5/30/2025
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Just 30 minutes ago Customers Bancorp (CUBI) announced a call of the 6.45% fixed to floating preferred (CUBI-E).
The issue has been floating for almost 5 years and holders got complacent–shares will open down 60-70 cents tomorrow as it closed today at $26.24. The dividend yield has been around 61 cents so that will be the dividend on the call date of 6/16/2025.
As noted earlier today by CR the Priority Income Fund 6.625% term preferred (PRIF-F) is to be redeemed on 6/11/2025.
This is another ‘hiding spot’ issue which I had mentioned months and months ago I thought would be called early–mandatory redemption is in 2027. PRIF has been aggressive in calling in their term preferreds and this is the 2nd issue recently that they have called way before mandatory redemption. The other was a 6.25% (PRIF-G) issue redeemed in December.
Everyone that bought this one recently is picking up a nice little capital gain with the call as it has been trading in the $24.50-$24.80 area.
As noted in comments today Atlas Corp (private) is going to be calling 2 issues of preferreds and 1 issue of baby bonds.
Atlas Corp is a shipping company, with primarily assets from the old Seaspan and was taken private by Poseidon on 3/28/2023.
I was kind of surprised to see this call as the coupons of all 3 issues are in the 7’s–and the total cost of calling these issues is $350-400 million–a pretty heavy lift, but their financials have been fairly stellar recently–the latest earnings of Seaspan are here.
The SEC filing on these actions is here—-of note is that while I believe the intention is to call all shares and bonds they do mention that ‘a portion of the Series H preferred shares will take place in the 2nd quarter’. Does this mean they will call the balance in the 3rd quarter?
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.
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.