Barring Late Change AmTrust Financial Preferreds to Trade OTC Tomorrow

Earlier today AmTrust Filed paperwork with the SEC to delist their preferred shares from the NYSE. The filing is here.

Tonight we see that tickers have been announced for shares on the OTC exchange (just preferreds-not baby bonds). We will be most curious to see what happens tomorrow.

As we mentioned earlier today the lawsuits on this delisting are starting to fly and some AmTrust Financial preferreds traded with very massive volumes today and share prices on most issues traded down around 50 cents.

The tickers for tomorrow are

6.75% AFSIA (old AFSI-A)

7.25% AFSIB (Old AFSI-B)

7.625% AFSIC (Old AFSI-C)

7.50% AFSIP (Old AFSI-D)

7.75% AFSIM (Old AFSI-E)

6.95% AFSIN (old ASFI-F)

We will be watching–more out of curiosity than anything else. With current yields in the 17-19% area it will be interesting. On the other hand I wouldn’t trust the snake management 1″.

46 thoughts on “Barring Late Change AmTrust Financial Preferreds to Trade OTC Tomorrow”

  1. How can there be lawsuits about the Amtrust Preferreds already? They haven’t even missed a payment yet and the company has declared regular payment for all the preferreds on March 15. No one has any damages yet.

    1. Just asking. On Schwab, they listed the preferred’s ex-date of March 1st. Have not seen any article from AmTrust regarding March 15 date. Where did you see this? Thanks in advance.

      1. I have not seen a dividend declaration yet, anyone else?
        http://www.quantumonline.com/search.cfm AFSIN
        AmTrust Financial Services, Inc., 6.95% depositary shares, each representing 1/40th interest in a share of Non-Cumulative Preferred Stock, Series F, liquidation preference $25 per depositary share, redeemable at the issuer’s option on or after 9/27/2021 at $25 per depositary share plus declared and unpaid dividends, and with no stated maturity. Non-cumulative distributions of 6.95% per annum ($1.7375 per annum or $0.434375 per quarter) will be paid quarterly on 3/15, 6/15, 9/15 & 12/15 to holders of record on the record date that will be 3/1, 6/1, 9/1 & 12/1 or such other record date fixed by the board, not more than 60 days or less than 10 days prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date). The dividends are non-cumulative and if the board of directors does not declare a dividend or the company fails to pay a dividend declared by the board for any quarterly dividend period, the holder will not be entitled to receive any dividend for that quarterly period and the undeclared or unpaid dividend will not accumulate. Dividends paid by this preferred security are eligible for the preferential income tax rate of 15% to a maximum of 20% depending on the holder’s tax bracket (and under IRS specified holding restrictions) and are also eligible for the dividends received deduction for corporate holders (see page S-37 of the prospectus for further information). T

    1. Hi William–not on the baby bonds. It is likely they will trade off your brokerage bond desk and you will have to call them.

  2. Tim,
    Thanks so much for the new OCTBB symbols. AFSI-E, the highest non cumulative preferred, which I do not own, went up a dollar with some bidders and asks, up a little. Schwab recognizes my AFSI-C, now AFSIC (easier to remember that SIC really means Sick, pun intended). 500 bids @$10.11 vs. 500 asks @10.50, which was the closed price at yesterday’s closing. Volume: 4,675 shares. Unfortunately I forgot AFSI’s common symbol, which was found at SA but no more. As I recall, their commons did reasonably well in 1 month and between 1 to 3 month price chart only available at SA. I just hit REFRESH on Schwab.com. All the data disappeared. Fidelity Active Trade PRO still shows (but numbers could be unreliable even for preferred stocks, showing 100 shares last trade up $0.25 with 525 shares transacted, which is DIFFERENT from Schwab.com seen just a few minutes ago. Theoretically, the ex dividend should be sometime in March. AFSIC went up now to $10.40, last trade 300 shares.
    I still hoping that the children and son in law of Michael Karfunkel may not trash these shares if they want to maintain AM Best A- rating. EDITED 1 Sentence Out. I still find it difficult to believe that Michael was a crook, probably a cut throat driver with skinny profit margin biz man.

