American Equity Investment Life Announces Preferred Pricing-Corrected

Insurer/annuity company American Equity Investment Life (AEL) has priced the previously announced preferred issue.

The fixed-rate reset preferred will carry an initial 5.95% coupon until 12/1/2024. At this point it will reset to the 5 year treasury plus a spread of 4.322%. On each 5 year anniversary it will reset again.

The issue is rated BB (just below investment grade) by both S&P and Fitch.

This is the companies 1st preferred, but they can be compared to Athene (ATH) a very similar company. The Athene issues can be seen here.

The pricing term sheet can be found here.

Jerry had the spread on this one pegged a couple hours ago.

Global Ship Lease Prices Baby Bonds

Container ship owner Global Ship Lease (GSL) has priced their previously announced $25 baby bonds.

The issue will carry a coupon of 8.00% and the issue will mature in 2024.

An interesting side note to this issue is that B Riley recently (10/01/2019) took a 11% position in the company and will be buying $2 million of this new issue.

Note the bonus rate for early redemption.

The pricing term sheet can be read here.

Regional Banker BancorpSouth Bank Sells New Preferred–Update

Update–link to FDIC site. Go to this page and search bancorpsouth (all one word).

Tupelo, Mississippi based banker BancorpSouth (BXS) has announced the issuance of a new preferred stock issue.

This issue is non-cumulative, qualified and has a 5.5% coupon.

The issue is rated Ba1 (junk) by Moodys. Note–junk doesn’t necessarily mean it is a bad issue.

The issue will trade OTC Grey market immediately under ticker BCSBP. The permanent ticker will be BXS-A when it moves to the permanent exchange.

The announcement can be found in this press release.

Details such as 1st call date, dividend payment dates etc have not yet been filed. The bank is regulated by the FDIC and filings follow a different process than with the SEC.

Thanks to mcg and Gary for being on this issue.

Still Waiting on Pricing

We are still awaiting pricing on a number of previously announced new issues.

Insurance/annuity company American Equity Investment Life Holding Co (AEL) announced a new issue on Tuesday the 12th. This will be a fixed-rate reset preferred–non cumulative when it comes.

Global Ship Lease (GSL) announced a new baby bond yesterday. This will be a senior unsecured note with a maturity date in 2024–the company has indicated pricing in the 8% area.

Priority Income Fund (nontraded) filed a registration statement a couple of weeks ago indicating a potential new term preferred would be coming. Typically Priority announces these and then it takes 3-4 weeks before we see anything firm on an actual sale.
Given that they have 5 issues outstanding whether they sell another new issue is of little consequence to me–I have a little taste of the PRIF-D 7% issue already.

We will post as soon as further info becomes available.

Kind of Quiet–a Good Time to Review Holdings

Nomadicmist reminded us today, on the Sandbox Page, that while the stock market continues to ‘party on’ there is plenty to worry about in the world.

Nomad points to the recent downgrade of the Global Sovereign Outlook to NEGATIVE by Moodys for 2020. Essentially Moodys has been downgrading a number of countries lately and doesn’t see the economic outlook improving–and maybe getting worse in the year ahead.

A reuters article on the Moodys action can be found here.

Neither Nomad or me are predicting anything at all–we all know the global economic outlook is tenuous, but just suggesting that while markets are kind of quiet it is a good time to review holdings.

We all know “black swans” are lurking–are you holding what you want to hold if a BS appears?

Compass Diversified Holdings Prices New Preferred

Compass Diversified Holdings (CODI) has priced the previously announced preferred.

The issue was priced at 7.875%, with 4 million shares being sold, with another 600,000 being available for over allotments. This issue will issue a K-1 at tax time.

I had originally thought this issue might be interesting, with a possibility that I might want a small position. But upon further review of the currently outstanding CODI preferreds I see no reason to rush into any purchase–CODI issues trade weakly.

The issue will trade immediately on the OTC Grey market under temporary ticker CMPSP.

The final pricing term sheet can be read here.

