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Strategies & Market Trends : BAK - Investing

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To: kollmhn who wrote (2809)	5/30/2012 9:00:55 PM
From: Flipper2058	Read Replies (1) of 3249

Re: Flipper- "If they have not re-fi'd the GAB F 6.20s by then, why wouldn't one prefer the Fs to a new B for an extra 3% per year?" I own a lot of GAB-F but you know the reason why I don't own too much. It is just a different animal. The call on it makes the yield 100 BP higher and that is some protection from rates going higher. I am told they have no plans to call it as it is likely they could not do a lot better. This is the key question to ask...not "will you call it?" As I mention I love the fact I am not dealing with credit issues on these family of preferreds. Any sell-off is rates or liquidity and I am OK with liquidity sell-offs. Rates have me a tad worried but I keep spread sheets on the spread between the 10 year and 30 year T-bomb. Both spreads to GAB-F are at new highs. So I am not inclined to hedge for yield risk much here. PEople paying $26+ I think are paying too much. Break even is too far away then given the call risk. It has taken me since last Fall to build a position and I continue to build it when the timing is right.

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