I cleaned up the SWAPS spreadsheet (I know, I've been neglecting it lately).
I have done very well with ATLCL, buying it at $24 due to a post on this board back in January. It now has risen above its call price to $25.28 (it can be called 11/30/25, and must be called 11/30/26). So I looked at ATLCP and ATLCZ "sisters". ALTCP is a cumulative preferred currently yielding 8.04%, and ATLCZ is a senior note, yielding 9.05%.
For retirement accounts (no taxable issues), I would swap ATLCL into ATLCZ at current prices (which I plan to do next week). You get 2.1 years more time until call with ATLCZ, so you reap a higher yield for more time, even though it will cost about 30c/share to do the swap.
I also recommend swapping ATLCP for ATLCZ, because ALTCZ is safer since it is debt, and not a preferred stock. However, ATLCP is callable in June 2026, and if called, you'll get a capital gain of about $1.30. But my opinion is that ATLCP will not be called since it is in the best interest of the company to pay the preferred for less interest than it is paying for ATLCZ, and they must redeem ATLCZ in Jan 2029.
For taxable accounts, you'll have to consider your tax consequences of the swap. But even then, the swap from ATLCL to ATLCZ is pretty compelling.
As always, I welcome any counter-arguments to my advice above. |
