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Southern Company to Call $25 Subordinated Debentures

The Southern Company (SO) will be calling their 5.25% junior subordinated debentures soon.

The issue to be called are the Series 2016A 5.25% shares (SOJB). At this moment these baby bonds are trading at $25.35.

No definitive date for the call is set, but they become callable on 10/1/2021.

The company has sold an issue of 1.875% notes in which they have stated the ‘use of proceeds’ is the call the above notes. Data is here.

Telephone and Data Systems Calls Baby Bonds

Early today Telephone and Data Systems (TDS) called their 6.625% (TDI) baby bonds which have been callable since 2010.

Not unlike many other issues these $25/bonds were trading way above any reasonable level–closing last Friday at $28.21.

Not sure who was buying at these levels, but recent buys gave back almost $3/bond really quick early in todays trading–now trading at $25.40

This is not the 1st time–nor will it be the last, where new buyers were not paying attention to their level of risk when buying–oh well let’s just call it a ‘lesson’.

Whoa is Me!!–US Cellular and Telephone and Data Systems Make Calls

While I didn’t hold any of the issues called today by Telephone and Data Systems (TDS) and majority owned US Cellular (USM) I hate to see 3 baby bonds go all at once.

As noted by Woody, Greg and mbg earlier today the related companies are calling 3 issues of baby bonds.

TDS is calling the TDJ (7.00%) and TDE (6.875%) issues. TDS had 4 issues outstanding so 2 remain. You can see them here. Call date is 5/12/2021.

The press release is here.

Us Cellular (USM) is calling the UZB (7.25%) baby bond effective on 5/12/2021.

USM has will continue to have 4 baby bonds outstanding. You can see them here.

The press release is here.

All of these issues fell about 1% this morning as they got ahead of themselves and holders will take a small loss of the calls.

I had these issues on my ‘watch list’ for dividend/interest captures, but did not hold any as they were too high in price and we all knew calls were likely coming.

Another Baby Bond to Be Redeemed

BDC Investcorp Credit Management(ICMB)has announced a new $1,000 note issue with a maturity in 2026.

The company will call the 6.125% baby bonds (CMFNL) with the proceeds.

It will be interesting to see how low this issue is priced given the Horizon Technology Finance (HRZN) priced yesterday at 4.875%.

The new note prospectus is here.

It is obvious that everything that is redeemable by a company that is solvent will be redeemed ASAP.

Just 2 Baby Bonds to Mature this Year

There are only 2 baby bonds maturing yet this year and both issues reach maturity in April.

Medallion Financial (MFIN) has a 9% note (MFINL) maturing on 4/15/2021. The issue is trading at $25.39 at this moment–it had just gone ex-dividend in late December. The issue will pay 1 more full interest payment of 53.6 cents/share on 4/15/2021.

REIT Ready Capital (RCP) has a 6.50% senior note (RCP) maturing on 4/30/2021. The issue is trading at $25.12 now after going ex-dividend earlier in January. There will be one more full interest payment of 40.63 cents/share paid on 4/30/2021.

I only note this because maybe there is a relatively safe 1.x% in the Ready Capital issue in the next 3 months to stash some excess cash.

I don’t believe that either issue will have any trouble being redeemed, although Medallion Financial is not a very strong finance company.

On the site we have the baby bond page on which you can ‘toggle’ by coupon, current yield, maturity dates or just alpha.