I currrently own HSB.PR.E (5 year fixed reset) prefs with a cost base of near $25.00. The trading price yesterday was $27.55. The dividend rate is 6.6%. My question is: does it make any strategic sense to sell the HSB, realize the gain (which in my case can be offset with capital losses) and then buy a perpetual discount issue such as HSB.PR.C which currently has a 6.3% yield.
I am not experienced in prefs over the longer term. Will the pricing on perpetual discounts behave like bonds if interest rates increase? And for the "fixed resets" what are the factors that will determine if they will be redeemed at the 5 yr mark? tks