We’re adding two non-credit-rated preferreds to the portfolio. Keep in mind that issuers must pay to have their preferreds credit-rated. 

Thus, the fact that a preferred is not rated means only that the issuer didn’t choose to pay for a rating. They’re not necessarily more risky than rated preferreds.

PennyMac Mortgage Investment Trust 8.13% Series A (PMT-A

PennyMac is a mortgage REIT that primarily invests in distressed (delinquent) mortgages secured by residential properties. 

Issued 3/2/17, these preferreds are cumulative, meaning that PennyMac remains on the hook for any missed dividends. The market yield is 8.0% and the yield to the 3/ 15/24 call date is 7.9%.

Spark Energy 8.75% Series A (SPKEP)

Spark is an independent natural gas and electricity provider serving customers in 19 states. Issued 3/18/17, these cumulative preferreds are paying an 8.5% market rate and the yield to their 4/15/22 call date is 7.9%

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