Below are some press releases from company’s with preferred stock or baby bonds outstanding – or in some cases just of general interest.
Hersha Hospitality Trust Announces First Quarter 2023 Results
Fidus Investment Corporation Schedules First Quarter 2023 Earnings Release and Conference Call
Stifel Reports First Quarter 2023 Results
ARMOUR Residential REIT, Inc. Announces May 2023 Dividend Rate Per Common Share
Navient posts first quarter 2023 financial results
TravelCenters of America Inc. Announces First Quarter 2023 Financial Results
Annaly Capital Management, Inc. Reports 1st Quarter 2023 Result
EPR Properties Reports First Quarter 2023 Results
Pebblebrook Hotel Trust Reports First Quarter 2023 Results
Ontrak to Report 2023 First Quarter Financial Results on May 10, 2023
ARMOUR Residential REIT, Inc. Announces Q1 Results and March 31, 2023 Financial Position
Ready Capital Corporation Announces First Quarter 2023 Results and Webcast Call
Apollo Commercial Real Estate Finance, Inc. Reports First Quarter 2023 Results
FTAI Aviation Ltd. Reports First Quarter 2023 Results, Declares Dividend of $0.30 per Ordinary Share
Raymond James Financial Reports Second Quarter of Fiscal 2023 Results
Richard.
Yep, have 200 FRC-J. Ironically had 400 bought around 17 last Sept but luckily lightened up to 200 just before the bank run, selling at nearly 20. Obviously kicking myself for not selling the other 200…but honestly, who knew?Pure luck I sold that 200
I think Tex’s calculation is right in the ballpark for % likelihood.
So, for me, is it worth selling the 200 at 2.50 or just holding them on the 15% chance or so that they eventually have more value?The $500 I would get (and $2900 loss) by selling wont significantly alter my big picture..theres not much of an opportunity cost by holding on. The worst that can happen is a $3400 loss rather than a $2900. So, convoluted as my thinking might be, Im holding on.
Does anyone have a different take in this sort of situation? I feel I have a lot still to learn in the area.
BTW still have a few SI-A too. That is a weird one as its been trading constantly in the around 7-8.
I think the question you should ask yourself is, “If I didn’t own this already, would I buy it now?”
Adrian….my numbers are similar to yours . A total potential or likely loss of $4350. I own two of their preferreds. Thinking back to 2020 and 2021, it seemed like a reasonable investment though they didn’t meet my usual criteria of too big to fail. I’ll be able to save enough money over a month or two to completely replace the loss.
I agree that Tex’s summary is the likely outcome. From here on in, as long as interest rates stay at the “Old Normal” all I’m buying is CDs and US Treasuries in the US and GICs in Canada.
The funny part is, thinking back to 2020 or so I owned some Delta Airlines Corporate Bonds and Common Stock. When Covid and travel restrictions hit I felt that it was better to take a small loss and sell my Delta holdings then worry about Delta filing for bankruptcy every day. Of course as it turned out, I over reacted and took a loss that was unnecessary. This time, I did just the opposite and once again, put myself in a position of having to absorb a loss that could have been reduced or avoided.
Guessing that I’m not the only one here who owns one of First Republics preferreds. I’d be curious if you give us a short summary of what happens if the bank is seized by FDIC and how the assets and businesses that are sold off may trickle down to the level of subordination of Preferreds. If at all. I had some hope FRC would pull out of this tailspin by selling assets and business units but it looks like the chance of that happening has now gone by.
Richard, there have been many sources reporting that the challenge with First Republic (FRC) is when you mark all of the holdings to market, it comes up about NEGATIVE $20 to $30 billion. If a larger bank, say JPM for example, were to buy FRC for literally one dollar, they would inherit an immediate loss of the same $20 to $30 billion. So no banker in their right mind would do that under normal circumstances. So the default case IMO is that FRC gets seized by the FDIC, common and preferred holders suffer a 100% loss. The FDIC eats the $20 billion, just like they did with Silicon Valley Bank.
We MIGHT not be in normal times. Recall when Bank of America bought Merrill Lynch in the 2009 Great Financial Crisis. Merrill also had a negative net worth and once the BofA folks discovered that, they tried to back out. Hank Paulson and Ben Bernanke explained to the BofA CEO (Ken Lewis) that he was NOT going to back out, so the deal went through. All of the Merrill bonds and preferreds kept paying on time as far as I know. We do NOT know with 100% certainty what Janet/Jay/FDIC will do in this case.
The market is pricing the FRC preferreds @ $2.50 to $3.00, which is OBVIOUSLY wrong. They are either worth ZERO or something commensurate with their coupon yields, say $15 to $20, like similar issues trade. Another way of looking at it is that the market assigns ~ 85% chance of them being worth zero and ~15% chance of them being worth say $15. I did not do the exact calculations but this gives you the lay of the land.
You will have to make the call on whether to hold them, betting on the 15% positive outcome or sell them betting on the 85% outcome.
We do not own any FRC, common and/or preferreds, in any account, so do not have a bias one way or the other.