Did You See These News Items?

A few items of special mention in the news of late.

As most of you know giant Net Lease REIT Realty Income (O) has made a call on all shares of their 6% perpetual preferred (O- or OPR or O.PR etc., etc.). The call is for 9/30/2024. These preferred were from the old Spirit Real Estate acquisition and it is no surprise that O would call them.

Carlyle Credit Income Fund (CCIF) has sold some term convertible preferred shares in a private deal. The shares carry a 7.125% coupon and are redeemable in 2029. At the same time CCIF announced a direct placement of common shares. Each of the deals has net proceeds in the $11 million area for total proceeds of around $22 million. No surprise in this deal. CCIF is a smaller CLO CEF and they needs to continually raise new funds to buy more CLOs.

Lastly LuxUrban Hotels (LUXH) had to restate their earnings (losses) for the quarter ending 3/31/2024. This company is a mess–and I would guess a potential bankruptcy candidate. The company’s restatement took their net income to a minus $42 million–much worse than the previous loss reported of $17 million. The common shares now trade at 7 cents and amazingly the perpetual preferreds trade at $15. The preferreds should trade around $4-5, and likely will when they finally suspend the dividend which is bound to happen eventually. RECALL that this issue required LUXH to escrow 18 months of dividends–so the issue date was 10/2023. I guess folks are staying until the last moment (in April, 2025).