Tim McPartland | Innovative Income Investor

Still Waiting on Pricing

We are still awaiting pricing on a number of previously announced new issues.

Insurance/annuity company American Equity Investment Life Holding Co (AEL) announced a new issue on Tuesday the 12th. This will be a fixed-rate reset preferred–non cumulative when it comes.

Global Ship Lease (GSL) announced a new baby bond yesterday. This will be a senior unsecured note with a maturity date in 2024–the company has indicated pricing in the 8% area.

Priority Income Fund (nontraded) filed a registration statement a couple of weeks ago indicating a potential new term preferred would be coming. Typically Priority announces these and then it takes 3-4 weeks before we see anything firm on an actual sale.
Given that they have 5 issues outstanding whether they sell another new issue is of little consequence to me–I have a little taste of the PRIF-D 7% issue already.

We will post as soon as further info becomes available.

Kind of Quiet–a Good Time to Review Holdings

Nomadicmist reminded us today, on the Sandbox Page, that while the stock market continues to ‘party on’ there is plenty to worry about in the world.

Nomad points to the recent downgrade of the Global Sovereign Outlook to NEGATIVE by Moodys for 2020. Essentially Moodys has been downgrading a number of countries lately and doesn’t see the economic outlook improving–and maybe getting worse in the year ahead.

A reuters article on the Moodys action can be found here.

Neither Nomad or me are predicting anything at all–we all know the global economic outlook is tenuous, but just suggesting that while markets are kind of quiet it is a good time to review holdings.

We all know “black swans” are lurking–are you holding what you want to hold if a BS appears?

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.