On this page folks should comment and write about illiquid securities–preferreds and baby bonds. By Illiquid I am talking about those issues that seldom trade–or only trade in very small volumes.
We have a lot of discussion on the site about these types of securities–normally $50 and $100/shares issues and the commenting gets scattered about–by using this page we can keep this topic more centralized.
A caution to all investors, but in particular those will little experience in illiquid securities. Tight limits must be used on all of these securities–if you don’t use limits you will butchered. Also while some of these issues have been outstanding for more than 50 years they can still be called–it happens and if you overpay (pay more than liquidation price) you may be setting yourself up for a loss. Always do your own due diligence–always double check the facts–everyone makes errors (certainly I do) and you need to know the facts.
Investors should know that illiquid securities will drop like a rock if there is a large move higher in interest rates. One of my current and long time holdings has been a $50/share issue from CEF Tricontinental (TY-P or TY-) with a 5% coupon–very high quality. This issue is now trading around $56, but in its life (issued in 1963) it has traded as low at $18/share–so there should be no doubt they can move sharply.
Concerning MSEXP,
Can anyone provide the appropriate contact (phone or email) for Middlesex general council to whom the sellers representation letter and opinion from external counsel should be sent? I tried Broadridge, but they were no help. Thanks.
mg,
I swore you are supposed to send all of that to Broadridge and they are the ones who are supposed to contact MSEX. Did they actually say they would not assist in the process? Below is what they told me.
” Please be advised to remove the restricted legend on the shares, we will require you to complete the attached Non-Affiliate Seller Representation letter and return along with Legal Opinion from counsel. We advise you to also confirm with your counsel that the 6-month period has been met, to provide the legal opinion. Please note there is no fee to remove the restriction.
Please mail all correspondence to the one of the applicable addresses below:
Standard Mail:
Overnight Packages:
***Addresses were listed here. Both for Broadridge*******
Attn: BCIS IWS
If you have any additional questions, please feel free to contact us.
Thank you,
Gwendolyn
Correspondence Department
Broadridge Corporate Issuer Solutions”
With that said I do not have that person’s contact info either and I do have a question for them.
Broadridge shareholder services (via phone) indicated I need to provide those items (sellers rep letter + opinion of counsel) to general counsel at MSEX, but then also wasn’t able to provide any contact info at MSEX, and told me to look on their website. So not super helpful, and may not be a reliable source of info on this.
mg,
I would definitely email SHAREHOLDER@broadridge.com. Give them both your account numbers. The old MSEXP number and the new MSEX restricted account number.
Then just explain what you want to do. They replied back to me within 24 hours.
I am 99.9% positive you MUST work with Broadridge. I am also pretty sure that is exactly what LT did.
AILLN at 78 ask should give a 6.28% yield excluding accrued dividend.
I already own some so prob not adding to it today. I’d like to see some Eversource issues come back up in yield. The best of those that I see is CNTHO at 43 ask for a 6.14% yield.
Are there any obscure/solid utilities with nice yields? Maybe smaller market caps but still some variety of monopoly? I haven’t found much from various screeners.
Yield,
I also have my fair share of AILLN. Depending on how long those $78’s are there I might pick some up. I see HAWLM (ask is 6.91%), not sure everyone would say they are ‘solid’ though. I would. Bought and sold them often during the recent fire troubles.
pig are they still paying dividends or were they suspended?
They are still paying the preferred’s. Never skipped a payment. I believe there is some measure of protection as HE would have to add 2 board members from among the preferred ranks if they were to skip payments. I’m unsure as to how many payments they would need to skip for that to happen. But I’m pretty sure that is why they never messed with them throughout the litigation period.
Thanks Pig, maybe a small pinch of spice to add some yield to the account.
nsaro and nsarp are two viable choices on dumps. It takes a while but I bought some of both with good yields over the last 2 years
I think these are under Eversource now and desirable from where I stand.
UEPEP ask $74 ~6.16%/6.26% with accrued
Ex date is 4/17
AILLN 79 ask yields 6.20%, CNTHO 6.14% at 43 ask, AILLM 6.135% at 80.2 ask. Could change and double check my math and your objectives before ordering any.
I trade in and out of these a lot as a disclosure note.
Holders of UMBFP:
I cannot foresee this NOT being called for 7/15. Yields a little over 7, and I am wearing a huge amount below $25.
UMB provides banking to Fidelity customers as it’s the routing bank on my account at Fidelity.
No other preferreds exist and I suspect they just pay this off and do not issue another preferred.
lt–this came about with the acquisition of Heartland Financial on 1/31/2025.
