As noted in comments today Atlas Corp (private) is going to be calling 2 issues of preferreds and 1 issue of baby bonds.
Atlas Corp is a shipping company, with primarily assets from the old Seaspan and was taken private by Poseidon on 3/28/2023.
I was kind of surprised to see this call as the coupons of all 3 issues are in the 7’s–and the total cost of calling these issues is $350-400 million–a pretty heavy lift, but their financials have been fairly stellar recently–the latest earnings of Seaspan are here.
The SEC filing on these actions is here—-of note is that while I believe the intention is to call all shares and bonds they do mention that ‘a portion of the Series H preferred shares will take place in the 2nd quarter’. Does this mean they will call the balance in the 3rd quarter?
I’ve been buying ATCO-H here at 24.6 and below.
My understanding is that H will be (fully) called eventually, it’s just a matter of whether the first portion is just a partial call.
8,000 shares offered at 24.60 as I type..
DYODD, stranger things have happened..
I did in fact receive a response from Atlas Investor Relations regarding my Monday, May 5th message asking about the partial redemption / potential delisting of the ATCO Series H 7.875% preferred shares:
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Hi _____,
Thanks for reaching out. Atlas intends to keep the portion of the Series H Preferred Shares that are not being redeemed listed on the NYSE. De-listing of Series H Preferred Shares will occur only after all outstanding shares have been redeemed.
Thanks,
Graham
Graham Todd
Senior Manager, Capital Markets
Mobile: +1 (604) 404-0805
Email: gtodd@atlascorporation.com
Atlas Corp.
200 Granville St., Suite 2600
Vancouver, BC
Canada, V6C 1S4
Main: +1 (604) 638-2575
http://www.atlascorporation.com
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His reply to me was the benchmark of brevity; my email to him (posted in this chain) was the vanguard of verbosity.
Thnx, ESW – I’ll bet he had a lawyer clamping down on his jaw when he replied………
Continuing ambiguity RE: the preferreds – In the just released quarterly, https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319153031&type=HTML&symbol=ATCO&cdn=098a439b35379ff5a280565225731ab6&companyName=Atlas+Corp.&formType=6-K&dateFiled=2025-05-09, Atlas slightly changed the wording of the redemption on the preferreds (no change about ATCOL) in that they no longer mention a potential partial (implying full only) redemption of H as well as D but do leave open an actual redemption date for both D and H:
p 22
“On May 5, 2025, the Company announced its intention to (i) voluntarily redeem its 7.125% Notes due 2027 (“Notes”) and delist them from the Nasdaq Stock Market, (ii) voluntarily redeem its Series D and Series H Preferred Shares (“Preferred Shares”) and delist them from the New York Stock Exchange and (iii) deregister from the U.S. Securities and Exchange Commission. The redemption of the Notes is expected to take place on July 7, 2025. The redemption date of the Preferred Shares has not been confirmed.”
NOTE: Unlike with the notes, Atlas has until 15 days prior redemption (as opposed to 30 days) to officially announce a redemption.
2WR: I’d laugh my proverbial a$$ off if this is the reason that Atlas removed that “partial redemption” language for the Series H shares:
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From: _____ _______
Sent: Monday, May 05, 2025 7:06 PM
To: ‘Atlas Investor Relations’
Subject: FW: New SEC Filing for Atlas Corp. (NYSE:ATCO) | Preferred Share Redemptions
Dear Atlas Investor Relations,
My name is ______ _______. I live in _______, __ and I am a longtime, sizable holder of the ATCO-H series preferred shares. I received your SEC filing by email today, announcing the redemption of ATCO-L and ATCO-D, and the partial redemption of ATCO-H. After reading the filing carefully, I had a question or two.
As it was written, today’s SEC filing says that there will apparently only be a partial redemption of the Series H preferred shares: “Atlas expects the redemption and delisting of… a portion of the Series H Preferred Shares ”. See https://www.sec.gov/Archives/edgar/data/1794846/000119312525112868/0001193125-25-112868-index.htm (emphasis added).
