Sorting Preferred Stocks by Largest Share Price Loss

We have added a new preferred stock listing – listed by largest share price loss.

The list is all $25 regular (or traditional) preferred stocks issues which in this case includes term preferreds–we have also included a few convertibles.

We do not include trust preferreds

This list is sorted each time it is loaded—the quote providers claim real time or near real time but it is safer to say quotes may be delayed up to 15 minutes.

We believe this list provides a real time (or nearly so) opportunity to snag issues that may have a large share ‘dump’ occurring for a quick profit.  We believe many readers can find a use for this listing.

The list can be found here-it may take an extra 1/2 second to load as it sorts with each load and contains over 430 issues.

Additionally we have included a link on the preferred stock page here.

Rate Hike as Expected

As expected the Fed has announced a 1/4% hike in the Fed Funds rate which was totally baked into all stock and bond markets.

While we don’t fixate on the Fed Funds rate we certainly make note of it—and actually we are happier with higher rates.  With our money market likely to toss off a current yield of near 2.2% we are at least earning a measurable return in our brokerage accounts which always seem to have too much cash.

The most important item will be the press conference to be held shortly with Fed Chair Powell.  Do they think wages are going to shoot higher?  Do they thing tariffs are going to stoke up prices?  Is the outlook still for another rate hike in December and 3 next year?

We have to leave the office so won’t be able to watch the press conference–but in the end it probably won’t matter much at all–and even if markets react it would be rare for us to do one darned thing based on this 2 hour window.

Adding More Spreadsheets

As we always note we are working continually on the site–you may not notice it too much because it is sometimes ‘behind the scenes”.

We have had a readers let us know when we are missing issues from the $25 Master List in particular but also other lists.

The $25 Master List continues to grow and contains around 600 issues which are preferreds stocks (including some convertibles being added slowly), baby bonds, and trust preferreds.  This sheet will open in a separate page which readers can copy if they desire.

Any time you see a link on a ticker symbol it will take you to the chart page with further detail and a link to the prospectus (although we continue to be adding detail–so some is a bit incomplete.

What we are adding now is ‘real time’ sorting.  We are adding the links on the ‘Preferred Stock‘ page.

The 1st new page we have added is the ‘Preferred Stocks of REITs’ page – sorted BY YIELD.  When you click the link you will immediately get the data sorted by current yield.  This page might take an extra 1/10th of a second to load as it has to sort and then display.

We will be slowly adding more info that we hope is helpful to folks.

Monday Morning Kickoff

The DJIA traded in a range of about 26,030 to 26,770 last week which obviously is in record high territory and closed the week near the highs at 26,743. The 10 year treasury traded in a ranger of 2.99% to 3.1% and at this moment is trading at 3.07%

Last week we had all kinds of housing numbers being released and they were about as expected except for housing starts which were stronger than anticipated–although builders cut back on applications for building permits to a 15 month low. The Leading Economic Indicators (LEI) which were released came in +.4% which indicates continued expansion ahead and helps validate both higher  long term rates as well as bolstering Fed rate hikes for this coming week.

For the coming week we have Consumer Confidence being released on Tuesday and while the markets give this little attention it is the basis for all things economically speaking in the U.S. as the consumer drives the economy.  The Fed meetings starts on Tuesday and ends Wednesday with no doubt a 1/4% rate hike in the Fed Funds rate.  Thursday will see a number of announcements with Durable Goods, Pending home sales and another revision of the 2nd quarter GDP.  Friday brings Consumer Consumption and Consumer Sentiment.  Let’s face it all eyes are on the Fed for the week–not for the ‘baked in’ rate hike, but for the press conference with Powell on Wednesday.

The Fed Balance Sheet fell last week by a couple of Billion $–that is 2 weeks with little movement so we should see a big runoff this week or next which will be supportive of higher interest rates.

