Aircraft leasing company Air Lease (AL) has announced a new issuance of $1000/share fixed rate preferreds. The company will be redeeming their 6.15% fixed to floating rate preferred (AL-A) which became callable on 3/31/2024 and is now floating with a current coupon around 9%.
The preliminary prospect is here.
I think it’s misleading to call this issue AL-D as it appears it will trade by CUSIP only, 00912XBQ6. As I read it. there’s a 6% floor on the reset:
“At a rate per annum equal to (i) 6.000% from the date of original issuance to, but excluding, the First Reset Date; and (ii) the “Five-year U.S. Treasury Rate” (as defined in the Preliminary Prospectus Supplement) as of the most recent Reset Dividend Determination Date (as defined in the Preliminary Prospectus Supplement) applicable to each Reset Period plus 2.560% for each Reset Period from, and including, the First Reset Date, provided, that the dividend rate per annum during any Reset Period will not reset below 6.000% (which equals the initial dividend rate per annum on the Series D Preferred Stock).”
With its senior debt trading at CYs < 5%, why is AL issuing a reset preferred instead of another bond? I also wonder if any of it will make to a retail market or all be bought by institutions.
I agree, R2S. Thanks. Good catch, it’s “Series” D, but won’t have the ticker “AL-D”.
Another one bites the dust. , oye vey. The calls are coming hot and heavy. I had positions in this. Was just milking the coupons…
I wish I got better notification of calls……..
Probably have 10-15 negative yield to calls I need to re evaluate tomorrow
AL-D priced. It’s a $1,000 liquidation value preferred.
1. Initial coupon = 6%.
2. Resets (unless called) on 12/15/2029 at 5-yr UST + 2.56%
https://www.sec.gov/Archives/edgar/data/1487712/000119312524220605/d885853dfwp.htm
I had just bought AL-A a few days ago. I was able to unload it this morning a bit above what I bought it at before the price dropped. I could wait for redemption but these are funds I don’t need for years so I’d like to get them into something a bit more long term.
Anything solid yet on what the coupon will be??
This prospectus defines the current coupon on AL-A at 8.696640%