Illiquid Securities

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.

469 thoughts on “Illiquid Securities”

  1. Where can I find the current conversion price for BAC-L?

    I see that the original prospectus and places like QOL give the initial says: “Each share of the Preferred Stock may be converted at any time, at the option of the holder, into 20 shares of our common stock, … which reflects an initial conversion price of $50.00 per share of common stock…”

    Which begs the question whether the conversion price has changed since BAC-L was issued?

  2. APRDN set both a a one year low and a FIVE year high today. Pretty unusual

    Low = 97.00 on 202 shares
    High= 123.24 on 125 shares

    Previous close was 104.15, so the 123.24 is far out of line with trades the last five years.

    No sure if any shares can be traded at either extreme tomorrow.

    We have no positions and/or orders on APRDN in any account.

    1. Keith, yes that one doesnt trade much at all does it.
      I nibbled on some more CNIGP getting 185 more at $28.59. Shareholders overwhelmingly approved merger vote (so shocked since less than a dozen people have the votes to approve it) a couple weeks ago. Will net $1.11 cap gain and probably four 25 cent divis before its consumated. Of course the risk is penal to this issue is merger fails. But no regulating body gives a rip about this I suspect. After all they let Corning buy a tiny electic ute in Pa a few years ago and they never even had any experience in electric utes. They had to borrow the employees from ute they bought from for a year as they had no one with experience.
      Daniel, congrats on a goofy score. Those are nice arent they!

        1. Kapil, CNIGP is a owner optional convertible with a mandatory redemption in 2026 at $20.75, if memory serves me off hand. However there was a stock split a few years ago that adjusted convertible to 1.2 common shares for every 1 share of CNIGP. CNIG buy out price is $24.75. So $24.75 times 1.2 = $29.70 at merger completion which is tentatively set for 1st qt. 2022 but ultimately determined on how long regulatory process drags out as it involves PA and NY regulators.
          If deal collapses so would CNIGP as CNIG would drop.

            1. I bought most of mine at $27, then flipped some back and forth between $28 and close to $29 when it was stirring back at merger talk. Still the elevator shaft down is long either way. At this price point, Im guessing about a 85%- 90% certainty of a $2 plus gain in less than a year, and a 10-15% chance of a guaranteed ass kicking…

      1. Grid, I’ve seen you comment on Ameren. AILLN traded at $133 and $104.60. Is it a buy at $104.60 in your opinion? I don’t understand a spread like this.

        1. JB, Just me but, I have thrown out a few trot lines on it at $103.50 and never got a sniff from that $104.60 ask. I just wont reach at $104 and gave up.

  3. Weird things can happen with these illiquids:

    Someone payed me $40 for SOCGP and I want to sell him/her more, but apparently they don’t want anymore at this (or even lower) price.
    I am also trying to re-purchase some of the sold shares in blocks of 50 @ several dollars below $40, but again, no sellers to me!

    The buy ask is now $34.4 to $38.77 and only 1.8K shares traded so far today.

    BTW: $40 looks really high (all time high?) but still corresponds to an almost 4% yield.

    1. Update: I finally bot back @ $34+, round trip of >$5 profit. not bad for a day.
      And the bid-ask narrowed now to $34.4-$35.6. Apparently that’s the end of
      this temporary annomality.

    2. Daniel, the 118 shares you sold @ $40.00 is in the running for the trade of the month . . .

      Well done.

      It is a little strange but literally one second before your 40.00 trade, the exact same quantity, 118 shares, crossed @ 34.8.

    1. K,
      Lucky you!
      I have been holding an order to buy ppwlm @ 152.99 for weeks, with only 1 (one) share executed. How did u succeed to have yours executed? How many u got? What broker?

  4. AWRY hit a one year low @ 121.5, down from 135. A whopping 145 shares traded. Not sure if any more are for sale at that price.

    We have no positions and/or orders for AWRY in any account.

  5. I know several here (including me) own SBNCM (N) preferreds and have never seen anything close to a sniff of the “prospectus”. I dont think there ever was one as they were not IPO issued. Here is the closest you will find most likely if you want to read. Its an interesting read. Its a shame it isnt convertible anymore because one could convert 38 preferred shares into one common. I would gladly convert 38 of mine for one $5000 dollar share of common stock. It was definitely a good ol boy offering, because you bought at $10, and could tender it back for $13.25 during that time also.
    Article IV at bottom of link explains the preferreds, much of which has long ago expired.

  6. Schwab is showing the market value of my shares of IPWLO as $0. This changed last night and is still showing up as $0 this morning. Does anyone else know what’s going on?

    1. Dick you should be used to that since you had an Ally account at one time. That happens to me there. The back computers always have it right. As I got the opposite problem now with a $1000 EIX preferred. Vanguard is showing me with 1.2 million more in my account than I have ever since I bought it several months ago. I dont worry about that either, as I know damn well what would happen if I tried to use that as margin, ha.

      1. Same issue with the ET pref I bought yesterday. 20k face is showing as 2 million $. The problem is limited to institutional preferred. The rep said Vanguard expected to have the problem fixed by “early July”.

        1. Same, but this is the first time I’ve heard a calendar time frame. Progress!

          I ask about this every time I talk with Vanguard. This time the answer was “we [brokers] have filed several [bug reports] and they’re working on it. They gave us a fix but it caused other problems. Now they’re taking another run at it.”

        2. In my experience, any time a rep says “a fix is coming by x date” it means their IT team has no idea when it will be fixed, but they gave the reps a date to appease customers.

          In the software world, there is “today” and there is “sometime after today”. all other dates are just made up.

          1. lol. Well having worked in software for 30 years I take your point, though in my experience the timeframe was a *little* more precise; viz., “this sprint” (current 3 weeks), “next sprint” and “later”.

  7. For those sniffing in the old illiquid dirt pile and watch BANGN, besides it probably being on the restricted trade list coming up there is another situation. The Maine legislature has it out for the 2 biggest utes and wants to forcibly buy them out and turn them into state run entities. Its just in bill form and governor hasnt voiced opinion yet, but three years running they have tried. If it ever got through (and subsequent lawsuits for several years) this could force a liquidation at par despite being a 100 plus year old noncallable preferred. I just recently reentered it in the plus 5% range and will take my chances going forward.

  8. Dmrrp – tried to buy more this morning. Broker has a market halt sells only allowed.

    Sitting on hold to get trade restriction lifted. Have a feeling liquidity is going to get non-existent..

    1. Can buy DMRRP at Schwab. I mean, in theory if someone was selling. You going to pay $175?

      1. the implementation of the SEC is going to be piecemeal among brokers, so this isn’t surprising, but they don’t want to create more headaches for themselves by allowing people to rush in under the gun because it is almost impossible to tell the difference between a legit security and bankrupt junk that the only transactions will be to unwitting buyers.

    2. Same here for another issue. I tried to purchase ENDTF, Canoe EIT Financial Income Fund, a Canadian closed end fund trading on the pink sheets and the broker said NOPE. It is frustrating because it has a market cap of $1B+ and is one of the largest closed end funds in Canada, larger than many U.S. based CEFS. Investors that are informed do not need hand holding by Government agencies. ( I understand that few on this site have interest in these type of products, so just relating my story ). *My broker does not allow direct trading on foreign exchanges ).

      1. Those should really not be traded on the pink sheets, and you will probably see them stop being quoted, since they have much more liquidity in their home market, but brokers don’t want to make the effort to segregate these (even though it is pretty easy with the “F” on the end of the ticker because it would require coding, which they don’t want to do.
        Brokers with a Canadian subsidiary don’t get nailed in fees and will trade them. in Canada.

  9. Fitch affirms ATT credit rating after proposed Warner spinoff.
    KTBA (2095 Bell South Senior unsecured assumed by T) is still BBB+ by Fitch.
    I noticed the actual bond has traded up recently back to $145 (4.7%). I have been able to snag 400 shares of KTBA past couple days under $30.90 as it has had quick volume dumps. Since it goes exD next week that price nets you over 5.8% yield if that is of any interest. I would only play the dump angle and not pay up as someone did at close price today.

    1. Grid – In that same vein of structured products, have you noticed where GJH is trading? 6.375% 12/15/33 US Cellular $10 senior note underlying theoretically non-callable but with maybe some wiggle room interpretedly that nobody’s yet been able to figure out yet how, it closed down today at 10.41. That’s slightly over par for a 6.375% USM bond due in ’33.. With the recent UZE 5.50% due ’70 trading at 25.5, isn’t this awfully cheap? It goes x-div in 3 weeks.. Fits my style with what I consider to be a very slight call risk if any at all…

      1. I have owned GJH frequently in past and actually bought again last year during rout around $6 range and rode it back up near $10. It does have some provisions Im not fully versed in; but the underlying bond though is a make whole variety.
        The Call Warrants permit their holders
        to purchase the Underlying Securities
        from the trust at any time on or after
        April 21, 2009 and during any earlier
        period during which (1) an Event of
        Default with respect to the Underlying
        Securities has occurred and is
        continuing, (2) a tender offer for the
        Underlying Securities has occurred and
        is consummated, (3) any redemption or
        other unscheduled payment on the


        Underlying Securities has been announced
        and the distribution to securityholders
        of the redemption price or other payment
        has not yet occurred or (4) an SEC
        Reporting Failure (as defined in this
        Prospectus Supplement) has occurred. The
        Call Warrants may be exercised in whole
        or in part in minimum amounts
        corresponding to $500,000 principal
        amount of the Underlying Securities or
        whole multiples of $1,000 in excess

        o An exercise of the Call Warrants in
        whole will result in the redemption
        of all of the Class A-1

        o In the event of an exercise of the
        Call Warrants in part, a
        corresponding amount of the Class
        A-1 Certificates will be redeemed.

        o Any redemption of Class A-1
        Certificates resulting from an
        exercise of the Call Warrants will
        be at a price equal to 100% of the
        principal amount of the Class A-1
        Certificates to be redeemed (i.e.,
        an amount equal to $10 per Class
        A-1 Certificate to be redeemed in
        full) plus accrued and unpaid
        interest on the called Class A-1
        Certificates to the warrant
        exercise date; no call or other
        premium will be paid.

        1. We discussed the GJH call warrants a few months back. The wrinkle on this one is that the warrant holder is actually collecting a portion of the interest; GJH yields 6.375% while the underlying yields 6.70%. So the hurdle to get redeemed is higher than the typical call warrant. And the underlying price has dropped since we last discussed, so I would assume the likelihood of a near-term call has dropped along with it. Since GJH is trading just a bit above par + accrued, the risk to principal is modest and it just need to remain outstanding a few months to avoid a loss.

          1. Risk reward is definitely good here and throw in underlying make whole clause and duration limit. But there has to be something missing as most rational investors would rather take 23% instant profit than focus on skimming 33 bps yearly for at most 12 years duration. The math doesn’t even compare so there is something more to this it would seem at the surface. Since Wachovia is not around maybe the “call warrant file” got lost when transferred to Wells Fargo Advisors, lol.

            1. Grid, I’m not following: are you saying the underlying 6.7% note is available to purchase?

              1. Yes, Bur. It trades on bond market. GJH is just a portion of that bond. It was trading 23% above par. The yield desrepantcy is typical for underlying bond to trust yield. The underlying bond of KTBA is about 43% above par.

                1. Grid – in a way, the comparison of percentage over par might be a bit misleading because you’re comparing a 2033 maturity to a 2095 maturity. The last trade on the USM underlying was at 123.39 to yield 4.273% according to I think the YTM on GJH @ 10.41 = 6.227%.

                  On KTBA, the last trade of the underlying = 144.95 or 4.784% [] KTBA last traded at 31.35, so stripped YTM = 5.72% if my math is right….So by comparison, GJH is trading 195.40 basis points cheaper than its underlying while KTBA is trading only 93.6 basis points cheaper than its underlying.. And of course BellSouth is trading at the higher dollar price because of its exceptionally longer duration…. I certainly agree though that the discount to underlying is essentiall an always occuring phenomenon on this stuff so nobody should buy on the premise this is a temporary thing.. That being said, I bet an historical study of GJH vs its underlying would make one think GJH is cheap right now…that’s above my pay grade though.

                  1. Ha, you think too hard, 2WR! I wasnt getting that deep I was just giving another example to show trust preferreds dont have some unlocked potential cap gain. I didnt mean to imply one had a better value. Its an is what it is thing to me. KTH would show the exact same thing as GJH and KTBA. Yield, duration, etc. all factor in. I aint tellin’ ya nuttin u dont know, being the wily old veteran bond trader you are! 🙂

                    1. Yeah, me and Popeye, right???? …. I yam what I yam… I knew you weren’t really trying to go where I went after you, but you did make me think a little bit based on the percentage numbers you quoted so I just had to do the numbers for me’self.. might as well share them while I was at it…..

                    2. Very illustrative, gents. Which leaves me wondering (just to stick w GJH for example) why the trust pfd fetches a higher YTM than its underlying. Call risk (if the warrants are exercised)?

                      When we last discussed this you may have told me, but I can’t find that thread (see moaning elsewhere about the search function on this blog).

                    3. Contrary to Grid’s description of me, I’ll give you the real skinny – the answer is”just because.” To be a little more specific, the fact that these are structured products and smaller issues than the underlying bonds, they do by definition offer lesser liquidity adn a bit more complexity but as far as the potential backdoor callability on GJH, I’m betting that Grid’s the only one who truly understands it and imho, that underlying possibility is far from being a cause for its cheapness…. That’s a pure opinion kind of answer based on absolutely no facts whatsoever but also factors in that the market’s been tempting for years for those who could theoretically benefit greatly from calling in the warrants, but nobody’s been able to do it yet … But as a group, as G has stated, a discount to their underlyings has always been the case for these structured products…. There are exceptions I suppose and GJO is one right now. It’s a Walmart STRAT f/f due 2/15/30 that floats at 3 month LIBOR +50 and is monthly pay… Right now, with an approx coupon of .66% it trades at a 1.25% YTM while its underlying 7.55% due 2/15/30 yields 1.61% but GJO trades at a discount to par while the underlying trades at 146% of par…. I’ve owned this one for years and have been just too lazy to sell it even though it yields next to nothing. I think it’s considered to be the purest of the pure regarding its inability to be called under any circumstances, same as its underlying, but it’s probably a far better sale than buy right now unless you’re a believer in runaway increases in interest rates over the next 8 1/2 years.

  10. Big volume on SLMNP today. Seems like a seller is back. 100 shares at 1049 and 534 shares at 1046.26.

  11. UEPEP, Union Electric 4.56% Preferred, being dumped below par.
    In fact, the price if called is $102.47, according to QOL

    Good opportunity to get some below call price if you are interested.

  12. More fun time in illiquids. AILLN traded 100 shares @ 133.10, up from previous close (5/17) of 105.05. Somebody pocketed an extra $2,800 on that trade. At least a 10 year high, might be an all time high. An additional 100 shares traded shortly after that @104.5, so I doubt there are any more buyers @ 133.10. Don’t know for sure.

    No positions or open orders in any account.

  13. APRDM hit a 52 week low on a 100 share trade @ 101.81, down from last Friday’s (5/14) close of 108. Not sure if any more shares are available around that price.

    Also note that CBKLP traded 250 shares @ 100.11, down from yesterday’s close of 102.75. Once again not sure if any more shares are available.

    We have no holdings and/or open orders in any account of either issue. Just a FYI . . .