Tim I loaded up on this one as a place to park my money. It’s better than a CD although not FDIC. It keeps my hands off the cash and I know I will be getting the money back to roll over in about 3 months. Hopefully the same comes about with SPNT -PB and WCC-PA Oops, my mistake they already issued 800 million of 6-3/8% bonds to call this
That’s not a fact to be overlooked IMHO, Tim. As far as I could tell, UMBF has never used preferreds in its corporate stack… That implies to me that even if it was a marginal economic call situation, they most likely planned to retire these asap when they agreed to the aquisition… Add in that it’s NOT going to be a marginal economic situation in July based on call vs letting it RESET and then not be callable again for the next 5 years, and it’s tough to figure a scenario where these won’t be called, barring economic catastrophe developing out of nowhere in the next three months.
that’s fun. I had dinner at friend at the old fidelity building on saturday. the old umb bank building is is dilapidated state in wyco. guess it makes sense they are intertwined.
bought 500 and might buy a little more if it stays below par.
Not sure why UMBFP is over here on the illiquids page, but they just paid out “dividends”. Fidelity called them “cash” and Schwab says “non-qualified”
Fidelity has them listed as Qualified on the research page…….. and Schwab, of course, says “Qualified tax status is unknown” which seems to be their default for too many preferreds. QOL also says qualified.
I guess I should go check the prospectus……. I just bought more in my taxable account.
Does this usually get worked out on the 1099, or will this require a call to get it corrected?
Mark in CO–I will check and see why it is on that page.
Mark—I see you are referring to discussion. My bad–thought you were referring to the spreadsheet of 50 and 100 issues-
https://www.dallasfed.org/research/wei
No doubt in my mind that these dividends are qualified.
The term illiquid refers to the low trading volume if I’m not mistaken.
Not sure if I offered this one up but I’ve had it for a bit, very high risk and esoteric and yields about 12%. It reminds me of a Gridbird type special. They have water rights in California with some converted pipelines and lots of lobbying efforts and pieces in motion. It may fall flat on it’s face or may work out. It’s been improving since I started nibbling.
Everyone has shared so much with me here so this is an idea to consider and do a very deep dive before pulling the trigger on it. I’d be interested in hearing people’s takes. Maybe you all will scare me out of it.
Cadiz Preferred
CDZIP
The Yield is 100% ROC, so take that under advisement in whether you buy it in a taxable or tax-deferred account.
https://investors.cadizinc.com/investor-resources/cdzip-tax-form-8937/
Interesting YH
Up around Northern Calif where I’m at there is a problem with selenium and arsenic, iron and manganese in the ground water due to the volcanic rock formations underground. Why I don’t drink my well water.
This company manufactures filtration systems for these contaminants. The towns of Davis and Sonoma have this problem. Not sure who the 3 contracts they landed in Oct are with, but 1.6 million isn’t much. As for the other project they are involved in a water bank in the Mojave desert storing water underground they just bought 180 miles of surplus pipe. I assume to run water to and from there. The Lancaster, Palmdale and Apple Valley (misnomer if I ever heard one) are suburbs of Los Angles and growing.
Suburbs of L.A.? Get a map, Charles.
Rocks, things have changed a lot since I was a kid. We have a warehouse in Ontario Calif and shop foreman commutes every day from Apple valley.
Not much different than living in Modesto and working in Santa Clara or going from lake county to Santa Rosa.
I have worked with people who do it and customers also.
Not a recommendation but I bought some.
AILLN, yield on ask 6.26%
CNLHP $39 bid ~5.77%
Ex is 5/9
The average CY for the 30 or so illiquids on my spreadsheet is 6.00% today, down from 6.05% recently.
CNLHP bid $40 ~5.63%
CNLHO bid $40 ~5.63%
CNLHO bid now $41.50
CNLHP bid now $48
Ugh. Stupid meetings. Missed my chance to sell at 48 for CNLHP. Good catch Ken. I was just too slow. Naturally I wonder why someone wanted them that badly.
Frenzied final minutes of the day in these 2 issues. Odd.
Someone dumped 500 CNLHP at $48, hopefully someone here, or Gridbird.
Ken, I managed to say goodbye to my CNLHO stash. Till we meet again.
I got some UEPEM at 64.75.
Ask prices, and my calculated stripped yields:
UEPEM ask 65.50 (bid 64.55). 6.19% (next ex-div 4/17/25?)
UEPEP ask 74.50 (bid 74.00). 6.21% (next ex 4/17/25?)
AILLN ask 79.50 (bid 79.10). 6.26% (next ex 4/11/25)
CTA-B ask 69.50 (bid 68.51). 6.48% (went ex 4/4/25)