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Reminder–Seaspan Corp is now Atlas Corp and Tickers are New

As a reminder Seaspan has reorganized and is now Atlas Corp (ATCO) effective 2/27/2020.

We have updated individual security pages and are in the process of updated spreadsheets.

Note that the 7.125% baby bonds (SSWA) are being delisted, but the company has announced plans to call the issue on 10/10/2020. The last day of trading is 3/9/2020.

End of Day Rally Felt Good–But Fed is in a Box

Seldom do any of us say that we feel good with a 356 DJIA loss, but it sure felt good.

Unfortunately I am afraid the Fed has put themselves in a ‘box’–back to the same old thing where the Fed yaks and the market prices in a rate cut. I guess everyone can have a good weekend, before we are back at the computer Sunday night.

I think we are going to see coordinated global interest rate cuts Sunday night–with the 10 year treasury at 1.12% a 1/4 point cut would still leave Fed Funds above it. I hate the thought of the rate cut (I’m talking my book here)–I don’t think it is helpful, plus us income investors will see our meager 1.50% money markets returns melt away.

If we don’t get coordinated Fed activity Sunday night I am afraid we will see a weak open again on Monday–but absent serious virus news on the weekend we likely are moving toward a base (famous last words).

Well for now I am done until tonight at which point I am going to survey my portfolio damage and get serious about putting together a shopping list.

23 Preferreds and Baby Bonds Higher

Really–I counted an hour ago and there were 23 preferreds and/or baby bonds higher–out of near 700 that I track. Wow! Wow!!

The average $25/share preferred and baby bond is off 42 cents today.

Anyway I have been so tempted to buy in here–but I have resisted–I notice a few folks are nibbling here and there, but myself I want to get to at least noon Monday before making further decisions.

Here is the loser list–looks pretty ugly for shippers and lodging REITs.

I do note that my ‘old friend’ WR Berkley 5.625% (WRB-B) is trading at $24.91 and there is a month of accrued interest in it already. I will resist until Monday.

With stocks off around 2 1/2% right now the close today will be interesting—a nice bounce this afternoon would be comforting, but not sure who would be buying going into a weekend with the virus background at play.

Looking Forward to a Weekend

Yesterdays close in equity markets was really poor as selling continued right into the last minute–that pretty much wrote the story for today’s opening.

Yesterday was the biggest drop in preferreds and baby bonds this week–and likely moved our personal accounts back to break even for the year (with a 30% cash position)–or maybe even a little red overall. The baby is going out with the bath water so we will see if that continues today.

For today we will review accounts–and again, likely do nothing–while we see lots of securities we would like to own it seems likely that we are going to keep powder dry until we get to Monday–and then re-evaluate.

The CEF preferreds have remained fairly strong–being down just 20 cents from their all time high–no doubt folks their are feeling good about their holdings and the safety of the required 200% asset coverage ratio. I would love to have a bunch more of these–but they are not cheap and it is hard to justify purchases right now to capture a 5% current yield. I will be watching these closely–I wouldn’t mind a tumble in them, but I doubt we will see it happen.

So buckle up–let’s see if we can get some stability after what is likely to be a 600 point DJIA drop.

The Baby is Getting Tossed Out With the Bath Water

It was bound to happen–all common stocks have been pounded lower and now the baby (preferreds and baby bonds) is getting tossed out with the bath water.

Since last Friday the average $25/share preferred and baby bond has fallen 50 cents (2% more or less).

Of course shipping is the worst being down $1.20 since 2/24/20, while CEF preferreds are off just 16 cents.

Here is the loser list No particular theme–but a bunch of issues off 2% or more.

Just Remember That Seeking Alpha is a Business

I watch a few folks on Seeking Alpha–let me repeat–I watch a few folks on Seeking Alpha. I say watch because I will take any good idea I can find, but honestly most folks on SA don’t write to help you and hear me out–they write to create revenue. I have no problem whatsoever with that, but I do have a problem with folks who are ‘experts’ in one area holding themselves out to be expert in everything–most of this based on quotes from Warren Buffett.

I had mentioned a month or so ago, that all the ‘heros’ on SA that mistook dart throwing luck for skill, would soon learn that owning stocks and bonds is not a 1 way street. The thrashings are now occurring. Some authors should feel very humbled right about now.

Everyone has to learn that SA is a business–it is about creating revenue–not about being right so use it for some ideas–don’t take anyone’s word on a ‘buy’. Do your own due diligence–don’t blame anyone else for your personal lack of homework.

This Too Shall Pass

Well it looks like another day to review your holdings–I did it multiple times yesterday, but didn’t find anything to sell. I will do it again today–probably twice.

No doubt the economy will be hurt by the corona virus reaction–and the odds that you will find me buying any preferreds from lodging REITs in the next few weeks is pretty small, BUT for those with a bit more taste for risk than I have we may be seeing some good bargains out there.

With the lodging REITs and many of the shippers I don’t think there is a reason to rush into any bargain buying–I would suggest that folks ‘leg into’ new positions (this really goes toward everything right now). If your normal full positions is 500 shares buy 200 shares first and wait a few days or weeks before committing new funds.

I realize that at this point in time in the market drop there are some folks that think the ‘world is going to end’–and they may be laying awake at night with worry. There is a point–and each and every investor is different–where you raise more cash. Investors don’t have to make any excuses to anyone on this website if they feel the need to do a bit more selling. For the same reason that I don’t make buy or sell recommendations, I don’t tell folks they should be holding securities in difficult markets. Everyone needs to do what is best in their mind for themselves–if that means 50% cash–so be it.

Keep your cool, stay sane and protect your ‘stash’ in the best way that you know how.

Bonds Not Buying Into This Stock Rally

Stocks took off for a good early gain–but those are now rapidly being given back.

The 10 year treasury popped a couple basis points–but now has settled back to yesterdays close.

I personally have reviewed all of my holdings a few times today–I haven’t bought or sold, although there were gains in the Golar LNG Partners (GMLPP) 8.75% I bought yesterday–which would have bought a steak dinner or two–I’m holding.

Today some of the mall REIT preferreds are taking it in the shorts. Pennsylvania Real Estate Investment (PEI) issues are off 10%–of course this company has plenty of problems.

The CAI preferreds are off 2% (more or less), and many bank preferreds are off 2%.

Here is the big loser list.

Just as I have been writing this note some equity indexes have gone RED. For now I will sit back and watch–we could be living with the corona virus for a while.

While I am watching I am watching some favorites that folks are talking about–some of the utility preferreds and baby bonds–they still aren’t cheap, but they are quite a bit cheaper than they were last week. Nisource 6.50% perpetual fixed rate reset (NI-B) which just went ex-div is around $27.15–$1.50 lower than last week. National Rural Utilities Coop 5.50% baby bonds (NRUC) which is off around $1.40/share. Also the DTE issues and Entergy issues have lost ground in the last week.

MFA Financial Prices New FTF Preferred–Corrected

CORRECTED–this issue is perpetual–no maturity date–earlier I had a maturity date in the chart below.

mREIT MFA Financial (MFA) has priced their new previously announced fixed-to-floating rate preferred stock.

The initial coupon will be 6.50% and will be paid until 3/30/2025 after which time it will pay 3 month Libor plus a spread of 5.345%.

Shares will trade immediately on the OTC Grey market temporarily under ticker MFABO.

This is a large issue with near adequate issuance to call both the 8% baby bond (MFO) and the 7.50% preferred (MFA-B) in full if the over allotment shares are sold. We will have to see what the company decides to do.

The pricing term sheet can be read here.