    1. Tex, It was a quick bounce. I saw it and tried to play APRDM at $103.50 with lead bid afterward and immediately got jumped, so I pulled my order. A lessor value, but I did snag a 100 of PNMXO under $101 today.

    2. The CBKLP really torques me since I had a standing order in for $100.50 and none of it filled.

      1. I am the one who set off the fireworks with CBKLP today. I purposely bought at ask @ 102.50 for 50 shares to see if I could create some action. I had lower bids all set below that. Not a darn one filled like Scott R. had happened. Now I have a measly 50 shares when I was hoping for a couple hundred around 100.50 to 101.50. I guess it was worth a shot. Even at 102.50 it is not a terrible purchase but not what I was hoping for.

        1. This is one of my biggest holdings, but I am always up for owning a little more since it is never a problem to flip it if I get too much. I always have a few hundred shares hanging out in my portfolio.

          Which broker were you with? My order was with Fidelity and have had this happen a few times with them on various issues.

          1. I was using ally invest which is the new version from ally. I also have my old ally tradeking account which seems to be all around better but alas I did not use it.

            1. Ally will sell you a dog turd if it has a ticker assigned to it. Only exception is F ending Foreign OTC issues.

                1. Bob, they love hiding under mommy’s skirt whenever one of their frequent picks goes bad. Even Boot Licking PhilOKC tends to hide also.

          2. Scott:

            CoBank is a $160 Billion private bank serving farms and rural utilities? Seems to be extremely well capitalized. Earned $324 million in net income during 1Q 2021.

            So why haven’t they called this $200 million 6.125% non-cumulative illiquid preferred at $100? Has been callable since 2018. Sure seems like they could refinance this lower by at least 100 basis points. Is there another story behind this one?


            1. Didn’t CBKLP, along wiht CBKPP and CKNQP, end up being placed in a No Man’s Zone by some brokers recently as they all of a sudden woke up to the fact that these were originally issued as 144a’s? I seem to remember some discussion here where some were told if you own them you’re OK but you can’t either sell what you own or buy any more…..I own at Fidelity but haven’t tried doing anything in the name recently to know how they are now treating it… Prospectus is hard to find but I found it somewhere and it says, “The Series G Preferred Stock is being offered and sold only to, and may be purchased by and transferred only to, “qualified
              institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)),
              institutional “accredited investors” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or individual
              “accredited investors” as defined in Rule 501(a)(5) under the Securities Act. For information regarding the transfer restrictions
              applicable to the Series G Preferred Stock see “Transfer Restrictions.””

              1. Schwab will let you own them, and will let you buy them if you are an accredited investor, but won’t let you sell them unless you personally go find another accredited investor to buy them from you.

          3. Well I give up on CBKLP for now. I tried again with a 50 share purchase at ask at 102.49 with bids set lower. Nada. Tried one more time with a 50 share purchase at 102.50. Nada. No one will bite with a dump since I snagged an odd lot or two. Now someone has come along and bought 300 shares all the way past 104. Too rich for my blood. I will just have to be content with 150 shares and let an order sit GTC for months which on the OTC seems to get ignored quite often. Chalk it up as a learning moment.

            1. Someone – and I’m betting it’s one of you guys – bought 200 CBKLP at 104.65 avg. Realize, this could get called tomorrow, in which case you’re out about $800.

              AGO is soon to call 2 and maybe 3 issues that have been callable for more than a decade. And AGO-B is still selling at almost 27.

              Remember never-will-be-called AILLL?

              1. CBKLP goes ex-div sometime around early June. So that is 1.53 is in the pocket. I figured at 102.50 or below that div really lowers your risk. Now it has been callable for a very long time. Since 2018. They had a chance to call it or redo it at rock bottom rates which are now starting to tick up a bit. I realize the risk but once you get into August you are basically at break even with the typical 30 day notice if you purchase at 102.50 or lower. I also feel that this bank obviously does not care too much about this preferred outstanding and I can see it floating around for years. It is owned by a bunch of different funds who are just sitting on it and milking it until the cows come home. So an IG QDI 6% in today’s market is worth a small risk if it does not get called for another couple of years you will come out ahead compared to a 5% equivalent (without doing the math that is a rough estimate).

                But yea.. at 104 plus.. the math above really stretches out for a few years compared to a 4.75-5.25% IG QDI…. The call risk is more real when you tack on a couple of bucks more to buy it.

                1. It’s a judgement call. The call on AILLL cost me a lot more than a couple of steak dinners (unless they came with a couple bottles of Pétrus). I considered it perhaps the least probable call of any issue I held. I’m liking WTREP a whole lot more.

      2. Scott, my bid got passed by again. Had an order in above 101.60 for CBKLP and I can clearly see some sold at the end of the day at 101.60. OTC is just plain odd. I guess some luck is involved some days.

        1. If you call and ask you will get some handwaving about how illiquid OTC issues are not available at all times to all accounts because of blah, blah, blah

          Basically (IIRC), sales are arranged behind the scenes and show up only when completed. They are never offered at large for that price. It might have something to do with the accredited investor thing mentioned above where there are people arranging sales, or it might just be people with access who are ginning up a commission. But you would think the sellers would want the best price available, and they are not getting it.

          All of mine were bought during last year’s swoon so I own them under call value. Sometimes if I can get them under or at the call price plus next coupon payment I will pick up more and flip them. But I am loathe to get rid of my main stash even when the price gets high because they are hard to get back, and right now they are really hard to get near a price I would be comfortable with.

          IIRC, Cobank is a cooperative, and a lot of the people who own these preferreds are members who probably like receiving the dividends so that might be why they have not been called already.

  14. Quite the dump on IPWLK. Picked up some shares at $101 from an old GTC order that I forgot about.

    1. Nickels—same with me. Bought 200 at $101 from an old GTC order. I immediately thought something bad must have happened. I’m happy with a 5.59% yield. Maybe sometimes patience is a virtue.

      1. Someone dumped 1,100 shares at $100.04. Don’t think that a call is likely, or the volume would have been higher. You guys got a good deal there at $101.

        1. Considering stripped price (approx 0.72 of accrued dividend) the 101.00 purchase is even more appealing. Congrats!

      2. I wasn’t greedy enough to get them at 101 but did buy at 102 after selling 3 weeks ago at 105.

  15. Just noticed a “trade of the year” candidate from Tuesday 5/11. Somehow I missed it in realtime. Somebody sold 1,760 shares of HAWEN @ 26.89, up from 21.19 on the previous close. A gain of $5.7/share or a cool $10,032! Your moving up from steak dinners to Yugo’s with that kind of money. It traded today @ 21.27, so the 26.89 was an aberration . . . might been an III’er that did it.

    No positions and no open orders in any of our accounts.

  16. I bought some more WTREP today at $25.34. There’s about 2 months worth of dividends accumulated and the qtrly payment is $0.48. I normally don’t do this, but I guess I’m bored with the lack of buy and hold stocks available now. At least I don’t want to buy and hold at current levels. Maybe the company that acquired Watford will ignore this preferred issue for a while. Who knows?

    1. Furcal, Tim just has a small smattering examples of these types of issues. Its now a subsidiary preferred of LYB, 6%, noncallable perpetual QDI preferred, It has a liquidation value of $1000, but an approximate $845 owner optional tender to company anytime. It was originally an A Schulman convertible preferred but LYB bought them out. So this is the genesis for the owner put if one ever desired, but probably wouldnt want to.
      About 115,000 shares outstanding. LYB subsidiary unsecured debt is BBB so this is probably a slotted BB+ rating even though its not technically rated.

  17. Looks like a few noncallable BACRP nuts can be shaken out of the tree with higher bids. I see 182 shares have traded today evidently in the $120 range. On a relative value, that is still a great buy compared to any other BAC preferreds. And the owner put and cumulative are a bonus freebee thrown in.

      1. No prospectus, just SEC annual filing link. It starts on bottom of page 1.
        It became owner callable in 1988, yet in regular financial filings it is referred to as issued in 1998.
        Toss in the fact its delisted and almost insures it was issued as a NationsBank, Fleet, some other previous acquisition or was an old BoA preferred before NationsBank acquired BoA. Remember NationsBank actually acquired BoA and then used its name instead of its own. I never bothered to figure out its ultimate genesis. Ok, I lied, I did try a bit to find its genesis but was too dumb to find it!

        1. Thanks, Gridbird. I remember NB and Fleet….Fleet was the first bank stock I bought…many years ago…..

  18. Big move down today for UEPCN, down 22.75 to 102.25 on 396 shares. Previous trade was on 1/8/21. Not sure if the seller is offering up any more shares at the price or not. . . Not every day you see a current dividend paying preferred down 18%. (You do see moves of that size for issues with suspended payouts that trade for pennies.)

    We have no positions or open orders in any account for it. Just an FYI.

    1. Texas, the price really just came down from a very few small stupid purchases with no subsequent trade volume. Its current price is largely just now in line with other 4.5%-4.7% issues of same ilk.

      1. Any holder who owned them should have left limit orders to sell them to that stupid purchaser at an amount that is a 4-5 years of dividends….

  19. Gridbird, thanks for the link…spent some time with it. Did my homework and narrowed my focus to twelve preferreds and placed some modest orders. I am a student of investments…probably still in grade school…keeps me interested and my brain active. Living in a wonderful retirement community in NC provides generous amounts of time for my interest.

  20. Thank you. Believe we are on the same track. I want to add as many as I can just as I have done with preferreds. $4.5% works fine for me. I have a watch list taken from Quantum which includes most of the illiquids. I need to work the list a bit I believe. Hope to stay in contact with you.

  21. Have been a reader for several years and have developed an interest in illiquid preferreds, Recently I purchased several and am interested in expanding my holdings and am unsure the best approach as I am interested in making them a major investment. Should I place numerous bids for smaller number of shares or select fewer preferreds on which to bid?

    1. How many are you looking to acquire, Keith? In general it deoends on what your goals are for them, ie trades or LT holds. And it would depend on the issue. For example BACRP. I would have bought 1000 shares if I could, but 100 was all there was.

      1. Am not a trader. In my 80s and desire consistent income. I have a number of preferreds and corporate bonds. I believe adding illiquids will add more of the same consistency. I like to spread the risk, so the more different ones I can buy the safer I feel, i.e. would prefer to own 20 of 200 shares versus 10 of 400 shares. Always look forward to reading your insights. Thank you for your interest in my question.

        1. Keith, I’m with you. Steady, increasing income is all I care about. Fortunately, I’m in a position to, so far, keep reinvesting dividends. So I am still happy with a secure 4.5% yield.

          This is currently available if you are careful and have a watch list you can keep track of. For example, I bought more PPWLM @ 155 Friday.

          I don’t like messing with stuff either, so I don’t flip much. I just want to get paid, because I’m old, too. And as my sweet MinLw once told me, “It’s no sin to get old, but it sure can be hell.”

          Gridbird is a true gem, a great resource who’s helped immensely to secure my dotage. Best of luck to you.

          1. Thank you. Believe we are on the same track. I want to add as many as I can just as I have done with preferreds. $4.5% works fine for me. I have a watch list taken from Quantum which includes most of the illiquids. I need to work the list a bit I believe. Hope to stay in contact with you.

            1. Kieth, you answered my questions already, and Camroc is correct about the QDI 4.5% handle for issues where you arent exposed to call losses if they occur.
              What is do is what you inferred. Populate a list and track them watching bid/ask spreads. If you see an absent respectable bid jump in front. If you see an ask creep down that may mean a more eager seller. Dont over chase the ask price unless it comes down into the buy zone then dont fight over pennies as someone will jump you and take them.
              Another I like to do is always be mindful of the 1-5 year pricing chart of the issue. This helps quide for proper entry point. I will use an example of one that probably isnt of interest to you as an example being its extra low yield…UEPEN… If you look at its 5 pricing chart, you can see its really down at the lower end which means its a relative fair entry point at $87.65. Of course the yield is a lowly 4% though. But entry point price wise if one assumes interest rates arent going up a lot (that is an individual decision, personally I tend to play all angles at the same time) this is a reasonable entry point.
              I also think your goal of 200 shares per issue is a wise one as its easier to attain. Plus they are easier to jettison if ever needed.
              The reason why I think you should look at 1-5 price charts as you get a better overall feel for what it trades for. Take an example of something I own..SBNCM showing a price of $21.55. At first blush one might assume snagging a buck lower at $20.55 would be a good deal….That would be incorrect. That $21.55 price point came about by a one time 100 share purchase. Its more recent infrequent trades usually are more in the $17 range. The $21.55 was a one off over pay.
              Some times illiquids have “one off dumps”. So you can set many bids of various issues with lower bids under current highest bid at a fair price point of your comfort zone and see if a share sell dump spills down to your price point.

              1. Its always a great feeling to know you got a great price especially if the market realizes it as well and rewards you with a quick lobster dinner.

                A factor I always consider for holding is some type of permanence. Without it my hand gets weakened to sell.

                1) Has the business model changed. (Did they start as a cheese manufacture and are now a bank).
                2) Has ownership changed.
                3) How focused is their business. (Are they a utility and a bank at the same time).
                3) Have you owned other assets headed by the same family, owner, or ceo before.
                5) Have companies within the industry survived bankruptcy or severe credit events.

              2. I always look at price charts for most trades and have found the look to be an important consideration for trading.. I began work last night on the suggestions and will continue today. You and Camroc enlightened my way forward. Grateful for you guidance.

              3. Grid, do you place GTC orders? Someone once wrote on this site that they place orders at market open (was it you?). Is there an advantage to doing that rather than a set-and-forget GTC?

                There’s the obvious–you may need to revise your bid based on circumstances changing–but that can just as easily be done by updating the price of the GTC order.

                I was just wondering whether placing market-open day orders were intrinsically more likely to be filled?

                1. Bur,
                  Market orders at the open are the absolute worst possible trade you can make. Bid/ask spreads are at their widest and you will very often get a bad and unpredictable fill price. Only use a market order when you can see the bid or ask and the associated quantity showing so that you have some degree of comfort what your fill price will be. Even then, why do a market order when you can just enter the same trade as a marketable limit order and not risk the bid or ask being pulled just as you are trading? Or even more dangerous, I have occasionally had a bid or ask simply disappear, with no trade occurring for me or anyone else jumping in front, when I place an order. This isn’t supposed to happen, but apparently there are some traders out there that get to look at your order and decide they didn’t really want to honor their bid or ask, so they somehow get to cancel it.

                  1. I don’t think Bur was suggesting using a “market” order type, rather to use a limit order placed at market open (i.e. timing of order, not type of order). I agree with Bur about that – there are often weird trades at market open. So, I often enter orders overnight that will be “live” at market open.

                  2. I almost always use limit orders. I know I’ve lost a few that way, but believe I’ve saved myself a whole lot more. Also, saved myself from myself by setting a limit and not chasing.

                    I was asking more whether anyone has experienced an advantage to being ready with a fresh (limit) order at market open as opposed to setting a GTC order and just letting it stand?

                    Sounds like the difference is being aware of changing context from day to day? Although in my case (see above), I’d just be tempted to chase it the price were running away from me. I guess it all comes back to knowing what you’re buying and why (so simple;-).