    1. johncal, please do not post ANYTHING about someone’s religion on this web site (as you just did with stating “Hungarian Jew” this has nothing to do with the investment discussion and will only serve to divide. Nomad

      1. Thanks. Nomad. I am a minority person and holds no prejudice against anyone. I continue to hold large preferred shares of Safe Bulkers, the rare SUPER HONEST Greek Ship small cap owner who bailed the public company with his (and his brother’s) wholly owned private company to buy the new ships and then lease it back to the public company, never skipped one quarter of dividends. In stark contrast to Navio Maritime. There is good and bad people in every race, religion or creed, indeed IMHO.

        1. No huge deal johnkcal, am sure you will proof read in the future–sometimes we all go off the rails a bit–I guess that is why I have the edit button.

        2. johnkcal, you see the root of my screen name is “nomad”; I just want to make sure all of us are helping each other navigate through these mentis investment markets. Tim has given all of us this great gift and both you and I do not want to alienate anyone from contributing. Have a great weekend my friend, Nomad

          1. Nomad, I apologize if I have accidentally offended you. I DO APPRECIATE the enormous wealth of INFO which Tim generously has given all of us. He picks up new issues TWICE the speed of Doug Le Du (who finally would give a prompt alert with no temporary symbol. I do have a tendency to embrace small cap company who made it big. Like a fool, I would put some chips on CTL common for an example, believing the new CEO of Level 3 with its neat cloud technology. Further, I am basically a BUY and HOLD income investor. I recently re subscribed Barrons Mag just taking their 26 week offer. It seems that they are quite bearish believing that the Feds will hold the rate and perhaps even enlarge the balance sheet. Who knows? Yes, have a great weekend, And have a great weekend to all who visits Tim’s great WEBSITE, Happy Belated greetings to Chinese or Lunar New Year which was Feb 5, Tuesday.

            John

            1. Johnk – Once you’re subscription runs out, if you’re a Chrome user, you might be interested in checking out the “Outline” extension on Chrome. It’s a nice little feature not only for Barrons but WSJ and Financial Times as well among others.

    2. John, I have no idea whether they will suspend or not. But doing so would not effect that A- rating. That is for the claims paying ability for the subsidiaries. The do nothing holding company where the preferreds and baby bonds lie are BB rated and separate from that rating.. In fact tecnically I suppose if hold co suspended payments and put the cash in reserves it could actually in increase that rating.

      1. Grid, thanks so much for your input. I missed the last train out when the Activist bought some shares and made the new private owner and Zysband to buy his shares out. This is a dilemma. I am reasonably sure that they will pay for this Q dividend. Going forward, it will or should depend how they do. Being a private company, they will not be faced with “insufficient reserve”, financials from 1 Q to the next Q. Then, it will depend on the integrity of the operators. Another joker in the deck is “the Karfunkel family and Zysbands could sell their shares after limited time (as I recall not that long). Then the new owner could easily suspend the non cumulative dividends. I was considering selling the preferreds and plow the proceeds into the baby bonds of Amtrust. Now, the symbols for these bonds are not so easy to identify. I will be leaving for Hawaii to get together with my daughter trying to get the income tax in order on the 14th. I could call Schwab or Vanguard to sell some of the AFSIC and ask them to buy either the old baby bonds of Amtrust. With zero training or background, except some dealings with lawyers, I am not sure whether they can pull something like Navio. Then there is also headwinds in the Hurricane season and California fire (although my small addition to ESGRP + 300 shares of ESGRO bought at IPO seem to hold its value). BTW, I do want to thank you for your shrewd ID of SCE-L. I sold small amount just not to go too big. It climbed very nicely. I will call Vanguard brokerage to see if they can help. Or Schwab. Good tax loss either way, after collecting all the QDI dividends after so many years. On another subject, some class action lawsuit against CBL. I tried to sell my forgotton CBL-E. Did not get triggered. CBL had a mixed Earnings report. Not great but stock seem to hold. Sad that the short sellers try to bury these companies with change of fortune, which could cause more unemployment going forward if they file for bankruptcies.

