Tim McPartland | Innovative Income Investor

Headlines of Interest

Below are some press releases from company’s that have preferred stock or baby bonds outstanding.

Global Ship Lease Announces Results of 2022 Annual Meeting of Shareholders

Priority Income Fund Announces 11.1% Annualized Cash Distribution Rate (on Class R Offering Price) Through Board Declarations of Increased Quarterly Cash “Bonus” Common Shareholder Distribution in Addition to Steady Monthly Cash “Base” Common Shareholder Distributions for December 2022 through February 2023 and Preferred Stock Distributions for December 2022

Newtek Secures Approximately $300 Million in Debt Financing to Further its Growth and Objectives for 2023

Diana Shipping Inc. Announces Sale And Leaseback of m/v DSI Andromeda and Time Charter Contract for m/v DSI Pegasus With Reachy

Triumph Financial, Inc. Announces Preliminary Results of Tender Offer

Armada Hoffler Announces Closing of $100 Million Fixed-Rate Unsecured Term Loan

Ellington Financial Declares Common and Preferred Dividends

Global Medical REIT Inc. Board Declares 2022 Fourth Quarter Common and Preferred Dividends

Ellington Residential Declares Monthly Common Dividend

Allstate Announces Preferred Stock Dividends

Hennessy Advisors, Inc. Reports Annual Earnings

Oxford Lane Capital Continues Selling Common Shares

Specialty finance company and closed end fund Oxford Lane Capital (OXLC) continues to sell plenty of common shares and they have released their latest update to sales.

With the share price at $5.11 which is a premium to the net asset value (NAV) of $4.79-$4.89. With 163.5 million shares outstanding I would expect in 2023 the company will reverse split the shares at 1 for 3—this will keep them out of penny stock territory (under $5/share).

The update is here.

Stocks Weak Again

The S&P500 is off a total of 3.2% so far this week–and thus far this morning futures are off about 2/3 %. I think stocks are coming around to the conclusion that the economy will weaken substantially from here–interest rates of course have been signaling this for some time now. The common share selloff has been nice and orderly–whether markets are up or down, just like interest rate movements, as long as price movements remain orderly I am calm.

We have only a few economic numbers today. We have ‘revisions’ to unit labor costs and productivity at 7:30 am (central) and late in the day we have consumer credit growth announced. These typically wouldn’t move markets, but they will be scrutinized closely this time around–unit labor costs and productivity for inflation contributions and consumer credit for growth beyond expectations. Consumers are leaning heavily on credit which may come back to haunt them later depending on general economic conditions.

So I will likely continuing on the side lines in terms of new buys–just no cash available yet. I am fine just watching while my money works for me–every month I am rewarded with dividends and interest and December is a big month.

Headlines of Interest

Below are some press releases from company’s that have preferred stock or baby bonds outstanding.

Midland States Bancorp, Inc. Announces Authorization of New $25 Million Stock Repurchase Program

Oxford Lane Capital Corp. Provides November Net Asset Value Update

Soluna Holdings, Inc. Provides Corporate Update

Applied UV, Inc. Launches 40% Off Winter Sale to Help the $33 Billion North American Cannabis Market Prosper

NexPoint Diversified Real Estate Trust Announces Preferred Share Distribution

Arlington Asset Investment Corp. Declares Fourth Quarter 2022 Dividends on Preferred Stock

Lumen Invests to Expand U.S. Intercity Network by 6 Million Fiber Miles

Sneaking Out of Common Stocks Today

When you look at the charts of the S&P500 it looks like everyone wants out—but they don’t want to spook anyone. This index keeps hitting new daily low after new low—but it has been very orderly after the 1st 90 minutes. There is no real economic news today and with the Fed in a ‘quiet period’ before the FOMC meeting next week they aren’t able to yak and muddy the waters. Regardless I don’t mind slow selloffs–folks don’t get so panicked with a drift lower.

The 10 year treasury is tame and the current yield has drifted 4 basis points lower–perfect. Interestingly preferreds and baby bonds are lower today–must be in sympathy with the common shares. The Athene preferreds outstanding are getting spanked pretty good since yesterdays new preferred announcement–they are all off 2-3% in the last 2 days.

It looks like demand for the new Athene 7.75% fixed rate reset issue is fairly tepid–it is trading right at $25/share–it is a large offering (20 million shares) so it will take a while to soak up the shares–no rush to buy any of this issue. ‘If you prefer’ mentioned in the comments that this is the 10th issue that will be outstanding from Apollo Management (APO)–lots to choose from with most of them being insurance/annuity focused. They are here.

The new 8% baby bond issue (RWAYZ) from BDC Runway Growth Finance (RWAY) doesn’t seem to be trading yet–I would think by the end of the week we will see it.

Some Much for a Quiet Monday

Well Monday trading was much wilder than anticipated. Economic news which is typically not highly important came in uniformly hot which sent interest rates up 10 basis point and stocks tumbling. Oh well one can never hang their hat on any given days news.

Today the only economic news coming out is the trade deficit – so very quiet economic news.

The new Athene Holding fixed rate reset preferred looks interesting at 7.75%–if I had cash I would take a taste. The concern with investors is over ‘change of control’ provisions–I need to read the prospectus over carefully to see what protections investors are afforded.

Yesterday I did zip–nothing at all. One of my largest accounts has about $900 in cash in it so obviously there is no longer ‘dry powder’–but as always one can sell something to buy a different security. Today is likely to be another day of ‘do nothing’ – just watch.

Equity futures are relatively flat at 7 a.m. central time. Interest rates are a bit lower with the 10 year treasury at 3.57%.

Athene Holding Prices New Preferred Issue

Athene Holding has priced their new fixed-rate reset preferred stock issue.

The issue prices at an initial coupon of 7.75% which remains until 12/30/2027 at which point the coupon will reset at 3.962% plus the 5 year treasury rate. There after the issue resets every 5 years.

The issue is investment grade.

The issue will trade immediately on the OTC grey market under ticker ATHLV.

The pricing term sheet is here.

Saratoga Investment Prices Baby Bonds

Business development company Saratoga Investment Corp (SAR) has priced their new baby bond.

The issue prices at 8.125% which is .125% higher than their October issue.

The issue will not trade on the OTC grey market and likely won’t trade on the NYSE (under ticker SAY) until net week.

This is the 3rd issue of baby bonds SAR will have outstanding and investors contemplating a purchase should not only look at the coupon, but also the yield to maturity.–all 3 issues mature in 2027 but have widely varying yields to 1st call and to maturity.