Apollo Global Management (APO) has announced the upcoming sale of Fixed-Rate Resettable Jr. Subordinated Notes with maturity in 2053.
Proceeds are being used to redeem 2 series of preferred stock – the AAM-A and AAM-B shares – both are 6.375% non cumulative preferreds. Disclosure – I have a modest position in the ‘A’ issue.
The preliminary prospectus can be read here.
The new issue will be resettable in 2028 and every 5 years there after at the 5 year treasury plus a spread yet to be determined.
Interest on the new notes can be deferred on one or more occasions for up to 5 year with a default being declared.
I believe these will be investment grade notes.
Thanks to J for catching this one.
I quickly scanned the prospectus – I was looking to see if a call date was announced for AAM-A and AAM-B. I suppose it’s a bit early to know that since they haven’t disclosed the final detail of the notes yet….. At today’s close of $25.17, there’s about $.23 meat on the bone before 8/31 Ex date. Trying to figure out if there will be another divvy payment before redemption.
I already own some of the A series. Thinking I may stand in front of the steamroller and and see if I can grab some dimes and pennies 🙂
TM – what do you think will happen to the price in 2028 if/when rates are low(er), JXN-A included?
Andrew – depends on how low rates fall. If they are say 1% or more lower in 2028 I would expect the share price to be $25 because of the call risk. Like Lincoln National and Jackson Financial preferreds this one may never see a day of trading after the 1st optional redemption period.
symbol is APOS… didn’t really think that one through… as it could mean “A POS”…/s
Yes Justin – guess we will know in a few years.