        1. Fidelity WEB actually recognizes this AFSIC. Called Vanguard brokerage. They were quite nice placed my 240 shares @ $11.50. Best news is IMHO is the Vanguard specialist dealing with delisted stock told me that AM Best gives a BB for the preferreds down from BB+. So, these guys, thank God, is watching for credibility of the shares. I also dug out old communications including my own posts (now all saved in WORD file). The Amtrust common trading VERY THINLY at OTC BB) as AFNL. 100K shares bid at $71 100K ask at $73 with volume of 268 shares as 90 day av volume. It gapped up from less than $10 to the bid price of $71. No clue on what’s going on. Nonetheless, it is possible that this asset is not as toxic as commonly viewed. Who knows?
          As I am writing. Someone sold it at $11.40, $0.10 lower than mine (mine was the only seller). I would need to call Vanguard to change the price. The backroom person, PAIN in you know where, would not let me place the order or CHANGE the order. I am not going to waste my time on this one. Will just let it sit and see what happens. It will not trigger most likely with me the only stupid soul have any faith or trust in the children of Michael.

          1. Schwab.com actually let me to sell without calling a broker. So, I placed my 200 shares of AFSIC to sell at $11.25 joining the other small seller. What the heck? I found the OLD symbol for its baby bonds,
            “Company’s 7.25% Subordinated Notes due 2055 (NYSE: AFSS) and the Company’s 7.50% Subordinated Notes due 2055 (NYSE: AFST) ” from Doug Le Du. He refused to give me the history with his $195 subscription. I can probably ask Schwab to give me the new symbols. BTW, the renewable energy seems to hold and BEP (large cap with presumably better balance sheet) gapped up. I sold mine when it did not seem to be good with its 6+% dividend history vs. Rida’s best PEGI [other than ARCC]. PEGI is holding well with large QDI dividends. Long term, SA writer who preferred BEP believe that CapEx may be problematic. PEGI has put its chips in Japan which is willing to pay high price hating the nuclear and always look for energy sources.

          2. John, according to this guy posting on SA, AFSS goes by this now…As I suspected it got banished to bond bullpen… AFSS CUSIP is 032359861.

            1. How does one go about finding the market value or trading of the BBs, AFST and AFSS now that they’re banished in bondville?

            2. Grid, thanks. Schwab failed to give me the new symbol for baby bond. My 240 shares at Vanguard brokerage is the only bid @$11.50. If it gets filled, I will ask Vanguard for the new SYMBOL. QOL does give the Cusip.

              Or I may use Schwab if it is tradable, to buy some baby bonds of Amtrust. Schwab just sent me an alert believing that the Feds are actually try to do QE again seeing market running of steam. Your SCE-L gapped to an unbelievable price. I took a bite on RNR-F, waiting for the First ex dividend. There is no real SAFE bargains. PBC should be safe, BBB by SP. Yet, it follows one of the most shameful BDC PSEC down. So, on a risk/reward adjusted basis, Amtrust baby bond may not look so bad, no?

            3. My vanguard brokerage limit order on the non cumulative preferred also got filled now trading slightly higher. Schwab refuse to let me buy the AFSI. Vanguard senior fixed income trader is trying to get some quotation on the two baby bonds. I plan to plow proceeds to get either of the two bonds.

            4. Grid, ZERO trade today on either of the two baby bonds, as reported by both fixed income department from Schwab and Vanguard brokerage, despite my attempt to entice Vanguard to place a Good Till Cancelled order on the old AFST 7.5% baby bond, rated by AM Best as BB+. Vanguard block desk cannot place an order either. So, that settles that. Cash is always good getting 2% APY from Ally bank. Thanks for your posts all the same. Have a great weekend. My daughter still hold some non cumulative preferreds. She refused to give me her password after I decided to let her own the stuff, on the money I gave her nearly a decade ago.

