Why does this preferred trade at such a discount to par? From everything I can tell, this dividend is paying. I'm holding this preferred. Any thoughts on why the $6 discount? I calculate the yield at about 11%.
Ally bonds are not showing distress, holding close to par. If Ally has a problem it will show up in the bond prices,so monitor them like I do.
in 2 or 3 years gm can start their own auto finance arm again. then I see problems for ally.
Floating yield in 2016 is lower than the current yield. If conditions continue, the yield will be 6-7% in 2016. I'm hoping for a call before then, but who knows.
Security is also rated junk, CCC/Caa1 by S&P and Moody's. Yields on junk bonds are +9% these days.