                2. Bur, as an example what happened today is more a typical type illiquid style buy for me. AILLI is an issue I like to snag and trade but dont get to often because it only presents itself a few times a year for a few trades.
                  I noticed recently the ask had started dropping from its stationary $109 perch. So I was starting to pay a bit more attention. But even then I almost missed it as seller dropped it down to the then current 100 share bid of $105. 200 sold and I jumped over the $104.75 bid to take 100. There actually were 34 more shares available which sold right after me. I should have put up 200 share bid but incorrectly assumed only a 100 was there. A few months ago Dick Whitman saw them at $104 and announced it but those were sopped up before I could put bid in. So I paid up this time and $3 over redemption, as I havent been able to get in it for a few years now.

    2. Biggest problem with a lot of these illiquid preferred are the following:

      1) low float (not many shares).
      2) majority of shares owned by institutions or owners. Making it hard to accumulate or dispose.
      3) Usually have low coupon rates 3.5-4.5%.

      Best time to buy is when a family office or fund is trying to unload into an illiquid marketplace. This is when small buying power and ability to change limit prices and quantities pay benefit. As long as your timeframe for holding is near forever.

      For example have held LyondellBasell Industries N.V. (LYB) since being listed on NYSE in 2010. When I discovered SLMNP even though only 5-10 shares trade a day have been buying with the intent to hold forever.

      1. Micahc, SLMNP is an interesting one. Some very rare days volume can spike up near 50-100 shares in a day, ha. And a few sells sometimes creates better opportunity. I picked up 7 additional shares at a decent price pre exD when ask dropped briefly and quickly.
        I referenced above looking at 1-5 year price charts. This is an example where that wouldnt apply. As it wasnt the same preferred in 2016 as it is now.
        Really only the past couple years are even relevant to compare.

          1. Bur, I use the TD online platform. I used to just peck from memory (i know all those tickers by heart) on OTC website to review. But Camroc shamed me into setting up a database to monitor. Shaming in that he is several decades older and could do it, so I joined the 21st century with him last fall.
            Level 2 is no be all. Makers hide bid ask volume all the time there.
            I dont leave standing bids. Too lazy, I just roll with the daily action or inaction.
            One reason why I dont is I want to test and see if a computer program is zeroed in on an interest of mine. If I put a bid out right after market opens and someone jumps me a penny instantly, I know Im getting no bargain. But if the bid ask spread is right I will teach that computer bastard a lesson. I will keep raising bid make it chase and then become a seller instead of buyer and dump them on his computer bot ass.
            Of course leaving standing bids and seeing if something over time drops to you, that is perfectly fine. Its just I stay fully invested and there is only so much money in bids, the brokerages will allow me to put out there on their dime. So that is also a big reason why I dont leave standing bids.
            Using BACRP as a recent example. It shown to have dumped 10 shares here and there well under $40. Nobody knows about issue so no real standing bid was there. About a month or 2 go I would have high bid maybe in $30 range or whatever. I see 10 shares go, and I think I got them. Wrong, thieves would intercept trade by a fraction of a cent. So a few weeks later I jumped it up bigly to 90, and same crap happened. Lost 10 shares by a magic penny. Then last week, I really had nothing on radar to even bid on, so I said WTH and throw out $105 after market opened as I had no bids out. Took a shower got ready to workout and all be darn if my margin account showed Im in the whole $10,500. Pretty sweet I knew I hit paydirt without even verifying. I guess the bot thing wouldnt chase over $100. I have no idea where shares came from because no ask price is ever shown. Just bids. Being this is noncallable (owner redeemable is just a free bee bonus) Its really worth around $150 in todays environment. I would like to tell BoA I will tender them back…For $200 a pop, lol.

            1. Grid and anyone else,

              After many years of relying on TD ThinkorSwim for real-time quotes, I just recently discovered that Schwab often (depending on what security you’re looking at, of course) shows a tighter bid/ask spread than TD. On relatively illiquid securities, it’s not unusual to find 1-2% tighter spreads with Schwab. On true “illiquids”, perhaps you won’t see much difference but it wouldn’t hurt to check. I looked up some quotes in Fidelity, too, and they were always the same as TD.

              So I don’t know the reason why, but if you are not using Schwab for quotes, you may be missing trading opportunities that are just sitting out there, invisible to customers of TD, Fidelity and I presume lots of other brokers. You can see these quotes just by looking up the securities at Schwab, or more wisely, you would use the StreetSmartEdge tool.

              1. Interesting. Will try a test tomorrow. Was this with exchange traded issues or OTC or both?

              2. Very well could be as OTC issues are not required to show accurate bid/ask spreads from what I read. FWIW, OTC markets always is aligned with TD. The last thing I need is another brokerage account. Last time I tried to consolidate from two to one, I wound up with three.

                1. I haven’t looked hard at a range of securities, but the ones I discovered this for were OTC. To be clear, from what I’ve seen, Schwab never shows worse prices than TD or Fidelity, but sometimes shows better prices on the bid, ask, or both. But you can still trade at other brokers using those Schwab quotes; though some of the bids and offers are hidden, they are still executable. And as I wrote here a few weeks ago, I have tended to get better price improvement at Fidelity compared to TD or Schwab. So maybe the answer is get your quotes from Schwab, but trade at Fidelity!

      2. Micahc, it seems like a controlled liquidator comes out every few days and offers SLMNP at $1050. I bought 3 more today to get to 30. Probably my fill here. I traded it some a year and a half ago for fun, but largely its just a waste of time being the issue trades fairly tight all the time percentage wise being its a $1000 issue. I repurchased some after last March rout and just held and have accumulated a bit more to top off the tank.

        1. I was in that 1050 crowd. Beats most of the 4 something yielding new issues coming to market.

          The volume was way above average.

          1. Bob, as you know its a strong relative market issue. And LYB is doing quite well and sounds like the shortages are benefitting their subsidiary industries. Leave it to incompetent Ally though. They got mine split up into 2 seperate issues with same ticker. One is the correct Lyondell name and the other half is listed under the old A Schulman name. They never cease to amaze me.

          1. Now overfully stocked with SLMNP. I wonder how much of the float is owned by participants in this board?

            1. There are only a 116,000 shares. But at $1000 a pop thats still a lot of cash! My 30 shares is just a tiny dent in the number.

  22. BACRP from yesterday. I found a little more info. About 7,000 remain outstanding according to BAC (I suspect they own some). It also has equal standing voting rights with the common stock shareholders. And it appears to have been issued in the early 1980s based on this from BAC. Someone shook 9 more shares out of the tree after I got my 100 it looks like.
    From and after October 31, 1988, any holder may, by written request, call upon the Corporation to redeem all or any part of said holder’s shares of said Series B Preferred Stock at a redemption price of $100.00 per share plus accumulated unpaid dividends to the date said request for redemption is received by the Corporation and no more (the “Redemption Price”). Any such request for redemption shall be accompanied by the certificates for which redemption is requested, duly endorsed or with appropriate stock power attached, in either case with signature guaranteed. Upon receipt by the Corporation of any such request for redemption from any holder of the Series B Preferred Stock, the Corporation shall forthwith redeem said stock at the Redemption Price, provided that: (i) full cumulative dividends have been paid or declared and set apart for payment upon all shares of any series of preferred stock ranking superior to the Series B Preferred Stock as to dividends or other distributions (collectively the “Superior Stock”); and (ii) the Corporation is not then in default or in arrears with respect to any sinking or analogous fund or call for tenders obligation or agreement for the purchase, redemption or retirement of any shares of Superior Stock. In the event that, upon receipt of a request for redemption, either or both of the conditions set forth in clauses (i) and (ii) above are not met, the Corporation shall forthwith return said request to the submitting shareholder along with a statement that the Corporation is unable to honor such request
    and explanation of the reasons therefor. From and after the receipt by the Corporation of a request for redemption from any holder of said Series B Preferred Stock, which request may be honored consistent with the foregoing provisions, all rights of such holder in the Series B Preferred Stock for which redemption is requested shall cease and terminate, except only the right to receive the Redemption Price thereof, but without interest.

    1. Grid – thanks for the due diligence and sleuthing on BACRP. You are truly Sherlock Holmes when it comes to some of these illiquid preferreds!

      On a different note, is that you crashing the price of CTGSP? The float on this noncallable utility preferred is only around 27,000 shares and you still own a bunch, correct?

      There has been a large seller that keeps dropping 20 cents in price. Only a 4% yield, but it is rock-solid and I have been buying more today for my “sock drawer”.


      1. Hi Rob. I missed out today as I was out and about. I only own a few hundred as a placeholder to remind me of it. I sold most around $7 last fall/winter. This will never be a high yielder so waiting for it to be 6% is just not going to happen. Looks like you drove the price back up. I would love to reenter near $6 and be a bit over plus 4%. Its getting harder for me to do much, because I have so many illiquids, I already own now.

  23. CRLKP….We had a debate on this one a year or so ago as SP had this screwed up in annual SEC filings. I get a little paranoid on wording after joining the 2White Roses anal reading fan club.
    I owned this several times in the past but this is what dropped me out of it as SP (obligator now) kept putting this in their annual filings…
    The Company acquired Subordinated Convertible Debentures (“Convertible Debentures”) as a result of the acquisition of Central. The subordinated debenture holders have the right to redeem the Convertible Debentures for $19.18 per share upon their stated maturity (April 1, 2028) or upon acceleration or earlier repayment of the Convertible Debentures. There were no redemptions of Convertible Debentures during the years ended December 31, 2019 and 2018, respectively. The approximate redemption value of the Convertible Debentures outstanding at December 31, 2019 and December 31, 2018 was $1.1 million for both years.
    …..Notice it said $19.18 upon maturity. That didnt make sense unless it was some quirky change of control provision I never found. But I dont fight city hall..
    Now fast forward to this year. I wonder if someone BMC’d to them as one word was changed this year, and its a big word…
    The Company acquired Subordinated Convertible Debentures (“Convertible Debentures”) as a result of the October 2, 2012 acquisition of Central Parking Corporation. The subordinated debenture holders have the right to redeem the Convertible Debentures for $19.18 per share before their stated maturity (April 1, 2028) or upon acceleration or earlier repayment of the Convertible Debentures. There were no redemptions of Convertible Debentures during the years ended December 31, 2020 and 2019, respectively. The approximate redemption value of the Convertible Debentures outstanding at each of December 31, 2020 and December 31, 2019 was $1.1 million.
    Notice the word “Before” replaced “upon”(Page 67) which means what it should. A $25 redemption price at maturity.
    Near term parking Covid problems aside, its game on for me again for a small play as I bought 400 today at $22.50. I wanted an even 500 so I paid up at $23 for last 100. There was some left at $23 if interested after doing DD. I preferred the $22.50 as that made it over 7% YTM, $23 wasnt as appealing but I did to be done and over.
    A little background to assist if interested. This was a convertible with a 2028 maturity issued in 1998. KKR bought them out and took it private. They listed it still as $25 maturity, $19.18 owner option redemption at any time. SP bought it out from KKR and then changed wording that looked like a 19.18 maturity. But finally this year they changed wording to eliminate the confusion. A lower bid may still flush some. About 40,000 shares are left outstanding. When it does infrequently trade it usually is between $22 and $23.05.

    1. Grid, from the verbiage you quoted, don’t the debenture holders still have the option to redeem at $19.18 before April 1, 2028?

      Granted that the price at maturity is $25, but to my untrained eye, I still see a risk of it being called at $19.18 as long as it is done before April 1, 2028.

      Now, if there is an “acceleration or earlier repayment of the Convertible Debentures”, would not that imply they can redeem at $19.18 as well? So that risk still remains.

      1. Yes, you can always redeem at $19.18.. But I won’t if I am paying $22.50-$23.00, lol… You dont have to worry about a company called $19.18… Lets break it down…
        The subordinated debenture holders have the right to redeem the Convertible Debentures for $19.18 per share before their stated maturity (April 1, 2028) or upon acceleration or earlier repayment of the Convertible Debentures.
        …This means you have the right to redeem at $19.18 BEFORE maturity or BEFORE acceleration or earlier repayment… This is why they havent because they would have to redeem at $25. Unless they announce a redemption on say May 31, and you tendered at May 30. Which would be dumb because if you tendered a day before redemption, you would get $19.18.

        1. Ah, I see where I got it wrong – the “subordinated Debenture holders” are the owners of Central Parking. Silly me, I assumed it was the issuing entity.

          Yes, it all makes sense now – it is like a Put that CRLKP owners possess.

          So, as far as redemption, either upon maturity or an “accelerated” event, the redemption price is $25.

          Thanks for clearing that up !

    2. I went activist on SP+ and got them to confirm yet again that the company can only redeem at $25, not $19.18. I then asked them to update the SEC filings since they were so poorly worded, for about 8 years!

      When the annual report came out a few weeks back, I saw that they slightly changed the language, but in my opinion it isn’t much clearer than before. I won’t bother with them again, but I have now confirmed on two separate occasions that, barring default, this will pay out $25 at call or maturity.

      1. Karma, well I am going to have to disagree with you. I think you did a great job! That one word change made all the difference for me. As I have been waiting for a reason to get back in, so that wording works perfectly for me. 🙂

        1. Agree totally with Grid; you did a great job, Karma. A single word – but a game changer.

          I don’t own any Central Parking myself, but had followed earlier discussions on it, here and elsewhere. I now have a lot of illiquids, but if the price is attractive I might just pick up a bit.

    3. Grid, do I understand correctly that it is now callable at any time (I get that it has a maturity of 01 apr 2028)?

      1. That is corrrect Bur. Im assuming there is no interest in such action on their part though.

        1. I haven’t looked in a long time, but I believe their secured debt restricts them from redeeming subordinated debt early. Given how small CRLKP is, you wouldn’t think the secured debt owners would care one way or the other, but covenants are covenants.

    4. I tried to get some CRLKP at $23 today, was not successful. Now the ask is $23.31; a little high, but still below call price so no risk on that aspect.

      Might have to crank up my bid a little.

      1. Inspy, It looked like it grinded up more today with a little volume also. I like the under par and 2028 duration it has. Probably wouldnt consider selling unless it popped over $24 then I would consider it.

        1. I was able to buy 200 shares of CRLKP at $23.24. Under par, so no call risk. Unlikely to redeem until 2028, so a good multi-year 5.5% income stream.
          Can definitely live with that!

        2. If only you had believed me 5 months ago when I told you it wasn’t callable at $19.18, you could have got some cheaper shares. Not that there have been many shares on offer, but I just bought a few more for my parents at $22.50 last week.

          1. I got $22.50 myself. And have owned it off and on several times many years ago and flipped at lower levels. I have always liked the issue. But it really had nothing to do with believing you as I never doubted your sincerity.
            I just cant buy something when it was worded as being redeemed at $19.18 upon maturity. Even if it seemed implausible, it said it. KKR clearly had it as maturing at $25. But as you mentioned SP butchered it. But I couldnt read prospectus for any definitive answer considering the change of control clause came into forefront.
            Anyhow, the important thing wasnt that, but you apparently were the driving force to get them to change one word. That is what is much appreciated because I just wasnt going to own it no matter what unless it dropped to$20 or lower without written assurance in some filing to verify what it should be. You pushed that across the goal line and that was appreciated!

    5. Grid – I don’t know if I, as a lifetime member, have nominating privileges for the Anal Readers Society’s Hall Of Fame, but if I do, your discovery of a single word change and recognizing its importance when you weren’t necessarily looking for it, most definitely allows me to nominate you…. We members of the A.R.S. call ourselves ARSes, and you now can consider yourself a true ARSE too…. ha… No way would I have caught that… At least with RCA, I was looking for RC to come through with a language change they were promising and they did.. With this one, you just found it. Nice catch….