For last week we had the issuance of a number of new issues kicking off on Tuesday with JP Morgan Chase (NYSE:JPM) selling a fixed rate preferred issue with a coupon of 5.75%.  Additionally tiny insurer Conifer Holdings (NASDAQ:CNFR) announced a baby bond issue with a 6.75% coupon.   BDC Hercules Capital (NASDAQ:HTGC) announced a 6.25% baby bond.  Associated Banc-Corp (NYSE:ASB) announced a fixed rate preferred with a coupon of 5.875%.  BDC New Mountain Finance (NYSE:NMFC) announced a baby bond with a coupon of 5.75% with a shorter dated maturity in 2023.  CMS Energy (NYSE:CMS) announced a baby bond with a coupon of 5.875%.  You can find additional short ‘blurbs’ on all of these below with lots of comments by readers.

We personally have little interest in the offering from last week, but at slightly lower prices (higher yield) the New Mountain Finance might be a decent long term hold.  Normally we would have like the Hercules Capital baby bond, but the maturity is out in 2033 which is somewhat longer than we would like–at least at this coupon and current yield.

We saw the average $25 preferred fall by 14 cents last week as the high quality issues ‘took it in the shorts’ so to speak.  It was actually worse mid week, but you saw a bit of a pricing bounce back later in the week as investors decided that the selloff was overdone.  We now have 192 $25 preferred selling for $25 or below.  This is 22 issues more than last week and certainly gives investors a bit of a higher current yield.

 

BDC New Mountain Finance Prices New Baby Bonds

Business development company New Mountain Finance (NYSE:NMFC) has priced their new baby bonds at 5.75%.  We note that the company has recently voted to reduce their asset coverage ratio to 150% from 200% as now allowed by law.

The issue will trade under the permanent ticker of NMFX when it begins to trade in the next week or two.  There will not be OTC Grey market trading.

The issue is nice in that it has a shorter dated maturity in 2023 with early optional redemption starting in 2020.

The pricing term sheet can be found here.

We are not very familiar with NMFC, although some readers have made positive comments on the company on our site.  For now we pass, but will consider a purchase once we are able to do due diligence and have some investable cash available.

 

 

CMS Energy Prices Baby Bonds

Michigan electric and natural gas company CMS Energy (NYSE:CMS) has priced their new baby bonds with a coupon of 5.875%.

The issue will have normal terms for a utility which means quarter payments and long maturities (2078)–there will be an early redemption available to the company beginning in 2023.   The interest payments are not qualified for preferential tax treatment.

The pricing term sheet can be found here.

High Quality Preferreds Being Slammed

As the more seasoned preferred stock investors know when interest rates rise the preferred that are knocked down the most are the high quality, low coupon, perpetual issues.

We always watch the Public Storage (NYSE:PSA) preferred for hints at direction movement and the size of those moves in quality issues.  PSA has 13 preferreds outstanding with coupons ranging from a low of 4.90% to 6.375%.

Here is a chart of the PSA-D issue which carries a 4.95% coupon showing a 5 day loss of 3%.  This is exactly why many investors stay away from these low coupon issues at this stage of the interest rate cycle.




Associated Banc-Corp Prices Preferred

Associated Banc-Corp has priced 4 million new shares (plus 1.242 million shares for overallotment) of a fixed rate, perpetual preferred with a coupon of 5.875%.

Of course the shares are non cumulative, being a banking company.  Dividends are qualified for tax purposes.

The issue is marginally investment grade–Baa3 from Moodys and BB from S&P.

The pricing term sheet can be read here.

Shares are trading on the OTC Grey market under the temporary ticker of ABCCL.  I see them last trading at $24.60.

CMS Energy to Sell Baby Bonds

In what has become a virtual rush to sell debt and preferreds electric and natural gas company CMS Energy (NYSE:CMS) has announced they will be selling a new baby bond issue.

Details have not been announced as of yet but the preliminary paperwork can be seen here.

The issue will have the ability to have deferred interest payments for up to 40 consecutive quarters without a default being declared.  This is fairly typical in baby bond issues from utility companies.

