I am retired and take educated guesses on all things financial.

March 25, 2010

March 27,2010: Inflation Protected Securities. Good Insurance For The Income Investor.

Many investors are weary of the miserly interest rates at their local bank and through Uncle Sam. They want safety. They do not want to loan out money practically free. They would like inflation protection over and above what TIPS provide.

The following select roster of securities will provide a stout yield with protection from inflation. All are rated Moody's Baa3 or higher. Most are trading at a discount from their $25.00 (or, rarely, $100.00) call price. Libor's are three month rates unless indicated differently. No caps for a maximum rate unless indicated.

This article is not to be considered a portfolio recommendation. The securities listed may be investigated for inclusion as a part of a diversified investment scheme. Most are thinly traded.

Aegeon Floating Rate(AEB) Libor+.875 with 4.00% floor. $20.22/share.
CABCO Trust (GYB) Libor+.85 with 3.25% floor and 8.25% cap. $19.12/share.
CABCO Trust (GYC) Libor+.65 with 3.25% floor and 8.00% cap. $20.62/share.
Goldman Sachs Pref. A (GSPRA) Libor+.75 with a 3.75% floor. $22.15/share.
Goldman Sachs Pref. C (GSPRC) Libor+.75 with a 4.00% floor. $23.98/share
Goldman Sachs Pref. D (GSPRD) Libor+.67 with a 4.00% floor. $22.39/share
HSBC Pref. D(HBAPRD) based upon 1-30 year T-bill basket with a 4.50% floor. 10.5% cap.$23.90/share.
HSBC Pref. G (HBAPRG)Libor+.75 with a 4.00% floor.$23.39/share.
HSBC Pref. F (HBAPRF) Libor+.75 with a 3.5% floor. $22.50/share
Lehman Trust Cert. (JBK) Libor+.75 with a 3.50% floor and 7.5% cap. $19.70/share.
MetLife Pref. A (METPRA) Libor+1.00 with a 4.00% floor. $23.79/share.
Goldman Sachs Cap I Certificates (PYT)Libor+.85 with a 3.00% floor and 8.00% cap. $18.29/share.
JP Morgan Floating Rate Certificates (PYV) 83% of CMT with a 3.00% floor and 9.25% cap. $25.40/share.
Morgan Stanley Pref. Series A (MSPFA) Libor+.70 with a 4.00% floor. $21.80/share.
Prudential Financial Inflation-Linked Notes (PFK) CPI+2.40%. $24.39/share.
Santander Finance Series 6 Pref. (STDPFB) Libor+.52 with a 4.00% floor. $18.80/share.
Southern California Edison Series A Pref.(SCEDN) Highest of Libor, 10-year CMT or 30-year CMT+1.45%.$99.75/share.
Tennessee Valley Authority PARRS/A Power Bond (TVE) 30-year CMT+.84%. $26.00/share.
Tennessee Valley Authority PARRS/B Power Bond (TVC) 30-year CMT+.94%. $26.58/share.
U.S. Bancorp Series B Pref. (USBPRH) Libor+.60 with a 3.5% floor.$21.86/share.
UBS Pref. Trust IV (UBSPRD) 1-month Libor+.70. $16.89/share.

My favorites are PFK and SCEDN. The author has a position in PFK.

Links to this post:

Create a Link

<< Home