Triton International Limited Prices New Preferred

Container company Triton International (TRTN) has priced their previously announced preferred stock.

The issue will have a fixed coupon of 7.375%. The issue is rated B+ by S&P.

The company is going “whole hog” on this issue with 7 million shares being sold (with no overallotment). Guess they are getting the cash while they can at this bargain rate. The other 2 issues outstanding were 3 and 5 million shares respectively.

Be cautious if buying this issue–the company is domiciled in Bermuda–brokers may try to charge $50 as a foreign company.

The pricing term sheet can be perused here.

JPMorgan Chase to Sell New Preferred

Giant banker JPMorgan Chase (JPM) will be selling a new preferred issue.

Of course we all know this new issue will be at a rock bottom coupon. The company will be redeeming their 5.45% JPM-A issue with the proceeds. You can see here that we had plenty of snoozers on this one as the issue closed yesterday at $26.00

The new issue will be lower investment grade so I am thinking a coupon in the 4.80% area, but as Gridbird reminds us “names count” and there is no bigger name than JPMorgan Chase.

Of course the issue will be non-cumulative, but qualified.

The preliminary prospectus can be found here.

Thanks to C Malcolm ferreting this one out on the Reader Initiated Alerts page.

Triton International Announces New Preferred Offering

Container lessor Triton International (TRTN) has announced a new offering of preferred shares.

The company already has 2 other issues outstanding which can be seen here. These are high yield shares which have traded in the $26-$27 area.

We note that being a lessor of containers this company will be very sensitive to global economic conditions and while their common and preferred shares have traded strongly this is subject to sharp changes in a recession (at least that is my opinion). These shares are rated B+ by S&P.

The preliminary prospectus can be read here.

As always numerous folks were on this one quick on the Reader Initiated Alerts page.

Some Earnings of Note for Income Investors

A couple companies have announced earnings for the quarter ending 9/30/2019.

Insurer National General Holdings (NGHC) which has 3 preferred issues and 1 baby bond outstanding released earnings today and they can be seen here. This company is controlled by the Karfunkels (of AmTrust Financial fame).

Financial services firm B Riley (RILY) announced huge revenue and earnings today. The numbers look great, but there is little detail/explanation of the increases. The press release can be seen here.

Sachem Capital to Sell New Notes

Real estate finance REIT Sachem Capital (SACH) will be selling a new issue of notes with a maturity date in 2024.

SACH is a small company with assets of just $96 million, but they have only $23 million in debt.

The notes will have an early redemption date in 2021.

SACH had issued notes earlier in 6/2019 with a 7.125% coupon under ticker SCCB–which can be seen here. Those notes have traded pretty decently since issuance and are at $25.95 today.

The preliminary prospectus can be read here.

Just to remind newer readers these notes will be senior to the common stock and pari passu (equal) to all outstanding and future unsecured unsubordinated debt. The only debt the company has is $22 million from their SCCB issuance (noted above and which is pari passu to this new issue) and mortgage debt of $800,000 which is senior to this issue.

Well That was Pretty Easy

Well the 1/4% Fed Funds rate cut came and obviously was exactly as expected.

Stock and bond markets barely wiggled after the announcement – of course now there is a press conference with Powell and this is where the risk probably is–slips of the tongue can be costly. Oh well.

So for now – with this out of the way – we can get back to getting some investing done.

Really Quiet Before Rate News

It happens every time–markets barely moved prior to any Fed Funds rate cut (or a hike) and this time is no different–equity and bonds markets are barely moving–less than a 1/10% in the stock market indexes.

The 10 year treasury has moved a bit more than stocks as yields are off 2 basis points to 1.81%. This is after a first read on 3rd quarter GDP of 1.9%–seems like a Goldilocks number to me–not too hot, not too cold. Is it a number that warrants a Fed Funds rate cut? I don’t really think so–BUT they will cut–the tail is wagging the dog and the markets are ‘demanding‘ a rate cut. If the FED doesn’t cut rates there will likely be some real fireworks this afternoon.

