As mentioned yesterday ACRES Commercial Realty (ACR) sold an additional 2 million shares (plus 300,000 available for overallotment) of the 7.875% preferred shares (ACR-D).
The shares were priced at $25. The term sheet is here.
The company sold this new issue originally in May when they sold a total of 2.4 million shares. Shares closed yesterday at $25.22, which was off a percent from the previous close.
Swapped ACR-D for a larger position in ACR-C. 20 cent price difference is a steal.
Interesting Martin G–there are 64k ACR-C being offered at 25.30 but still selling off. I picked up a starter position at 25.26 which is hair over 8.5% yield for three years.
Not only is it higher yield and higher YTC it also has a floor under the floating price. Only advantage of D is longer time to call date which means nothing to me under par. I’m not convinced it’s a great purchase but it’s a good deal better than the other one.
I’ve owned C now for about 2 years….I can’t think of another issue that crashed harder in March ’20 the XAN-C aka ACR-C…. I keep kicking myself because I had a bid in for some at 2 something which would have been hit, but I withdrew it when I walked away from the markets for the day and then never followed thru… I guess we all have stories like that though.. I figured I was essentially buying a call at that price, so why not…. yeah, I know, woulda, coulda, shoulda… lol…. I certainly agree that it’s tough to understand the huge differential in price between C and D given the coupon differences… All I can figure is that many look at C and read only “F/F” and stop there, not realizing how unusual C is in that it only floats in one direction and that’s UP, a direction that favors the shareholder, not the company… Of course, ACR will probably call it if it’s in their interest (and NOT the shareholder’s) at the time, but still, it’s an unusual and beneficial feature.
From QOL, “Cumulative distributions of 7.875% per annum ($2.1875 per annum or $0.546875 per quarter) will be paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record that will be the first day of the calendar month in which the payment date falls or the record date fixed by the board, not more than 90 days or less than 10 days prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date). ”
So according to this, the ex-dividend date is tomorrow, June 30, so if we buy today we get the partial dividend, correct?
this seems to answer the question:
https://www.dividend.com/stocks/real-estate/reit/other/acr_pr_d-acres-commercial-realty-corp-7875-prf-perpetual-usd-25-ser-d/#
Large volume and price dropped under 25.