I was surprised by this partial redemption notice, because the terms of the 2023 Atlas / Poseidon Group merger agreement specifically require the continued NYSE listing of the public preferred shares. Here’s the operative language:
Section 8.11 Continued Listing of Preferred Stock. From and after the Effective Time, Parent shall cause the Company to continue to cause the Designated Company Preferred Shares (other than the Series J Preferred Shares) to be listed on the NYSE.
https://www.sec.gov/Archives/edgar/data/1794846/000119312523004976/d313377dex99a1.htm , page A-64 (emphasis added).
The reason I am concerned about the possible delisting of a portion of the Series H shares is that under SEC Rule 15c2-11, after delisting the shares will trade on the OTC market. Unless Atlas pays for some type of listing arrangement with the OTC Market Group, there is the possibility of the shares moving to the so-called “expert market”. If the non-redeemed Series H shares go to the expert market, most mainstream US brokerages will not display quotes (bid and ask) for the shares; and only sales of the shares will be allowed (no “opening trades” – purchases – will be allowed at brokerages like Schwab, Merrill Lynch, Vanguard). As you might imagine, for shares that move to the OTC “expert market”, liquidity dries up, and typically the share price plummets.
Here’s my question. Does Atlas intend to pay the OTC Market listing fees to ensure that the non-redeemed Series H shares do not move to the expert market?
Simply FYI, one comparable situation is the preferred shares of the PartnerRe insurance company. There, the company went private and delisted its preferred shares, but the company chose to pay for and maintain a “Pink Sheet” status sufficient to keep the shares freely trading. PartnerRe’s Group Treasurer wrote to a fellow investor that:
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PartnerRe plans to continue to meet the OTC’s “Pink Limited” requirements.
“Pink Limited” shares can also continue to be proprietary quote eligible (PQE) and Piggyback Qualified – Catch All.
Best regards
Stephen Boylan
Group Treasurer
Direct +33 1 44 01 81 10
Partner Reinsurance Europe SE, Succursale Française, 32 rue Guersant, 75017 Paris, France
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Here’s the OTC listing for PREJF:
https://www.otcmarkets.com/stock/PREJF/quote
You’ll see that it is listed as “Pink, Limited information”. That OTC status will suffice to keep the shares liquid and tradeable for most US investors.
Any light you can shed on the future status of the non-redeemed Atlas Series H shares would be very welcome, especially concerning whether Atlas intends to make sure the -H shares do not move to the “expert market”.
Thank you very much.
_____ _______
I’ve been on vacation this week and came home to 500+ emails in my inbox, but to the best of my knowledge Atlas IR has not responded directly to my email last Monday.
Very thorough, ES….. If it is, it won’t be the first time a company found it necessary to alter their public announcement due to credible input from the general public…. Please do share if you get an actual response…………
Happy for the call. Risk off.
Correct me if Iam wrong but I believe the very controversial David Sokol is the Chairman of this company. I did own one of these issues for a couple of years but sold them quite a while ago.
I don’t understand what there is to delist if the securities are going to be called.
That is the language required for any publicly traded instrument to stop trading, and the reason has to be given. A redemption serves to de-list the security, so notice has to be given under this SEC regulation, which lists the 4 reasons for the delisting. Redemption is reason #1. (it also needs to be filed at the maturity of a baby bond, even though it is pretty obvious why those stopped trading)
https://www.law.cornell.edu/cfr/text/17/240.12d2-2
Thnx, J – That’s what I thought was the reason for the language being as it was but nice of you to spell it out with reference..
FWIW – Interestingly, if I am figuring correctly @ 24.93 offered on ATCOL right now, Mr. Market feels fair value for offer = 9.63% YTC to the 7/7/25 call date… seems attractive, but then again, I managed to buy all the way down to 24.85 today….24.90 av.
I thought by delisting it was meant that the preferreds would continue to trade but that they would only be available more or less to so-called experts. Thanks for the clarification.