For whatever reason I decided to try to check out AmTrust Financial (private) a bit last night. As most of you know AmTrust is an insurance company that went private in late 2018 and then delisted their preferreds and baby bonds. All shares are now traded on the OTC markets. Dividends have been paid on the delisted securities consistently for the last 5 years and they just announced preferred dividends on Monday.
AmTrust management has always been viewed as a bit on the ‘shady’ side (Zyskind and Karfunkel), but what little data I can find on their financials seems to indicate they are doing quite well and AM Best (the insurance company ratings agency) has them at A- (excellent).
I am guessing we have some holders of these preferreds and baby bonds on this website and I am considering taking a tiny position in the baby bonds–current yield is around 12%–at $15.50/share it might present adequate risk reward for just a tiny position. Just a thought.
The 10 year treasury closed at 4.09% yesterday and today is trading at 4.12%–it seems like we will remain in this area for the time being. There simply has been no economic news recently to move rates too much and Fed yakkers have been out in force backing Fed chair Powell in his comments that rate cuts are NOT inevitable in March. Plenty of data is yet to come which may change the rate cut scenario. The balance of this week has no meaningful economic releases–next week we get the consumer price index (CPI) and the producer price index (PPI)–potential fireworks.
Equity markets are kind of quiet this morning–I expect that just like interest rates they are awaiting news. The movement in share prices thus far this week are very company specific as we continue to get earnings releases.
I continue to sit on my hands–maybe I taste the AmTrust Financial baby bonds–I’ll dig around a bit more on them–we’ll see.