Apollo owned Aspen Insurance has announced a redemption of their 5.95% fixed to floating rate preferred (AHL-C) effective 1/1/2025 which is the next dividend payment date.
Honestly I have been waiting for this to happen for quite some time now. The issue was originally to float starting a year ago, but the company was able to fix the rate at 9.593% because of the prospectus language relating t0 the LBOR/SOFR issue. Just the same 9.593% is a very high coupon for shares just 1 notch under investment grade.
This issue had traded as high as the $26.80 area in the last 60 days–crazy–a reminder that holding shares much above $25 holds potential danger for those paying sky high prices for shares.
As has become the norm J posted this in reader alerts early today (very early). Thank you J!!
nhcoast, thanks.
Curious that they’ll pay out on a 93-day period. I get only 92 days of accrual, not 93 days.
From the press release: “… for the full current quarterly dividend period from and including October 1, 2024, to but excluding January 1, 2025, will be paid separately in the customary manner on January 2, 2025 to holders of record at the close of business on December 15, 2024. ”
Oct 1 through Dec 31 = 92 days.
Including Oct 1st:
October = 31 days.
November = 30 days.
December = 31 days
$0.0066621 x 92 days = ~$0.6129
The only thing that I can think of is that because the payment is actually on Jan 2, they are also counting Jan 1 in the total.
Wbat’s strange about this one is the dividend they have been paying and will pay on 1/1 does not equate to a 9.593% coupon amount…. They will be paying is .6196. A quarterly pay @ 9.593% would be approx .599. So what they have been paying quarterly has averaged about 2 cents more than would be expected….. .6196 would equate to an approximate coupon rate of 9.91%… Anyone know why?
2WR,
Actual redemption date is 1/2/2025. So I get .0959343*$25=$2.39836. Then $2.39836/360 = $0.066621 per day for 93 days = $0.6196
2wr,
When they switched to floating, they changed their way of calculating divs.
Then went from the 30-day month, 360-day year method to accruing based on the actual # of days in the quarter.
That explains why their quarterly amounts have varied since they began floating. On this final div, I get a different amount but it appears that’s because I calculated 92 days of accrual whereas their amount assumes 93 days (see my other post).
from their prospectus (p. S-25):
During the fixed rate period, dividends payable on the Preference Shares will be computed on the basis of a 360-day year consisting of twelve 30-day months with respect to a full dividend period, and on the basis of the actual number of days elapsed during the period with respect to a dividend period other than a full dividend period.
During the floating rate period, dividends payable on the Preference Shares will be computed by multiplying the floating rate for that dividend period by a fraction, the numerator of which will be the actual number of days elapsed during that dividend period (determined by including the first day of the dividend period and excluding the last day, which is the dividend payment date), and the denominator of which will be 360, and by multiplying the result by the aggregate liquidation preference of the Preference Shares.
Thanks, mbg… I figured you’d be the one with the answers…. I had just coincidentally noticed the differential over the weekend but didn’t bother to research it further once it became academic.