Giant self storage REIT Public Storage (PSA) has announced the offering of a new issue of perpetual preferred stock.
This issue will be cumulative, non qualified and investment grade rated.
The company may use the proceeds of this offering to redeem the 5.375% perpetual preferred (PSA-V) which has been redeemable since 9/20/2017.
The new issue will have a permanent ticker of PSA-L when it hits the permanent exchange after a stint on the OTC grey market (temporary ticker not yet announced).
In a continuation of the melt up in equities the S&P500 traded in a range of 3032 to 3212 last week before closing Friday at 3194–a huge gain on Friday capping off a gain on the week of over 5%.
The 10 year treasury moved much higher last week closing at .9%–the highest closing level since 3/20/2020.
The Fed balance sheet moved to a level of $7.17 trillion which was up $68 billion from the week before.
The average $25 preferred and baby bond moved higher by 66 cents–2.5%. As you can see below mREIT preferreds moved $1.61 higher, lodging REIT preferred were $2.89 higher while investment grade, which had already been much higher over the last number of weeks, moved just 13 cents higher.
Last week we had 3 new income issues announced (as well as 1 reopening).
Virginia banker Atlantic Union Bankshares (AUB) priced a new non-cumulative issue with a coupon of 6.875%. The shares are trading on the OTC grey market under ticker AUBKL and last traded at $25.
United Community Banks (UCBI) priced a new non-cumulative preferred issue with a coupon of 6.875%. Now trading on the OTC grey market under ticker UCBKL and this issue also closed the week at $25.
Lastly annuity provider Athene Holding (ATH) sold a new issue of non-cumulative preferred that is a fixed-rate reset, with coupon reset every 5 years. The issue carries a 5.97% spread which will be helpful in the out years.
The issue is trading on the OTC grey market under temporary ticker ATHHL and last traded at $25.40.
I have watched the equity indexes go higher and higher–good news is great news. Also apparently ‘fake news’ is great news also. I think todays employment report was pretty fake–meaningless.
For many reasons the economic news is fake. PPP (paycheck protection) money is being used to keep folks on the payroll playing tiddlywinks so they don’t hit the statistics. Company earnings are fake as they are receiving a tax credit for keeping folks employed (compliments of the CARE act)–I noticed Best Buy showed profits of around $150 million on the quarter, but they had tax credits for keeping folks employed of $60-70 million included in there. Also companies are able to defer paying the employer portion of the FICA taxes until next year–so more money the Federal government won’t collect (at least for now)–you would think the government was solvent.
Things are pretty fake all around–oh well, nothing we can do but enjoy the party.
I’ve had my 70-73% invested position for a month (more or less) and the 1st of the month brought some nice dividends and interest payments–June will bring another batch in.
I decided today to do a little selling–not bunches, but a few percentage points. Even quality utility and closed end funds get to silly prices–or at least darned high prices. I would be just fine holding these issues, but am a bit nervous with crazy high prices. At this rate I won’t get above 73% anytime soon.
I sold some of the Spire 5.90% perpetual preferred today (SR-A). I had paid $26.20 and sold for $27.20 to book a capital gain. This one I have been in and out of many times–each time booking 3-4% over the course of a month or so.
I also sold some of the DTE 5.375% baby bonds (DTJ). I had a very large capital gain and had just collected an interest payment so I let 1/2 the position go at $26.16.
All week I have watched the new issues come out and while I was willing to pay $25 for some of them they opened too high and I didn’t chase.
Below is the pricing detail for the new Athene Holding LTD (ATH) fixed rate reset preferred.
Until 9/30/2025 the coupon is fixed at 6.375%.
The coupon will reset every 5 years starting 9/30/2025 and will reset at the 5 year treasury plus a spread of 5.97%–a pretty decent spread on an investment grade issue. This spread becomes the floor rate for the future coupon.
This issue is redeemable starting 6/30/2025 for a period of 90 days (until 9/30/2025). Then is only redeemable for a 90 day period in a coupon reset year (every 5 years) from 6/30 until 9/30.
Athene Holding (ATH) has priced the previously announced fix-rate reset preferred.
As of 8:30 pm (central) the SEC FWP (free writing prospectus) with the pricing terms has not been filed. Below is what we know now.
The initial coupon will be 6.375% which will remain in effect until 2025. After 9/2025 it will trade at a coupon which will be reset every 5 years at the 5 year treasury plus a spread–until the FWP is filed early tomorrow the spread is unknown. We will have the detail before the market opens tomorrow (assuming it is filed).
The issue is non-cumulative, qualified and low investment grade (BBB-).
Athene Holding LTD (ATH) has announced the issuance of a new fixed-rate reset preferred. The issue will be non-cumulative.
This issue will be rated low investment grade by S&P at BBB-
A fixed-rate reset preferred will trade with a fixed coupon for about 5 years–meaning until 9/30/2025 in this case. After this point the coupon will reset every 5 years at the 5 year treasury rate plus a yet to be announced ‘spread’.
The new issue will trade under ticker ATH-C when it hits the NYSE after trading on the OTC grey market for maybe a week (OTC ticker yet to be announced).
The company currently has a fixed-to-floating rate preferred outstanding plus they have a fixed rate issue outstanding. These issues can be seen here.
As noted yesterday New York community banker Dime Community Bancshares (DCOM) is ‘reopening’ a previous issue of preferred stock–it is the 5.50% perpetual issued in January.
The company is offering 2 million shares plus an additional 300,000 shares for over allotment. The offering price is $19.87/shares.
Shares had moved lower yesterday on the announcement of the reopening and closed yesterday at $20.85.
Shares opened today at $20.25, but have now moved to $20.60.
It is not yet know how many new shares (likely around 1.2 million) will be sold, but the currently outstanding shares are trading lower by 3% ($21.22) on the news.
