Finally late yesterday we got pricing on the new Eagle Point Income (EIC) term preferred.
The issue prices at 8%. The issue is a monthly payer.
The company has 2 term preferred issues outstanding already which can be seen here. I own the 7.75% EICB issue.
The pricing term sheet is here.
Users who liked this:
EICC finally trading at the major brokerages. Was able to buy at Fidelity and Schwab. Trading under par, approx 24.85 as of morning on April 11th. It’s really bad how it has become so hard to buy these things on the pinks like we used to do back in the day. The SEC, “protecting us”, not allowing us to buy on the “expert” market, and the brokerages not understanding (or caring) about the differences between a pink sheet dark issue and a fully compliant offering that is trading temporarily on the gray market. Whatever, you can get in today under par.
I picked up 2k shares yesterday @ 24.78, but didn’t get all I wanted so I planned to try again this morning. Unfortunately, Schwab won’t let me place a buy order (EAGPP)… so I’m hoping it’s transitioning to EICC.
Schwab is saying you can buy at closing price of 24.84 but if you try setting a limit order it rejects it. Maybe during the day you will see a better price,
Thanks Charles… but I just talked to them and they said they said it’s moved to gray market and Schwab is only accepting orders to close the position. I tried market order and it failed too. Guess I have to wait… grr…
I spent\ an hour on the phone with schwab yesterday and another 1.5 hours today.
-Yesterday they said they would fix it and allow it to trade. That was a lie, but it got me off the phone. They said they would call back when they had finished, but nobody called.
-Today,
1.they first said they wouldn’t let it trade because the company wasn’t up to date on its SEC. I sent them the links to the SEC filings.
2.Then they said they weren’t up to date on filings for this specific issue. I sent them the link to the SEC filings for this security. (at this point, it was just becoming fun to see how many times they would ask me to do their job).
3.Then they said it is “policy” that they don’t let anyone trade on an OTC grey market ticker (and never have). I pointed them to several issues I own/have owned that I purchased under grey market symbols at schwab. They got a supervisor on the phone who had no answer to that other than “it must have been a mistake”.
4. The supervisor finally said “it doesn’t matter, we can’t let you trade that security OTC at schwab. there is nothing more we can do on this. is there anything else we can help you with?”.
So, apparently we will have to wait for it to be trading under the permanent ticker at schwab.
Thanks for the effort and letting us know. I’m frustrated as well but didn’t put in nearly the time you did. Much appreciated.
I was going to make a post on the proper area of this website to see if we could pool the wisdom of all the users here to come to an agreement which broker was the most preferred/baby bond/bond friendly overall. At this point I really have no clue. I thought Schwab was one of the good ones.
I bought 1K shares of EAGPP on Wed @ 24.78 too. Again no bid/ask prices so I had to put in a limit order and wait. I did it with Fidelity. Schwab had a $6.95 charge set up for all OTC transactions so I stopped the order before placing it. Why does it show first Div payment is 2/29/24 when it was issued 3/28/24? I thought the first payment would be 3/28/24 (mthly) as is with EICB.
Hi Rich,
Where did you see 2/29/24 – at Fido? Schwab?
From the pricing term sheet (“FWP”), whose link Tim attached above:
1. Div pay dates = Dividends will be payable monthly in arrears on the last
business day of every month.
2. Div record date = The record date for the initial dividend period will be
April 10, 2024.
So the ex-date is April 9.
I’m waiting for OXLC to announce a new issue to fund the mandatory redemption of 6.75% OXLCM in June.
I got to thinking about it and realized once EIC receives the money from the sale of this term preferred, they still have to invest the money to start producing income. So the first few monthly payments are going to be 100% ROC.
Charles – You might be right – no clue how they will ramp the assets and distribute associated dividends between common and preferred as well as other preferred issues. One quesion I would have is if it is possible to pay different % amounts of return of capital to different series of preferred stock? Doesn’t each series have to be treated equally?
Anyway this issue is interesting when compared to alternatives:
The underlying asset behind the relevant CLOs are bank loans. I use a T ROWE Price bankloan fund PRFRX. This month it payed a $.07 dividend paying an annualized yield of about ~9%.
The Eagle Point Income fund purchaes B and BB rates bonds created by these CLOs. There is a Janus ETF which invests in these bonds (includes BBB as well) it has ticker JBBB. This month it paid $.30 dividend. If you annualize that you get about a ~7% yield.
This instrument would be similar to a preferred stock issued by this JBBB etf (if there was such a thing).
The JBBB and the PRFRX both have floating dividends. The underlying bankloans are tied to SOFR. These payouts will certainly drop when (if) the Fed starts to lower rates. This issue has a fixed coupon.
The term preferred is callable, but it will return par. The ETF and open end find are not callable but will not return par.
Looking at these two alternatives to me the 7.75% coupon on this issue looks like a pretty good rate. What I don’t love is the capitalization of the fund. The common has a $300M market cap – I just would like it to be a bigger fund.
