Chatham Lodging Trust (CLDT) has priced their new preferred stock issue which was previously announced.
The issue prices at 6.625%, is cumulative and non qualified.
The 1st dividend will not be paid until 10/15/2021–so almost 5 months to 1st payment.
This is a big issue for a modest sized lodging REIT–4.8 million shares.
While I will not be buying this new issue for a long term hold I will be looking at early price action to try to buy for what I think is a 2-3% capital gain opportunity.
The OTC grey market ticker has not yet been announced. I assume there will be OTC trading and will post the ticker when known.
The pricing term sheet can be read here.
CLDTV trading on fidelity. Purchased 100 @ $25.45. Looking for more at a better entrance price
Temp ticker is CLDTV.
https://otce.finra.org/otce/dailyList?viewType=Additions
06/24/2021 10:07:51
06/24/2021 00:00:00
CLDTV
CHATHAM LODGING TR SER A CUMULATIVE REDEEMABLE PFD SHS BEN INT Preferred Stock
Just FYI. With this configuration of underwriting managers, it would not be uncommon for me to get most, if not all, of my indicated interest. In this case, I got nil. My guess is that it went institutional — so the opening will probably be very strong. We will see.
How do you get preferred IPOs directly from the underwriters, prior to OTC trading? Do you have to have some kind of prime brokerage or institutional account? Or can mere mortals also do this?
I have 40 year relationships with retail brokers. In addition, I really do not pick and choose — I take everything I am given up to a certain dollar amount each deal. Today I flipped a secondary offering of OSW common — priced at $9.50 and sold at $11.00. I also was allocated stock in an IPO called Bright Health Group (BHG) — the deal was downsized and priced below the expected range. So, I may be taking a hit on that deal. It’s not open yet. I take the bad to get the good, but on balance it works out great.
My first trading strategy was buying IPOs back in the 80’s. Typically reserved for high volume clients but I found myself a rookie broker who didn’t have any.
During the runup to the Tech bubble in the late 90’s, a host of online brokers, including some not well known ones offered IPOs to their customers. Because it was in essence a lottery system, I had multiple accounts in my name, my wife’s name, plus some for other family members at multiple brokers to increase my chances Probably 20 different accounts overall. The success rate in getting IPOs was surprisingly high and while you usually were sometimes limited to 100 shares per account, the way some of these exploded upward in the tech bubble made it all worthwhile. It was like they were printing free money
I haven’t done it (yet), but don’t the fixed income desks of major brokers sometimes sell certain preferreds before they hit the OTC? You have to get on their list, and you’ll have the option of buying some at PAR before they get listed.
I haven’t heard of anyone on this site getting preferreds before OTC (at par, not market price) by calling their fixed income desk, so I’m guessing it’s not possible, but if someone has successfully done this, please speak up!