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In "Top 5 Part High-Yield, Part Investment Grade Bonds," I provided readers with the details of five corporate bonds from companies with the highest yielding bonds among split-rated issues. In this case, I defined split rated as one investment grade rating and one non-investment grade rating from Moody's and S&P alike. I would now like to round out the top 10 and provide readers with the next five companies with the highest yielding split-rated corporate bonds.

Each of the following notes has less than 10 years to maturity and one investment grade rating from either Moody's or S&P. The yields in the list range from 5.369% to 6.15%. In terms of the spread to Treasuries, these corporates trade at a premium of 354.1 to 453.6 basis points. In the cases in which companies had more than one CUSIP on the list, I provide details on the highest-yielding bond of the group and then list some of the remaining CUSIPs for those investors interested in conducting their own research.

M.D.C. Holdings' (NYSE:MDC) senior unsecured note (CUSIP: 552676AP3) maturing 2/1/2020, has a coupon of 5.625% and is asking 96.729 cents on the dollar (6.15% 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 Baa3; S&P rates it BB+. It was originally offered at a price of 97.565, and the offer size was $250 million. The offer date was January 12, 2010. Currently, the 2/15/2020, U.S. Treasury security (CUSIP: 912828MP2) is yielding 1.614%, which means M.D.C.'s note is asking 453.6 basis points more than a corresponding Treasury. This note's yield has increased slightly from when the top five list was published. As of today, it would be a member of the top five, rather than its previous ranking of sixth.

Discover Financial Services' (NYSE:DFS) senior unsecured note (CUSIP: 254709AE8) maturing 7/15/2019, has a coupon of 10.25% and is asking 126.558 cents on the dollar (5.794% 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 Ba1; S&P rates it BBB-. It was originally offered at a price of 100, and the offer size was $400 million. The offer date was July 10, 2009. Currently, the 8/15/2019, U.S. Treasury security (CUSIP: 912828LJ7) is yielding 1.509%, which means Discover's note is asking 428.5 basis points more than a corresponding Treasury. Other CUSIPs from Discover appearing among the highest yielders include: 25466AAA9, 25466AAB7.

CenturyLink's (NYSE:CTL) senior unsecured note (CUSIP: 156700AR7) maturing 6/15/2021, has a coupon of 6.45% and is asking 105.689 cents on the dollar (5.656% 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 Baa3; S&P rates it BB. It was originally offered at a price of 99.659, and the offer size was $1.25 billion. The offer date was June 9, 2011. Currently, the 5/15/2021, U.S. Treasury security (CUSIP: 912828QN3) is yielding 1.886%, which means CenturyLink's note is asking 377 basis points more than a corresponding Treasury. Other CUSIPs from CenturyLink appearing among the highest yielders include: 74913GAX3 (Qwest).

Expedia's (NASDAQ:EXPE) senior unsecured note (CUSIP: 30212PAH8) maturing 8/15/2020, has a coupon of 5.95% and is asking 102 cents on the dollar (5.65% 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 Ba1; S&P rates it BBB-. It was originally offered at a price of 99.893, and the offer size was $750 billion. The offer date was November 10, 2010. Currently, the 8/15/2020, U.S. Treasury security (CUSIP: 912828NT3) is yielding 1.749%, which means Expedia's note is asking 390.1 basis points more than a corresponding Treasury. Other CUSIPs from Expedia appearing among the highest yielders include: 30212PAB1.

Steelcase's (NYSE:SCS) senior unsecured note (CUSIP: 858155AD6) maturing 2/15/2021, has a coupon of 6.375% and is asking 106.961 cents on the dollar (5.369% yield-to-call before commissions). It has a make whole call and pays interest semi-annually. Beginning 11/15/2020, it is continuously callable at par. Moody's currently rates the note Ba1; S&P rates it BBB-. It was originally offered at a price of 99.953, and the offer size was $250 million. The offer date was January 27, 2011. Currently, the 2/15/202,1 U.S. Treasury security (CUSIP: 912828PX2) is yielding 1.828%, which means Steelcase's note is asking 354.1 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: Part High-Yield, Part Investment Grade Bonds, Part II