Compass Diversified Holdings to Sell New Preferred

Diversified manufacturing company Compass Diversified Holdings (CODI) has announced a new fixed rate preferred unit issue that will have a ticker of CODI-C when it begins to trade on the NYSE.

CODI is a limited partnership and thus any distributions are non qualified and the investor will receive a K-1 at tax time. Distributions will be cumulative.

The company has 2 other issues outstanding which can be seen here. These 2 issues have traded rather weakly.

The preliminary prospectus on the new issue can be seen here.

Thanks to If you Prefer and George for being on this one.

Global Ship Lease to Sell Baby Bond

Container ship lessor Global Ship Lease (GSL) will be selling a new Senior Unsecured Note with a maturity date in 2024.

These $25 notes will have bonuses for early redemption. They will be redeemable on and after 12/31/2021 up until 12/30/2022 for 102% plus accrued interest. Then redeemable on 12/31/2022 until 12/30/2023 for 101% plus accrued interest. Additionally they may redeem the notes anytime prior to 12/31/2021 for 104% plus accrued interest.

I do not find a current credit rating on this issue, but Standard and Poors did recently raise the companies rating on some other notes to B+.

We would expect this unsecured note issue to price fairly high–they currently have a high yield 8.75% preferred outstanding and trading around $25.15.

Remember that while this is note issue it is unsecured and with the exception of common shareholders you are kind of on the bottom rung of the capital stack.

The permanent ticker will be GSLD–there will not be OTC Grey market trading, although when the CUSIP is issused you may be able to secure shares (bonds) with a call to your broker.

The preliminary prospectus can be read here.

Thanks to mcg for being on top of this.

American Equity Investment Life Announces a Fixed-Rate Reset Preferred

American Equity Investment Life Holding Company (AEL) has announced a new $25 preferred issue.

This is another Fixed-Rate Reset issue, which means it will have an initial fixed rate until 12/1/2024 at which time the company can optionally redeem the issue–or reset the coupon based upon the 5 year treasury plus a “spread”.

There after as long as the issue is outstanding the coupon will be reset every 5 years at the 5 year treasury plus the “spread).

The issue will be non-cumulative, but should be qualifed. The permanent ticker will be AEL-A once trading begins on the NYSE.

The issue will trade on the OTC Grey market, but the temporary ticker has not been announced yet.

The preliminary prospectus can be read here.

Insurance rating agency AM Best had previously rated the company and you can read a previous press release here.

I find no credit ratings from Moodys, Fitch or S&P.

I am not familiar with the company–but could have an interest. When I don’t recognize a company I do extra deep digging to avoid surprising ‘history’.

As usual mcg was right on top of this announcement with SteveA tracking down some ratings.

Goldman Sachs Group Announces New $1,000 Preferred

While we don’t cover $1,000/shares issues it is noted that Goldman Sachs (GS) will sell a new preferred.

This is a Fixed-Rate Reset preferred. This is interesting as we have seen a number of Fixed-Rate Reset preferreds this year.

The way the fixed-rate reset issues work is that they will have a fixed rate for a number of years (in this case until 2/2025) after which it will reset every 5 years at the 5 year treasury rate, plus a fixed spread.

Currently there are no plans by the company to list this issue.

The preliminary prospectus is here.

mcg pointed this issue out.

Ladenburg Thalmann to Merge

Financial services firm Ladenburg Thalmann (LTS) has announced a merger with Advisor Group. The deal supposedly will close during the 1st 1/2 of 2020.

Yesterday in the comments under “Ladenburg Thalmann Announces Earnings”, 2 whiteroses posted a Barrons article on this particular possibility and folks discussed it further. Last night Nomad picked up the formal announcement during the evening

Currently we do not own any of this issue and whether it is good or bad–??–everyone probably has an opinion.

The press release is here.

Investment Grade Preferreds and Baby Bonds Now Callable

Below is a link to a spreadsheet with all (or virtually all) $25/share issues that are investment grade that are now available for an optional redemption by the issuer.

