All I Want For Christmas Is A 5% Yield - Part Two

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 |  Includes: AIG, BRCD, C, CTL, GS, HIG, MS, WY
by: The Financial Lexicon

In All I Want For Christmas Is A 5% Yield, I provide a sample of corporate notes 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%. There are many more corporate notes that fit those criteria, several of which are as follows:

Hartford Financial Services Group’s (NYSE:HIG) senior unsecured note (CUSIP: 416515AU8) maturing 9/15/2014 has a coupon of 6.30% and is asking 105.538 cents on the dollar (5.245% yield-to-maturity before commissions). It pays interest semi-annually and has a make whole call. Moody’s currently rates the note Baa3; S&P rates it BBB. The note was originally offered at a price of 99.997, and the offer size was $500 million. The offer date was February 28, 2008.

Goldman Sachs’ (NYSE:GS) subordinated note (CUSIP: 38141GEU4) maturing 1/15/2017 has a coupon of 5.625% and is asking 99.153 cents on the dollar (5.819% yield-to-maturity before commissions). It has a conditional call feature and pays interest semi-annually. Moody’s currently rates the note A2; S&P rates it BBB+. The note was originally offered at a price of 99.931, and the offer size was $2.25 billion. The offer date was January 3, 2007.

Weyerhaeuser’s (NYSE:WY) senior unsecured note (CUSIP: 962166AV6) maturing 8/1/2017 has a coupon of 6.95% and is asking 109.196 cents on the dollar (5.05% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Ba1; S&P rates it BBB-. The note was originally offered at a price of 99.508, and the offer size was $300 million. The offer date was July 30, 1997.

Citigroup’s (NYSE:C) subordinated note (CUSIP: 172967CQ2) maturing 9/15/2014 has a coupon of 5% and is asking 98.60 cents on the dollar (5.556% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Baa1; S&P rates it BBB+. The note was originally offered at a price of 99.294, and the offer size was $4.085 billion. The offer date was December 3, 2004.

Morgan Stanley’s (NYSE:MS) senior unsecured note (CUSIP: 61747YCL7) maturing 1/26/2015 has a coupon of 4.10% and is asking 95.087 cents on the dollar (5.856% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note A2; S&P rates it A-. The note was originally offered at a price of 99.978, and the offer size was $2 billion. The offer date was January 21, 2010.

CenturyLink’s (NYSE:CTL) senior unsecured note (CUSIP: 156700AQ9) maturing 6/15/2017 has a coupon of 5.15% and is asking 100.397 cents on the dollar (5.066% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody’s currently rates the note Baa3; S&P rates it BB. The note was originally offered at a price of 99.75, and the offer size was $350 million. The offer date was June 9, 2011.

American International Group’s (NYSE:AIG) senior unsecured note (CUSIP: 02687QBW7) maturing 5/18/2017 has a coupon of 5.45% and is asking 96.277 cents on the dollar (6.271% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Baa1; S&P rates it A-. The note was originally offered at a price of 99.893, and the offer size was $850 million. The offer date was May 15, 2007. Currently, there is $1.25 billion of outstanding notes for this CUSIP.

American International Group’s (AIG) senior unsecured note (CUSIP: 026874CA3) maturing 9/15/2014 has a coupon of 4.25% and is asking 97.15 cents on the dollar (5.382% yield-to-maturity before commissions). It pays interest semi-annually and has a make whole call. Moody’s currently rates the note Baa1; S&P rates it A-. The note was originally offered at a price of 99.448, and the offer size was $1.2 billion. The offer date was September 8, 2011.

Brocade Communications Systems’ (NASDAQ:BRCD) senior secured note (CUSIP: 111621AG3) maturing 1/15/2018 has a coupon of 6.625% and is asking 104.45 cents on the dollar (5.333% yield-to-call before commissions). It pays interest semi-annually, has a poison put at 101, and the following call schedule: Prior to 1/15/2013, there are conditional calls. Please contact your broker or read the prospectus for additional details. Beginning 1/15/2013, it is callable at the greater of 103.313 or make whole; beginning 1/15/2015, it is callable at the greater of 101.656 or make whole; beginning 1/15/2016, it is callable at par. Moody’s currently rates the bond Ba2; S&P rates it BBB-. The note was originally offered at a price of 99.239, and the offer size was $300 million. The offer date was August 25, 2010.

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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.