Came across this item this morning–interesting. This 5.50% non cumulative preferred (CADE-A) is an exchange traded issue and to see a special paid to preferred holders is pretty unusual.
Category: Preferred Stock
Priority Income Fund Calls Another Term Preferred Issue
Untraded closed end fund (CEF) Priority Income Fund has called their 6% PRIF-H for redemption on April 9, 2025–the mandatory redemption on this one was scheduled in 12/2026.
This is the 2nd term preferred that PRIF has redeemed early in the last 4 months. They redeemed the PRIF-G 6.25% issue in December, 2024. It had a mandatory redemption in 6/2026.
It is quite obvious that PRIF is making these calls based on the mandatory redemption dates–not by coupon. These are generally smaller issues–a million shares or so – not a big hardship on a CEF with total assets of over 900 million to call. I believe the next issue they will redeem is the 6.625% PRIF-F issue–this is the issue with the next mandatory redemption which is 6/30/2027. This issue is currently callable and trading at $24.38. I will immediately try to buy some of this issue since our H shares are being called.
Disclosure–we own shares of the PRIF-H 6% issue in 2 accounts.
Rithm Property Trust Finally Prices Fixed-to-Floating Preferred Issue
It took a little time, but Rithm Property Trust (RPT) has priced their new fixed-to-floating rate preferred issue.
The issue priced at a fixed rate of 9.875%. The issue goes to floating rate on 5/15/2030 at 3 month SOFR plus a spread of 5.56%.
This is an unrated issue and one must remember risk equals reward–this is a dicey issue. Deep due diligence should be done by investors. This is the old Great Ajax mREIT which originally invested in non performing and re-performing residential mortgages which is now swinging toward commercial mortgages.
The pricing term sheet can be seen here.
I Sold This Floating Rate Preferred
Lo and behold—I just wrote about ‘call risk’ and then I found the Annaly 6.95% fixed-to-floating preferred (NLY-F), which I hold, trading at $26.25. It would be quite embarrassing to get caught with this one after warning folks of call risk.
My shares are gone—sold at $26.23. So I collected a number of dividends at a very high rate (around 10%) and got a 3.5% capital gain to boot. Will be looking for a replacement issue.
Rithm Capital Makes a Partial Call on Floating Preferred
As posted by Z and Maine in comments earlier today mREIT Rithm Capital (RITM) is calling 2 million shares ($50 million) of their 7.50% fixed-to-floating preferred (RITM-A). Their press release is here.
This is a 6.2 million share issue so plenty will remain outstanding–but this is a ‘shot across the bow’ and will ensure the issues trades around $25 plus accrued dividends. The issue fell about 15 cents in trading today–not a big reaction, but only because pricing was reasonable.
I do own a modest position in the RITM-B 7.125% floating issue, which I bought instead of the ‘A’ issue figuring the A issue would be redeemed 1st.
This just a reminder to all of us that if something goes to a $25 plus 2 or 3 dividends and is callable there will be call risk-we can never forget this.