Category: Company News

Insurance and annuity company Brighthouse Financial (BHF) has been trying to sell the company for the last 6 months or a year and there is news today on potential bidders etc.

I no longer hold any preferred shares in BHF, but there are 4 preferred issues and 1 baby bond outstanding and holders of all of these should consider potential options for their shares should an acquisition occur (i.e. sell or hold).

In an acquisition preferred may be handled in a number of ways. The acquiring company could delist the shares–meaning no public market would be available for buying or selling. They could redeem the shares at $25 (plus accrued dividends). And of course they could simple let shares remain outstanding and trading on NASDAQ. No one knows at this point in time what may happen.

Today we saw steep drops in preferred share prices as many investors decided to bail out already.

Be prepared.

Collateralized loan owner (CLO) Eagle Point Income (EIC) has approved a buyback of common shares up to $50 million.

You may remember that just 10 days ago the company cut their distribution from 20 cents monthly to 13 cents monthly–an excellent move as the company had aggressively moved their payout higher over the last 5 years and now have been overpaying their net investment income. Contrary to most CLO owners Eagle Point Income wants to match up their distributions to their income (smart folks).

Eagle Point Income (EIC) holds mostly debt tranches of the CLO (albeit the BB tranche) so they have a slightly safer portfolio than most other CLO company’s i.e. Eagle Point Credit (ECC), Oxford Lane Capital (OXLC) etc. With the safer portfolio their income has fallen over the last year as interest rates fell earlier in the period – CLOs contain loans which are at floating rates.

At this moment shares of EIC are trading at $13.23 while the net asset value on 5/31/2025 was estimated at $14.08-$14.18–it only makes sense to start to buy shares back at a discount. Interestingly the company sold 4 million shares with their ‘at the money’ program during the quarter ending 3/31/2025.

The common share dividend cut and the opportunity for the company to buy back shares at a discount are both excellent moves and they give me even more confidence in the company than I already had.

Disclosure–I own both the 7.75% term preferred (EICB) and 8% term preferred (EICC).

As noted by aj in the comments just now Brighthouse Financial (BHF) is looking to sell itself.

I have very modest exposure to 2 preferred issues which I may/may not exit with losses. My concern is a potential delisting of preferred shares–I will need to read the prospectus to see what it has to say on the matter.

An article is here.

B Riley (RILY) announced a suspension of their preferred stock dividends today. The beleaguered financial firm has 2 issues outstanding which can be seen here.

Honestly they are a quarter or two too late on this–they should have done it previously. Both issues traded down sharply today–to close in the $6/share area. Dividends are cumulative.

This could be disaster for some holders OR it may present great opportunity for the speculators. The company finally filed old financials last week showing there is now a negative $143 million in equity as of 6/30/2024.