Chicken Soup for the Soul to Sell Baby Bonds

On line and television content creator Chicken Soup for the Soul Entertainment (CSSE) will be selling some $25 baby bonds. ‘Yield talk’ is in the 9.5% area.

The notes will matured in 2025 and will have a early redemption period starting 7/31/2020.

The company is estimating that they will be selling around 1 million bonds.

Of course the issue will be unrated by the major rating agencies, but will be rated by Egan Jones–potentially BBB.

The preliminary prospectus can be read here.

The company does have a $25/share perpetual preferred outstanding which they have re-opened numerous times–you can see it here.

Thanks to EarlyBird for picking this one up.

9 thoughts on “Chicken Soup for the Soul to Sell Baby Bonds”

  1. I have owned this in the past. They did not suspend dividends despite more well heeled companies that did pull the plug. This company could be a good Covid dividend play as their content is great for the stay at home crowd. You just have to know their cash burn rate, and size of their bank account. As long as the balance sheet has cash, they will likely pay that dividend. Also, agree this would be an inexpensive buyout for a larger entertainment firm.

  2. Geez, even for a neophyte like me, I’m seeing BBB and 9.5% strung together and thinking ‘something’s not right here’.

      1. That would be correct Grid! Quarterly revenue of about $13M, but then an operating loss of about $10M, based on the SEC filings. I’m guessing the proceeds will be used to pay for the payments on the preferred stock, well until the well runs dry. But overall, I’d prefer the crab bisque.

    1. Chicken Soup is run by creative types Lou, not accountants…their revenue over last year Q1 is way up, but they also got dunned by their banker for failing to maintain a minimum cash balance. They’ll probably use the baby bond proceeds to get out from under that term loan, and it wouldn’t surprise me it they’re bought up by a larger company in a year or two whose looking for a content provider in the streaming space. On a buy out, the monthly paying preferred shares trading at a discount to par would be the better bet here imho.

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