The latest issue of Barron’s had an article discussing “Baby Bonds”. These bonds typically have a $25 par value, and most trade just like stocks on the New York Stock Exchange. (See article here.) Two electric utility bonds were actually mentioned in the article, one by the Tennessee Valley Authority, and the other by a subsidiary of Entergy. This got me wondering about what other utility baby bonds might be out there. After searching through FactSet, I was able to find twenty-two different issues that fit the baby bond criteria. The face value of these bonds was over $7.5B. Entergy, DTE, and Southern Company are actually the biggest users of this type of financing. Here’s the list for those wanting to look at this unique segment of the market.