      1. 2WR, If it was more than one word, I may not have understood it, ha. Karma saw it a few weeks ago and could have saved me the effort if he had reported it, lol..
        Though I track the issue loosely, typically the ask was always in $23 range when I ever bothered to notice. But I saw $22.50, and decided to then do my yearly annual filing review to see if they changed it. They did and so I bought. So I have to admit, I was looking for it as I have its approximate spot memorized in the filings as it really doesnt ever change. It just takes motivation to do the work.
        Humored myself today buying the Ocean Spray for the third time today at $18. Thats a reach, but I have bought 200 shares and 300 shares before and made $4 and almost $5 a share each time in short order. If 3rd time doesnt pan out oh well I will hold and hope people eat Cranberries so I can collect the 6 month divi come June.

        1. Grid:

          Can you give us more info on the Ocean Spray preferred? OCESP 4% Preferred? Nothing on Quantum Online. What is the deal behind this one? Nothing on the corporate website that is investor-related.

          Nobody eats more cranberries than me. Every day. An anti-oxidant king. Filled with vitamin C, iodine, and extremely anti-inflammatory. Wonderful for you urinary tract. We would be a much healthier country if more citizens consumed them.

          Ocean Spray also maintains a large industrial facility here in southern Nevada for the last 20 years. Thanks!

          1. Hey Rob.
            Financially speaking this is the best info you are getting. Its from Fitch from last month. They had a helluva year last year and their debt is way down. Preferreds are BB rated and their debt is BBB-. A good read below.
            Historically speaking my best guess it was issued somewhere in 1940s, give or take a lot. Originally there were 98,000 shares but by 1977 they were whittled down to 63,000. There may only be a small amount left outstanding by now. As the only thing that ever gets mentioned is the late 1990s, 144a issued preferred that was issued at 6.25%. It last traded in June (we cant buy it only institutions can) in low $80s but that is irrelevant as that was a spill off trade from March 2020 rout. Heck I was buying LANDP near $20 last June and it was redeemed months ago.
            Forum member Dick W called a while back and told me they said they pay the dividend every 6 months. I think somewhere around June is the next 50 cent payment. Due to the goofiness from lack of any knowledge or interest of this, you need to make sure you get a fair entry point. $16-$17 isnt the worst. These types you need to be able to control your destiny in terms of when you want to sell. As there may not be a solid bid under it all the time. It wont get radio airplay because Ocean Spray doesnt publically disclose financials. But you can backdoor it when rating agencies such as Fitch get a look see and report their updated credit rating on it.

            1. Grid:

              Thanks again for your reply on OCESP and always-informative responses.

              Tried to buy OCESP at a reasonable price and didn’t get filled. Today, the bid on OCESP is all the way up to $21, so you just made another $3/share in a few days. 17% return in 3 days….well done!

              Hoping you spend some of the realized gains on the QVC website or TV channel.

              1. Ha, No I actually still have my measly shares. Be patient. This thing swings up and down in $4-$5 movements at times…But maybe a month or two gap between trades. I saw yesterday late like over 700 shares were there at $22.75. So in time these may get dumped at some point who knows. I would just leave a standing bid at price you are comfortable with and see if it comes to you on a trade or spill through dump.

          2. Rob, a meaningless update as I research off and on to find the rosetta stone to origin of this preferred. I just recently found 1962 and 63 financials. It was still there then reaffirming my suspicions of being a 1940s type issue (or even issued earlier at genesis of company’s origin) as that was the prevalent par yield back then. They actually were issuing more then as 96k were outstanding in 62 and 101k shares outstanding in ‘63. By ‘77 there were only 63k.
            If you look on page 7 you will see reference to cumulative. Ocean Spray is a Co-op and so they dont pay out dividends but instead “patronage payments”. But like common divis as Fitch stated the patronage payments cannot be paid until debt and preferred payments are satisfied first.
            I enjoy these rabbit hole searches, and its proving to be harder than any. Ocean Spray had a different name at one point also compounding the problem. I could cheat and just ask them but that isnt any fun.

            1. Out of curiosity, I typed in the ticker on TDA and it appears there’s another one OCESO.

              What was the original issue price of these? If $25, then why are you saying that $16-$17 would be a good entry point?

              1. Mark, that is actually a “ 4% $25 par, participating preferred” and that float was roached out by the 1970s where I researched. I dont know if there are even a 1000 shares outstanding. Ask has been 1 share for $175 past year I have watched with no action. Here are the trades since 2008…Not many lol..
                I was just giving a safer “current environment yield” for a BB off the wall illiquid preferred. $17 slots you a 5.88% QDI. But I just being more conservative not knowing what expectations were. I trade the other a lot and have fun with it. I have flipped a few hundred for $4-$6 on several occasions, and smaller amounts other times. I personally have bought higher but I am more fearless having nice cap gains on it. Plus I dont know if someone would freak out on a quick $12 sell if no bid floor is under it; as this preferred has little “radio airplay” and no public info on it.
                Here is the participating preferred trades…Better be patient, lol.
                11/18/2020 13:58:17 EST I 11.00 1 OTCBB
                11/18/2020 13:58:17 EST I 11.00 1 OTCBB
                11/10/2020 11:11:46 EST I 16.00 1 OTCBB
                10/29/2020 13:42:44 EDT I 175.00 1 OTCBB
                10/30/2019 13:32:57 EDT Z 14.00 104 OTCPK
                12/13/2017 13:00:20 EST 8.25 50 OTCPK
                12/01/2017 13:54:39 EST 8.25 4 OTCPK
                01/10/2017 14:46:18 EST 8.25 28 OTCPK
                12/09/2015 10:51:53 EST 7.25 104 OTCPK
                12/17/2013 9:40:42 EST 7.25 94 OTCPK
                02/25/2013 15:45:02 EST 7.25 144 OTCPK
                06/25/2010 9:54:29 EDT 11.00 398 OTCPK
                12/31/2008 10:18:09 EST 6.05 399 OTCPK
                12/09/2008 11:45:53 EST 10.05 200 OTCPK
                11/14/2008 15:52:27 EST 11.50 199 OTCPK
                11/14/2008 15:52:00 EST 11.50 199

                1. Aah, I’m with you on the 16-17 range now for OCESP. It’s about yield, not entry price.

                  Those trades must be for OCESO? Yeah, that’s like 1700 shares traded over a 12 year period. But other than the 1 @ $175, it looks like everyone got pretty good pricing for a $25 issue. Is it the low yield that keeps both of these issues at such low price points? That, and it’s obscurity? It seems there’s plenty of near 4% yield issues trading much closer to par – with emphasis on the word ‘trading’ I guess.

                  I feel like it’s kind of a badge of honor to snag some of these little obscure gems. And there’s always the chance you can sell one for a ridiculously high price….

                  1. Yes, that was sales for OCESO. OCESP has more liquidity, I doubt there are 50,000 shares left in it. Maybe a lot less…. I love illiquids and traded them for years now. I have known about this one for 8 years, but wouldnt touch it because I didnt know if it was even an active preferred. Thought it could be some walking dead issue that didnt pay anymore (OTC has a few of them).
                    But once I found out about the 144a preferred issued in 1990s last year, I warmed up to the gamble. Found their credit ratings and plunged in for small plays.
                    Yes its going to trade lower because there is no public info on it or awareness. But its dutifully paid for at least 60 years and probably a lot longer not knowing actual issue date. Ironically though it escaped TDs buying ban list that starts end of next month. As OTC lists it as “Pink no public info”. But doesnt have the “Caveat Emptor” designation that TD will not allow future buying on.

              2. Mark, added thought I forget… Participating preferred for this issue is defined as this from what I read. OCESO pays $1 divi paid out semi annually. The participating part is this. Anytime patronage payments (think dividend) to members is over 4%, OCESO shares in that benefit with an increased payment. I dont know the proportionality of it, but I saw in 1970s one time they got about a $1.50 in payments which $1 was just the annual divi. So it has really juiced returns at times evidently. But I have zero insight on what its been in recent times. Heck many brokerages usually dont even show the dividend of these issues or its current yield. I have in the past thrown out a $25 bid for a week at a time a few times. But I threw in the towel and gave up.

              1. Thank you much for the sleuthing, Justin. In the mid 40s now where I thought minimum it originated from. Company was formed in 1930, so I wonder how much closer it gets to that.

              2. What a fascinating link. It doesn’t really designate whether it is O or P series of preferred, does it? Or am I missing something here? I did not read the entire document, but did find an interesting snippet on the home economics page. “….a home economics department whose job it is to show women how to serve cranberry products in more ways more often.” Also, on page 6 of the report, the caption under the billboard says that the ad was from the early 1920’s. I thought Ocean Spray was formed in 1930, but maybe that was when the NCA was formed and Ocean Spray preceded that.

                I wonder how many of the original shares are still owned by the families of the co-op, if any.

                1. Mark its the OCESP issue. OCESO (the participating preferred) I have narrowed down to being issued sometime between 1964 and 1970. As it wasnt there in their ‘63 financials and was included in the ‘71 financials.

                  1. Grid, would you have an idea about IPWLP? I’ve had a bid in for a while at 94 and change, see 120 traded today at 93.50 . . . am I doing something wrong? Thanks very much.

                    1. Hi D. I dont understand why, but IPWLO is a grey market while the other sisters are bid/ask. This means there is no organized routing system to get it. Its like going to a mall and walking into every store looking for an iphone. Most mall stores dont so every random entrance will lead to no purchase. Some brokerages have access of the inventory and others dont or at higher prices.
                      I havent had IPWLO for a while either. And I suspect I know why. Looking back I was always able to snag every now and then through Ally. But TD has never got me 1 share ever. Even though I would have bids at same time. I remember a couple old water preferreds that were like this. I would put a bid in on them through TD and then several hours later put a separate bid in with Ally. Ally would hit and TD would never transact.
                      If you called and got a broker who knew what he was doing he may be able to call down see if there are inventory available through other dealers.

                    2. D, I remember several years ago trying to snag FIISO. At that time it had no bid or ask. So I called Vanguard and got a good broker. He called down to floor and got me a few hundred at $90. Then I called a few days later and he said there were indications of them being available for $5. I was getting all excited, but the indications didnt pan out and of course none were actually available at that price. So they can dig around for you if they are motivated and are willing. But of course it may not lead to anything though.

                    1. Good sluthing, Justin. I could only find random yearly reports. I wasnt googling good enough. The participating preferred trades like there may only be a few thousand left if that many.

    6. Someone has come a long way since investing in utes with 500x interest coverage.

      If you keep scraping the bottom of the barrel like this you gonna need a spatula.

      Actually, I almost bought a parking garage about 20 years ago. Glad I didn’t as the customer base left town on account of the local government being so outstanding.

      1. Bob, I still have a nice portion there. I will always have a decent slug of those. And speaking of utes I actually bought almost 1000 shares of another ute common stock less than 10 days ago. I pealed off 200 for 18.5% 2 day gain. They wanted them all but Im keeping for now. A 6.4% divi at purchase price with a 27% payout ratio of income from last years earnings. It took me 4 years to get a chance to buy at my price as they rarely trade at all, so I am not eager to peel them all off just yet. You think some issues are deep in the weeds, how about a 140 year old public regulated T&D utility who makes no SEC filings. Bring on the poison ivy spray as this one is deep in the weeds.
        But things change, and being flexible has really helped me. And reviewing things every now and then to see if situations change is helpful also. A separate issue I mentioned in earlier post here that has been viewed as spatula scraping actually has IG status debt now and keeps reducing debt leverage. In 2019 it was 2.1 leverage (total debt with equity credit to operating EBITDA) and now its down to low 1 range as determined by Fitch.

      2. too bad nobody has ever come up with a portable parking garage that can be assembled in vacant lots that increases the parking capacity for special events or seasonally like in beach and ski towns.

  24. Any thoughts on the remaining Ameren preferreds? The two with the highest coupons were called recently, which surprised a few folks. Nothing in SEC filings indicates that additional calls are forthcoming–but I wouldn’t expect Ameren to signal its intentions early. UEPCO (5.5%) and AILLI (5.16%) are the outstanding issues with the highest coupons. Both, at times during the year, though thinly traded, present good arbitrage or investment opportunities. Both have traded up the last few weeks (pre-ex-dividend). Inside information aside, does anyone have any “educated” guesses about the future of these issues? Grid? Thanks.

    1. Oldman I presently own AILLN and AILIM from Ameren. I would own UEPEP and have, many times. It can typically be plucked at redemption price. There have been 2400 shares offered of AILIM which is 15% of float for several months. Maybe they will crack and dump at $102 some day. I personally wouldnt pay more esp. since it just went exD. The Union Electric ones havent went exD yet. UEPEP seems to be the easiest ones to pluck at time. Its a bigger a float.
      Dick told us about AILLI at $104 not too many weeks ago, but I missed it. I wouldnt chase it here, personally.
      There really arent any bargains. I only keep mine because I force myself too as a base hold of some illiquids. It seems like the Ala Power, CLP, Ameren, and Indianapolis Power issues are pretty compressed. Not much arbitrage value there at this time. I try to trade around them if I get a chance. Actually NSARO is my biggest illiquid hold. It just went exD so the $104 price shown is not a good entry point. $102.80 is redemption price and would be my max mark for an entry point tops.

      1. IMHO their (uepep and nsaro) low coupons 4-4.5% make them less attractive as interest rates go up. I have reduced my holdings in both of these.

        1. Libero, I dont disagree at all.. Overall I have lowered my exposure here several months ago, but I have to keep a portion here.

          1. Thanks for the comments. With our country being largest debtor in the world, there is huge incentive to keep rates low, almost (but not entirely) without regard to inflation. If prices rise there will be inflationary pressure to be sure; wages need to keep pace or a hard recession is looming. But, I’m of the mind that over the longer term, rates will remain relatively low–as they have for much of the past 20 years. IF correct, this should bode well for the ute illiquids, of course provided they’re not called. And, “safe” yields in the 4.5% range should remain competitive.

            The Ameren call a few weeks ago spooked me because much of my “safe” portfolio is in these. The Pacificorp illiquid duo (PPWLO and PPWLM) aren’t callable and should remain safe havens if the company’s fire liability is proportionate to their reserve for this along with insurance (and there is no meaningful disclosure I’m aware of with detailed info). The other “non-callables” are so thinly traded and so few shares are outstanding that they are irrelevant in my view. So, back to the question–will Ameren or Connecticut L & P, or the Southern Company (Alabama Power) soon call some of their preferreds? I understand there is no reliable answer and that there is a “voting benefit” to the parent in keeping these alive. But, then, why did Ameren call two? Certainly they can replace the capital at much lower rates, but they own the majority of the shares, which raises concern about motive. Thanks for enduring my rambling and I hope more perspectives on this will follow.

  25. Has anyone traded in and out of Huntington Bancshares institutional Fixed-Rate-Reset’s:

    – series F (5.625%, resets 15 jul 2030 at 4.945%+10YTreas, CUSIP 446150AT1)
    – series G (4.450%, resets 15 oct 2027 at 4.045%+7YTreas, CUSIP 446150AV6)

    Do I need to worry about liquidity on these?

    1. No, but you will benefit from understanding how inst pref trade.

      Use IBKR, or else give away 50 bps per trade.