CMS has 1 other 5.625% baby bond outstanding (NYSE:CMSA) which is trading at $24.37 for a current yield of 5.77%.

BDC New Mountain Finance to Offer Baby Bonds

New Mountain Finance (NYSE:NMFC) has announced their intention to sell an issue of baby bonds with a maturity date in 2023.  The permanent ticker symbol will be NMFX when trading begins in a week or two.

No details have been released yet, but the preliminary prospectus can be read here.

New Mountain had previously voted to reduced their asset coverage ratio needs from 200% to 150%.

 

 

BDC Hercules Capital Prices Baby Bonds

BDC Hercules Capital has priced their new baby bonds with a coupon of 6.25%.  This is a full percentage point above the last issue the company sold.

Please note that the maturity date is substantially longer than issues Hercules has sold in the past–it is 2033.  They are paying a premium coupon based, at least partially, based upon the longer dated maturity.

The company has stated that they may call the balance of their 6.25% issue which is due in 2024 (NASDAQ:HTGX).  This issue is now trading at $25.26 so their is virtually no call risk in holding them.  They had previously partially called this issue.

Additionally the company has a 5.25% issue outstanding (NASDAQ:NCXZ) which is due in 2025 and is trading at $24.84.

The pricing document on the new issue is here.  The new issue will trade with the permanent ticker of HCXY when it trades in the next week or so.  There will not be any OTC Grey market on the issue.

Associated Banc-Corp Announces New Preferred

Wisconsin regional banker Associated Banc-Corp (NYSE:ASB) has announced the sale of a new issue of fixed rate preferred stock.

No details of the new issue have been announced as of yet.

The company has 2 issues of fixed rate preferreds currently outstanding–they are marginally investment grade.

 

The preliminary prospectus can be found here.

Monroe Capital and QVC Baby Bonds Trading

We have gotten notes from readers that the Monroe Capital 5.75% baby bonds (NASDAQ:MRCCL) and the QVC 6.375% baby bonds (NYSE:QVCD) are now trading.

The issues are trading about where I thought they would trade.  MRCCL is a shorter maturity baby bond and last traded at $24.90, while the long dated issue from QVC is trading weakly at $24.25.

We are unlikely at this time to have an interest in these bonds as the QVC bonds are too long in maturity for us and the MRCCL bonds are slightly light in coupon (although at a lower price we would have an interest because of the 2023 maturity date).

 

JPMorgan Chase Prices Preferred Issue

JPMorgan Chase has priced their new fixed rate perpetual preferred right where it was expected–5.75%.

The issue is a fairly massive issue with 59 millions shares being issued with another 8.85 million available for overallotments.

The issue is normal in all respects–qualified dividends, non cumulative (since it is a bank) and optionally redeemable about 5 years after issuance.

Shares will trade on the OTC Grey market under the temporary ticker of JPMLL.

The pricing term sheet can be seen here.

BDC Hercules Capital to Sell Baby Bonds

Business development company Hercules Capital  (NASDAQ:HTGC) has announced the issuance of new baby bonds.  The issue has not yet been priced.

The new issue will have the normal terms, but the maturity is a bit further out than we prefer as it is in 2033.

The new issue will trade with a permanent ticker of HCXY when it begins trading in the next couple of weeks.

The company had last issued baby bonds on 4/23/2018 at a coupon of 5.25%–those bonds are now trading at $24.85.

The company has announced that they may use the proceeds to redeem the 6.25% 2024 issue which had partially been redeemed on 2 previous dates.

The preliminary prospectus can be read here.

 

Specialty Insurer Conifer Holdings Announces Senior Notes (Baby Bonds)

Conifer Holdings (NASDAQ:CNFR) has announced the sale of a $25 senior note offering.  The baby bonds carry a coupon of 6.75% and will mature in 2023.

The company is selling 800,000 shares with an additional 120,000 being available for overallotment.

