Duke Energy (PremierNotes) dropped rates for amounts over $50K to 1.05%. However, their Yield shows as 1.06%. Other banks generally show a yield of 1.10% when rate is 1.05%. Can someone explain the discrepancy? Note also for other amounts rates and yields are the same. Shouldn't yields be always a bit more than rates? http://www.duke-energy.com/investors/individual-investors/premie...
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Senior Member - 3K
posted: Aug. 13, 2016 @ 9:00p
Rates fluxgate daily with the money market, date of purchase and who does the math. IMO, there is not enough difference in your numbers to get excited. I suggest you look over the following threads before investing.
3 years ago, I wrote this : A word of advice: For 0.5% more then an government insured bank account (GE Capital), you are thinking of investing your retirement in BBB- debt (one rating above "junk bond"). If Duke goes bankrupt, you'd very back of the line with your subordinated debt claim. Duke Energy said: Instead, PremierNotes are variable denomination, floating rate demand notes that are unsecured debt obligations of Duke Energy Corporation and are backed only by the assets of Duke Energy Corporation. Your investment in PremierNotes is not equivalent to a deposit or other bank account and is not guaranteed, insured or subject to the protection of the Federal Deposit Insurance Corporation.
Prospectus said: are structurally subordinated to the indebtedness and other liabilities of Duke Energy’s subsidiaries. As of December 31, 2012, there were $34.2 billion of indebtedness and other liabilities of Duke Energy’s subsidiaries. ... The Notes are not guaranteed, endorsed or insured by any of our subsidiaries or any financial institution or government entity. Duke Energy does not maintain reserves for its obligations under the Notes. There is a risk that Duke Energy will be unable to meet interest payments or repay principal on the Notes. You may lose all or part of your investment, including accrued interest, if Duke Energy is unable to pay its debts, enters bankruptcy or seeks protection from its creditors. You don't suppose I could interest you in 23% yielding bonds from a nation with the largest oil reserves in the world?
Senior Member - 3K
posted: Aug. 13, 2016 @ 10:32p
I did not have to leave this country to sink money down the rat hole in Texas oil company's bonds. They were looking good until the price of oil sank like a rock. Actually my GE Capital bonds worked out well a few years back.
posted: Aug. 14, 2016 @ 7:10a
JW10 said: Rates fluxgate daily with the money market, I see what you did there... Clever!
posted: Aug. 14, 2016 @ 7:47a
For 1.05%, I could get that rate and better at a real bank. Time to leave Duke.
posted: Aug. 14, 2016 @ 11:29a
stormdog123 said: For 1.05%, I could get that rate and better at a real bank. Time to leave Duke. I forgot to mention their rates for amounts over $50K used to be 1.25% for many years.
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