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Added This Insurance Resettable Preferred

This morning I bought MORE of the SiriusPoint LTD 8% Resettable non cumulative preferred stock (SPNT-B). I have had a position in this issue for a very long time and have added to it 3 times now–that is the end of buying more of this issue–I’m full up. I paid $25.19 for the shares. This issue resides in my ‘sock drawer’

The issue is rated BB+–1 notch below investment grade, but yet a decent quality.

The coupon is 8% until 2/26/2026–at which point it resets to the 5 year treasury plus a fat 7.298%. This means the company will redeem the shares–at least I am 99% sure they will because the coupon will reset at something over 10% (of course no one really knows). Shares are ONLY redeemable on a dividend reset date so if not redeemed on 2/26/2026 (or before) they are stuck with that coupon for 5 years.

Of course there is no expectations for a capital gain–just a solid 8% for near 20 months.

17 thoughts on “Added This Insurance Resettable Preferred”

  1. I still have positions in SPNT B which have held up a lot better than many hi quality, lower coupon, pfds

    1. If you Prefer–at least part of the stability comes because of the assumed redemption in 2026.

  2. SPNT-B
    “Dividends on the Series B Preference Shares are cumulative from May 31, 2021”
    From page 1 of the prospectus.
    You should correct your error.
    Thank you for all your hard work!

  3. I have gradually accumulated SPNT-B last year and reached full allocation at avg $25.08…it doesn’t move much and pays handsomely…

  4. Interesting buy Tim. I fully admit I’ve never heard of the company. But I assume you did plenty of DD or you wouldn’t have bought it. I wanted to buy some of the relatively new MTB+J but it has completely gotten away from me as now its around $25.76. Mad at myself when I didn’t pull the trigger back at $25.30 but it took me too long to do my DD.

    1. Chuck P – followed them since day 1 of their existence–they seem to be pretty savvy insurance folks. Maybe I need to write in more depth on them?

      1. TIM; I truly think many of us here would welcome an indepth write up on the company. I suspect there are many folks here that are not familiar with the company. I freely admit I had never heard of them before until today. Because of some of your past write ups I did a ton of DD on CHSCL and hence now own 16,500 shares. I also freely admit that Iam very mad at myself for not pouncing on the MTB+J when it was first issued. I won’t “chase” it but it does seem that it was a good buy back in the $25 to $25.30 range. I suppose a guy could buy it now at $25.70 but Iam reluctant to do so. For me personally its getting harder and harder to find good quality names at a decent price point.

    1. I got in ALL-B bigly last year when it dropped into the $25.1x range.

      There was a discussion of ALL-B a few months ago about the likelihood of a call. I concluded that it will likely be called before long (I think Allstate can raise capital for less than 8.5%), so I bailed out in the $26.3x range.

      I might get back in if it drops close to redemption+accrued, but I won’t pay a premium on something I think is likely to be called.

  5. I remember SPNT-B from when Dan Loeb drove the price down and then back up. Made a profit piggybacking but sold too soon.

  6. @Tim McPartland- just curious as to what portfolio weights (in general) are B your “sock drawer” holdings such as SPNT-B …are they greater than non sock drawer holdings?
    Sizing the bet question 🙂

    1. money doesnt grow on trees—just a guess that of the baby bonds and preferreds that I hold ‘sock drawer’ issues are 30%–mostly ones I have held for years (riding prices up and down).

      1. @ Tim- guess I did not phrase the question properly…what weight are each of your sock drawer holdings in general (example 1-2% of portfolio etc) or do you Biggie size your bet due to the “sock drawer” safety factor/gut feel

        1. money–I don’t have a set rule–I have one at 10%, but mostly maybe around 3-5%. Thats just kind of a guess without checking all the details. I like buy and hold which is pretty much what the sock drawer is for–I’m not much of a ‘trader’.

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