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iStar Financial Inc. Message Board

  • foreverwhiteroses foreverwhiteroses Dec 2, 2010 6:42 PM Flag

    Preferred Compression

    What an interesting phenomenon in preferreds today. At closing prices today the spread between D's and I's is only 22 cents. Current yields on D's, E's, F's, G's and I's are 13.25%, 13.14%, 13.02%, 12.84%, and 12.60%. Rarely are the D's not trading at a premium to the other series and right now they are the cheapest of them all. I'm not sure what to make of this, but given the tiny dollar spread and the huge yield advantage for D's, especially given its historical pattern, it's tough to figure a scenario that does not say D's are a bargain vs, the other series....

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    • are you buying the pref at these levels?

      I own the pref and common

      • 1 Reply to haoleboy1967
      • I am holding in an IRA account and did swap out of F's to buy D's. I think the current yields are no longer excitingly out of sync with the rest of the universe, but then again, I also believe much of the risk of non-divvy payment is behind us... I mean if they've paid divvies throughout, it's hard to think the situation is worse today than when they were paying and preferreds were in the 3's. So I'm thinking there's no reason to back up the truck anymore, but there's good reason to swap into D's if you have any of the other series in a tax-deferred account....

 

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