Innovative Income Investor | Innovative Income Investor

Party On!! Not a Bad Time to Bank a Few Capital Gains

I have watched the equity indexes go higher and higher–good news is great news. Also apparently ‘fake news’ is great news also. I think todays employment report was pretty fake–meaningless.

For many reasons the economic news is fake. PPP (paycheck protection) money is being used to keep folks on the payroll playing tiddlywinks so they don’t hit the statistics. Company earnings are fake as they are receiving a tax credit for keeping folks employed (compliments of the CARE act)–I noticed Best Buy showed profits of around $150 million on the quarter, but they had tax credits for keeping folks employed of $60-70 million included in there. Also companies are able to defer paying the employer portion of the FICA taxes until next year–so more money the Federal government won’t collect (at least for now)–you would think the government was solvent.

Things are pretty fake all around–oh well, nothing we can do but enjoy the party.

I’ve had my 70-73% invested position for a month (more or less) and the 1st of the month brought some nice dividends and interest payments–June will bring another batch in.

I decided today to do a little selling–not bunches, but a few percentage points. Even quality utility and closed end funds get to silly prices–or at least darned high prices. I would be just fine holding these issues, but am a bit nervous with crazy high prices. At this rate I won’t get above 73% anytime soon.

I sold some of the Spire 5.90% perpetual preferred today (SR-A). I had paid $26.20 and sold for $27.20 to book a capital gain. This one I have been in and out of many times–each time booking 3-4% over the course of a month or so.

I also sold some of the DTE 5.375% baby bonds (DTJ). I had a very large capital gain and had just collected an interest payment so I let 1/2 the position go at $26.16.

All week I have watched the new issues come out and while I was willing to pay $25 for some of them they opened too high and I didn’t chase.

I anxiously await next week.

Athene Holding LTD Pricing Detail

Below is the pricing detail for the new Athene Holding LTD (ATH) fixed rate reset preferred.

Until 9/30/2025 the coupon is fixed at 6.375%.

The coupon will reset every 5 years starting 9/30/2025 and will reset at the 5 year treasury plus a spread of 5.97%–a pretty decent spread on an investment grade issue. This spread becomes the floor rate for the future coupon.

This issue is redeemable starting 6/30/2025 for a period of 90 days (until 9/30/2025). Then is only redeemable for a 90 day period in a coupon reset year (every 5 years) from 6/30 until 9/30.

The pricing term sheet can be read here.

Athene Holding LTD Prices New Preferred

Athene Holding (ATH) has priced the previously announced fix-rate reset preferred.

As of 8:30 pm (central) the SEC FWP (free writing prospectus) with the pricing terms has not been filed. Below is what we know now.

The initial coupon will be 6.375% which will remain in effect until 2025. After 9/2025 it will trade at a coupon which will be reset every 5 years at the 5 year treasury plus a spread–until the FWP is filed early tomorrow the spread is unknown. We will have the detail before the market opens tomorrow (assuming it is filed).

The issue is non-cumulative, qualified and low investment grade (BBB-).

The company press release can be read here.

I may have an interest in this issue–but can’t know until the spread is announced.

The OTC grey market ticker will be ATHHL. The issue will trade tomorrow.

The permanent ticker will be ATH-C after it has traded on the OTC grey market.

Annuity Provider Athene Holding LTD Announces New Preferred Issue

Athene Holding LTD (ATH) has announced the issuance of a new fixed-rate reset preferred. The issue will be non-cumulative.

This issue will be rated low investment grade by S&P at BBB-

A fixed-rate reset preferred will trade with a fixed coupon for about 5 years–meaning until 9/30/2025 in this case. After this point the coupon will reset every 5 years at the 5 year treasury rate plus a yet to be announced ‘spread’.

The new issue will trade under ticker ATH-C when it hits the NYSE after trading on the OTC grey market for maybe a week (OTC ticker yet to be announced).

The company currently has a fixed-to-floating rate preferred outstanding plus they have a fixed rate issue outstanding. These issues can be seen here.

The preliminary prospectus can be read here.

mcg was on top of this one.

Dime Community Bancshares Prices ‘Reopened’ Preferred Issue

As noted yesterday New York community banker Dime Community Bancshares (DCOM) is ‘reopening’ a previous issue of preferred stock–it is the 5.50% perpetual issued in January.

The company is offering 2 million shares plus an additional 300,000 shares for over allotment. The offering price is $19.87/shares.

Shares had moved lower yesterday on the announcement of the reopening and closed yesterday at $20.85.

Shares opened today at $20.25, but have now moved to $20.60.

The pricing term sheet is here.

Thanks to 2whiteroses for picking up the pricing.