Preferred Stock | Innovative Income Investor

2 Favorites to Be Called For Redemption

It looks like the Axis Capital 5.50% perpetual preferred (AXS-D) will be called soon (no official notice has yet been made).

Axis Specialty Finance LLC has announced a new $1000 Fixed-Rate Reset Junior Subordinated Note issue with the stated “use of proceeds” for “redemption of all of our outstanding 5.50% Series D preferred shares”.

This issue was one of the issues we owned as it traded right in the $25 area and had little to no call risk (i.e. money would not be lost on a call). It is now trading at $25.07 after going ex-dividend on 11/14 with a pay date of tomorrow. Assuming the call notice will give 30 days notice the accrued dividend should be in the 11-14 cent range meaning a value of $25.11 or 25.14.

Additionally Kimco Realty (KIM) has announced the redemption of the 5.50% KIM-J issue on 12/31/2019. We did not own this issue, but had studied it for a potential purchase. The issue will be redeemed at $25.29028 as it will have about 2.5 months of accrued dividends included as the last payment date was 10/15/2019. The notice is here.

First Republic Prices Preferred Stock

The previously announced new preferred issue from private banker First Republic (FRC) has been priced.

The company will sell 14 million shares (with another 2 million available for overallotments) with a fixed rate coupon of 4.70%.

The issue will be non cumulative and qualified.

The issue is investment grade with a BBB- rating from Standand and Poors and Baa3 from Moodys.

The new issue will trade under permanent ticker FRC-J when it begins to trade on the permanent exchange.

The new issue will trade on the OTC Grey market starting immediately under the ticker FRCJL.

The company’s press release with the pricing can be found here.

Thanks to Jerry for having the coupon 1st–very early.

Private Banker First Republic to Sell Investment Grade Preferred

Private banker and investment firm First Republic (FRC) has announced the issuance of a new series of non cumulative preferred stock.

The coupon on this one will be low–5% or below–and will be qualified. The issue should be rated BBB- by Standard and Poors and Baa3 by Moodys

NOTE–for due diligence you should go to the company’s investor relations page here. Alternatively you can go to the FDIC website here and search for First Republic. The company is NOT under supervision of the SEC so filings will not be found there.

The preliminary paperwork can be found here.

Thanks to mcg for being on this one.

Fortress Transportation and Infrastructure Prices Preferred

Fortress Transportation and Infrastructure (FTAI) priced their previously announced fixed to floating preferred stock with an initial fixed rate of 8%. The issue will float starting in 2024.

The company is a partnership and as such it will issue a K-1 at tax time. As a partnership it will not pay a qualified distribution.

The pricing term sheet can be read here.

Fortress Transportation and Infrastructure Announces Fixed to Floating Preferred-Corrected

Correction–FTAI is a LLC and thus Non-Qualified and will issue a K-1.

Transportation infrastructure company Fortress Transportation and Infrastructure (FTAI) has announced the issuance of a new issue of Fixed-to-Floating Rate preferred stock.

The company currently has 1 other fixed-to-floating rate coupon issue which was sold in September with a fixed rate of 8.25% which moves to floating on 9/15/2024 with a coupon of 3 month Libor plus a spread of 6.886%. This issue is currently at $25.79 after trading as high as the $26.40 area prior to the new issue announcement. You can see it here.

Obviously this issue is not investment grade, but will be cumulative, but NON qualified (K-1)

The preliminary prospectus is here.

Eugene was right on top of this one earlier this morning.