              1. John, you have way more investing courage than I do! These tickers you have mentioned here make SCE-L look like safe gold bars stored in Heaven! 🙂
                Heck it took a lot of courage for me just to buy SCE-L. 🙂

                1. Grid, I guess I must be crazy. The 7.5% baby bond, AFSIP, was trading with quite a sizeable BID and ASK. I tried to grab some at Schwab.com and Vanguard brokerage. Went up to $11.65 bids with HUGE volume. I finally cancelled the order at Vanguard and increased 425 shares at $11.86 and went to eat my late breakast. It got filled and AFSIP gapped up some more. Many years ago, I followed some Southeast gentlemen at Doug’s buying the upsteam MLP’s, BBEP, VNRxP and another small cap Legacy something in Permian basin and plus more. All except the Legacy went bankrupt including the BBEP, led by some hot shot Stanford MBA CEO. Then toward the end BEFORE bankruptcy I followed some SA commenter and bought their bond. It actually made some money. I was not brave enough to stay throughout the bankruptcy court and cashed out with some cap gains plus very nice interest. I learned from SI that you are in Sierra Nevada. Beautiful country when I lived in San Francisco back in the 70’s to early 80’s. The roads can be treacherous, please drive VERY carefully and be safe. BTW, I decided to keep SCE-L. Difficult to find replacement while I spent the time to figure out Amtrust baby bonds. AGO-E is good. Then my greed to replace risky asset (AFSI non cumulative pfds) with lesser but still risky (AFSI bonds) got to me. I am reluctant to follow Rida (non subscription) post to buy more BRP or RQI (which is considered risky 2 Star by MorningStar). Good day for BDC commons with Feds deemed reluctant to raise rates plus a positive article on ARCC by BDC Buzz.
                  All my best, John

                  1. Hey John! We just got in our room..24 hours late…But not Tahoe’s fault but out own airport…Bad weather flight cancelation and then on a reroute later in day through LA… 22 hours later made it to Reno. Just stayed night there… We made it! Hope you do well on the action this week! I may try to reenter SCE-L myself on the phone this week, lol..I cant let it totally go even on vacation!

                  2. John, AFSIP is not a baby bond except if something changed lately. Any idea about the range of trading in BBs: AFSS and AFST, in other words how to get an online quote for them.

        2. John, take comfort in knowing their financials will be scrutinized by the state regulators in which they are headquartered in (the subsidiaries). They must met reserve requirements and such and are watched. Unfortunately the holding company proper is a different question and what they do. Remember the beast of the holding company is fed from the cash generated by subsidiaries profits. Its all complicated and way over my head. The reason why I know this is I have a delisted insurer baby bond that went private also. The books are open back door through NY regulators. But they also grant access to shareholders who can prove they own the baby bond.

  3. Anyone know what’s going on with the NGHC preferreds (NGHCO, NGHCP, NGHCN)? The common and BB’s are holding up but these preferreds have tanked badly. I saw where PFF dumped a lot in Jan. yet still hold several 100K so maybe they are selling out?

    1. Could be PFF selling out of one or more of the issues. Even if they only held 1, others will trade down to similar yield, at least for now. PFF seems to have dumped their GLOP issues pretty fast but are still liquidating other ones like CMRE-E to give you another example of an issue that has been hit pretty good and has dragged down the other CMRE Preferreds with it.

      Don’t think PFf actually fully tracks the new ICE index untiil November 1, so who knows What else they will do. Seemed to dump and buy way too much on the first rebalance. They are supposedly rebalancing for 10 months to get ready but doubt we will see anything that dramatic again.

      1. Ken, this is why I have no interest in this funds. They are tethered to some artifical bogus madeup fictional index tracker that has no relevance other than to reshuffle. The managers care less about capital preservation and dump and buy to parrot the bogus index.
        And fund managers of their own funds trail my performance so badly they are not worth my time. And if I want leverage (which I dont), I could just buy what I own on margin myself.

        1. Agreed Gridbird, this whole process has been terribly managed. Buy high and sell low, seems like a great strategy for your shareholders.

