17 Too Big To Fail Senior Bonds

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Includes: BAC, BK, C, GS, JPM, MS, STT, WFC
by: The Financial Lexicon

In “8 Too Big To Fail Banks: A New Way Of Analyzing Credit,” I discuss the necessity of analyzing the political climate and the probability of future bailouts in the United States as the major factor in determining the creditworthiness of the eight American systemically important financial institutions. For investors who decide purchasing unsubordinated debt in the “too-big-to-fail” banks is appropriate for their portfolios, here is a list of 17 senior unsecured bonds from those banks:

JPMorgan Chase’s (NYSE:JPM) senior unsecured note (CUSIP: 46625HHZ6) maturing 5/10/2021 has a coupon of 4.625% and is asking 99.479 cents on the dollar (4.694% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Aa3; S&P rates it A+. It was originally offered at a price of 99.889 on May 5, 2011.

JPMorgan Chase’s (JPM) senior unsecured note (CUSIP: 46625HJA9) maturing 7/15/2016 has a coupon of 3.15% and is asking 98.368 cents on the dollar (3.537% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Aa3; S&P rates it A+. It was originally offered at a price of 99.76 on June 22, 2011.

JPMorgan Chase’s (JPM) senior unsecured note (CUSIP: 46625HHS2) maturing 7/22/2020 has a coupon of 4.40% and is asking 98.921 cents on the dollar (4.552% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Aa3; S&P rates it A+. It was originally offered at a price of 99.736 on July 15, 2010.

Bank of America’s (NYSE:BAC) senior unsecured note (CUSIP: 06051GEE5) maturing 1/5/2021 has a coupon of 5.875% and is asking 90.695 cents on the dollar (7.291% 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. It was originally offered at a price of 99.264 on December 16, 2010.

Bank of America’s (BAC) senior unsecured note (CUSIP: 06051GEA3) maturing 8/1/2016 has a coupon of 6.50% and is asking 98.493 cents on the dollar (6.88% 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. It was originally offered at a price of 99.749 on July 23, 2009.

Bank of America’s (BAC) senior unsecured note (CUSIP: 060505DH4) maturing 9/1/2017 has a coupon of 6.00% and is asking 96.198 cents on the dollar (6.807% 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. It was originally offered at a price of 99.775 on August 20, 2007.

Wells Fargo’s (NYSE:WFC) senior unsecured note (CUSIP: 94974BEV8) maturing 4/1/2021 has a coupon of 4.60% and is asking 96.198 cents on the dollar (6.807% 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 AA-. It was originally offered at a price of 99.793 on March 22, 2011.

Wells Fargo’s (WFC) senior unsecured note (CUSIP: 949746JM4) maturing 2/7/2035 has a coupon of 5.375% and is asking 118.473 cents on the dollar (4.129% 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 AA-. It was originally offered at a price of 99.882 on January 31, 2005.

Citigroup’s (NYSE:C) senior unsecured note (CUSIP: 172967EC1) maturing 5/29/2037 has a coupon of 5.875% and is asking 100.834 cents on the dollar (5.812% yield-to-maturity before commissions). Please check with your broker for call features on this bond. It pays interest semi-annually. Moody’s currently rates the note A3; S&P rates it A. It was originally offered at a price of 98.681 on May 18, 2007.

Citigroup’s (C) senior unsecured note (CUSIP: 172967EH0) maturing 8/15/2017 has a coupon of 6.00% and is asking 108.082 cents on the dollar (4.382% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note A3; S&P rates it A. It was originally offered at a price of 99.644 on August 8, 2007.

Goldman Sachs’ (NYSE:GS) senior unsecured note (CUSIP: 38141EA74) maturing 8/1/2015 has a coupon of 3.70% and is asking 97.443 cents on the dollar (4.462% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note A1; S&P rates it A. It was originally offered at a price of 99.882 on July 21, 2010.

Goldman Sachs’ (GS) senior unsecured note (CUSIP: 38141EA66) maturing 6/15/2020 has a coupon of 6.00% and is asking 97.95 cents on the dollar (6.314% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note at A1, S&P rates it A. It was originally offered at a price of 99.744 on May 26, 2010.

Morgan Stanley’s (NYSE:MS) senior unsecured note (CUSIP: 61744YAD0) maturing 12/28/2017 has a coupon of 5.95% and is asking 94.834 cents on the dollar (7.007% 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. It was originally offered at a price of 99.717 on December 20, 2007.

Morgan Stanley’s (MS) senior unsecured note (CUSIP: 61747YCK9) maturing 11/20/2014 has a coupon of 4.20% and is asking 95.541 cents on the dollar (5.857% 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. It was originally offered at a price of 99.96 on November 17, 2009.

Morgan Stanley’s (MS) senior unsecured note (CUSIP: 61747YCM5) maturing 1/26/2020 has a coupon of 5.50% and is asking 87.989 cents on the dollar (7.494% yield-to-maturity before commissions). Please check with your broker for call features on this bond. It pays interest semi-annually. Moody’s currently rates the note A2; S&P rates it A. It was originally offered at a price of 99.992 on January 21, 2010.

The Bank of New York Mellon’s (NYSE:BK) senior unsecured note (CUSIP: 06406HBU2) maturing 2/1/2021 has a coupon of 4.15% and is asking 106.093 cents on the dollar (3.371% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note Aa2; S&P rates it AA-. It was originally offered at a price of 99.83 on January 25, 2011.

State Street’s (NYSE:STT) senior unsecured note (CUSIP: 857477AG8) maturing 3/7/2021 has a coupon of 4.375% and last traded at 108.832 cents on the dollar (3.263% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the note A1; S&P rates it A+. It was originally offered at a price of 99.655 on March 2, 2011.

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.

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 am long CUSIPs 46625HHS2 (JPM), 94974BEV8 (WFC), 949746JM4 (WFC), and 172967EC1 (C).