ADP has just reported (for what it is worth) 125,000 new jobs in October–this also seems to be a Goldilocks number. For the official government jobs report on Friday the median forecast is for 75,000 jobs and this is the number markets tend to focus on (versus ADP).

So we watch and wait–we seldom, if ever, react to rate cuts etc. As individual investors there is little use in thinking you can make a investment decision that is going to beneficial based on events like this. In the ‘olden days’ (or 10 years ago) I thought I was smarter than the market many times–I wasn’t and I don’t remember ever helping myself by buying or selling prior to ‘news’.

Northern Trust Corporation Prices New Preferred

Northern Trust Corporation (NTRS) has priced their new previously announced preferred.

The issue will have a fixed rate coupon of 4.70% and of course will be qualified, but non cumulative.

The issue should trade immediately on the OTC Grey market under temporary ticker NTREL.

I personally would love to own some of the NTRS preferred, BUT it will need to trade down quite a bit from $25–the company is a very well run company and I love quality.

The pricing term sheet can be found here.

Interest Rate Pop Brings Some Red to Income Issues

The last 60 days has brought the 10 year treasury from a low of around 1.45% back in late August to a recent level of about 1.84%.

I know readers have been watching this climb from some of the comments made on the site–and certainly these climbing rates have made everyone kind of leery of purchasing much in the way of recent new issues that came to market at really low coupons–i.e. 4.875% to 5% and it looks to me like folks should use a bit a caution right here.

The perpetual preferred issued by 4.875% PS Business Parks (PSB) last week, which continues to trade on the OTC Grey market under ticker PSPBZ, came out of the chute pretty hot trading up to $25.20 on day one–but now is struggling to get back above $25.00 closing today at $24.96.

The new junk rated 5% preferred from Citizens Financial Group (CFG) has traded as high as $25.20, but closed today at $24.99 on the 1st day of trading on the NYSE.

Personally we have noted some of our investment grade holdings have dropped some today. The Allianzgi Convertible and Income Fund II (NCZ-A) 5.50% preferred was off 22 cents and the Allianzgi Convertible and Income Fund (NCV-A) 5.625% was off 11 cents. On the other hand these issues were kind of overheated a bit anyway and a bit of a sell off is not a surprise–even though I hate to see RED on the brokerage statement–this year has been a bit of a gravy train for gains so I guess we will have to work harder to make our 7% next year.

Northern Trust Corporation to Issue New Preferred

Banking company and asset manager Northern Trust (NTRS) will be selling a new fixed rate non-cumulative preferred issue.

Preferred investors have been awaiting this issue anticipating that the company would use the proceeds to redeem the 5.85% non cumulative preferred (NTRSP) that the company currently has outstanding. Since the redemption has been anticipated these shares were trading around $25.50 so only minor damage is done to holders. The redemption can only take place on a dividend payment date, which is January 1 and the payment will be 36.5 cents–at the current price of $25.28 there is 8.5 cents in the shares.

We would anticipate a sub 5% coupon on the new issue as the rating should be BBB+ from S&P and Baa1 from Moodys.

The preliminary prospectus can be read here.

Monday Morning Kickoff

Here we go with what is sure to be an exciting week. We have a Federal Open Market Committee (FOMC) wrapping up on Wednesday with what is likely to be a 1/4% cut in the Fed Funds interest rate. Additionally we have the October employment report on Friday which always have the potential to move markets.

Last week the S&P500 moved in a range of 2991 to 3027 before finally closing the week at 3023–up 1% for the week. The 10 year treasury moved in a range of 1.73% to 1.84% closing near the highs on Friday.

The Fed balance sheet moved up only $2 billion last week–so the slowest growth we have seen since early September, although given their recent actions we should expect further building in assets.

Last week we had a couple of new preferred issues announced.

