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Despite the fact that Treasuries with maturities of less than seven years are yielding no more than 1.38%, it is possible to find much higher yields with similar maturity profiles in the corporate space. I ran a scan for corporate bonds currently being offered in the secondary market with at least one investment grade rating from either Moody’s or S&P, maturities of less than seven years, and yields greater than 5%. The scan returned 225 hits.

When glossing over the items returned, I immediately noticed a heavy influence of financials, especially among the highest yielding corporates on the list. However, some non-financial companies did manage to creep in among the highest yielding notes. What follows is a sample of the corporate notes found by the scan. Keep in mind that given some of the yields on the list, relative to the investment grade ratings, corporate bond investors are implying they do not believe many of the current ratings.

Genworth Financial’s (NYSE:GNW) senior unsecured note (CUSIP: 37247DAK2) maturing 5/22/2018 has a coupon of 6.515% and is asking 91.471 cents on the dollar (8.25% yield-to-maturity before commissions). It pays interest semi-annually and has a make whole call. Moody’s currently rates the bond Baa3; S&P rates it BBB. The note was originally offered at a price of 100, and the offer size was $600 million. The offer date was May 19, 2008.

Masco’s (NYSE:MAS) senior unsecured note (CUSIP: 574599BF2) maturing 3/15/2017 has a coupon of 5.85% and is asking 99.956 cents on the dollar (5.857% yield-to-maturity before commissions). It has a make whole call, conditional puts for a change of control, and pays interest semi-annually. Moody’s currently rates the bond Ba2; S&P rates it BBB-. The note was originally offered at a price of 99.648, and the offer size was $300 million. The offer date was March 9, 2007.

Bank of America’s (NYSE:BAC) subordinated note (CUSIP: 060505DA9) maturing 3/15/2017 has a coupon of 5.42% and is asking 90.877 cents on the dollar (7.558% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the bond Baa2; S&P rates it BBB+. The note was originally offered at a price of 100, and the offer size was $1.6694 billion. The offer date was April 26, 2007.

Computer Sciences’ (NYSE:CSC) senior unsecured note (CUSIP: 205363AL8) maturing 3/15/2018 has a coupon of 6.50% and is asking 103.412 cents on the dollar (5.837% yield-to-maturity before commissions). It has a make whole call, conditional puts for a change of control, and pays interest semi-annually. Moody’s currently rates the bond Baa1; S&P rates it A-. The note was originally offered at a price of 99.575, and the offer size was $1 billion. The offer date was February 27, 2009.

Gannett’s (NYSE:GCI) senior unsecured note (CUSIP: 364725AW1) maturing 9/1/2018 has a coupon of 7.125% and is asking 99 cents on the dollar (7.314% yield-to-maturity before commissions). It pays interest semi-annually. This note was originally issued as a private placement without a prospectus. The note later went public. I am finding conflicting call and put features on this note depending on the source (FINRA, Bloomberg, various brokers). Please contact your broker for more details on the call and put features. Moody’s currently rates the bond Baa3; S&P rates it BB. The note was originally offered at a price of 98.527, and the offer size was $250 million. The offer date was September 20, 2011.

Merrill Lynch’s (BAC) senior unsecured note (CUSIP: 59018YJ69) maturing 8/28/2017 has a coupon of 6.40% and is asking 96.285 cents on the dollar (7.204% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the bond Baa1; S&P rates it A-. The note was originally offered at a price of 99.854, and the offer size was $2.75 billion. The offer date was August 22, 2007.

Qwest Communications’ (NYSE:CTL) senior unsecured note (CUSIP: 749121CC1) maturing 4/1/2018 has a coupon of 7.125% and is asking 103.50 cents on the dollar (5.932% yield-to-par call before commissions). It pays interest semi-annually and is continuously callable beginning 4/1/2013. Beginning 4/1/2013, it is callable at 103.563; beginning 4/1/2014, it is callable at 101.781; and beginning 4/1/2015, it is callable at par. For additional conditional call features, please contact your broker or read the indenture. Moody’s currently rates the bond Baa3; S&P rates it BB. The note was originally offered at a price of 98.44, and the offer size was $800 million. The offer date was December 20, 2010.

Prologis’ (NYSE:PLD) senior unsecured note (CUSIP: 743410AT9) maturing 5/15/2018 has a coupon of 6.625% and is asking 105.149 cents on the dollar (5.654% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody’s currently rates the bond Baa2; S&P rates it BBB-. The note was originally offered at a price of 99.766, and the offer size was $600 million. At the moment, there is only $14.445 million outstanding. The offer date was May 1, 2008.

If you are interested in purchasing any of these securities but are nervous about counterparty risk wreaking havoc on your portfolio, learn how to hedge individual bonds in “Protect Your Income Portfolio With Cross-Asset Hedging.”

Please be aware that prices in the over-the-counter U.S. bond market may vary depending on the broker you use. The current prices may also differ greatly from those listed at the time this article was written. For additional call or put features on any of these notes, please contact your broker or read the indenture.

Also, please do your own due diligence on the financial profiles of the companies mentioned in this article. Only you can determine if taking the counterparty risk of purchasing individual bonds is suitable for you.

Source: All I Want For Christmas Is A 5% Yield