We Personally Own These Monthly Payers

We wanted to take a minute to review some of our personal holdings that we have been highly satisfied with and most of which have been owned for years.

We are/have been high on the Gladstone Companies term preferred stocks which they have been issuing for 10 or 15 years.  They have always performed exactly as intended.

This doesn’t mean that we are positive on the individual Gladstone common shares, but we only have to be ‘so-so’ on the individual issues to own the term preferreds.

Here are some we own and may go to overweight positions, in particular if they sell much lower.

NOTE THAT FIDELITY MAY NOT ACCEPT ORDERS ON THESE ISSUES

Gladstone Capital 6% 2024 Term Preferred (NASDAQ:GLADN).

Gladstone Capital is a BDC and as such is covered by the leverage rules for senior securities, which includes preferred stock which means they must have 200% asset coverage ratio.  The company has been around since 2001 and recent financials have been acceptable–not great–not terrible.  Mandatory redemption in 2024.  We bought this on the OTC Grey market when issued in 2017.

Gladstone Investment 6.25% 2023 Term Preferred (NASDAQ:GAINM).

Gladstone Investment is a BDC and earnings recently have been better than average for the company.  They have $566 million in investments.  Mandatory redemption in 2023.

Gladstone Land 6.375% 2021 Term Preferred (NASDAQ:LANDP)

Gladstone Land is a farmland REIT (1 of 2 farmland REITs).  The company has performed ‘ok’ in a tough business right now as any farming related land company has had to navigate low commodity prices–thus low rents.  Gladstone Land concentrates on owning land for fruits and vegetables instead of corn and soybeans (like Farmland Partners) and thus has not had quite as tough a time as FPI.

Being a REIT there is NO leverage rule that applies, thus the issue may contain more risk.

Gladstone Investment 6.75% 2021 Term Preferred (NASDAQ:GAINO)

Same as the above Gladstone Investment.  Note that the shares are now redemption eligible as they became redeemable 12/31/2017.

For us owning these securities is simply a way to receive a decent (not huge) dividend while having a relative certainty of return of capital in the not distant future.

 

11 thoughts on “We Personally Own These Monthly Payers”

  1. Tim,
    Although not a monthly payer, ECCZ an ETD from Eagle Point Credit appears to offer value. The issue is past par but the stripped yield is a few cents from par. The term date is in 2020. The term preferreds ECCA and ECCB do pay monthly. Any thoughts?

    1. Speaking of monthly payers, Tim. Is my memory correct in that you own GWSVP, also? I have some of that one. A curious little thing.

    1. I thought you were the genesis of my interest in it, but was a bit shakier on memory as opposed to KYN-F which I remembered. Primo declared after merger they would not be calling it. I dug recently into financials and noticed the bank who supplies Glaciers revolving line of credit, will not allow the trust issue to be redeemed without its permission.

  2. Any good ideas I take credit for–any bad ideas are yours alone LOL.

    I didn’t know that about the bank permission, but since Primo I haven’t dug into the numbers at all.

    I am best not being in the issue–I was too comfortable with it, but I think one of my brothers is still in it–probably all complacent collecting the fat income stream. I would though reconsider if the pricing would drop–and I am betting it will – sooner or later. A lock in until 2028 at 9.06% would be quite tasty.

    1. Its a very peculiar issue. I didnt realize it, but they had a second near similiar trust issue that was private placed evidently that was redeemed at acquisition. As suspect as the company was financially, it never went below $25 even during taper tantrum. I could see it dropping under $26, but the last time it did was when acquisition was announced and heavy selling from redemption fear occurred. After Primo’s announcement if went back up. It has fits of jumping over $27 for brief periods of time. Every time it does I sell and then rebuy around $26.50 as it recedes back to that level quickly.

      1. Got to get into the shorter maturity stuff for teh next 6-12 months if you can.

        Talk with you this weekend

  3. I felt very comfortable with it initially because it had some very powerful (and wealthy) board members such as Richard Kayne (Kayne Anderson) and I was convinced that as long as the trust preferreds kept paying those folks were very happy.

    The privately held trust preferreds ring a bell, but I need to revisit all the financials under Primo for the time when it falls down to $25 (mid year maybe).

  4. I am back into LANDP again today for the zillionth time at $25.69. Its just been too easy to buy at 25.80 and under, flip when it bounces over $26 and buy back on the dip. Often times keeping the divi also. A great hold issue, too. No way its getting called this fall, but market will respect it anyways and keep it tehrered within shout distance of it. And the 2021 backstop and 300 basis point penalty for not redeeming it, is just a bonus.

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