      Appreciate that the bid ask on IBKR are indicative, not live quotes. If buying you can go under the offer and vice versa. These are DEALER indicative prices you are looking at, not exchange bid/ask. But your bid is binding, so don’t enter a bid just to see if it will execute. If it does you own it.

      There may be min quantities needed to get an execution at a particular price. I bought a bond today and had to buy 25 bonds to get the price I offered. Sometimes, you can get a better price by going to a higher quantity.

      Get acquainted with FINRA:

      Volatility is your friend but it can also leave you stranded in a low YTC issue if rates move and stay against you. I love these two HBAN issues because of the structure but the YTCs are in the 3s, so manage your risks.

      1. Thanks v much for the info and pointers, Bob.

        Yes, per the advice of you and others here on III, I opened an IBKR account exactly so I could trade bonds and inst pfds at a better price (choosing not to regret how much has gone to middlemen for my bond trades over the years before this).

      2. Re “There may be min quantities needed to get an execution at a particular price,” how do you tell when placing a trade via IBKR what that min qty might be? I’m assuming that would be something the seller indicates, but how/where would I see that?

        (E*Trade shows min qty info in the order ticket, but the IBKR ‘Client Portal’ doesn’t seem to.)

        1. For IBKR use Web Trader, not Portal.

          You don’t know in advance of submitting a bid what the real price or min quantity may be. Trial and error. Start low and give it time. Unlike an exchange there is a person on the other end (or a dealer’s own robot) that decides to take the trade or not.

          If no execution go higher in price. Or try more shares at same price. On occasion I’ve gotten a message telling me price is OK but quantity is below dealer min.

          I’ve also had bids execute just by resubmitting them at the same price/quantity.

          Follow FINRA.

          1. Bob – Usually, a difference between something with a name like IBKR Lite vs another platform with a name like IBKR Pro would mean that if you have the money to fund a Pro account you’re better off in it vs. Lite. That difference doesn’t seem to be all that clear when looking at, except if you’re figuring on going on margin or keeping high percentages of idle cash… How come only Lite talks about commission free trading for US Exchange-Listed Stocks / ETFs and Pro talks about “Fixed or Tiered Pricing?” I just had a bunch of 2% CDs roll over – maybe I should fund an IBKR account using that money to have a third alternative to TDA and Fidelity…….

            1. 2wr – sorry I didn’t see your message before. I will always respond to messages.

              At IBKR I have pro accounts because 1) I like the web trader platform, which you can only get if you have pro, and 2) most of what I buy at IBKR would have me paying commissions no matter where I was buying them. Cdn pref, institutional issues, foreign exchanges, and all that will get you commissions no matter where you buy them. If you can buy them.

        2. Bur asks: “I’m assuming that would be something the seller indicates, but how/where would I see that?”

          Bur, there is not a straightforward answer to your question unfortunately. Minimum quantities to buy bonds can come from three places in general:

          1) Original prospectus from the issuer specifies minimum quantity, typically 1 or 2 for corporates, 5 for munis
          2) The bond trading exchange can specify a higher minimum if they want, 100, 200 and 250 are common for corporates
          3) The selling dealer can also specify a higher minimum if they want

          As a buyer, all you can do is enter the minimum that your brokerage allows. If you enter it at the listed Ask price and it does NOT get filled, you just have to keep changing the quantity. I have seen it go both ways, where I had to enter a higher quantity and other times a lower quantity to get filled. Entering a high quantity is the more common. None of this is typically a significant issue. Sometimes the selling dealer will NOT fill your order, even when you offer his ask price. Also not the most common, but it does happen.

          Related to this, I have tried to have the inside (aka highest) Bid for the new EIX preferred since it started trading. So far, I have gotten ZERO fills, regardless of the quantity I have used. You are going to have to pay the Ask price if you want to chance to get any.

        3. Bob, Tex, thanks for the guidance.

          Bob, after a puzzling login failure with WebTrader and then digging into the comparative chart at, I discovered that I only can use WebTrader if I have a Pro account.

          I’ll need to digest the commission structure (published at to evaluate whether to move to Pro.

          In the meantime, I submitted a toe-in-the-water, low-ball GTC bid for HBAN Ser. F via the Client Portal.

          1. You can always go to TWS. “Pro” requires a 100k account or you pay a 10$ monthly fee. You pay a commission on bond trades whether you are pro or not.

            1. Thanks, yeah. I have to figure out the TWS interface. It’s ungodly cluttered. Looks like they put everything in there plus several kitchen sinks. I’ll get there eventually

        4. Bur Davis, I use the bond quotes from other brokers to supply info on quantity/price market. E.G. Fidelity always shows the minimum and total quantity available for each bid/ask bond price. It eliminates having to pay for some of the IB data feeds available for free elsewhere.

  26. Someone is sleeping at the wheel – AILNP is one of the two destined for redemption, yet a couple of transactions at 126.75 this morning … and Bid remains at 126.75, Ask at 165.25. Not many of these were outstanding – only 4542 shares.

  27. If the call of AILLL is the start of a trend, there is a long way to go. I show 68 illiquid issues that are past their first call dates and are trading above their call price. I used average number of shares traded daily <= 2,500 shares per day to define illiquid.

    Here is the list:

    Obviously there are many issues that are trading for less than their call price that are past the first call date. The working assumption is that these have major problems and are in trouble.

    1. Tex,
      Thank you for the list. One I spotted on there I have owned, CUBI-D
      It may be past call and over call price but I expect it to drop below par once it goes to floating and people realize the divided dropped. That would be the time to snag it. CUBI doesn’t pay a dividend on the common. I own CUBI-C and it has went to floating and I expect it to slowly pay more going forward in a rising rate environment.

      1. I own CUBI-C also. Even if 3 month libor goes to zero, it still pays 5.3%. Buying it around par ($25) eliminates any call risk and it could go higher if short term rates go up from the current 19 basis points.

    2. Seeing $CNLPL trade today at a new ATH of 63.25, a whopping 21.6% above call price of 52, I think it’s safe to say that there wasn’t much collateral damage to the rest of the market from the call of $AILLL.

      1. That was my sale that I had a gtc sell order in at 61.90. Love it when this happens. A few months back I had an Alabama Power sell order of 106 or so fill at over 120. Of course, like others, I’ve been burned a few times over the years by hitting market instead of limit.

  28. Did any of you folks hear anything about a possible call of AILLL and other Ameren Preferred stocks?

    Saw this on another forum, but so far no one has been able to confirm the OP post, and he did not provide any link or source for his claim.

    Thanks for any info confirming or refuting this.

      1. Dick, your safe.. Carry on with AILLI. But if your in panic mode, I will gladly buy your shares at $103.50… Take a load off your mind. 🙂

  29. AILLI has been trading at $104 today. Thats a yield of 4.96%. Redemption price is $102 so you’re paying just under 2% above redemption. Factor in the next accrued dividend and it looks like a wash if called immediately.

    1. Thanks for the post, Dick, but by the time I went to put in an order, the ask has now gone up to 107.88. Bid is $104.

    2. I sold all but 100 shares of my AILLI today for $107. The bid is still showing as $107 for anyone else wanting to sell.

  30. CWGRP, the COWN convertible, is now in the money for holder conversion. Another 50%, and the company can call it.

  31. Watford merger ………..

    Meeting on merger is scheduled for March 30. It’s in Bermuda if you want to pop in.

    Merger agreement calls for WTREP to be reissued as Arch preferred on same terms. That said, there is nothing to stop Arch from noticing a redemption the 31st and redeeming 30 days later or April 30.

    To take a cynical (and perhaps realistic) approach, preferred holders get to vote on the merger, not just the preferred resissue but the whole merger. Arch may not want to have a mean, angry mob of preferred holders voting against the merger hence the “agreement” to reissue.

    Stripped price is right at redemption price so the “market” appears to be expecting redemption. If it doesn’t happen right off it will be a nice money maker. Enjoy it while it lasts.

    1. Bob–does that mean all the regulatory hurdles have been passed and the merger vote is just a formality?

      1. I would refer you to the SEC filings for an authoritative answer. That said I can’t see the meeting being scheduled if there were any major lose ends.

        Formality, no. Bermudian law is not US law. Mergers require affirmative votes from shareholders. No such thing as broker non votes or broker voted shares. Bermudian mergers sometimes take more than one meeting. But I can’t believe the merger won’t happen. The common has almost all the voting power and the merger is a big boost for WTRE common.

        It may not last long but for a time the reissued WTREP may be the best IG preferred on the planet.

        1. Bob, ya an affirmative vote will be a layup. Arch and their directors own 15% of Watford common.
          Randy, the regulatory hurdles have not been cleared, that I am aware of and there could be further delays if a Watford transaction in France clears before merger, then they will have to approve also. Delay is fine by me,

          We anticipate completing the merger in the first half of 2021, subject to approval of the Merger Proposal by the Company’s shareholders as specified herein, receipt of required regulatory approvals and the satisfaction or waiver of the other conditions to closing, although the Company cannot assure completion by any particular date, if at all.
          Governmental Approvals
          Consummation of the merger is subject to obtaining required regulatory approvals from the U.S. Federal Trade Commission, the European Commission, the Turkish Competition Authority, the Bermuda Monetary Authority, the New Jersey Department of Banking and Insurance, the California Department of Insurance and the Financial Services Commission of Gibraltar. In addition, in the event Watford completes its pending acquisition of Axeria IARD, a French société anonyme, prior to consummation of the merger, the approval of the French Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution) will also be required to consummate the merger.

          1. Layup, I’m not so sure. The requirement is for the merger proposal to get 50% of the common/preferred vote voting as a single class. Considering the preferred, ARCH and associates ownership is less than 15%.

            The risk of non passage lies with owners just not voting, the so-called “broker non votes”. I just got my voting notice from Vanguard yesterday. The merger will get the required 50%, the question being whether they can do it on the first round or not. Selfishly, I want WTREP to hang out as long as possible so my interest is served in delay. To vote “no”.

            The merger agreement was signed in October, 4 months ago. The time that has passed has been all about regulatory approvals. Are they done? Probably not, but they are well advanced and the companies have a strong convictions that approvals will be done. The timing of the meeting is related to these approvals. There is nothing else that would result in this much delay. Mergers themselves can be done in a week.

            WTREP goes XD next Friday. It’s trading at 25 stripped now.

            1. I got email notices to vote from two separate brokerage accounts myself. I havent done it yet. Probably wont. This isnt some 100,000 share illiquid preferred where company is herding cats to get a vote like CLP tried and failed a few years ago.
              The big players at the table are identified and known. Regulatory approvals or lack there of (if any) are not relevant to when vote occurs. The voting cattle is known and has been corralled already. Our small investor votes are irrelevant is my bet.

              1. What say you pick the % voting to approve and I’ll chose the over or under?

                I know you’re a betting man!

                1. Why would I want to risk a greater chance of losing, lol.. Im just sticking with its being approved by simple majority, and you can take the rejection side, ha. I suspect the time delayed on vote was herding the cattle, ensuring majority approval, not any regulatory issues as that it a separate issue. They just stated in recent filing France could possibly delay it longer anyways.
                  Many a time voting was long ago approved and companies were still left blowing in the wind on final regulatory approvals that ultimately got done.

                  1. Either way Grid decent place to park your money.
                    Think Bob or 2WR said not to over pay beyond what you get from the dividend. so just holding for that now.

                    1. Charles, I already own a couple thousand shares…I dont need anymore for my stash I promise… Im just saying they arent going to be cold calling peon me needing my meager 2000 votes to get this thing passed.

  32. To whoever bought 2 of my 100 CNLHN that I listed for sale yesterday, I am glad you filled out your position….

    1. Market makers have done that to me a lot on various illiquids. Bumps me off the board and gets me out of their way. Hard not to curse when I speak of them.


    2. Separate but related (and forgive the common stock cross-talk): I placed a limit order last night to sell 155 shs of a small-cap stock I held. I opened my account this morning to see it had taken 25(!?!?) transactions to fill the order (2 shares, 3 shares, 5 shares, etc). Never seen that kind of fragmentation before.

      1. B.D. :
        It happens to me frequently at TDA. They pick up all the odds and ends floating around first before the bulk of the transaction is completed, BUT, the full trade almost always completes. I aways use limit orders, so occasionally I will have to adjust my limit price before the full trade finalizes.

  33. WTREP dividend tax treatment …………

    Got my 1099 from Vanguard. This is held in a taxable account. First acquisition was in November (October?) and first dividend was received on 12-31. Point being I had not met the holding period for QDI yet so I was unsure of what Vanguard would do with it.

    100% QDI according to Vanguard. Can’t speak to how other brokerages may treat it.

    1. I’ve wondered about this issue from time to time, always assuming that the broker would get it right. Be easy enough to check back on some of my preferred purchases and see if they got the shortterm dividends correct, but in checking my 1099s against my spreadsheets I’ve never seen them split quarters between QD and Regular.. broker misclassifications falling through the cracks as in your case ~

      1. Brokers don’t always get dividends right. They especially have difficulty with foreign issues. Your 1099 will always split dividends into qualified and no-qualified but brokerage monthly statements may not.

    2. Can anyone comment on which broker’s compute the holding period and change the dividend accordingly?
      Vanguard sure doesn’t.

  34. Hot tip: FNFPA. Hasn’t traded in 4 years. 120 year old S&L with one branch. 28 cent (annual) dividend.

    11/21/2017 14:12:14 EST 8.00 150 OTCPK
    08/08/2016 9:59:25 EDT 8.00 100 OTCPK
    08/08/2016 9:59:20 EDT 9.96 10 OTCPK
    05/02/2016 14:09:12 EDT 10.00 100 OTCPK
    04/15/2016 16:26:08 EDT 5.00 50 OTCPK
    01/14/2016 14:31:05 EST 0.00001 15 OTCPK
    10/12/2015 12:58:21 EDT 10.00 154 OTCPK

      1. Put in that GTC order and sit back and wait! Maybe you can leave it to the great grandchildren.

      1. Bur, Dont lose sleep over it. Its one of those ding a ling preferred stocks created out of common equity about 14 years ago.. The bank wanted to “go dark” which means basically private with no need to file SEC forms.
        The bank had to shed shareholders to get under the amount to legally go dark, so some shareholders were converted into preferred share holders which dont count.
        The Certificate of Amendment to First Niles’s Certificate of Incorporation providing for the reclassification of shares (the “Reclassification”) of First Niles’s common stock held by shareholders who are the record holders of 300 or fewer shares of common stock into shares of First Niles’s Series A preferred stock were approved by First Niles’s shareholders on December 14, 2006 and became effective on December 20, 2006 upon the filing of a Certificate of Amendment with the Delaware Secretary of State. As a result of the Reclassification, 27,637 shares of First Niles common stock held by approximately 240 shareholders of record were reclassified to First Niles Series A preferred stock, on the basis of one share of Series A preferred stock for each share of common stock. After the Reclassification, the number of outstanding shares of First Niles common stock was 1,356,916 and the number of common shareholders of record was approximately 181. Additionally, after the Reclassification, the number of outstanding shares of First Niles Series A preferred stock was 27,637 and the number of Series A preferred shareholders of record was approximately 240.

        1. Grid – I was hoping you would do the research and you didn’t disappoint. This is one of quite a few tiny bank preferred that was issued to get shareholder figures below SEC reporting levels.

          One branch. It’s the Bailey Building and Loan. At one time they probably issued shares to new customers instead of a toaster.