This MAY BE a place to hunt for issues that are ‘on the bubble’ as far as a call goes–in theory, they should be somewhat pegged to $25 plus accrued interest or dividend.

Some you will look at and say “what the hell”–why is it trading at $27? Of course the answer is that someone–either the issuer or the investor is snoozing a bit.

Others you will look at and say for 1% call risk (1% potential loss if called) you will take a chance.

On the other hand you might say–why would I hold these low coupons when they will get totally slammed if interest rates move higher.

It all depends on your personal outlook for interest rates–will they go up or down?.

Disclosure– from this list we hold the Axis 5.50% preferred (AXS-D) and the WR Berkley 5.625% baby bond (WRB-B).

Here is the spreadsheet.

Note–it is possible I missed an issue that has already been called–just let me know in the comments and I will delete it.

Also we have removed the pure floaters from the list since they are not tied to $25 at this time and trade much below $25.

Ladenburg Thalmann Announces Earnings

Financial services firm Ladenburg Thalmann (LTS) has announced earnings for the quarter and 9 months ending 9/30/2019. The company remains marginally profitable–as has been the case for years.

We post this because LTS has 5 outstanding high yield securities–4 baby bonds and 1 perpetual preferred.

The companies outstanding issues can be seen here.

Monday Morning Kickoff

The S&P500 traded in a range of 3065 to 3097 before closing around 3093–a gain of just less than 1%. At this time all news is good news–at least this is what equity markets indicate—party on I guess.

The 10 year treasury traded in a range of 1.75% to 1.97% before closing at 1.93%. We have seen rising rates knock preferreds and baby bonds down a bit so it will be interesting to watch rates this week. Every year, for the last 4 years, we have seen income issues sell off hard at some point between November and February so it wouldn’t be surprising to see that happen again–maybe we will get a chance to buy some quality issues at lower prices.

The Federal Reserve balance sheet grew again last week, this time by a hefty $20 billion–the balance sheet is now solidly over $4 trillion–$300 billion higher in the last 10 weeks.

Last week we had 4 new income issues.

Insurer Allstate (ALL) priced a new non cumulative perpetual preferred with a paltry 4.75% coupon. The issue is trading under the OTC Grey market ticker ASTLZ. The issue closed the week at $24.77. The issue is investment grade.

Storage giant Public Storage (PSA) sold a new issue of cumulative, perpetual preferred stock with a 4.70% coupon. The issue is trading under the OTC temporary ticker of PBLSZ and closed on Friday at $24.83. PSA preferreds are the highest rated preferreds available with a A3 rating from Moodys and BBB+ from S&P.

Synchrony Financial (SYF) sold a non cumulative preferred issue with a coupon of 5.625%. Now trading under OTC Grey market ticker SNFI the closing price last Friday was $25.03.

CIT Group (CIT) sold an issue of non cumulative preferred stock with a coupon of 5.625%. The B+ (junk) rated issue closed last week at $24.93.

Unlike previous new issue the current batch are having trouble gaining traction–if interest rates hang in the 1.90% area we likely won’t see too much movement upward in the low coupon issues. Remember, while stocks will trade on Monday, bond markets will be closed.

Clear Your Cache for Site Changes

I see that Chad has been making some changes this morning–we had met yesterday for discussion on some changes. To see the changes you may have to clear your cache.

Some changes are not meaningful to functionality (such as the blue colors instead of green), while others are changes that I hope help the function.

You will see that when I post a link now most of them should show up underlined – like websites of old. The problem I had before is I could only bold a link–then you couldn’t tell if it was a link or simply something that needed emphasis and thus was bold.

Some other changes you will see are on the security detail page—here. Chad will add a ‘variable’ option under the ‘qualified’ box–this will be helpful for the CEF preferreds for instance which are may be qualifed or not.

Additionally we will add a 1009/K-1 box on the security page–just to clarify.

There will be other changes–but I won’t mention them, because maybe they aren’t even possible–sometimes I want changes that can’t be done (old sucker that I am).