August 26, 2016
At least one JC Penny's insider is buying stock.
I like their debt better than their stock. At $19 a share, PFH is yielding 10% annually. That gets my attention.
PFH is a Corporate
Asset Backed Corp., CABCO Trust Certificates, principal amount $25 per
trust certificate. The underlying securities are the J.C. Penney Co.
Inc. 7 5/8% debentures due 3/01/2097. The certificates are redeemable
any time at the issuer's option at $25 plus an additional redemption
premium amount based on the present value of the remaining scheduled
payments based on a certain benchmark interest rate plus 20 basis points
which appears to make the actual redemption of these securities
unlikely prior to the maturity date. The certificates pay distributions $1.90625 per annum semiannually on 3/1 & 9/1.
It can't be called for less than $25, and doesn't come due until March 2097. We could be collecting money from this one for 80 more years.
This debt was investment grade when issued in March of 1999, but is currently rated CCC (junk), so don't go crazy and buy more than you're willing to risk.
Friday, August 26, 2016
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