          1. Forgive the tangent, but remember when gas stations handed out things like drinking glasses when you filled up?

              1. I remember! My parents played that game. I wasn’t driving age yet. I think that’s the period when they were driving a Buick Vista Cruiser station wagon.

          2. Bob, Lol, that was funny! Im sure its bigger now a bit, but one of their last public filings showed total equity value of $98 million. That is less than 2WR’s wife spends daily on QVC products. Bailey Building and Loan, huh… So was that bank the one Jimmy Stewart ran in It’s A Wonderful Life?

  35. Clarification on WTREP …..

    I would have bought this regardless of QDI or not. If I knew somehow it wasn’t going to be called I would put it in a qualified account but given the finite space I have in qualified accounts, the amount I hold, and the possibility of a call, I didn’t put it in qualified. Nothing I was prepared to bump to make room for WTREP.

    A reminder that being QDI isn’t the only requirement for you to get QDI treatment on an otherwise eligible dividend. There is a holding requirement, too:

    “For preferred stocks, the shares have to be held for over 90 days during a 181-day period that begins 90 days before the ex-dividend date.”

    I bought my first WTREP in mid-November. I got the 12-31 dividend but my 1099 for the year probably won’t show them as qualified, because of the holding period requirement. The next dividend pay date is 3-31 and if the issue is promptly called you may never get a qualified dividend if you buy now. So, if a min of 7.6785% isn’t good enough unless qualified you may want to avoid.

    I will repeat that I see no reason that WTREP should not be QDI (if held for the minimum holding period) notwithstanding what QO says. Or Schwab for that matter. Schwab remains the only brokerage I know of that hasn’t figured out that Canadian preferred pay qualified dividends.

  36. WTREP traded a good volume of shares this morning in the 25.25-25.30 range. At this price there is no call risk. No new SEC filings so timing of merger and issue of redemption remain as before – uncertain.

    1. Thanks Bob! I haven’t had a chance to look at this one in detail yet. I believe in an earlier post, you mentioned that AXS is the acquiror. Just doing a quick search, I’m seeing that ACGL is acquiring WTRE. I’m sure I’m missing something obvious. Can you please help me connect the dots here? TIA

      1. Dick – acquiring company is Arch Capital, ACGL.

        My press office should have issued a correction.

          1. WTREP should be QDI. QOL depends on the prospectus for tax status as far as I can tell but Watford was not SEC reporting at the time the preferred was issued so there is no prospectus to be found at the SEC.

            Should be exactly the same as all the Bermudian corporations paying dividends out of profits, meaning QDI.

            Being Bermudian, there is no tax withheld. In a taxable account it will attract tax like any other QDI preferred. In a qualified account it’s a total free skate. That’s a minimum of 7.67% tax free, for as long as it’s outstanding.

              1. I played around with WTREP a few months ago for a couple flips, but you guys dragged me back into it at $25.30. I notice this one seems to “dump”. I got 500 pretty much at open I guess, and later I decided to go 500 more at $25.30 again and it hit also in a dump. At worst it will keep the money out of trouble for a while.
                Dick, I am in the middle of an experiment with the high yielding TDA/USM debt issues. Bought a bunch of TDE at $25.48 a few weeks ago, then bought more at same price last week. It went exD today, so I dumped them in low $25.30s, and rolled them all into UZA at $25.46 and it will go exD in about a month. After it goes exD I will roll into another of the series that has a price sag and is nearing its exD date again. I bought some UZB also at 25.56, but not as enamored with this one because it probably is first in the call cross hairs.

                  1. Bob, this method is a bit more clinical so the returns wont be as good as the random stuff I pounce on. But if market conditions are normal it will always work if bought near exD price. As market never typically gives you a freebee back to par. It usually drops in the 20 cent plus above par range to make you work for anything and put a little call risk fear in your britches.
                    But you know the game, Bob. Buy at $25.46 and give up 3 cents. Payment is in a month so next accrual will begin next week. They have a couple other higher ones outstanding on the totem pole so it makes a reasonable risk reward while waiting for better entry points of other issues.

              1. Then don’t but it from Schwab. Schwab mischaracterizes a lot of dividends. Much has been written here in the past about the problem. I will get a 1099 from Vanguard on Monday. Will let you know how they pot WTREP.

                The price of WTREP, which had been hanging tough in the 27.70 range, dropped to 25.25-30 mid morning and heavy volume has ensued. At this price you have zero call risk in the sense that you are paying stripped par.

                I see no new SEC filings related to merger.

            1. FYI, three ways a stock can be considered qualified dividends.
              1. US issuer that is a C corporation
              2. Incorporated in a treaty country
              3. Trades on a recognized US exchange

              For Watford, they fail tests 1 and 2 because of their Bermudian domicile, but the preferred meets test 3, so it should be considered qualified.
              But there is a catch. While the transfer agent is reporting it as qualified, the brokerage community relies on various vendors to assign qualified status, and at least one of these vendors is getting it wrong and assigning it non-qualified status.
              So if you own this in a taxable account and you meet the holding period test, I would challenge that status at your broker.

              1. The very few times that brokerage has gotten the qualified status of a foreign issue wrong the mistake was corrected on request. Except Schwab, which never corrects any errors having to do with foreign securities.

                1. They usually correct it by looking up the prospectus, which doesn’t exist in this case.
                  Two other tickers that I am curious how brokers are reporting this year.
                  I wonder when they correct them, do they just flip the account and not verify that they are correcting is actually the case, and leaving all other customers who didn’t ask in the wrong status.

                  1. I can’t speak to RACE or BGEPF. I did, however, get my 1099 from IBKR today and they got all the Canadian issues 100% correct. So did TD; I gather they have not been infected with the Schwab virus yet. In past years Vanguard got them 100% correct. Eventually.

                    I’m not sure what Vanguard did to make the corrections I requested but they did. Seems a little silly that an individual should have to school a multi trillion asset manager on tax law but that was the case. The big one was BRENF. I hold that in a Roth at Vanguard and they wanted to withhold 15%, compared to the correct amount of 0%. A big difference considering how much I own.

                    Vanguard tried to BS me twice, the 2nd time laying it off to the payment agent, which was JPM. I persisted and Vanguard backed down and credited me for all the withholding and stopped it going forward. They even called me to apologize for the error.

                    The fascinating thing, to me, was that the 15% being withheld on BRENF had no place to go. Withholding is done by the country where the payment originates and Bermuda doesn’t have a tax or a withholding. As best I could tell, JPM was pocketing it. I very pointedly asked Vanguard who was keeping the withholding and that’s when they coughed it up.

                    I don’t like fighting epic battles. Rather move my money to where they get it right. Had better success with IBKR than anyone else.

                    1. BRENF is a security that causes all kinds of problems for non-Canadian owners and I am not surprised Vanguard had problems with it. I’ll bet every broker will have problems.
                      As a partnership, everything passes through and their country of organization is disregarded, so forming a partnership in Bermuda really caused unnecessary complexity and clouds the issue.
                      If you think owing it in an IRA is bad, in taxable accounts, the tax only appears on the monthly statement and not on any year end forms if bought on the pink sheets since you don’t get a Canadian Tax form, so keep your statements to get the tax credit.
                      The tax opinion in the prospectus clocks in at almost 7 pages of dense language and lays out exactly this scenario where a non-Canadian resident buys it and the administrative problems that it entails.
                      See page S-29.
                      Long story short.
                      Part XIII of the Canada income tax act is what you got caught by, and it is normally used to prevent tax evasion in Canada by non-Canadian entities owed by Canadians from skirting the law, which is why as a US IRA, they refunded the tax, as you were not the intended target.
                      The lawyers who wrote this definitely earned their paycheck.
                      in case anyone is curious, here is a FAQ on Part XIII

    2. Bob:

      If you had to handicap it, what are the chances that Arch leaves this 2.15 million share WTREP preferred outstanding after the merger?

      From Quantum Online:

      “From 06/30/2019 dividends will be paid at a floating rate of the Three-Month LIBOR plus 6.6785% per annum.”

      Is QO wrong on this? Last two quarterly dividends were $.4839/share. This is a tough one to invest in with no prospectus available.


        1. So it’s “the 5 year “mid” swap rate to the Floating Rate as set out on the IRSB18 at noon Eastern Standard Time on the date of calculation” plus 1% (since 3M LIBOR is well below that). Which begs the questions:
          – what is the date of calculation? and
          – what was “5 year “mid” swap rate to the Floating Rate as set out on the IRSB18” at noon on that date?

          $.4839/share gives 7.7424% which implies the answer to the second question is “6.7424%”. But elsewhere I see 6.6785%.

          Practically speaking I don’t care (either one is good enough for me), but from the standpoint of Learning How to Read a Prospectus, I am seeking edification.

  37. Just bought wtrep @25.30 will see if it gets called in the 1/4 when the merger goes through.

    1. I also own wtrep, but I can’t find anything (recently) discussing the actual completion date of the merger. Have you found anything?

      1. No nothing new, I don’t see why the merger wouldn’t go through in the 1st quarter.

        1. QX, They have left themselves a bigger window. On 2/8 SEC filing on voting meeting they stated this.
          Expected Timing of the Merger
          We anticipate completing the merger in the first half of 2021, subject to approval of the Merger Proposal by the Company’s shareholders as specified herein, receipt of required regulatory approvals and the satisfaction or waiver of the other conditions to closing, although the Company cannot assure completion by any particular date, if at all.

          1. Insurance is a heavily regulated business. The number of approvals the companies have to obtain is large and takes time.

            WTRE just turned in a pretty good 3/12-month report. The merger is not unraveling that I can see. I am OK with delay.

          2. Grid thanks for taking the time and sharing the info. I may even try to buy couple hundred more if I can buy for 25.30 or less.

            1. Yes, the longer the better as far as I am concerned. Maybe the redemption comes after the merger and drags out further too. The fact I read that while reviewing the process encouraged me to reenter for whatever the return generates. The longer I can stay in this the more chance something else will drop, I can roll into.

    2. To my name sake in Vegas – the evidence on a call is contradictory. I can’t handicap it but if I’m buying at or below redemption amount I don’t care so much. I have bundles of cash so my opportunity cost at the margin is zero.

      If it survives it becomes a gem. If it goes I have lost nothing.

      A prospectus really won’t help. Other SEC filings describe the issue in detail and the merger issue is addressed at nauseating length.

      The tricky point on the rate is that LIBOR is floored at 1%.

  38. Kinda nice seeing the market down 2%, and my porfolio is down .001%. But… i don’t see any buys today for what I am looking at other than PPX, and I picked up and added to portfolio after x-div. It is down over .60 + in the last few days and the baby bond just paid .37. My buy territory is $25.50… but I nibbled on some to add to the stash I have. I’m just adding to my stash that I bought in March 18th for $16.55. Can you believe investors were throwing these out in the streets? So PPL a 20B market cap company going bankrupt? Many thanks for the shares.

  39. Skill testing question:

    Name the perpetual preferred whose liquidation preference is the same as the common and whose coupon is a percentage of the distribution rate on the common?

    Prize is a 9-hour wait in the line at the Delaware DMV in sub zero temperatures waiting for a COVID vaccine.

    1. Bob, I know several OTC market regional bank preferreds that pay rate common dividend and some that is 105% and 110% of common. But Im not sure about the liquidation values aligning with common though.
      So I cant get the vaccination offer from you. Im alright though as my antibodies are still in my system so I dont need it yet. Will patiently wait later this year for the nobody in line Johnson and Johnson one shot vaccine.

      1. It’s going to be like hand sanitizer. We will go from a feeding frenzy to swimming in vaccine by the end of the year. Assuming that the Astra Zeneca problem isn’t really a problem.

        1. Bob, I just got an antibody booster last month as my live in GF got Covid and it hit her hard. Basically in bed and couch for 2 weeks. I made no effort to avoid her since I had it in October. I basically only had a modest cough and nothing else. She got the full compliment of options covid provided and doesnt want it again. So I will wait for the frenzy to die down before I go that is certain.

          1. Pink sheets. The preferred was dividended out to small shareholders in exchange for common to get the shareholder numbers below the SEC reporting threshold. No prospectus that I could find. The company went dark right after the dividend, a decade ago.

                1. SBNCM? My guess is probably wrong, but yours is gonged already, lol.. I own SBNCM and it definitely isnt that one. It pays a fixed 90 cents annually and is non callable. Besides as you already know…Who needs SBNCM when one has Reddit? 🙂

                  1. Grid, I’ll take the gong it was an idk guess while distracted by something else. I threw it agaisnt the wall and it slid stright to the floor. But there is plenty of commonality here. I know you know Southern Bank went private (and secretive) some years back and it would take someone more resourceful than I to locate the original prospectus online. SBNCM (series B) if I recall correctly was absorbed by SB with the acquistion of Pine-something bank – ergo the random guess.

                    Early last year I called SB back-office (there is no IR) and spoke with a few nice folks who told me they do not have a copy of the original prospectus. uh-huh. But as it’s a perpetual from a highly profitable private and secretive southern bank company with plenty o’ insider local ownership (think The Firm) – well, in some ways that’s better than a prospectus. So I need to show up at SB HQ with a box doughnuts or someday when in Washington walk into the SEC and see if I can find that document.

                    1. Alpha, Duh…Im old and forgetful. I knew you owned this as you told me, but I forgot….But I remember now and am not going to reveal the deciding reason why you bought it to hold, ha, ha.

    2. GrandSouth Bancorp. A real micro bank but with common and preferred trading on the OTC.

      The preferred is queer. Appears to be identical to common except it has no voting rights and pays 5% more than whatever the common dividend happens to be. Not 5 percentage points, but 5%. Not redeemable that I can see and has no liquidation preference to the common.

      Effectively, it’s a non-voting common with a small yield bump.

      Thinly traded and price is all over the place.

      1. Bob the First Tennessee ones are like that also. One pays 105% and the other 110% of the common. There are a few oddball ones left like these on OTC, but yields too low for a bank to excite me personally. There actually were several more of these but they blew up in 08-09 crisis and never recovered.
        I remember now the one you mentioned. Each one I actually dug deep thinking I found a hidden jewel. Only to find the actual details and pass. Time wasted, but the hunt was fun, ha.

        1. It was hidden alright but no pearl, sorry. Just one of those things that I turned up in research.

          There are quite a few micro banks that trade OTC but very few have preferred shares that also trade.

        1. Which is why I passed. If I could get it for 5 bucks I might buy it. But I could wait 5 years for that. Finding too many decent trades to bother with this one. It was more like a Jeopardy question than investment advice.

          1. Bob, I like the research thing myself. Keeps my brain fresh when I deep dive. Sometimes I deep dive more after I buy than before. Such as today with snow on the ground, I finally dug deep into my PNMXO. I found out it also is one of a very few old subset that also allows the preferreds to take majority control of the board after 4 missed payments. Wont be needed but it was interesting to research to find.

    3. The prize should be one of those Delaware low number license plates….
      You look on the FDIC?

      1. Justin – a single digit plate sold for half a million a couple years ago. Even a 3 or 4 digit plate will sell for thousands.

        1. Hoo boy. Just shoot me now if I ever start jonesing for one of those. A first edition John le Carré I could see, but a low-digit license plate?

          1. Yes. It’s a Delaware thing but low number license plates are a big status symbol. I’ve not seen it in other states.

            The low number plates are also physically different. They are black porcelain on metal and a different size.


            That one would probably sell for a couple hundred grand.