The new issue will have an anticipated ticker of CNFRL.  The baby bonds should trade on NASDAQ in the next 10 days or so.

Conifer is a small property/casualty insurer headquartered in Michigan and they target niche and under served segments.  The company was formed in 2012 and focuses on insurance for bars, restaurants and convenience stores etc.

The registration statement for this new issue can be found here.

This FWP (free writing prospectus) contains a company presentation with pricing as well as other details about the company.  Potential investors would do well to review this FWP prior to purchasing any shares.  This is a small company and we are not familiar at all with them, but as always we certainly like the short maturity.

 

JP Morgan Chase Announces New Fixed Rate Preferred

Giant banker JP Morgan Chase (NYSE:JPM) has announced a new issue of fixed rate preferred stock.

The issue will pay qualified dividends for tax purposes and the shares will be investment grade—Baa3 from Moodys and BBB- from Standard and Poors.  Of course, being a banking issue, it is required to be non cumulative to be used as Tier 1 capital.

The pricing of the issue has not been announced as of yet but it will be between 5.625% and 5.875%.  We expect pricing soon.  No OTC Grey Market symbol is available as of yet.

JP Morgan currently has 6 $25/share issues outstanding (shown below) and all are fixed rate.  JPM has a number of fixed-to-floating issues outstanding but they are $1000/share issues.

The preliminary prospectus can be seen here.

 

 

 

Monday Morning Kickoff

The DJIA traded in a range of about 25,850 to 26,211 last week which is a wider range than we have seen for a few weeks, but generally is still pretty quiet.  The 10 year treasury traded in a ranger of 2.93% to 3% and at this moment is trading right at 3%.

Last week we had Consumer Credit released and it grew by $17 billion in July which is a sizable jump and reflects the level of consumer confidence we have observed for many months now.  Also last week we had the Produce Price Index released at a -.1% and the Consumer Price Index came in right at consensus at .2% higher.

For the coming week we have bunches of housing numbers being released.  Home Builder Index is released on Tuesday, Housing Starts and Building Permits are released on Wednesday and Existing Home Sales are released on Thursday.  These number have been running weak in the last few months and we expect that to continue.  Leading Economic Indicators will be released on Thursday and while the number could be important there are none of the economic releases this week that anyone will pay too much attention to as far as interest rates and equity indexes are concerned.

Economically speaking the new tariffs to be announced on China by the U.S. are the biggest news and could eventually cause havoc in the markets–but predicting major market events based on tariffs has proven fairly futile thus far.  All we can do is wait and see.

The Fed Balance Sheet grew last week by a couple of Billion $, but overall continues on a downward trend.

For last week we had quite a number of new income issues announced.  Duke Energy (NYSE:DUK) announced a 5.625% baby bond.  REIT American Homes 4 Rent (NYSE:AMH) sold a new preferred stock with a coupon of 6.25%.  Container shipping company Seaspan (NYSE:SSW) sold a new 8% fixed to floating rate preferred.  mREIT Chimera Investment (NYSE:CIM) announced a 7.75% fixed to floating rate preferred.  Lastly AllianzGI Convertible & Income Fund (NASDAQ:NCV) announced a very high quality fixed rate preferred with a coupon of 5.625%.

We personally have no long term interest in the issues announced last week–BUT we could see a potential ‘flip’ of the Chimera issue depending on where one can buy it in the OTC Grey market.  The issue is trading under ticker CIMPP and closed at 24.85 on Friday.  We could see a 40-50 cent flip over the next 30 days if one can buy right in this price area.

We have 170 $25 preferred stocks trading at $25 or lower and the average price of a preferred stock fell by a full dime last week.  This is the largest drop we have seen for quite a while and mirrors the rise in interest rates last week.  As we have written about over the years in an orderly market–kind of Goldilocks when rates are rising slowly over time you can lose 1-2% in share price and not really notice.  As share prices fall a few pennies here and there another dividend is collected–at the end of the quarter you end up ‘even’ etc.  We like orderly price adjustments and interest rate transitions,

mREIT AGNC Investment Releases New Presentation

From time to time we like to mention new investor presentations from companies which may have some importance to income investors.

mREIT AGNC Investment (NASDAQ:AGNC) recently presented at the Barclays Global Financial Conference and you can find their presentation on the following link (it will open a new PDF on your computer).

