August, 2020 | Innovative Income Investor

Triple Net Lease REIT VEREIT Calling More Preferreds

VEREIT (VER) has announced they are redeeming another 6 million shares of the 6.70% cumulative preferred (VER-F).

Of course over the years this issue has been PARTIALLY redeemed many times–it was a giant issue to start–almost 43 million shares. With this new call outstanding shares should be in the 18 million shares area.

newman and bob caught this press release from the company 90 minutes agO and posted in the Reader Initiated Alerts page.

Investors had a chance to sell in the $25.70 area a few days ago. I had bought last time there was a partial redemption down around $25–but took a nice profit (2% I think) a few weeks or so later.

Shares are now trading around $25.26.

I have a low ball order in just in case someone wants to panic and give me a few shares.

DiamondRock Hospitality Prices a Juicy Preferred Issue

REIT DiamondRock Hospitality (DRH) has priced the previous announced cumulative, non qualified preferred stock.

The coupon is 8.25%–a very juicy coupon from a quality lodging REIT–BUT like all lodging REITs you can be good–but you need some business. This one will be interesting to watch.

The issue will trade on the OTC grey market (as noted by aview a few hours ago) with the temporary ticker of DRHPP.

The pricing term sheet can be found here.

Earn 0% with this Junk Rated Convertible Note

I thought I was seeing things when reviewing a prospectus a minute ago for Hannon Armstrong Sustainable Infrastructure Capital (HASI).

They are offering $125 million in 0% senior convertible notes maturing in 2023.

Looking through it I guess you are simply buying a call option on the common shares with a $48.36/shares strike good for 3 years.

I guess in theory this could work out, but how about 1 or 2% for the holder?

This one I know I will take a pass on.

The prospectus is here.

Bank Holding Company CNB Financial Finally Prices New Preferred Issue–Update OTC Ticker

The OTC ticker for temporary trading is announced as CCNEL–although OTC has been known to change these when trading begins.

Bank holding company CNB Financial (CCNE) has finally priced their previously announced new preferred issue.

The issue prices with a coupon of 7.125% which seems to be a little skimpy to me given their level of exposure to retail, hospitality and other widely affected businesses during the pandemic.

Make sure to do plenty of due diligence on these small banking issues–personally I have been ‘flipping’ them–no long term holds.

The issue will trade on the OTC grey market but the ticker is not yet known.

The pricing term sheet can be read here.

david was on this announcement at 2 hours ago.

DiamondRock Hospitality to Sell New Preferred

DiamondRock Hospitality (DRH), a lodging REIT, has announced that they will issuing a new series of preferred stock.

The issue will be cumulative, but non qualified.

DRH is a lodging REIT with 31 properties and total normalized revenue near $1 billion.

It has been years since I have followed DRH and it will be most interesting to see how this issue prices.

The preliminary prospectus is here.

Public Storage Calls 2 Preferred Issues

Public Storage (PSA) which had issued a new 4.125% cumulative preferred last week (a $200-$225 million issue) announced a call on 2 older issues late today.

While the new issue provided enough new money to call 1 issue, obviously the company dug into their cash hoard (they had $1.3 billion in cash on 6/30/2020) to call both issues

PSA-W ($500 milion) and PSA-X ($225 million) , both which carry coupons of 5.20%, are being called. The press release is here.

The call will occur on 9/30/2020–a normal dividend payment date.

Input Needed for Commenting Upgrade

About a year ago folks asked for the ability to ‘edit’ their comments after publication–the native wordpress system did not allow for editing. At that time I thought I would go ahead and change the entire commenting system.

Then I found a wordpress ‘add in’ that allowed ‘editing’ of comments (which is set at allowing 5 minutes for edits)–which took care of that immediate issue.

NOW it looks like it is time to upgrade the commenting system to something that allows a more robust search capability–to search by user name–maybe to allow ‘scoring’ of comments–to get notification when someone responds to your comment–etc, etc. There are many, many possibilities in commenting systems.

So what I am asking ALL OF YOU is if there is a commenting system somewhere that maybe you use that you think has lots of great features? If you could let me know the website I could look at it.

If there isn’t one that you are aware of then simply what are some features that you would think would be desirable?

In about a week I will make a decision on a change. I have about 10 options so far–and of course they all sound great, but without seeing a live system who really knows. If I choose the wrong one–oh well we will just move onto a new one.

Please leave some feedback for me – it would be helpful.

Little Buying and Little Selling

Just a note on a few of the buys and sells I have done lately.

I sold some of my Tri-Continental 5% $50/shares preferred. I held 300 shares for years and this time as it trades up around $57.50 (and sometimes $58.40) I decided to ‘lighten up’. This issue has been outstanding since 1963 and likely will continue to remain outstanding, but with a call price of $55/share I decided to let some go–I am open to re-buying down around the call price.

I sold a 1/2 position of the Wesbanco 6.75% fixed-rate reset preferred which was a new issue from 8/4. I bought it for $25.50 and sold for $26.25. I am not buying any of these small bank issues to ‘hold’–just to flip.

I bought a full position of the new Federal Agricultural Mortgages 5.25% non cumulative preferred at $25.11 a day or two after it was issued. I see it trading at $25.58–think I will hold this position unless it goes totally crazy.

Lastly, I added a couple hundred shares of the Highland Income Fund 5.375% preferred (HFRO-A) at $24.86. While I am not thrilled with the Highland Income Fund (HFRO) as long as it is strongly investment grade (A1 from Moodys) and their asset coverage ratio remains reasonable good – 276% as of 12/31/2019 I will hold it as I can’t get investment grade issues with current yields of 5.40-5.50%.

Comments, Commenting and Hijacking Threads

As is pretty typical of most websites I have ever been on comments on articles tend to drift ‘off topic’. No giant surprise on that happening–at least not to me.

At this time I need to reinforce the need to comment in the correct areas. If the comment isn’t relative to the topic (for instance a new issue) it should be made in the correct area. Some areas for miscellaneous chatter are listed below.

Sandbox page.

This area is for most anything you want to post.

REIT chat.

This should be obvious–talk about REITs.

Reader Initiated Alerts

A popular page–obviously to have quick announcements on new issues–redemptions etc. Since I can’t monitor all the data 24/7 this page is the most timely. While I get to the new issues etc–it is usually an hour or two after some folks have the news.

Canadian discussion

Again–obvious–for Canadian related issues. Many folks buy the Canadian preferreds and discuss them here.

All of the available pages are in the RIGHT HAND COLUMN.

Because of the ‘off topic’ commenting the thread is ‘hijacked’ to another topic, which makes it difficult for those wanting to find older comments to find them as they have to wade through 100’s of ‘off topic’ comments to find what they need.

If folks could try to adhere to some level of on topic commenting things will be a bit more organized in the comments.

Thanks all for you help.

Prudential Financial Prices Baby Bonds

Prudential Financial (PRU) has priced the new baby bond previously announced with a rock bottom coupon of 4.125%.

Of course the issue is investment grade.

There is no OTC grey market trading in this debt issue–and in fact the company didn’t even announced a tentative ticker symbol. Anxious investors will need to contact their broker with the CUSIP if wanting to buy the issue before exchange listing.

The company will be calling the 5.75% (PJH) baby bond as well as the 5.70% (PRH) baby bond with the proceeds of this new issue. Both issues to be called tumbled around 3% yesterday.

The pricing document can be read here.