Category: Uncategorized

In 15 years I have never posted something ‘just because’ it was funny–but for someone as old as me to damn near fall off my chair after watching a you tube video of a court hearing–it must be pretty good or I am just plain warped.

Hard money lender, and REIT, Sachem Capital (SACH) has announced they are ‘re-opening” the currently outstanding 7.75% baby bond issue (SCCC).

No offering price, no number of shares to be sold has been announced although I expect the offering price to be $24.75 to $25/share.

This issue was originally sold on 8/26/2020. This issue was small–just 520,000 plus over allotment. The issue was reopened 10/20/2020 and another 520,000 shares were sold. The issue had been trading at $25.07/share today–the issue had just gone ex-dividend for about 48 cents a few days ago.

NOTE–this offering was announced late in the day and no negative reaction was logged this trading day in the pricing of the outstanding shares–but normally we will see a setback in prices with more shares being sold. aview made note of the offering on the Reader Initiated Alerts page today at 3:25pm.

The offering prospectus can be found here.

I will be out of the office some in the next couple of days so will be slow to get new issue information posted. Reader initiated alerts will have them very quickly as is typical.

This week I removed a comment from the comment stream. The way this works is if I ‘unapprove’ a comment it removes the comment and all of the responses to that initial comment. So if you notice some comment you made ‘missing’ it may have been in the comment stream.

The initial comment had an personal ‘attack’ (in my mind) and was really uncalled for–if someone makes a factual error it is ok to correct the error–but not berate the individual.

I don’t ban folks for going ‘off the rails’ a time or two–I am NOT overly strict. There remains only 1 person ‘banned’ from a couple years ago–he/she was persistently attacking folks and refused to stop.

I am sure many noticed that the preferred shares of lodge REIT Ashford Hospitality (AHT) took a real hammering on Friday. 4 issues closed in the $4.xx area with 1 issue closing at $5.39.

Of course the shares had been trading down in the $5-$6/share area on Thursday before heavy selling came in on Friday—obviously investors are bailing out when they can get a few bucks–because there is a very real chance the company will be walking away from ALL of their hotels in the next 60 days.

This is a lodging REIT which has over $4 billion in debt and they are making NO debt payments at all right now. Most of the debt is ‘non-recourse’ meaning they can walk away from the debt and turn the keys back to the lender.

AHT recently did a 1 for 10 reverse stock split on 7/15/2020. Common shares closed at $5.74 the day of the reverse split and now are trading at $3.92—as usual with a reverse split shares continue lower after the split.

In a last ditch attempt to survive the company proposed an exchange offer for all of their preferred shares outstanding–more than 20 million shares in total. A TINY amount of the offer is to buy shares for cash ($9.75/share)–a total of $30 million, while the balance of the offer is for 2.64 shares of common in exchange for each preferred share–more than 59 million new common shares. The company would go from 10 million shares outstanding to around 70 millions shares.

With the common at $3.92 now–fully diluted maybe it is worth 50 cents–making the exchange offer worth around $1.25 per preferred share. Those preferred holders which do not exchange shares will be automatically converted to 1.02 common shares.

Strange things happen but without a federal bailout AHT is dead!!