  40. Doing a little useless surfing over coffee and discovered something I didnt know. For any Hawaii Electric preferred owners (or ones patiently waiting for a spill deal) who did not know, they are one of a very few subset that allow preferred shareholders to take majority control of the Board of Directors if 4 payments are missed.
    This provision just isnt around anymore, most preferreds from any company now are allotted the now customary 2 seats until paid. The Indianapolis Power issues have this mechanism and that is all I know about. Some old noncallables from various companies have the provision but the hold co’s own the majority of those shares negating that provision.
    For any who own Hawaii Electric here is the best primer info stating all about the preferreds I have encountered.
    Occasionally one can benefit from a mini dump to find relative value with these, however presently, there is none. Though one must be aware these are $20 par and $21 redemption preferreds (except Series I which is $20 redemption) not the customary $25. I own some of the Series J, but I need to see a price drop to get my investing loins more interested in accumulating.

    1. Was looking at Hawaii Electric preferreds…Some dumb money here..
      HAWEL 5% ($20 par, $21 redemption) bid $23.50 ask $25.00
      HAWEM 5% ($20 par, $21 redemption) bid $22.43 ask $24.44
      Some people are bidding on issues they believe are $25 par issues and are not.
      Meanwhile sister HAWLI 4.75% ($20 par, $21 redemption) sits with a current ask of $20.70. Crazy crazy that people dont know the par and redemption prices before bidding….. I shouldnt have but I bought a few hundred more as I was getting a bit short in total illiquid ute stash allocation.

      1. Nice work Grid!!! Yep a great example of investors not knowing what they are doing, and how to compare against sister funds. This was some sleuthing. This family of preferreds doesn’t move much, and you have to pry them out of existing holders’ hands to get them ! I snagged 300 shares. This is right up my alley.

        1. Mr. C, I already owned some HAWLI (Series J) I bought last year. You are right they dont trade much and I get lazy and dont follow them much. But I checked today and saw the bid just laying there so I took 400 more. If I didnt already have some I would have bought more.
          I see ask is up to $28.94, so you must have cleaned out the rest. I didnt know how many was left on ask when I posted.
          Irish, I dont know why Quantum or Tim neither have this one listed. It is part of the Hawaii Electric series of old issued preferreds. If you look up above on my previous Hawaii Electric post a few days ago and open up the link, you will see it as the Series J.
          HAWLI is actually one of the bigger series of the HE preferreds. 250,000 shares and a total par market value of $5 million.

          1. Excellent thanks! Looked all over but didn’t scroll up. Snagged a few to join my small collection of APRDO, UEPEP, and recently CNTHO. Never owned utilities before this year but it’s been fun to learn.

            1. Irish, they arent paths to instant wealth, but they wont give you Gamestop losses shorting either, lol. The key allure to me is their off the charts coverage ratios in terms of divided coverage and they most often are not market correlated which can serve as ballasts in market upheaval. In other words when you get a Dec. 2018 or last March’s rout its nice to see some issues not sinking like a rock with the rest of the liquid preferred market.
              But…And I think you already know this, stay disciplined on entry point and dont chase wild ask spreads.

              1. I put an order in, and they filled partial order, and got 350 shares. This is nice to keep filling up the pinned to par bucket. When the market drops, these guys don’t move much at all. Very cool. Thank you Grid

              2. Aren’t we all glad that the exchanges and the regulators came in to rescue the hedge funds on their GME shorts? These people need protection!

                1. I dont have a dog in the hunt here, Bob, but did you hear the IBK chairman on CNBC this past hour? He said it was all done to protect the intermediaries of the system not to protect investors from anything. He said there was billions involved and some were worried the ones who owed wouldnt have the money to pay those who had it coming to them. They did it to prevent being caught holding the bag in terms of paying. FWIW anyways….

          2. Grid, what is the ticker for the Series I?

            HAWEN: Hawaiian Electric Co. Inc., 4.25% Series C Cumul
            HAWEM: Hawaiian Electric Co. Inc., 5.00% Series D Cumul
            HAWEL: Hawaiian Electric Co. Inc., 5.00% Series E Cumul
            HAWLM: Hawaiian Electric Co. Inc., 5.25% Series H Cumul
            HAW??: Hawaiian Electric Co. Inc., 5.00% Series I Cumul
            HAWLI: Hawaiian Electric Co. Inc., 4.75% Series J Cumul
            HAWLL: Hawaiian Electric Co. Inc., 4.65% Series K Cumul

            1. Bur, its HAWLN…Quantum has it wrong its the only $20 redemption price of the entire series.

              1. thx, I was shooting blind relying on auto-fill on Marketwatch. Typed HAWL and it offered HAWLI and HAWLM but not HAWLN. Of course when I enter HAWLN directly it comes back with the info. Ya gotta love technology.

                1. Bur, Still it beats spending $500 yearly on a thick bound book on illiquid securities that was dated before even purchased like they had back in the good old days, ha.

    1. Thanks @Dick Whitman.
      Just what I was looking for. As long as I get it below redemption, I am glad to hold onto a 4.5% in my conservative cash portfolio….

  41. The current ask for PPWLM is $160. This is a noncallable so that would be a yield of 4.38%. PacifiCorp is owned by Berkshire Hathaway. This issue is rated Baa2/BBB+.

    1. Oldman, I would bird dog them a bit down from there. I got 100 today at $101.95 to go with another 100 I purchased pre exD. A fair value type hold for me. Mostly bought to balance out the heavier higher yield flipping game I have been on lately.

  42. UEPEM is being offered at $100.00.
    XD date is tomorrow, for a dividend of $1.00.

    Only a 4% QDI yield at this price, which is likely too low to attract very many folks.

    The company can call this issue anytime at $105.63, so no cap loss risk.
    It has been a stable & reliable income stream for me, I consider it like a High yield CD.

    I bought another 100 shares at $100.10.

    1. I would probably prefer UEPEP here. It’s being offered at $103. If you strip out the next dividend of $1.14 per share, you’re getting a yield of 4.48%. It can be redeemed for $102.47 per share. Since redemption soon is unlikely, I’d probably go for the higher yield. Thanks!

      1. Dick, I already have UEPEP.
        I think both are great holdings IF one can live with the admittedly low yield.
        You are correct that UEPEP produces a higher yield.

        I might go get a few more UEPEP today, now that you have drawn my attention to it. :-))

        1. Guys, what about UEPCO? Current yield 5% at last price of $110 (if I’m calculating correctly)? I can’t find a prospectus, so I don’t know what the call risk is, however.

          1. Bur, if you could get it at $110 or under for no call risk. I believe it has to be called at $110. It trades very little though. 1 share traded in Nov, and 6 shares in Dec. I don’t like having buy orders sit out there for a few months.

          2. UEPCO appears to be of similar flavor to its sisters UEPEP & UEPEM.

            Looks like there were only a few trades throughout 2020; really fits the definition of “illiquid”.

            If you can get some at a good price, it would be a great investment. The challenge here is to find a seller. Call risk is zero if one buys at or below $110, as that is the redemption price.

          3. Bur, there are about a half dozen or so Union Electric preferreds. UEPCO is the smallest (though they all are small as combined they are about $60 million, in other words combined the same size as LANPP being issued today, and it is considered small in and of itself, ha). These issues were IPO’d in the 1940s and 50s with UEPCO being the last issued.
            They really are subsidiary Ameren MO preferreds (not Ameren the parent, AEE), as Union Electric ceased to be called that many years ago. For some reason Ameren never changed the name of these unlike the Ameren Illinois preferreds were when acquired.
            Basically if any are ever redeemed, all in unison will be redeemed. They may never though. I have owned and flipped in past, but as Mr. Conservative said it just is too hard as only 50,000 exist and I am sure most are tied up in some preferred funds. I own several Ameren Illinois preferreds, but UEPEP is the only Union Electric issue I presently own. I personally wouldnt chase too far above redemption price but you may need to be very patient as Mr. C said it rarely trades.

      2. Dick, I decided to pick up a few more shares of UEPEP to round off my holdings to an even 200 shares.

        Thanks for the heads up.

        1. Glad to help. If you have some extra cash sitting around, RNR-E may be another one to look at.

          1. i picked up 3,000 shares of RNR-E. I usually buy near this level and flip out if it goes above 25.70. Another good one.

          2. Will look at RNR-E. Would like to get at a price closer to par + accrued interest if possible.

          3. Dick, on Jan 13, you suggested I look at RNR-E, which I did. And then bought a few hundred shares at $25.39.
            On Friday 2/5, it dropped from $25.55 to $25.33 ( which is par + upcoming dividend ). Volume much heavier than normal.
            I sense a call coming up, but found nothing on the news feeds or filings.

            What do you think? Is a call imminent?

            1. I called investor relations a few months ago when there was a big drop on high volume. I asked if anything had been previously publicly disclosed about a call. I was told there was not anything. I bought more on Friday. Even if there is a call, I’m not out anything I like these types of issues in an interest rate environment that is uncertain. Also, RNR just announced a dividend raise on their common.

              My preference is for past call issues with higher coupons these days. I’ll also buy illiquids at the right price.

              I also have been buying PPX lately as there seems to be some controlled selling.

              SJIJ is another to check out. It has an ex-date coming up. I bought some recently at an average cost of $25.57 which gives me a YTC of around 5%.

              Hope this helps!

              1. Sure does help!! Appreciate it !
                Good to know something similar happened previously as you had described. I already have a full RNR-E position, but if it drops below the $25.32 level, might pick up a few more as there is no way I’d lose.

                I also own PPX and SJIJ, so here’s hoping right along with you for good news out of both.

        2. Inspy, Ya got the day after bounce on Power Reit today which puts it at “par” plus accrued….Are ya gonna be man enough to hang on and see what happens?

          1. Oh yeah. Definitely will be hanging tough on this.

            I got PW-A for $25.24; whenever a call comes, should get more in par + accrued interest. So this is a gravy train to be ridden until termination of the ride.

            Have way less shares than you, so it is a small position which will not move the needle much, if at all.

            1. Inspy, Ya I got a little eager beaver here. I own more than the amount that traded today that is sure. They typically wait and declare about 2 weeks prior to record date, so end of this month is “show time”.
              The dividends as has been recently will most likely be “return on capital”, as they are working through a 2017, $16 million tax “NOL” (Net Operating Loss) from unwinding of the Railroad lawsuit. So thus highly profitable now, they are paying no income taxes until that is exhausted.

              1. That is news – good news – that I did not know about. So they have a NOL that they need to work off? Great, so my cost basis will go down, which is good for me because I have big carryover losses to work off as well.

                Will hold strong

              2. (If and when I ever pick up any PW-A) Does the distribution for this one actually show on your broker’s statement as ‘return of capital’? (As opposed to them showing as dividends and you “just having to know” and accounting for it correctly at tax time.)

                1. Good question, I cant answer it. When I have held it in past has been in tax free accounts, or in taxable on a quick cap gain flip without a divi.
                  Brokerages tend to assume and be generic which may not properly reflect Power Reit tax status. Whether they correct later I dont know.
                  They do officially post it after year end though.

                  As far as buying it now…Make sure you are aware of call risk and current pricing in relation to that risk as it recovered from the buying 2 days ago.

                  1. Thanks the cautionary note Grid. Yeah, not for me at the current price. Too bad I didn’t act on the dip Tuesday.

                  2. After reading the posts from you & Bur, remembered that I had bought PW-A in my IRA, not a taxable account!

                    So the return-of-capital feature will be moot in my case.

    1. Justin, ya got your hands full snagging. 5600 shares left outstanding at DTC (And that is assuming BAC doesnt have some of those, too) Its noncallable 7% paper, great if you can get…
      The trades the past 11 years….
      12/22/2020 13:11:58 EST I 15.50 40 OTCBB
      10/28/2020 9:30:21 EDT I 9.50 2 OTCBB
      12/20/2017 12:43:49 EST 0.001 10 OTCPK
      04/27/2015 15:25:50 EDT 80.00 26 OTCPK
      08/13/2009 14:46:45 EDT 54.90 100 OTCPK
      08/13/2009 14:46:32 EDT 54.90 259 OTCPK
      07/23/2009 12:17:04 EDT 30.25 219 OTCPK
      07/23/2009 12:17:03 EDT 30.25 219 OTCPK
      04/14/2009 9:44:13 EDT 35.00 131 OTCPK

      1. held at DTC is different than outstanding. That just means they’re held in street name at cede & co vs certificate form. My data shows 7571 outstanding (not that it makes a huge difference)

        1. Dont disagree, but certificate form is typically not a likely trade. But what isnt showing is what the company owns from whats left and what is actually tradeable. Assuming the posted trades are correct above, there may be less of a truly “tradeable” float. Which could be a very different number than total outstanding and at DTC.

          1. Sure, that is generally referred to as the “float”, the shares that are freely tradeable. Would agree that the float is likely <= than the total held at DTC depending on if BAC has repurchased any and has them in the treasury but still in street name

            1. Its hard to determine without any company acknowledgement. I know only through company statements that at least two of mine have a significant smaller float than what is published as being outstanding. But it wasnt easy to determine as I had to hit some PSC filings to flesh those out.

            2. is it chilled for deposit or withdrawal?
              This thing could kill me in commissions if it gets filled one share at a time, so this is definitely one for the all or nothing option.

  43. Could not resist the bid, and sold 20% of my AILLL position at $31.10.

    Tomorrow is XD, but even with the dividend loss, it’s a pretty good sale price.
    Thinking that I will have opportunity to buy the stock back below $30 in due time.

    1. Nice play, Inspy!
      I wish I could find another illiquid to switch to lock up some nice gains in liquidville. But they keep stair stepping higher and some modest juice flipping and reentering to keep goosing things. So its hard to stop there when its going good.
      I did see APRDM dumped at $103 for 300 shares. So I set lead bid at $103. 200 more shares sold afterwards but the ahole back room club stole them from me and gave to somebody else at same price.

      1. Sold some of my CNIG yesterday at 16.00 bought around 15.50 see its moved higher. Without targeted spending by the government instead of this talk of dropping 2,000.00 on everyone including people who don’t need it is like throwing kerosene or is it gas on the fire.
        I think treasury rates will continue to move up especially as overseas investors re-think the stability of them after watching the Shenanigans of this past Wed.
        If rates move up, then fixed rate assets will move inverse to them. May also be a good time to look at Canada and EU if the dollar falls

        1. Charles, Im 0-2 on receiving govt checks, so it isnt everyone getting them, lol. But hey, my Dad got one. The trouble is he couldnt personally spend it because he died in 2018.

          1. 2-2 Grid, just went into savings. My daughter blew a cork when she found out my granddaughter who is 18 and living at home with no bills supported by mum spent 16,000.00 of un-employment and stimulus money last 9 months and mom is paying for her dorm room and going off to UC Santa Barbara this week. Well at least Door Dash drivers, Dine out restaurants, and Star Bucks made out.

            1. Charles, Hopefully a degree from UC will help accommodate your granddaughters lifestyle she has already been accustomed to. Maybe you can give dear granddaughter your stimulus check to help keep Door Dash in business. 🙂

      2. Grid – what site do you use to get the updated float outstanding for some of these truly illiquid issues like APRDM?

        Quantum Online often does not have updated figures.


        1. Rob, As Dick linked going to the parents annual filings (usually around a Feb. document) and dig them out there. It is the most reliably accurate method. OTC Markets under “Security Details” usually provides accurate data also for OTC securities. But not all of them are posted. For example this issue is not posted in OTC Markets.
          The specific stock page of a security from TD is typically but not always 100% accurate. For example here, with APRDM it is accurate and matches the SEC filings.

