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Author: Tim McPartland

Colony Capital Redeems High Yield Preferreds

Giant REIT Colony Capital (CLNY) has redeemed 2 of their high yield perpetual preferreds.

A number of folks have discussed this a bit on the Reader Initiated Alerts page. Barbara posted this redemption at 7:16 this morning and other have chimed in.

The issues called (for Jan 10th) are the CLNY-E 8.75% issue and the CLNY-B 8.25% issue.

In addition to these issues there remains 4 outstanding perpetual preferreds that popped just a bit (1%) on the redemption news.

These 4 issues are all trading below $25 and have coupons ranging from 7.125% to 7.50%. Only the CLNY-G 7.50% is currently redeemable

Given the lack of yield in the market maybe some investors with a bit of risk appetite should look at these 4 issues?

Colony Capital has been a poorly run REIT and has been through trying times–their common stock trades at $4.xx, but recently they are coming under pressure to right the ship and with over $22 billion in assets (a total of $53 billion under management) you can be certain there is plenty of room for improvement. They have just sold a $5 billion portfolio of industrial properties to Blackstone so they are moving to get the house in order.

The 4 outstanding issues can be seen here.

This, of course, is not a recommendation, but a suggestion that maybe there is opportunity here for some investors.

Update–the company released an investor update yesterday which can be seen here.

Equity Markets “Take Off” as Rates Rise

It is always disappointing to me to see the silliness of the marketplace in reaction to potential deals–such as trade deals.

We don’t do politics, at all, on the website, but for once I would like to see both stocks and bonds trade on fundamentals.

We have so-called ‘trade deals’ which move the markets and we have a FED that is being controlled by short term market movements. Then we have algorithms moving the market based on whatever key words are in the news

Early this morning we had a quiet market–both interest rates and stocks were off just a bit–nice and quiet just like we prefer. Then a tweet and a meeting at the Whitehouse on China sends market sharply higher. Stocks up 1% and interest rates up 7 basis points (9 basis points higher from earlier levels) on the day.

Now in the end it doesn’t matter too much to me–holding what I hold there isn’t much movement, but I do worry about movements in markets getting out of control–irrational exuberance–as these things eventually (who knows when) come home to roost with movements in the opposite direction.

Oh well I guess I should get used to it–it certainly seems like the new norm.

Public Storage Prices New Preferred Issue

Self storage giant Public Storage (PSA) has announced the pricing of their new preferred issue.

The coupon will be 4.75%, which is in line with the other recent issues from PSA. Proceeds are to redeem the 5.875% PSA-A issue on 12/30/2019.

Being a REIT the issue is cumulative and non qualified.

The issue is rated A3 from Moodys and
BBB+ by S&P.

Trading begins immediately on the OTC Grey market under ticker PBSGZ.

The pricing term sheet can be read here.

Gabelli Equity Trust New Preferred Details

Finally the final prospectus for the new Gabelli Equity Trust (GAB) preferred has been posted.

As everyone knows the coupon is 5% with an early redemption available to the company in 2024.

Issue is cumulative and likely qualified (this is not guaranteed and various dividends may not be qualified–some may be return of capital).

The company said they anticipated a Moodys rating of A1, but Moodys has no rating issued at this time–we shall see if it hits in a day or two.

The final prospectus can be read here.

New Gabelli Equity Trust Preferred OTC Grey Market Ticker

While the official details of the new 5% perpetual preferred offering from CEF Gabelli Equity Trust (GAB) are still not posted on the SEC website we do have a OTC Grey Market ticker.

The ticker is GBLQP. It doesn’t appear to be available at eTrade or Fidelity right now. It will likely be available tomorrow everywhere.

Cash Machine REIT Public Storage Announces New Preferred

Storage REIT Public Storage (PSA) has announced the issuance of a perpetual preferred.

Previously the company had announced the redemption of the 5.875% PSA-A issue which became redeemable on 12/2. The redemption date is 12/30/2019.

The company had sold a preferred issue on 9/5/2019 with a coupon of 4.875%, PSA-I, and a 4.70% issue PSA-J on 11/5/2019 so we know this will be a darned low coupon.

All of their outstanding issues can be seen here.

The issue will be investment grade.

The preliminary prospectus can be found here

Thanks to mcg, EarlyBird and if you prefer–all right on top of the announcement.

Kayne Anderson MLP Prepares for Redemption

Closed end fund, Kayne Anderson MLP (KYN) is preparing for redemption of their 3.50% monthly paying term preferred shares.

They have announced the private placement of mandatory redemption preferreds in amounts that are adequate to redeem the KYN-F shares.

The KYN-F shares must be redeemed on 4/15/2020 (or before). Shares pay a 7 cent/month dividend and currently are trading at $25.12.

The company press release on the private placement can be found here.

This is NOT a notice of redemption of KYN-F.

Disclosure–I own a large position in KYN-F.

Gabelli Equity Trust Prices New Preferred

The Gabelli Equity Trust (GAB), a closed end fund, has announced the pricing of their new issue of perpetual preferred stock.

As the SEC paperwork has not been filed many details are unknown–we will post details when they are released.

The issue prices at 5%. 4 million shares are being sold.

The company press release can be found here.

Quiet Markets While The FED Meets

It is most interesting that since the FED claimed they are on hold until we see inflation news, markets are not paying too much attention at all to them.

They began meeting today and tomorrow they will make an announcement on the Fed Funds Rate–certainly any change, in any direction, would be one heck of a surprise to everyone.

Just watching the 10 year treasury–while no one is talking much on the meeting it is certain the bond traders are waiting for the official ‘news’–which will be no news.

The 10 year treasury opened the week at 1.83% and hasn’t moved more than 2 basis points in either direction in 2 days–that is pretty unusual.

Personally I have barely peaked at the personal accounts–although moments ago I looked for the 1st time today and there is some upward creep–I’m talking a few cents–maybe a dime in an issue or two and as always I am just fine with quiet markets–certainly excitement of some sort will come before the month is out.