Tim McPartland | Innovative Income Investor

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.