Pointed out by mcg this morning.
Legg Mason which is an investment grade financial firm has been bought by ‘A’ rated giant investment manager Franklin Resources (BEN). The deal was closed last Friday.
BEN has announced that they will be ‘delisting’ 2 issues of baby bonds that Legg Mason has outstanding. Investors are not fond of delisted securities. The last trading day will be 8/20/2020
While Legg Mason was split investment grade, Franklin Resources has been rated A+ by Standard and Poors until recently being lowered to A. Obviously a very strong company.
I note that Legg Mason has an older 6.375% baby bond which tumbled on the delisting news–from $26.08 down to $24.88, but now at $25.25. This baby bond is callable beginning 3/15/2021–IT HIGHLY LIKELY WILL BE CALLED AT THAT TIME.
The other baby bond outstanding with a coupon of 5.45% may well be called when 9/15/2021 (1st call date) rolls around.
I purchased a small position in the 6.375% baby bonds and may add to the position in the next 2 weeks–depending on whether folks drive the price down with selling.