TSX:BPO.P.A - Post by User
Post by
CrazyTraderon Jun 27, 2023 9:10am
154 Views
Post# 35515930
Looking For Inflation Hedged Fixed Income With Yield 10%+
Looking For Inflation Hedged Fixed Income With Yield 10%+Resetting to possible 17-22%... Check out BPO Preferred Shares.
17 to 20%???? How's that you ask.
Well some of these preferreds resetted when interest rates were near ZERO back in around 2020-21.
Dividend calculated at a rate that = A base rate plus the 5yr Canadian Bond rate
They reset every 5 years.
So, those that resetted back in 2020-21, resetted at the BOTTOM. Dividend Rate, rock bottom.
Yet, they yielding over 10% on dividend rate that's rock bottom.
Now interest rates have rocketted up.
If the 5yr rates hold or continue higher when preferreds reset, the yield will rocket up.
Don't believe me, do the calculation yourself, and/or ask around, Check out my post, ask the board if the calculations are wrong or correct. So far, I haven't heard anyone say they are wrong.
What the risk are, I'm not sure.
But 17-22% possible reset yields are just CRAZY.
All just my opinion/view/thinking