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Headline of Interest to Holders of Preferreds and Baby Bonds

Below are press releases from companys with preferred stock and/or baby bonds outstanding–or just news of general interest. Earnings season is pretty much over so we will have slow news days for a month or two.

Star Bulk Carriers Corp. Announces an Amended Dividend Policy and Share Buy-Back Under a New Share Repurchase Program

NewtekOne, Inc. Declares a Quarterly Dividend of $0.19 per Share

Diana Shipping Inc. Announces Time Charter Contract for m/v Maera

Hyperscale Data Sells St. Petersburg Development Property for $13 Million

AXIS Advances Transition to Specialty Underwriter, Announces Loss Portfolio Transfer Reinsurance Agreement With Enstar on Reinsurance Segment Reserves

AG Mortgage Investment Trust, Inc. Announces Fourth Quarter 2024 Common Dividend of $0.19 per Share

Synovus to announce fourth quarter 2024 earnings results

Xcel Energy Announces the Early Results of its Cash Tender Offers for Outstanding First Mortgage Bonds Issued by Northern States Power Company (a Minnesota corporation)

Bridgewater Bancshares, Inc. Completes Acquisition of First Minnetonka City Bank

Pebblebrook Hotel Trust Declares Dividends for Fourth Quarter 2024

Air Lease Corporation Announces Closing of $966.5 Million Unsecured Term Loan Facility

Great Elm Capital Corp. (“GECC”) Declares $0.05 Per Common Share Special Cash Distribution and Approves First Quarter 2025 Distribution of $0.37 Per Common Share

Rithm Capital Corp. Declares Fourth Quarter 2024 Common and Preferred Dividends

Ellington Financial Inc. Completes First Securitization of Closed-End Second Mortgages

No One Wants to Give Me Shares

In what one might call one of my ‘penny wise, pound foolish’ moments I have been trying to buy 100 shares of the new very short duration RiverNorth/DoubleLine Strategic Opportunity Fund 6% Term preferred all morning. I only wanted to pay $10.03 per share–at 6% the coupon is somewhat lite for me–thus penny wise pound foolish.

Does it matter if I spend an extra $4? Of course not! I know it will trade within 5-10 cents of $10 (liquidation preference) for the next number of months–or maybe years.

In these situations I just finally give in and buy the shares–then I will set a good-til-cancelled order in at $10.02–eventually I will get some more shares at my price. This is simply a cash proxy until 2027 since it is a somewhat better coupon than money markets and CDs. The games I play over $4.

Weekly Kickoff

Well we had a week which saw the S&P500 hardly move–really one of the quietest weeks in years. The range was about 1% with a low of 6029 to a high of 6093–and ending on Friday with a loss of about 1/2% for the week. The economic news on the week was mainly on forecast, although producer prices were a bit hot, but prices remained tame.

Interest rates were a bit out of control on the week with rates on the 10 year Treasury shooting higher by 25 basis points. The yield closed the week at 4.40%–one has to wonder if equities can continue to remain level or move higher with threats of higher interest rates. It certainly seems like the ‘sugar high’ of the elections has disappeared and now we have to deal with the here and now and the specter of massive government deficits.

This week we have the FOMC meeting on Tuesday and Wednesday and then the presser and rate cut announcement mid day on Wednesday. I am fairly confident in the 1/4% rate cut–also I am relatively confident that Jay Powell will attempt to tamp down future expectations for more rate cuts –whether he succeeds is questionable in my mind. On Friday we get the PCE–personal consumption expenditures–report for another read on inflation.

Last week, we had some ugly numbers in the average $25/share preferred and baby bond pricing. The average price fell by 25 cents, with investment grade off a whopping 37 cents, bankers off 23 cents, CEF preferreds off 8 cents, and mREIT issues off 9 cents. Even the shippers fell by 13 cents. Part of this fall was ‘real,’ while late-week ex-dividend dates contributed to the fall.

The Federal Reserve balance sheet grew by $2 billion – the 1st pause we have seen in runoff of the balance sheet assets since early October.

Last week we had 2 new income issues price with BDC Gladstone Investment (GAIN) pricing a new baby bond with a coupon of 7.875% and CLO CEF Pearl Diver Credit (PDCC) pricing a term preferred at 8%.

RiverNorth/DoubleLine Strategic Opportunity Fund Term Preferred Now at $10

The series C, 6% short duration term preferred (OPP-C) from closed end funds RiverNorth/Doubleline Strategic Opportunity Fund (OPP) is now trading somewhat ‘normally’–right around the liquidation value of $10. This ‘rights offering’ series sold with strange pricing for a few days before now settling in. This has just 410,000 shares outstanding and it looks like the $10 liquidation value threw folks off for a few days.

The issue has a mandatory redemption on 12/1/2027 so maybe it is a decent spot to hide out in as a cash alternative of sorts.

”Extend and Pretend” About to Bite Small Banks?

Have the small bankers-community and regional bankers–been lagging in their recognition of bad commercial real estate loans? Their modified loans are substantially fewer than the big banks–with about $500 billion in loans coming due this year are we about to see some major write-offs?

This article provides some food for thought–and that is all it really provides. Personally I exited most bankers earlier in the year–waiting for more ‘shoes to drop’ (although they may well never drop). Never hurts to ponder the ‘what ifs’.