Citizens Financial Group (CFG) sold a new perpetual preferred with a coupon of 5%. The issue is trading with a OTC ticker of CFGZL and shares closed at $25.15 last week. The issue is non cumulative, but qualified.

PS business Parks (PSB) sold a new perpetual preferred with a meager coupon of 4.875% and shares are trading under OTC ticker PSPBZ and last traded at $25.18. The issue is cumulative and non qualified.

Additionally the Priority Income Fund (nontraded) registered a new issue of term preferred stock, but nothing beyond the initial registration is known at this point in time. This is typical for Priority and we will be looked for an actual sale in the next week or two.

All Is Good in the World

Just looking at equities today I guess I have to conclude that all is good in the U.S. and the global economies.

Forget that the whole world is operating on quantitative easing (QE) as central banks keep trying to pump up global economies and growth is slowing everywhere. Oh well this game will work until it doesn’t and these things can go on for years and years–actually they have already gone on for years.

Right now we are awaiting the 1/4% rate cut next week to the FED Funds Rate. Hey-maybe they won’t cut–but really we all know that equities would tumble hard if no cut came and we know who is seemingly calling the shots at the FED-and it isn’t the FED.

Of course us that have been happy to at least get paid some amount when in cash (money market) will take a hit. Just checking the Gabelli US Treasury Money Market AAA (GABXX) we have in eTrade it is currently yielding 1.82% while the Fidelity Government Cash Reserves (FDRXX) is paying 1.6%. These will begin to trend lower with a rate cut–the speed to be determined by the maturities of the holdings.

It has been a busy week for us as we lock down some of the profits in individual issues. We went ahead and let the New Residential Investment 7.125% (NRZ-B) preferred go early today-seems like for now it is running out of steam and locking down the 3.5% gain seems like the right thing to do. Also the account this holding was in was almost fully invested and I wanted to raise a little cash in that particular account in case an opportunity comes up. My eTrade accounts are almost always fully invested, while the Fido account usually holds too much cash–caused by restrictions Fido has on some baby bonds and preferreds.

PS Business Parks Preferred Details

Below are the details of the new preferred stock issue from REIT PS Business Parks (PSB).

Even though the issue is priced at a skimpy coupon I believe I will purchase a position to try to do a ‘flip’ (short term hold) for 30 or 40 cents (I hope)–of course this depends on how it trades today (Thursday). If the issue comes out of the gate too hot I will not chase it–but at $25 or a little below I will buy.

The pricing term sheet can be found here.

PS Business Parks Prices New Preferred

REIT PS Business Parks (PSB) has priced their new, previously announced, preferred stock.

The fixed rate coupon has been set at 4.875%. This pricing doesn’t seem logical given that sister company Public Storage (PSA) just sold a new issue at the same coupon. Public Storage is rated a notch better than PS Business Parks. In the end it is what it is—wish they would price like I want them too.

It is amazing how strong the new Public Storage 4.875% issue (PSA-I) has traded which may well have contributed to this low coupon from PS Business Parks. The Public Storage issue closed at $26.26 today.

The issue will trade OTC Grey market tomorrow under ticker PSPBZ. At the right price we will purchase some for a flip–maybe we can squeeze 30-40 cents out of it.

The SEC pricing term sheet has not yet been filed but the company press release can be read here.

Irrational Exuberance Continues

We are all grappling with the same problem–too many gains in our ‘base holdings’–we should have these problems all the time. We all know the time will come when the issues is how to minimize the losses, so I guess we should just enjoy the ride.

Today the Gladstone Capital 6.125% Note (GLADD) issue spiked mid day which I saw and figured it was some ridiculous ‘market order’ which cost someone some bucks–but no, there were trades after this one and it continued to stay high–closing the day at $26.67 (up 79 cents).

I did not let mine go–maybe should have–always the same problem–what to buy with proceeds? On the other hand 2 quarters of interest is pretty lucrative.