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Babcock and Wilcox Announces a New Preferred Issue

Babcock and Wilcox Enterprises (BW) has announced they will be selling a new issue of preferred stock. They plan to sell 2 million shares with another 300,000 available for over allotment.

This issue will be cumulative and qualified (assuming they have income).

The permanent ticker will be BW-A, when and if it reaches the permanent exchange. No OTC grey market ticker has been announced and the issue is not priced yet.

Note in the preliminary prospectus the company has no CURRENT ability to pay dividends on either their common or this new preferred issue until they can get their credit agreement modified as the agreement does not allow dividends.

Please note this company is not profitable and there is plenty of risk owning shares in this company.

The preliminary prospectus can be read here.

BW has an issue of 8.125% baby bonds outstanding that trade fairly well.

aview was on top of this late date filing.

Yield talk is 7.75-8% per EarlyBird.

5 thoughts on “Babcock and Wilcox Announces a New Preferred Issue”

  1. This issue has much to distinguish it. The use of proceeds includes “reduction in net leverage”. The company is BORROWING money, not repaying anything, and calling it a reduction in leverage. This happens of course because they will include the preferred in equity rather than debt where it belongs. The only difference between debt and cumulative preferred is the right to defer payment on the preferred.

    Riley and Ladenburg Thalmann are behind this masterpiece. If it had an Egan Jones rating slapped on it then it would push all the buttons. Oh, and an HDO recommendation!

  2. They should issue it immediately and set the record for shortest time from IPO to dividend suspension.

    Disclosure: Long BWSN

      1. On the long list Justin. As you may (or may not) remember I lost ‘Chad’ who did all my work for the last 10 years on the various websites–he went to work for another company. I have had some trouble getting the folks at my vendor to play by ‘my rules’. With Chad I could send a note and he would make the change almost instantly. Now I have to send it to the owner of the company who vets it and passes it on to the techies–they say ‘what the hell is he trying to do’ and nothing happens. I am meeting with them in a couple weeks where I can impress directly on them what I want ‘face to face’. I have a list of about 15 items so far.

  3. What a sad tale. Another of our former giant Corporations hanging on by a thread and trying to make it happen.

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