5/7/2025
Our site runs on donations to keep it running for free. Please consider donating if you enjoy your experience here!
Insurance company American Financial Group (AFG) has announced a new issuance of baby bonds.
The company has a number of issues already outstanding–3 baby bond issues to be exact.
The company intends to redeem the 6.25% baby bonds due in 2054 (AFGE), which have been redeemable since 9/30/2019.
The new issue will likely be investment grade (BBB- from S&P and Baa2 from Moodys) so the coupon will be fairly low. The permanent ticker will be AFGC when it begins to trade on the NYSE in a week or two.
Multi strategy REIT Ready Capital (RC) will reopen (sell more shares in a currently outstanding issue) their 6.20% baby bonds (RCB).
This issue was originally sold in July, 2019 and was most recently trading in the $25.59 area.
Disclousre–I own this issue and may take this opportunity to add a little more.
The selling price of the new issue has not been announced yet.
Online and television retailer QVC (owned by Qurate Retail:QRTEA) has priced the previously announced baby bond.
The issue will carry a coupon of 6.25% on 17.4 million shares (plus 2.6 million over allotment shares).
The issue is low investment grade per S&P and Fitch, but speculative per Moodys.
Being investment grade one would have expected a lower coupon, so this means that holders of the QVCD issue (the currently outstanding 6.375% baby bond), which carries a yield to worst around 5.5% would be a bit better off buying the new issue once it trades (sometime in the next week), assuming it trades in the $25 area.
There will be no OTC Grey market trading in this issue, but if one desires an early purchase a call to your broker might allow you to purchase before permanent market trading.
VEREIT has priced a new issue of Senior Notes–NOT baby bonds.
$600 million in investment grade notes were priced at 3.10%. The notes are expected to be rated Baa3 by Moodys, BBB- by S&P and BBB by Fitch.
I only mention this because the VEREIT 6.70% perpetual preferreds have been a favorite of many of us–and for good reason–where do you find this coupon of a quality REIT?
While I won’t go into detail VEREIT is the old American Realty Capital Properties, which almost fizzled out of existence 5 years ago because of accounting fraud.
VEREIT announced a settlement of about $740 million in September and now the company can move forward. This is no little company–they have $14 billion in assets and $7 Billion in equity, but the lack of a settlement in the American Realty Capital accounting fraud case had hindered the company from moving ahead with the normal course of business.
The VER-F preferred fell by 36 cents today as the filing on the above referenced senior notes stated they would be calling some number of the issue. With VER-F now trading at $25.12 it would seem that a partial call of the issue might leave some opportunity.
With a monthly dividend of almost 14 cents any shares left outstanding will garner a generous coupon.
There are currently 39 million shares of the VER-F issue outstanding (as they had previously redeemed 4 million) so it would require $1 billion for a full redemption, but in the prospectus for the notes they used an ‘assume’ $200 million for redemption–so this should leave around 30 million shares out.
The prospectus on the notes can be read here. The pricing document is here.
Retailer QVC (owned by Qurate Retail:QRTEA) has announced a new offering of $25/share baby bonds.
The Senior Secured Notes will have a maturity date way out in 2068.
The notes will trade under the ticker QVCC when they begin to trade.
The company has a 6.375% baby bond already outstanding (QVCD) which can be seen here. While we don’t see a new rating today the QVCD notes are low investment grade (BBB-) per S&P and a below investment grade per Moodys Ba2
The preliminary prospectus can be read here.
Ptrader and If you Prefer were on this on instantly.