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In addition to macro threats (wars, climate change, etc) ....
"Fuss sees less of a threat from the buildup of BBB credits—the lowest investment-grade rating—than others. Corporations still have an incentive to seek an optimal rating, borrowing to buy back stock and boost earnings per share, but usually stop before reaching the absolute limit of investment grade at BBB-minus. Indeed, he looks for possible “rising angels” that may move up to an A rating."
"When the fund couldn’t buy long-term AT&T bonds trading below face value (which would provide the most upside) in sufficient quantity at an attractive price, he opted to purchase the stock instead. The common’s yield of just over 6% is about 1.6 percentage points more than the bonds, which is a big attraction,"
Comments
In addition to macro threats (wars, climate change, etc) ....
"Fuss sees less of a threat from the buildup of BBB credits—the lowest investment-grade rating—than others. Corporations still have an incentive to seek an optimal rating, borrowing to buy back stock and boost earnings per share, but usually stop before reaching the absolute limit of investment grade at BBB-minus. Indeed, he looks for possible “rising angels” that may move up to an A rating."
"When the fund couldn’t buy long-term AT&T bonds trading below face value (which would provide the most upside) in sufficient quantity at an attractive price, he opted to purchase the stock instead. The common’s yield of just over 6% is about 1.6 percentage points more than the bonds, which is a big attraction,"