The ocean shipping sector has been a profitable sector for a number of years now, which means the the companies in this sector are mainly pretty well off financially with cash on the balance sheets.
Costamare Inc (CMRE) which has been mainly a containship owner, but more recently investing in the Dry Bulk segment announced a full redemption of their 8.75% perpetual preferred (CMRE-E) on Friday after markets closed. Holders will take about a 4% hit on their shares come Monday as accrued dividends on the issue will be about 56 cents–shares closed at $26.66. Folks paying attention should have seen this possibility and been out of this one.
Costamare (CMRE) has 3 other high yield issues outstanding all of which are redeemable at this time.
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On the flip side, now the market will price in the high call risk on the remaining issues so you won’t have to overpay anymore.
I like preferred money markets when they become available.
I have profited hugely from the E series (as well as the D preferreds) I have owned over many years, well below par buy. I always considered Costamare, as far as the shipping industry goes, an acceptably safe source of high yield, tax favored income (AFTER each quarterly dive into its financials). I am not crying about missing an earlier sell date. I still have a large cap gains staring me in the face. I will miss this dependable source of great QDI.
Don C–right–for those holding for many years the overall gains have been tasty–for those most recently buying at this high levels not so much.
There’s a new BB:
Redwood Trust, Inc 9.00% Senior Notes Due 09/01/2029
Ticker Symbol: RWTO CUSIP: 758075873 Exchange: NYSE
Thanks for the heads up Peppino–will get a blurb out.
Sal Mercogliano over at the What’s Going on with Shipping? YouTube channel (https://www.youtube.com/@wgowshipping/) says shipping companies are doing great financially because the Houthi rebels are causing significant disruption to shipping routes. Ships are going around Africa instead of using the Red Sea/Suez route.
Sal Mercogliano is an excellent resource.
Tim McPartland wrote: “Folks paying attention should have seen this possibility and been out of this one.”
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Yes, indeed! Our first clue came about a year ago, when Costamare CEO Konstantinos Konstantakopoulos started selling his Series E preferred shares. Here’s a filing summarizing his slow selloff of 44,451 shares for total proceeds of $1,116,023.33:
https://www.sec.gov/Archives/edgar/data/1503584/000195004723002178/xsl144X01/primary_doc.xml
(I had owned the CMRE-E shares since 2017, but bailed last year when I saw KK selling. )
Other similarly situated maritime preferred shares with substantial potential call risk loss include the former TGP preferreds (now Seapeak; SEAL-A and SEAL-B); Global Ship Lease Series B (GSL-B), which is trading at $27.+ per share; and a handful of others that I don’t own or follow carefully (the Dynagas preferred shares, and to a lesser extent the GasLog Partners preferred shares, for example).