Commercial mortgage REIT Acres Commercial Realty (ACR) is going to be selling a new issue of preferred stock.
The company, which was previously Exantas Capital, has 1 fixed-to-floating rate preferred outstanding–it is the 8.625% ACR-C issue which becomes redeemable in 2024.
Terms are normal terms–unrated, cumulative, non qualified and optionally redeemable in 2026.
The proceeds of the new issue will be used for investment in additional commercial real estate loans.
The preliminary prospectus can be found here.
J was on top of this one.
Bought 400 ACRDP today at $25.01.
Also pretty long the ACR.C shares too.
Priced at 7.875% at 4:10 PM on a Friday.. Go figure https://seekingalpha.com/news/3696767-acres-commercial-realty-prices-cumulative-redeemable-preferred-stock?mail_subject=acr-acres-commercial-realty-prices-cumulative-redeemable-preferred-stock&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha
go figure what?
Why would they initially price on a Friday afternoon after the close?
I still don’t get what your point is? They also pushed the press release before the close, 15:30 or so. If you’re getting your news from SA you’re behind the curve 🙂
SA just happened to be the first thing I saw from an email alert after having spent the afternoon outside…. The point is whether or not it was announced at 3:30 or 4:10, I think it’s unusual for an underwriter to choose to price a new issue late on a Friday afternoon. There’s always seemed to be an unwritten rule for companies issuing reports for example, to attempt to schedule good news early in the week if possible and bad news late in the week…. I”m not saying this pricing is bad news, but it’s got to be harder to build momentum on an issue when it’s initially priced at or near the end of business hours for the week. What’s the point of not waiting to price first thing Monday morning?
For what it is worth, I think your ‘go figure’ was justified. 🙂
2WR, Here is something else you can complain about, lol. IStar declared dividends for all 3 series today. Notice the Series D (your favorite of the 3) is not mentioned below in their SEC filings. Its because D cannot be redeemed with cash. It can only be redeemed if another preferred is issued to replace it. I flipped out of Series D around $26.25 a week or so ago, then bought some back at $25.75 a few days ago. Couldnt get them all back so I had to hit the Series G to finish my full load off again….I thought IPWLK was my only call loss risk issue I owned but forgot about these.
The Company may, at its option, redeem the Series G and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date.
Holders of shares of the Series D, G and I preferred stock are entitled to receive dividends, when and as declared by the Company’s Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Company’s Board of Directors for the payment of dividends that is not more than 30 nor less than 10 days prior to the dividend payment date.
Hmmmmmmmmm, that’s interesting, Grid… As you know I studied the 5 outstanding STAR preferreds at the time a long time ago to try to figure out why they were calling the two highest coupon issues EXCEPT for the highest of them all, the 8% D’s. I never could quite come to a definitive answer but thought it might be because D has voting rights that the others do not and/or was issued originally by another company, not IStar. Are you quoting language that implies what you’re saying that D can only be redeemed by a new preferred? Because if you are, I don’t see the inference…. and if it can only be redeemed by a new issue, does that mean that a holder of D would manditorily receive the new preferred rather than cash or just that STAR is required to call it by refunding strictly via preferred to preferred but D shareholder would still get cashed out? Where’s the language?
BTW, I wasn’t complaining about ACR-D, just thought it was an unusual underwriter’s decision to price when they did… As an owner of C, I’m happy to see how D’s been priced. Also I did notice the spike in STAR-D and immediately figured there goes Grid out the door! lol another nice trade.. also stupidly I never did get back into any of the STAR preferreds after deciding years ago to go up the stack and own bonds instead of preferreds… I was far too rigid in that decision…STAR’s an underrated company imho thanks to their unencumbered assets (now largely SAFE shares) and their history of using them (hard assets at the time not SAFE shares) for debt service when they needed to..
No, one still gets the $25 cash, its the process behind it that differs. But, thanks for challenging me because I was of an error. The redemption doesnt have to be generated solely from new preferred stock it can also be from any capital stock including common. Its just the sourcing of the funds must come from issuance of more capital, not just company cash like G and I as mentioned in annual filing.
This is where D differs in addition to the voting rights.
The redemption price
(other than the portion thereof
consisting of accrued and unpaid
dividends) shall be payable solely out of
the sale proceeds of other capital stock
of the Company, which may include other
series of Preferred Stock, and from no
other source. See “Description of Series
C Preferred Stock — Redemption.”
The redemption price of the Series C Preferred Stock (other than the portion thereof consisting of accrued and unpaid dividends) is payable solely out of the sale proceeds of other capital stock of the Company, which may include other series of Preferred Stock, and from no other source.
So maybe its the PIA theory that it stayed outstanding. I know some directors own this preferred also including CEO Sugarman, but to what specific degree and amounts I am not though. Added note, new readers should understand this was an old 1990s issued reit preferred that was a Trinet preferred before Starwood later bought it out.
OK, thanks to you, I see what I missed originally, but what I see is from two different sources, not consolidated in a single description of preferreds as in the most recent 10k, Note 14, p 82. That note does make the important differentiation as you’ve pointed out where they do not include D when stating, The Company may, at its option, redeem the Series G and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date.” That’s an opening clue. However, I had to go back to the original prospectus, right there on the very first page to find the language that must not have ever sunk in with me originally when I first researched this around the time of the call of E and F in Oct ’17: “The redemption price (other than the portion thereof consisting of accrued and unpaid dividends) shall be payable solely out of the sale proceeds of other capital stock of the Company, which may include other series of the Company’s preferred stock, par value $.0l per share (“Preferred Stock”), and from no other source.”
These are important differences and go a long long way toward understanding why D remains outstanding…. By inference, it also makes a case where there’s a good possibility that if today’s the day that STAR wanted to retire more preferreds (these 3 are relatively tiny inconsequential issues to them nowadays) it is more than possible that they could decide to call G and I yet still leave D out which was the whole point of the exercise in the first place if one was considering getting into any of these as “pinned to par” kind of investments.
The Sleuth Master Award remains proudly pinned to your chest, Grid… Thanks
ACRDP otc ticker.
I own the other (only) outstanding pr issue ACR-C (formerly XANTAS) which is currently priced at $25.34 and yielding 8.56%. This traded down to almost $2 per share March a year ago. I sold half my position at my cost ($25.80) and kept the other half. The first call date is 7/30/24. If the company is now able to sell a new issue, perhaps the one I own is a decent buy at its current price. It will be interesting to see where the new issue is priced. Just a thought.