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Headlines of Interest

Below are press releases from companies with preferred stock and/or baby bonds outstanding-or just news of general interest. News will pick up when the next earnings season arrives (around10-10/2024).

Federal Home Loan Banks Present Housing Supply Recommendations

Great Elm Group Reports Fiscal 2024 Fourth Quarter and Full Year Financial Results

ARMOUR Residential REIT, Inc. Announces September 2024 Dividend Rate Per Common Share

Mortgage Rates Continue to Drop

Pending Home Sales Dropped 5.5% in July

Diana Shipping Inc. Announces Time Charter Contract for m/v DSI Pegasus with Cargill Ocean Transportation

Enstar Completes Previously Announced Transaction with IAG

Virtus Equity & Convertible Income Fund Announces Distribution and Discloses Sources of Distribution – Section 19(a) Notice

SITE Centers Provides Third Quarter 2024 Transaction and Financing Update

Two Virtus Closed-End Funds Announce Two Monthly Distributions: NCV, NCZ

Out of ‘Powder’ For Now

At this moment I am out of dry ‘powder’ and awaiting my September redemptions of CDs to begin to hit next week. As always there will be something to buy in a week–don’t know what that is yet, but lots of time to ponder it.

Well the party in common shares continues even with the supposed disappointment in Nvidia earnings. When someone stumbles others pick up the slack. Best Buy is flying and up $13/share–this is one I never understood as BBY is pretty much a non growth story and usual results in the last few years are just less bad than lowered expectations–I don’t really view them any differently than General Motors etc–over time pretty lethargic.

Todays economic data was not really supportive of a 1/2% rate cut next month by the FOMC. Jobless claims remained around 230,000 which is pretty much where they have been in most recent weeks and months. The 2nd read on 2nd quarter was revised higher to 3% from 2.8%. On the other hand pending home sales fell sharply from last year. This is the 1 sector that could be hurting as we enter the fall and winter–with 6 of 7 homeowners in mortgages with less than a 6% interest rate they are biting at rates of 6.4 or 6.5% (or higher depending on your credit score).

So now I wait on the PCE report tomorrow–then we will have an inflation read–will it support a 1/4% cut or a 1/2% cut? Who knows!!

Headlines of Interest

Prospect Capital Announces June 2024 Financial Results and Declares 86th Consecutive $0.06 Dividend

Ellington Financial Announces Estimated Book Value Per Common Share as of July 31, 2024

Bridgewater Bancshares, Inc. Announces Strategic Acquisition of First Minnetonka City Bank

Fifth Third Bank Announces Redemption of Senior Bank Notes due October 27, 2025

RLJ Lodging Trust Sets Dates for Third Quarter 2024 Earnings Release and Conference Call

AM Best Affirms Credit Ratings of AXIS Capital Holdings Limited and Its Operating Subsidiaries

B Riley Extends Terms

Once again B Riley has negotiated to have terms of their debt terms changed to extend the time available for filing financial statements. The company could have been found in default on some loans because they have not filed within the 45 day covenant limit after the end of the quarter.

The company had received a notice from NASDAQ for not timely filing the financials.

This is a real mess and one short seller mentioned that baby bonds would go to zero if the company files chapter 11 since assets are pledged for more senior securities. Extreme caution is necessary with this mess.

Did You See These News Items?

A few items of special mention in the news of late.

As most of you know giant Net Lease REIT Realty Income (O) has made a call on all shares of their 6% perpetual preferred (O- or OPR or O.PR etc., etc.). The call is for 9/30/2024. These preferred were from the old Spirit Real Estate acquisition and it is no surprise that O would call them.

Carlyle Credit Income Fund (CCIF) has sold some term convertible preferred shares in a private deal. The shares carry a 7.125% coupon and are redeemable in 2029. At the same time CCIF announced a direct placement of common shares. Each of the deals has net proceeds in the $11 million area for total proceeds of around $22 million. No surprise in this deal. CCIF is a smaller CLO CEF and they needs to continually raise new funds to buy more CLOs.

Lastly LuxUrban Hotels (LUXH) had to restate their earnings (losses) for the quarter ending 3/31/2024. This company is a mess–and I would guess a potential bankruptcy candidate. The company’s restatement took their net income to a minus $42 million–much worse than the previous loss reported of $17 million. The common shares now trade at 7 cents and amazingly the perpetual preferreds trade at $15. The preferreds should trade around $4-5, and likely will when they finally suspend the dividend which is bound to happen eventually. RECALL that this issue required LUXH to escrow 18 months of dividends–so the issue date was 10/2023. I guess folks are staying until the last moment (in April, 2025).