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Over the past few weeks, I have been reading more and more about high-yield debt increasingly becoming the place to which many investors are flocking in search of yield. If you are interested in high-yield exposure other than through ETFs, individual bonds is another possibility. When buying individual junk bonds, keep in mind that prices can fluctuate quite significantly, even with much smaller moves in benchmark Treasury yields. This is because the further down in credit quality an investor ventures, the larger spreads to Treasuries become and the larger the movements in spreads. In other words, the lower one goes on the ratings scale, the more the market demands to be compensated for default risk. And, given the effects even small cyclical changes in the economy often have on companies with lower-rated debt, people invested in this type of debt should always be prepared for the possibility that spreads, yields, and bond prices will fluctuate wildly.

With all this in mind, presented below are details on junk rated bonds of five companies. The notes have maturities of less than ten years, yields between 4.782% and 9.501%, and spreads to Treasuries of 397.6 to 856.3 basis points. Furthermore, none of the notes have a rating in "C" territory; although, a couple come close.

Sunoco's (NYSE:SUN) senior unsecured note (CUSIP: 86764PAD1) maturing 1/15/2017 has a coupon of 5.75% and is asking 104.201 cents on the dollar (4.782% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody's currently rates the note Ba2; S&P rates it BB+. It was originally offered at a price of 99.629, and the offer size was $400 million. The offer date was December 11, 2006. Currently, the 2/15/2017 U.S. Treasury security (CUSIP: 912828GH7) is yielding 0.806%, which means Sunoco's note is asking 397.6 basis points more than a corresponding Treasury.

Cooper Tire & Rubber's (NYSE:CTB) senior unsecured note (CUSIP: 216831AE7) maturing 12/15/2019 has a coupon of 8% and is asking 107.00 cents on the dollar (6.83% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody's currently rates the note B2; S&P rates it BB-. It was originally offered at a price of 98.135, and the offer size was $225 million. The current amount outstanding is $173.578 million. The offer date was December 8, 1999. Currently, the 11/15/2019 U.S. Treasury security (CUSIP: 912828LY4) is yielding 1.521%, which means Cooper Tire & Rubber's note is asking 530.9 basis points more than a corresponding Treasury.

Alpha Natural Resources' (NYSE:ANR) senior unsecured note (CUSIP: 02076XAC6) maturing 6/1/2021 has a coupon of 6.25% and is asking 99.98 cents on the dollar (6.251% yield-to-maturity before commissions). It pays interest semi-annually and has the following call schedule: Prior to June 1, 2016, there is an equity proceeds call of 35% of the principal amount of the notes at 106.25 (please contact your broker or read the Indenture for more details on this). Beginning June 1, 2016, it is callable at the greater of 103.125 or make whole; beginning June 1, 2017, it is callable at the greater of 102.083 or make whole; beginning June 1, 2018, it is callable at the greater of 101.042 or make whole; and beginning June 1, 2019, it is callable at the greater of 100 or make whole. Moody's currently rates the note Ba3; S&P rates it BB. It was originally offered at a price of 100, and the offer size was $700 million. The offer date was May 18, 2011. Currently, the 5/15/2021 U.S. Treasury security (CUSIP: 912828QN3) is yielding 1.843%, which means Alpha Natural Resources' note is asking 440.8 basis points more than a corresponding Treasury.

MGM Resorts International's (NYSE:MGM) senior unsecured note (CUSIP: 552953BB6) maturing 1/15/2017 has a coupon of 7.625% and is asking 101.125 cents on the dollar (7.347% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody's currently rates the note B3; S&P rates it B-. It was originally offered at a price of 100, and the offer size was $750 million. The current amount outstanding is $743 million. The offer date was December 13, 2006. Currently, the 2/15/2017 U.S. Treasury security (CUSIP: 912828GH7) is yielding 0.806%, which means MGM's note is asking 654.1 basis points more than a corresponding Treasury. It is also worth mentioning that this corporate note has rallied more than 25% in price since early October.

Sprint Nextel's (NYSE:S) senior unsecured note (CUSIP: 852061AF7) maturing 8/15/2017 has a coupon of 8.375% and is asking 95.25 cents on the dollar (9.501% 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 note B3; S&P rates it B+. It was originally offered at a price of 98.575, and the offer size was $1.3 billion. The offer date was August 10, 2009. Currently, the 8/15/2017 U.S. Treasury security (CUSIP: 912828HA1) is yielding 0.938%, which means Sprint Nextel's note is asking 856.3 basis points more than a corresponding Treasury.

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. I discuss this in my article, "Are You Paying Too Much For Your Bonds?" The current prices may also differ greatly from those listed at the time this article was written. For additional information on any of these notes, including any additional call or put features, 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: Venturing Into The World Of Junk Bonds