When all is said and done I still prefer the YTM of the ECCC. I also like CLO equity better than the mez debt. If this issue goes to a discount, however, I will take another look at it.
It is worth noting that JAAA – Janus ETF focusded on CLO AAA bonds – has a floating yield over 6%. Pretty good yield of AAA underlying assets I suppose, but I still prefer agency notes.
August, I like the way you think about this. ECC has a market value of 778 million but then I looked at it on Yahoo and Quantum. ECC data goes as far back as 2014 and then the fund did a minor name change in 2018 and did a IPO for 20.00 a share. It is down almost 50% since then. It’s getting close to that $10.00 mark I don’t like seeing when shares go under that I file in my mind as higher risk whether or not they are. Obvious why it’s smarter to hold the term preferred.
The EIC is a micro cap at 166 million on Quantum and Yahoo says it’s 188 million so no sure where got 300 and IPO’d at 19.89 in 2019 and is down to 16.65 on Friday
If either fell below the 1940 asset coverage I suppose EIC would be at the higher risk of liquidation if it couldn’t raise funds by selling more shares.
Just noodling here thinking over some of the information available.
The common equity in the CEF funds themselves is IMO uninvestible.
Sorry I am using total market captialization includes all of the public securities reported in teh investor decks and rounding up to the nearest round number. Either way the captialization is small. So it is incorrect when i say the market cap of the commin is $300M sorry, but it is still small.
Some prefs dropped hardly!
I bought VNO-O at $13 and PMT-C at $19.10
I’m taking this opportunity and sold all ~5k shares it EICB in hopes of either nabbing EICC below par when it first comes out, or that EICB falls to 24.75 and I’ll load up on either or both. 8% vs 4.3% in CDs is a nice spread.
TRINZ is trading, just not available to the retail investor right now. I was hoping it would show up for retail this Friday, but I forgot it was Good Friday.
Been trading as low as 24.80 and as high as 25.30
You know.. I bought just a taste of EICB. 253 shares. I kept putting in low ball bids below par. Got some fills when it first came out. I told myself I was not going to touch these non IG preferred but after dwelling on it I told myself I should buy some of these preferred which have such a high yield during this time period. Just a little.
Sure enough EIC is now issuing more preferred. EIC common shares are enjoying a little pop up in price so that is somewhat comforting versus a downward trend. They pay a mighty large common dividend so there is a lot of room to pay the preferred right now. Not really sure what to think. I guess I prefer the earlier maturity versus a slightly higher payout. Probably just stick with what I have and stop dwelling on it. If this new preferred drives EICB down past 24.80 I might round off what I have in EICB to 300 shares. Small potatoes to a lot of folks around here I suppose.
Still waiting for TRINZ to trade. (Schwab)
Gary–yes that one and the new Eagle Point Income issue are the only 2 left to start trading.
According to the person(s) who inherited Doug Le Du’s service, the temporary simple should be ESGRP
I think it is EAGPV. Appears to be trading OTC.
Quote showing 20k vol and $24.68. Vanguard won’t take the order online yet – I’m not going to bother trying to call. E*trade won’t accept an order. Put in a small limit order at 24.68 w FIDO that hasn’t executed after 1/2hr
I read it took someone’s order at $24.70 Tuesday. I bid $24.73 but didn’t get it.
I’ve been trying to purchase at Schwab with no luck. Hopefully tomorrow? The EAGPV ticker seems to work but am not getting execution.
03/28/2024 15:00:27
Addition
03/28/2024 00:00:00
EAGPV
EAGLE PT INCOME CO INC TERM PFD SER C %
OTC Equity
RE: EAGPV at Fidelity
For those interested in EAGPV, successful trades executed @24.89, 24.90 at 3:34 pm.
RE: EAGPV; now trading as EAGPP
For those interested, the stock formerly known as EAGPV is now trading as EAGPP.
best, avi
EAGPV. Now FIDO does not even recognize that OR EAGPV. I need to call FIDO. I should have bid the last trade price QUICKLY.
eagpp
Thanks to Tim’s CUSIP, the new temporary SYMBOL is EAGPP. I changed with the last price at $24.88. Still not filled. Only 230 shares sold 36 minutes after the Market opened. LOL.
Swapped 1200 EICB at $25.00 for 1200 EAGPP at $24.84 average. A bit of work for $160.00 plus a little better rate. Am bored and earned a couple of chicken dinners. Yippee!
Yikes. Actually made $192.00. I’m rich.
Small buy at 24.65
Charles,
Nice price. I don’t like buying into OTC without bid/ask info. You must be more patient than me. Ha.
Fryman, my mistake the order didn’t fill at Fido even though I saw during the day it went below my bid. Schwab will not let me set a limit order, a warning pops up saying I can only buy at the offering price of 24.84 I don’t like take it or leave it offers so unless I see a better offer during the day I will pass.
Still holding EICB. Don’t want to but new issue from Schwab who charges $6.95 for OTC trans. May wait until it moves over to NYSE.