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Strategies & Market Trends : Preferred Stock Investing

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From: inspbudget	7/13/2012 2:04:10 PM
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HCN_I and HCN-J I have been following these 2 "sisters" for a bit. The I series is convertible with little chance of that occurring anytime soon - probably never. The J series is call protected until 3/2017. both have the same 6.50% coupon rate. Right now, there seems to be a major disconnect between their pricing. HCN-I is at $55.20, whereas HCN-J is at $26.40. Adjusting for par value, the I series is pricing in at way above the J series. ( 5.88% yield versus 6.15% ) Why would people buy the I series when they can have the J series and receive more yield plus call protection? In 2017, we are likely to see Fed rates higher than at present. I bought HCN-J recently, so I'm now committed - hope things work out well.

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