    2. NGHC is one of the three AmTRust companies, run by Michael Karfunkel’s son. As I recall, they had one bad quarter, from auto liability insurance PLUS surprising to me some Catastrophic insurance, which NGHC did not use to play. They may have also bought some of the common or preferred from AFSI. Most of my holdings at NGHC is their baby bonds NGHCZ, also beaten up. AmTrust has become the most hated company in the street. I am NOT worried with NGHC, despite my doubt on the ability of the offsprings of Michael Karfunkel.

    3. Leonard,

      FYI, NGHC is one of the 3 companies from the offspring and Zyskind (son in law) of Micheal Karfunkel. Run by the son. It was the strongest of the 3. Had a bad quarter from surprisingly Catastrophic insurance loss one or two Q ago with Golf coast Hurricanes + California fires (please check on the Form 8. They also did not do well with the auto liability insurance biz in that same Q if I recall correctly. Nice close for the day. I own quite a 500 shares of NGHCN bought probably at IPO at $25.314 back on 7/16/2016 plus its baby bond, NGHCZ in various IRA accounts paid from low $24 to high $24 back in 2015. This is least worrisome holdings of the three IMHO. Because the name Karfunkel and Zyskind have become the most hated in investment company, perhaps well justified. What we are seeing is probably collateral damage of some sort. I have the son has learned from his own mistakes.

      1. Johnkcal, appreciate the input. I hold NGHCO and NGHCZ so I’ve been quite nervous lately holding them (mainly the preferred). I also note PFF has been selling them so combined with your comments regarding Zyskind, etc., a lot of downdraft for a thinly traded preferred.

  4. On a separate note, I wonder if PFF threw in the towel on its AmTrust holdings today. PFF specifically held 1.3M shares of AFSI-F as of its most recent holdings report (Feb-6), and AFSI-F was by far the heaviest volume issue traded today among the AmTrust’s preferreds (by a factor of 20x).

    I’m not a fan of PFF switching to the ICE index. Unlike S&P, ICE does not seem to publicly list its index’s constituents, nor have they yet provided any advance notice of constituent changes (notices which S&P always provided well in-advance for their index). Makes tracking upcoming PFF holding changes impossible. And introduces some odd anomalies. Example – PFF is still holding Maiden’s suspended preferreds (which were dropped last month from the S&P preferred index that PFF formerly tracked).

    1. Agreed, think PFF has managed this horribly. Helped me out on a few GLOP-A flips, but just ridiculous.

      Not sure I’d want to be invested in PFF as they make these blind changes.

    2. I prefer PSK for non leveraged. Follows the preferred investment grade index. For CEF’s if you like leverage preferred investments like FFC

  5. A coordinated effort to have AmTrust preferred/baby bond investors contact their brokers and request a DRS transfer of their shares out of ‘street name’ and into their own name could reverse this terrible outcome. If any issue exceeds 300 reported shareholders, AmTrust is forced to re-list it and continue SEC reporting. DRS transfers are free at Ameritrade and very low cost at other brokers. It’s a guaranteed outcome if enough investors participate, just would take a good deal of coordination to accomplish. Though it would really need a leader to lead such an effort. Tim, if you’re interested, I proudly nominate you as that leader, and I’m sure you’d have the full backing of all of us here. If the effort were successful, it would certainly enshrine your namesake as a heroic defender of income investors. 🙂

  6. This may mean as I suspected the baby bonds got tossed to the evil bond desk thieves. They will try to rip you off. The baby bonds of AFSI will join PFX and investment grade IEH to bond desk hell…Take PFX yesterday. It had like 5 trades with trades ranging from mid $15 to well over $17.
    I saw a month or so ago IEH drifted to $23.50 on last trade. I called to get in as that trade was just posted and all the thieves would quote me was $25.

    1. Thats how I took it Grid–if they traded the debt on the OTC it might make an interesting speculation–but the preferred not so much.

  7. WOOPS!!!
    Now I read it as you wrote it. “wouldn’t trust. Sorry Tim, I must have misread your comments earlier.
    – Dave

    1. Dave–for 30 seconds I had a typo–lol. I looked at it after I hit the publish button and said–whoops.

  8. Tim:
    Did you mean you “would trust the snake management” or would NOT trust the snake management?
    – Dave

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