I don't think you are missing anything. The preferred is rated BBB, which is investment grade. So that makes it look like a reasonable risk investment.One concern might be defaulting mortgages. Did they participate in subprime mortgages or offer second mortgages? Did they get help from the feds? Those mortgages probably have years more on the books before they are all resolved. So further writedowns (meaning big losses) could be coming. (The HFC ticker makes me think of Household Finance Corporation, famous for their storefront loan operations.)I have a list of trust preferred stocks posted here--http://spreadsheets.google.com/ccc?key=0ArC7PlrDoTbpdFFqbThI...They cover a full range of yields, and you might be able to find some with fewer risks. Companies like IBM and Boeing have issues that are very safe. Higher yield ones usually mean taking more risk. But I think they are still OK as part of a diversified portfolio. Remember, occasionally, one of these will default and maybe even declare bankruptcy. It does not happen often, but if it does, you will wish you had done something else. So make sure the individual issues chosen are not larger than you are prepared to lose.
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