Category: Preferred Stock Call

I was reviewing the large volume issues from today (large compared to normal daily volume) and I noticed an old friend of mine in the list–Gabelli Utility Trust 5.625% preferred (GUT-A) had traded just 8,700 shares–but that is 7 times normal volume.

It wasn’t really the volume that caught my eye–it was the ridiculous share price that stood out—$27.81 and optionally redeemable since 2008. I think investors are just daring Mario Gabelli to spank them with a 10% loss.

With the call of the Gabelli Dividend and Income preferred (GDV-A) on Monday you would think they maybe would be keeping their eye on other potential calls–especially because they could replace called issues with sub 5% new preferreds if they desired.

I mentioned this as being an ‘old friend’ as I held it for many years – even after it was redeemable–but I guarantee you it was never this far out of line in price.

Gabelli has always been kind of slow to call issues, but it is becoming more difficult for a fund manager to explain to common holders that it makes sense to line the pockets of preferred holders at the expense of the common people.

I am watching for a call here.

Now just how soundly do you have to be napping to be caught holding the Gabelli Dividend and Income 5.875% (GDV-A) cumulative preferred stock when it is trading at $26.35 and has been optionally redeemable since 2009?

Those holders got a 4% lesson yesterday–as a call was announced and the ‘dump’ was swift–tumbling 97 cents.

The redemption will occur on 9/25/2020.

The company had previously called 1.542 million shares on 5/6/2020 so that should have alerted folks shares were in the company sights for a full redemption–but memories are short nowadays and after a fall after this earlier call folks drove the price right back up.

On the other hand holders have garnered a great, safe dividend for many years by holding shares so I guess holders turned out ok–unless you bought last week.

The press release on the redemption can be found here.

mcg was on this at 2:23 pm as was Ptrader 3 minutes later noting a volume spike. I was reviewing the preferred share loss page at the same time and noted the large drop in the issue–I instantly knew a call was at hand–it had traded 25 times normal volume. Posting was on the Reader Initiated Alert page.

VEREIT (VER) has announced they are redeeming another 6 million shares of the 6.70% cumulative preferred (VER-F).

Of course over the years this issue has been PARTIALLY redeemed many times–it was a giant issue to start–almost 43 million shares. With this new call outstanding shares should be in the 18 million shares area.

newman and bob caught this press release from the company 90 minutes agO and posted in the Reader Initiated Alerts page.

Investors had a chance to sell in the $25.70 area a few days ago. I had bought last time there was a partial redemption down around $25–but took a nice profit (2% I think) a few weeks or so later.

Shares are now trading around $25.26.

I have a low ball order in just in case someone wants to panic and give me a few shares.

New York community banker Dime Community Bancshares (DCOM) has ‘reopened’ a previous preferred issue.

The issue they are reopening is the 5.50% Non-cumulative preferred issue (DCOMP) sold in late January. Shares are rated BB- by Fitch.

It is not yet know how many new shares (likely around 1.2 million) will be sold, but the currently outstanding shares are trading lower by 3% ($21.22) on the news.

The reopening prospectus can be read here.

The bank has also released a new investor presentation.

Thanks to mcg for catching this.

In what almost seems like a ‘return to normalcy’, CEF Gabelli Dividend and Income (GDV) has announced a partial redemption of their 5.875% perpetual preferred (GDV-A). The redemption is for 5/6/2020.

The company will redeem 50% of the outstanding shares–shares that have traded very nicely during the recent market drop.

The announcement can be read here.

The CEF is a relatively decent sized fund with over $2 billion in net assets (as of 12/31/2020) and this redemption of 1.542 million shares is relatively easy for the company.

This partial redemption may make the other half of the shares remaining outstanding a decent buy at around $25–of course they could announce redemption at any time.