4/6/2025
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For those that have not seen the news apparently Franchise Group (FRG) may be going private.
FRG has a 7.50% cumulative preferred outstanding FRGAP.
If the company goes private they may or may not file SEC reports–they may or may not keep the preferred listed. This is not known now.
The preferred shares are trading at $22.52 now.
This ‘heads up’ is simply to remind preferred holders to weigh their options.
Yesterday was a strange day in the markets as preferreds and baby bonds were up for the 5th day in a row—although only by 1/10%.
Interest rates shot higher yesterday by 10 basis points, but income issues which typically would react negatively to higher rates– but as I noted in the Monday Morning Kickoff there is good demand for income ‘bargains’ after the December selloff and these buyers may well be ‘stronger’ owners than owners late last year. Interest rates are down about 4 basis points this morning at 3.59%.
mREIT Redwood Trust (RWT) finally priced their new fixed-rate-reset last night. The issue prices with a sky high initial fixed rate of 10%—WOW. I won’t be looking at this one for myself–I guess if one is into high risk this might fit–won’t for me.
I see nationwide flights are down–what a mess–all I can say is that I am glad to not be flying today as my patience for these things is minimal—regardless of the cause.
Economic news is non existent today–so we will be looking forward to CPI tomorrow at 7:30 a.m. (central).
mREIT Redwood Trust (RWT) has finally priced their new issue of fixed-rate-reset preferred.
They have priced 2.6 million shares with a fixed rate of 10% with a spread of 6.278% (to be added to the 5 year treasury). in April, 2028.
The issue is rated BBB- by Egan Jones and is obviously a high risk issue.
Below are press releases from company’s with preferred stock or baby bonds outstanding–or just general news of interest.
Dime Community Bancshares to Release Earnings on January 27, 2023
Saratoga Investment Corp. Announces Fiscal Third Quarter 2023 Financial Results
Runway Growth Finance Corp. Provides Fourth Quarter 2022 Portfolio Update
MetLife Declares First Quarter 2023 Common Stock Dividend
NuStar Energy L.P. to Announce Fourth Quarter 2022 Earnings Results on February 1, 2023
After nice rally’s in equities and interest rates it appears that markets will go on ‘inflation watch’—somewhat minimal movement as we wait for the all important consumer price index (CPI) to be released on Thursday. Expectations are for the core rate to be 5.7% versus 6.0% last month (both year over year). CPI is expected to be 6.5% versus 7.1% last month.
So with equities up about 1/3% this mornings and the 10 year treasury yield bouncing to the 3.57% area (up 6-7 basis points) we wait.
The fear I have (I am always worried–100% of the time) is that we get a ‘hot number’ on Thursday and with the rally we have experienced we could see a giant sized move higher in rates–maybe 20 basis points, which would certainly mean income issues get spanked.
On the other hand many of the gains seen in the last week were likely from bargain hunters after tax loss selling in December and they may be less prone to sell with interest rate movements.
In the end I am mostly ‘buy and hold’ so whatever will be will be.