A couple items of note in the headlines from last night.
The skunks at Prospect Capital (PSEC) have made a tender offer for their $25 5.35% perpetual preferred shares (PSEC-A) for about $15.88/share. Shares were trading in the lower $14’s yesterday with a current yield over 9%–today they are trading at $15.82.
Also Vornado Realty (VNO) announced their earnings – they have been hurting for the last year–but just maybe they have things going in the right direction–maybe. Their financials are fairly complicated to try to understand–lots of moving pieces. Vornado has numerous perpetual preferreds outstanding.
These are the only comments I’ve seen online regarding this odd tender offer from Prospect. I came to the conclusion that I wouldn’t take the offer, too, but not sure if there are negative repercussions for that decision. As Charles mentions, why do they not just start buying them on the open market?
Weird
That’s easy to answer – there are 5.9M shares, and average volume is 12.5K, so it would either cost much more or take forever to buy on the open market.
TIM..,,PSEC ,,,,they are genise…… they make a profit.. of $ 9-8.00 on each share ..Georges PS… all the companies should be doing that.. Know ???
How many have they tried buying on the open market I wonder.
Are there preferreds where they can force you to take the lower tender offer?
I do recall reading ‘in event of buyOut’ clause in some and 200% maintenance requirement in some baby bonds but not encountered any where one has to accept a much lower price in a tender offer…
Of course, in case of bankruptcy, you get way less . or even zero…
I have never seen an issue where the company can force you to take a tender offer (as in “its in the prospectus”). I don’t think anyone would buy an issue that says “we can force you to accept less than the redemption value” – but
I have seen tenders where the company twists arms pretty hard, and a few that all but threaten holders…
BTW, Tim – Just your daily Headlines of Interest feature alone is worth the price of admission around here… Thanks!
2wr–thats good to hear. I always rush to the office to get it done-glad some folks take note.
I got some of those. Not selling.
same for me. not selling.