Now
for something specific to ET. Let's assume SOFR will be the new
benchmark and preferreds cost goes to 9+ percent. The equity is
currently trading at 8+ percent yield, and they aren't done raising the
distribution back to $1.22, which would put the yield over 10% on the
common units. So I don't see any incentive to take
out the preferreds because of their "cost" to the company. And the
publicly traded preferreds aren't a huge part of their capital stack
anyway.
Having said all that, it must be obvious
to the reader that I own some ET preferreds. I like to buy them on
price weakness, because I think ultimately holding a security with
roughly a 9% yield and some upside to par is a good value in these
times. I don't expect them to be taken out next year, but they might
trade up to par anyway if interest rates take a turn for the better.