No. of Recommendations: 0

When you do a bond scan at E*Trade (or at any broker with a decent search engine), the output of the scan is a list, with each bond being a hot link. Clicking on the link will open a "Bond Detail" page on which a bunch of further info is given, one of which will be the call schedule and another the step schedule (which becomes available as a drop down menu). Poke around. Everything you need to know about the bond is probably there.

Suggestion: Stop worrying about how bonds are priced with reference to par and, instead, pay attention to what your total inflation-adjusted yield will be. That's what matters, not whether there will or won't be cap-gains.

Since you were attracted by the yield offered by Lyoyd's new issue and were benchmarking it against GS, I'd suggest you look at all banker bonds. It's highly likely that if any of them get into trouble, all of them are going to get into trouble, because they're all making related bets, directly or through derivatives, and often with each other, hence the panic on the part of American banks over Greek bank problems. Typically, they don't own Greek debt directly, but they wrote CDS against it.

OTOH, if your search constraints are single-A or better, no more than 8-10 years out, offering 5.5% or better, then poke around in the munis. Possibly, you could find less problematic debt with better yields. And, no, you won't be making the 8.25% on Lloyd's debt in its last two years, for the bond, for sure, having already been called. Like any of the serial issuers (Barclays, GE, GS, BofA, GMAC), all of them issue beaucoup step-bonds and then call them before maturity. But if shopped carefully, it's sometimes possible to pick up extra bps on a favorable call created by the pricing of an odd lot.

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