PS Business Parks has just announced a tender offer for their outstanding preferred shares.
Of course they want them on the cheap—I have a name for them but can’t type it here.
Author: Tim McPartland
Another Quiet Day on Tap
Yesterday was fairly quiet all around – stocks and bonds – tight trading ranges and I love it. Preferred stock and baby bond pricing can/will move up penny by penny in a flat interest rate environment. The nervous nellies who bought high and sold low eventually make their way back into the market–slowly. Of course it is way too early to declare victory over inflation–so who knows if this is a flattish interest rate environment–2-3 days is not a ‘trend’.
I took the opportunity, on a quiet day, to add to my very small position in the new Lincoln National Corp (LNC) 9% non-cumulative preferred at $26.50. My commitment remains small to this one, but am likely to add again soon.
I’m looking to do more nibbling–nibbling which over the course of months turns small positions into full positions–but like the Fed I am ‘data dependent’ and want to see inflation data for November before making any large commitments to buying.. I do have some 3 month t-bills maturing in December so will need to make the decision as to what do do with that cash.
Today we have no economic news of real interest so the quiet day may persist all day long—but tomorrow we could see some movement—even being Thanksgiving Eve. Below is the economic calendar for Wednesday–lots of data–none which is probably (who knows) highly market moving, but the FOMC meeting minutes in the afternoon could provide additional ‘color’ relative to the Fed rate hike in December (i.e. 50 versus 75 basis points).
Source:Marketwatch
Headlines of Interest
Below are some press releases from company’s that have preferred stock or baby bonds outstanding.
RPT Realty Announces Fourth Quarter 2022 Earnings Release Date and Conference Call Information
ARMOUR Residential REIT, Inc. Announces December 2022 Dividend Rate Per Common Share
Diana Shipping Inc. Announces Time Charter Contract For m/v Myrsini
Newtek Receives Approval from the Federal Reserve to Become a Bank Holding Company
Fulton Financial Corporation Declares Special Cash Dividend
Extra Space Storage Inc. Announces 4th Quarter 2022 Dividend
NEW YORK COMMUNITY BANCORP, INC. DECLARES A QUARTERLY CASH DIVIDEND ON ITS PREFERRED STOCK
Monday Morning Kickoff
Last week was a relatively quiet week in markets–the S&P500 moved in a range of 3907 to 4208–closing at 3965 which is a modest loss of less than 1% from the previous Friday close.
The 10 year treasury yield ended up at 3.82% on Friday which was less than a basis point higher than the previous Friday. The yield traded in a range of 3.69% to 3.90%. Rates were held in check by the very soft producer price index which was released last Tuesday–coming in at 1/2 the expected level. This week we have no real economic releases on Monday and Tuesday, but numerous releases on Wednesday–durable goods, jobless claims, consumer sentiment and some other minor items. Then we have a holiday and the end of the week with no releases scheduled–all in all a quiet week.
The Federal Reserve balance sheet continued to be reduced with a $53 billion reduction week—after a $2 billion increase the previous week. At $8.625 trillion we have a very long ways to go.
Trading in preferred stock and baby bonds last week was relatively quiet–just the way I like it. The average $25 share was off 9 cents on the week. Investment grade issues rose 3 cents, banking issues were off 4 cents, mREIT issues were down 3 cents.
Last week we had 1 new income issue priced by Lincoln National Corp. (LNC). The perpetual preferred was priced at 9% after poor quarterly earnings hindered more favorable pricing. The issue is investment grade.
The issue is now trading at $26.69 on the OTC grey market under ticker LNCDL for a current yield of 8.4% with a yield to 1st call date of just under 8%. Disclosure–I bought a small amount last week and may add again today.
Darned Quiet as We Head Into the Weekend
Investors don’t know whether to buy or sell today–maybe some of both as the S&P500 is flat as a pancake.
I bought a nibble of the newer Lincoln National 9% preferred–more of a placeholder position — something to remind me to buy more if it passes due diligence. Looks like they have had giant write downs and maybe some drama in the C -Suite–regardless I need to dig deeper. Hopefully there issues are resolved so I can get a big chunk of this one next week–may have to reduce other positions to get it but it would be worth it I hope.
Today we had existing home sales announced as down 5.9% from the previous month–no giant surprise. This is a modest decline all things considered and I am surprised sales have been as good as they have been up to this point. But eventually the declines in the various housing data points will take a toll–i.e. house building and employment.
The 10 year treasury is up 4 basis points to 3.82%–trading up a few basis points and then down a few–that is how I like it–none of this up and down 10-20 basis points which scares the shix out of everyone.
Under the filing of ‘glad I didn’t buy this’–Argo Blockchain 8.75% notes–a new issue almost exactly a year ago.
