A 9% Yield On Sale, With Rising Rate Protection And Upside Potential

The Fed's rate hike and recent comments and rising bond yields are causing discounts in some preferred shares. The price of this series is now ~17% below its $25 call value. It has a floating rate feature, which will protect investors against rising rates, and may lead to a windfall profit down the road.

As part of the HDS+ portfolio holdings, NuStar Energy L.P. 8.50% Series A Fixed/Float Cumul. Red Perp Preferred Units (NYSE:NS.PA) and NuStar Energy L.P. 7.625% Series A Fixed/Float Cumul Red Perp Preferred Units (NYSE:NS.PB) have both been further discounted by the market recently, due to the Fed's .25% rate hike and rising bond yields. NuStar Energy L.P. 9.00% Series C Fixed/Float Cumul Red Perp Preferred Units (NYSE:NS.PC) also has fallen a bit as well.

Source: Seeking Alpha

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