AGNC Barclays Presentation.

AGNC has 2 perpetual preferred outstanding which income investors may own-or have an interest in.

You can see their preferreds here–as well as a listing of all mortgage REIT preferreds.

 

AllianzGI Convertible & Income Fund Prices New Preferred

As many readers already know AllianzGI Convertible & Income Fund (NASDAQ:NCV) has priced their new perpetual preferred with a coupon of 5.625%.

This is kind of a surprise bonus as the AllianzGI Convertible & Income Fund II (NASDAQ:NCZ) priced a new preferred with a coupon of 5.50% last week and we doubt there is a nickel worth of difference between them.  We should note that this issue has traded weakly on the Grey Market since issuance–around $24.80-$24.85

The new issue has a OTC Grey market ticker of NZCZP.  We are not seeing the ticker being active on the eTrade platform as of yet.

The final prospectus can be seen here.

Since this is a preferred issue of a closed end fund (CEF) the company is required to have an asset coverage ratio of 200% (or more).  The company filing shows the a current asset coverage ratio of 262% on preferred shares.

Disclosure–we bought a measly 100 shares of the 5.50% issue in one of our accounts–we certainly realize the risk to net asset value (share price) if interest rates continue to move higher.

 

 

Potential Error in Chimera OTC Ticker

I have been notified by a number of readers that the OTC Grey Market for the new Chimera fixed to floating preferred MAY BE CIMPP.  This ticker is showing up on eTrade and it looks like it is probably the correct ticker.

I just double checked and FINRA has it as PRBRP–which seemed weird to me when I originally listed it.

mREIT Chimera Investment Prices Fixed-to-Floating

As noted by a number of readers Chimera Investment (NYSE:CIM) has priced their new fixed-to-floating rate preferred issue with an initial fixed rate of 7.75%. While the initial fixed rate coupon is about as expected the spread on the float (which begins in 2025) is a disappointing 4.743% which is added to 3 month Libor.

The terms are the normal terms–except the issue doesn’t become floating for 7 years.  When fixed to floating rate issues started being issued (in large quantity) a few years ago many didn’t become floating for 10 years—and most recently most have been 5 years.  Whether one is better than the other depends on ones interest rate outlook.

The pricing term sheet is here.

The OTC Grey Market ticker is PRBPP

CEF AllianzGI Convertible & Income Fund to Issue Preferred

Just last week the AllianzGI Convertible & Income Fund II (NASDAQ:NCZ) sold an issue of perpetual preferred stock–this week we have the sister (or is it brother) AllianzGI Convertible & Income Fund (NASDAQ:NCV) fund selling a new issue.

Given the coupon on the sister CEF of 5.5% there is no reason to believe this will be any different.  The issue from last week is trading on the OTC market yet at $24.95 and came to market at $24.75—it should trade up another 30-40 cents when big board trading starts.

As a CEF the issue requires a 200% asset coverage ratio–so very safe and investment grade.

No OTC Grey market has yet been announced.

The preliminary prospectus can be found here.

 

mREIT Chimera Investment Selling Fixed-to-Floating Preferred

mREIT Chimera Investment Corp (NYSE:CIM) is selling a new issue of fixed-to-floating rate preferred.

The issue is not priced as of yet.

The preliminary prospectus can be found here.

The mortgage REIT has 2 perpetual preferreds currently outstanding–one of which is a 8% f-t-f issue (see below)  which is being knocked down today on the news of a new issue.



While we are not fond of most mREITs there may be a flip opportunity on this one if the coupon and spread are reasonable–we shall see.