Group 1 - The article discusses the risks associated with high-yield investments, particularly those yielding over 9%, which often lead to dividend cuts and declining prices [1] - The focus is on baby bonds, which are preferred for their ease of trading and ability to generate strong yields with less volatility compared to regular bonds [2] - PennyMac Mortgage Trust (PMT) has announced a new baby bond, PMTW, which has a 9% coupon rate, similar to PMTV, with minor differences in ex-dividend dates and pricing [3][4] Group 2 - PMTW has seen high trading volume since its recent launch, with a goal of issuing $100 million, potentially increasing to $115 million with over-allotment [6] - The issuance of around 4 million shares is expected, with the anticipation of sellers closing positions before the weekend [7] - The yield to maturity for PMTW is approximately 9.49%, with a maturity date about five years out, providing a reasonable income stream [12] Group 3 - PMTW shares are currently within the target price range, with a calculated yield to maturity of 9.35% at a price of $25.05 [13] - The article emphasizes the importance of not using market orders due to potential price jumps and the strategy of placing bids instead [8][11] - The company plans to actively trade this position based on yield changes and the spread between these bonds and similar duration Treasuries [12]