48 |
 |
| 2019 METPRA 50 Shares +$63.25 |
 |
| 2019 VRP 102+ Shares +$42.67 |
 |
| 2019 TWOPRC 50 Shares +$7.69 |
 |
| 2019 MSPRA 100 Shares +$56.26 |
2020:
 |
| 2020 AXPRI 50 Shares +$104.5 |
 |
| 2020 MSPRA 90 Shares +$83.73 |
 |
| 2020 MSPRA 5 Share +$5.88 |
 |
| 2020 MSPRA 10 Shares $9.8 |
 |
| 2020 MSPRA 10 Shares +$33.72 |
 |
| 2020 BMOPRS:CA 150 Shares +C$805 |
2021
 |
| 2021 AXPRA:CA 200 Shares +C$681.5 |
 |
| 2021 EMAPRC:CA +C$747 |
 |
| 2021 SLFPRJ:CA +C$80.5 |
 |
| 2021 CPXPRE:CA 50 Shares +C$217 |
 |
| 2021 EBGEF 100 Shares +US$70.04 |
 |
| 2021 FFHPRI:CA +C$433.5 |
 |
| 2021 FFHPRG:CA 50 Shares +C$151 |
 |
| 2021 BAMPRT:CA +$C281.5 |
 |
| 2021 BAMPRS:CA +C$273 |
 |
| 2021 CPXPRE:CA C$843 |
 |
| 2021 EBGEF 50 Shares +US$281.49 |
 |
| 2021 TAPRE:CA 100 Shares C$58 |
 |
| 2021 BPOPRP:CA 200 Shares +C$1,322.5 |
 |
| 2021 ENBPRP:CA 100 Shares +C$368 |
2023:
 |
| 2023 PWFPRT:CA 100 Shares +C$535.5 |
 |
| 2024 TRPPRH:CA +C$140 |
 |
| 2024 FFHPRF:CA +C$552 |
 |
| 2024 METPRA 5 Shares +$7.58 |
 |
| 2024 WSBCP 15 Shares +$53.51 |
 |
| 2024 TFCPRI 5 Shares +$8.56 |
 |
| 2024 CVEPRC:CA 100 Shares +C$717 |
 |
| 2024 MBINP 6 Shares +$7.85 RI |
 |
| 2024 MBINIP 25 Shares +$72.95 |
 |
| 2024 CFGPRD 6 Shares +$19.3 |
 |
| 2024 ALAPRA:CA 50 Shares +C$203 |
 |
| 2024 FFHPRD:CA 100 Shares +C$559 |
 |
| 2025 PPLPRC:CA 100 Shares +C$438 |
 |
| 2025 TECTP 20 Shares +$17.34 |
 |
| 2025 CPXPRE:CA 100 Shares +C$430.5 |
 |
| 2025 TRPPRE:CA 100 Shares +C$413 |
 |
| 2025 PWFPRT:CA 100 Shares +C$454 |
 |
| 2025 TRPPRD:CA 50 Shares + C$262.5 |
 |
| 2025 ENBPRP:CA 100 shares +C$19 |
 |
| 2025 PPL.PRC:CA 50 Shares +C$244 |
 |
| 2025 EMAPRC:CA 100 Shares +C$565 |
 |
| 2025 TAPRH:CA 100 Shares +C$803 |
 |
| 2025 PPLPRC:CA 50 Shares +C$356 |
 |
| 2025 ENBPRP:CA 100 Shares +C$191 |
 |
| 2025 ENBPRP:CA 100 Shares +C$432 |
 |
| 2025 TRPPRD:CA 100 Shares +C$763 |
 |
| 2025 AXPRI:CA 50 Shares +C$255.5 |
 |
| 2025 AXPRI:CA 100 Shares +C$567 |
2026
 |
| 2026 AQNPRA:CA 100 Shares +C$580 |
 |
| 2026 ENBPRP:CA 50 Shares +C344.5 |
 |
| 2026 PPLPRC:CA 50 Shares +C$418.5 |
 |
| 2026 MFCPRM:CA + C$1,010 |
 |
| 2026 ENBPRP:CA +C$389 |
 |
| 2026 FTSPRM:CA +C$757 |
 |
| 2026 TRBPRE:CA +C$461 |
USDs: +$16,525.47
CADS: +C$30,879.5
EBGEF is a Canadian reset equity preferred stock that is traded in USDs.
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