  44. I just bought some NSARP for $100…this was a trade that got placed in early December in an non-qualified account. NSARP went ex-div this morning, which might explain the drop in price. Redemption price is $103.62, callable anytime. Thanks to Dick, Grid or whoever mentioned this one earlier. This will be a long term hold.

  45. One of the interesting things about old trust preferreds is what they are worth can not be extracted from selling in the market. Take KTBA which is an ATT 2095 non callable bond. KTBA itself is also noncallable. But its true locked up value historically will never mirror the actual bond pricing itself.
    KTBA trades at $30.50 with a 5.74% yield. While the actual 2095 bond itself last traded a week or so ago (maybe $25 million tops remain outstanding in “The Wild” while KTBA has the remaining ~$50 million remain trapped in KTBA) at $142.90 or a 4.86% yield.
    Im showing this as I know several own this including me and may be curious.
    KTBA equivalent bond pricing is $122. Nothing unusual going on here, just showing what the bond is trading at in real life.

      1. Hey JB, Take my advise with a grain of salt because I have ‘tude towards equity units and mandatory convertibles. They are fake preferreds, they are common stock bets masquerading as a preferred.
        Keep in mind this is a personal opinion about the structure of these issues, not the actual company in any way. I have always spouted off on why I wont own these for years and succumbed to temptation with the CNP convertible. Made a quick buck flip early in year, went back to well and quickly lost $2 or $3 bucks and sold at $45. Glad I did then as it has dropped quite a bit more.
        Equity Units are even more convoluted. Anytime I read the main basic of a prospectus, and ask myself “WTH did I just read”, I usually move on. And with Equity Unit issues, I say that just reading the one paragraph summary, lol.
        Ultimately in general its just a bet on the common stock, which can be done by just buying the common. Typically these are done to delay the inevitable equity dilution with company trying to digest something and grow into the earnings before conversion.
        In other words they dont serve my purpose, but that doesnt mean it wouldnt for you though.

          1. I’ll chime in and say that normally I view convertibles like Grid. However earlier this year I went overweight utility convertibles on sector valuation. DTP, NEE-P, SRE-B, SOLN, AEP-B, CNP-B. I still like them as equity exposure, with higher IG yields until they convert.

  46. AILLL traded 241 shares @ 32.00, up from Wednesday’s close of 28.99. It did not trade on Thursday. Probably the most illiquid $25 face issue that traded today.

  47. Grid, in a thread below you wrote, “Did you know Hawaii Electric still has 7.25% private placed preferreds callable since 1990s still outstanding?”

    I wonder which family members are enjoying *that* sweet issue?

    Seriously, though, does HECO document these?

    1. Yes, last I looked it is in the SEC annual filings under Hawaii Electric not the holding company. I know annual public filing documents to Hawaii regulatory agency shows them. One was Maui Electric and I forget other one as they were actually subsidiary preferreds of Hawaii Electric. I did contact Hawaii Electric IR a few years back and they said no they were untradeable and private.

        1. Bur, I think you are being too cynical. Im sure its a complete minor oversight these preferreds werent redeemed 20 years when they should have been. And its probably just a bunch of Joe 6 packs who have all the shares, also…Ha!

        2. Bur, I quickly checked…Its worse…They are both 7.625% preferreds. One is Hawaii Electric Series G a $7 million issue, and the other is Maui Electric Series H a $5 million issue. Oh, but they had no problem redeeming the 6.5% lower yield trust debt issue I made a killing on over the years flipping that us low lifers could actually buy…
          The reference to them is on page 109 and page 110.

          1. I have seen this situation up close and personal. The uncalled HE issues were probably issued to a closed group (employees, directions, et al) and buyers were given actual certificates. With restrictive legends, with transfers subject to company approval. And the company may well have acted as its own transfer agent. So none are likely to ever leak out.

            I still have a few such issues.

  48. How would you like a $25 preferred that trades like this one has the past 2 months, lol…
    12/08/2020 15:37:12 EST 17.50 200 OTCBB
    12/08/2020 11:09:07 EST I 17.01 57 OTCBB
    12/04/2020 10:14:14 EST Z 16.82 114 OTCBB
    11/25/2020 15:21:38 EST I 16.81 4 OTCBB
    11/20/2020 9:32:09 EST I 24.00 2 OTCBB
    11/18/2020 10:47:25 EST I 24.00 1 OTCBB
    11/16/2020 12:35:14 EST I 24.00 20 OTCBB
    11/13/2020 13:40:03 EST I 16.82 50 OTCBB
    11/12/2020 15:32:01 EST Z 17.00 400 OTCBB
    11/12/2020 15:31:48 EST Z 17.00 100 OTCBB
    11/12/2020 15:23:36 EST I 44.97 4 OTCBB
    11/10/2020 13:25:37 EST 25.01 100 OTCBB
    11/06/2020 12:00:01 EST I 25.02 1 OTCBB
    11/04/2020 9:30:00 EST I 25.01 3 OTCBB
    11/03/2020 9:30:00 EST I 100.00 5 OTCBB
    11/03/2020 9:30:00 EST I 25.01 45 OTCBB
    10/30/2020 9:41:31 EDT I 26.00 50 OTCBB
    10/27/2020 15:48:10 EDT I 149.99 56 OTCBB
    10/27/2020 11:40:22 EDT I 30.00 2 OTCBB
    10/26/2020 15:13:09 EDT I 50.00 4 OTCBB
    10/26/2020 15:13:01 EDT I 50.00 46 OTCBB
    10/26/2020 13:30:56 EDT I 50.00 4 OTCBB
    10/26/2020 9:37:20 EDT I 50.00 50 OTCBB
    10/26/2020 9:33:35 EDT I 49.99 5 OTCBB
    10/26/2020 9:33:32 EDT I 49.99 25 OTCBB
    10/23/2020 11:13:48 EDT Z 25.00 200 OTCBB
    10/22/2020 14:34:19 EDT I 144.99 1 OTCBB
    10/20/2020 9:38:40 EDT I 20.00 1 OTCBB
    10/16/2020 9:30:00 EDT I 173.99 4 OTCBB

      1. Dick, I promise I will. I just would like to find more info on this Sum Bitch first. I have just dragged Bob-in-DE into the fray and see if he can research anything as he has actually looked at company but for an unrelated look. You have definitely heard of the company I 100% guarantee, but I dont even know if it or its sister preferred even pays a dividend as I cant find any tangible proof it does outside of a 1976 financial statement I dredged up.
        Its not a 10% IG illiquid ute I promise though, lol. Though unrelated thought..
        Did you know Hawaii Electric still has 7.25% private placed preferreds callable since 1990s still outstanding? It aint called “Island Business” for nuttin’.

        1. Grid – if you can figure how to buy it I will be impressed.

          Hint: grid is totally right that it’s a household name.

          1. Bob, I did buy about 300 shares. Just as an amusement as I dont know enough about it to justify it as a true investment.

        1. Thanks. I was able to find it too.

          I couldn’t find anything yet about whether it actually pays a dividend. Weird.

          1. The Schwab website says it does not pay a dividend.

            In any case it is so thinly traded it would be very difficult to get more than a token number of shares, which would not make a material difference in dividend income received.

          2. Dick, this is the only “new” info I can track that shows anything and it is to the 144a 6.25% issue, that has an approximate $82 million float at $100 a share. Notice it does reference link the two older preferreds so they arent total made up scam tickers anyways. John Hancock is a lover of the 6.25% series it appears.

            Ocean Spray Cranberries Inc (US:675022404) has 16 institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). These institutions hold a total of 991,450 shares. Largest shareholders include John Hancock Premium Dividend Fund, John Hancock Preferred Income Fund Ii, John Hancock Preferred Income Fund, John Hancock Preferred Income Fund Iii, Flaherty & Crumrine Preferred Securities Income Fund Inc, Eaton Vance Tax Advantaged Dividend Income Fund, Flaherty & Crumrine Preferred Income Fund Inc, Flaherty & Crumrine Total Return Fund Inc, Flaherty & Crumrine Preferred Income Opportunity Fund Inc, and JHNBX – John Hancock Bond Fund Class A.

            1. Both OCESP and the 144A issue are listed as Ocean Spray Cranberries, Inc., so it appears that they are issues of the same corporate structure and are therefore likely to be pari passu. I’m not guaranteeing anything here, just positing that if the 144A is paying, OCESP most likely is, too. I picked two of the institutional holders to peruse their holdings data for details. Eaton Vance priced the 144A at 87 last November, while Flaherty & Crumrine priced it at 80 in May. If anyone wants to dig into more of the institutional SEC filings, you may be able to find something more recent. But just based on overall market action and not knowing anything specific about the company, I wouldn’t be surprised if it’s priced around 90 right now. That would be a 7% yield, meaning that OCESP would need to trade closer to $14 for a comparable yield. And given OCESP’s illiquidity, you should probably want to pay less.

              1. You mean the shares for the $25 par issue bought at $50 overpaid, lol . Personally its uninvestible without more info for a serious investment. Parri Passu wont mean anything if its a payment tied to direct disbusements of a common dividend instead of a traditional cumulative preferred type. As I have had no direct proof it is on. And any prior credit rating reports never mention them just the 144a issue. Some may not no know this there are preferred stocks tied directly to common divident payment.
                And this being a co op may make situation different. Clearly the company itself is not of the credit quality that the name brand itself represents.

      1. Definitely not Fannie/Freddie. None of them have traded like that and it’s easily discovered that they stopped paying dividends in 2008.

        I skimmed through QOL and and I suspect it’s on neither of them, so something really off the wall.

          1. If it’s on OTC, then the screener data can’t be correct. There is only one security with 257 shares traded today, GIKLY, but it’s last price is $14.35, so no match. There are no securities with a last trade of 17.01. There are 4 securities that show a last trade of $17.50 (including rounding up), but all 4 show no volume today and are definitely not household names. So is the screener broken?

            1. Karma, I just used that volume screener for first time. Never used and looked any further down than the screen tool list than just the preferred stock tickers. I see the problem though. The screener lags a day. As I see NEWEN on the screen list with 100 shares. That happened yesterday not today as NEWEN did not trade today.

            2. I see the problem now. The stock screener appears to still be showing 12/7 data. So I looked up the previous last price of 16.82 and found OCESP, Ocean Spray 4%. Moody’s withdrew credit rating of Ba3 rating in 2014, so while junk rated it must have still been paying dividends at that time, otherwise it would have been rated C.

              1. While it would be nice to buy OCESP for $6 (you could probably try your whole life and never get any), this one doesn’t look to be worth the effort. A junk-rated preferred with a 4% coupon and no liquidity…I’ll leave it for someone else. Schwab currently shows a bid of $12 anyway – too rich for my blood!

                1. Karma, besides not knowing if it still actually pays, the credit rating is dry. It could be better or worse since then as that was withdrew and its very dated. It in the past actually had the preferreds A rated, so its hard to tell.
                  The company is a private co-op so any real info is hard to come by besides just sales and membership number affiliation. Now they have a 144a 6.25% preferred issued around 20 years ago that is owned by many fund companies. I would assume it pays or these income funds would have no interest in owning.
                  But yes clearly this is not an “investible idea”. I would like to track down its issue date and terms as getting ahold of their balance sheet doesnt appear possible online anyways being its private. It must be old as by 1976 its original near 100,000 shares issued was already down to about 60,000 outstanding with the others put back in treasury. Who knows what has went on since then with it or the participating sister issue.

        1. Grid, you have “Stumped the Chumps” with this one. It is not in my database. A little tougher than the similar BANGN trade I was able to solve a couple of months ago. . .

          1. Tex, Still you all caught me off guard, as you guys have more systematic screening methods than I do. I just operate under random “poke and hope”. Never occurred to me there was an actual method. It must just be delayed in terms of showing screening wise. As all the brokerage sites I have under its specific ticker matches up to the volume and price correctly.
            Bob is working on it, maybe he can find something. Its hard for me to say, ya I like this issue because it cranked out a divi in 1976, lol.

  49. Anyone familiar with WTREP? It’s a an L+6.68% floating rate preferred from an insurance company that is being acquired by Arch Capital after a bidding war. Preferred should be left outstanding after the merger. It’s strangely low volatility, especially for an unrated issue, going no lower than 23 in the March panic. Just wondering why it trades like it does.

    1. I’m interested in this one too as a long term holding. Why do you say that the preferred will be left outstanding after the merger?

    2. I know the press release stated it would be continued, but can one trust such a release?

    3. Landlord, great tip idea, thanks. I spent last couple days buying up enough for me in 25.50s. The acquiring company has investment grade preferreds themselves (page 2)..
      Kind of an inbred as management of Arch already owned some of the common stock as well as Arch itself.
      This preferred was a private placed issue back when it was formed about 2014.
      8½% cumulative redeemable preference shares
      On March 31, 2014, in connection with our original private placement, we issued 9,065,200 8½% cumulative redeemable preference shares, at a price of $24.50 per share, for an aggregate subscription price of approximately $226.6 million. In this subsection, we refer to these preference shares as the preference shares.

      It has gone floating but has the 1% Libor floor. (Libor will be around for a bit still in US).
      Dividends accrue (i) from (and including) June 30, 2014 to (but excluding) June 30, 2019 (the Fixed Rate Period) at 8½% (the Fixed Rate) of the $25 per share liquidation preference per annum (equivalent to $2.125 per share per annum); and (ii) from (and including) June 30, 2019 (the Floating Rate Period), at a floating rate per annum (the Floating Rate) equal to three-month U.S. dollar LIBOR plus 667.85 basis points; provided, that, if, at any time, the three-month U.S. dollar LIBOR shall be less than 1%, then the three-month U.S. dollar LIBOR for purposes of calculating the Floating Rate at the time of such calculation shall be 1%. Other than the right to payment of accrued but unpaid dividends, if any, on the preference shares, the holders of the preference shares are not entitled to share in any other dividends or distributions of our company.

      With it going exD in less than a week, I will gladly pay 7 cents above that and let this play out and see how long they let them stay outstanding as there is no money lost from any redemption at this entry point. I have moved the ship past couple months into more higher yielders and call anchored types. This one more than fits the bill for me. Not a big insurer guy, but this one is set up to fit my needs as a great capital hide out and see if they walk the talk on leaving issue outstanding for a while. Lets see if things go to plan how long they want to keep a 7.5% plus issue outstanding from an IG company and let it play out.

    4. Guys, looks like a slight of hand action going on, as Randy was already pondering that. I actually got ahold of the filings and buried deeper is the fact this one is likely a goner near merger completion. Buried on page 44…Not much meat on the bone here with an anticipated first quarter closing.
      Cooperation. From the date of this Agreement to the earlier of the Closing Date and the date this Agreement is terminated in accordance with its terms, at Parent’s sole expense, the Company shall use its commercially reasonable efforts, and shall cause each Company Subsidiary and its and their respective Representatives to use their respective commercially reasonable efforts, to provide Parent and Merger Sub with all cooperation reasonably requested by Parent or Merger Sub to assist Parent or Merger Sub as is reasonably requested by Parent or Merger Sub in connection with a potential debt financing in an amount necessary to redeem the 8½% Preference Shares outstanding on the Closing Date (the “Debt Financing”, and the redemption of the 8½% Preference Shares and the transactions related thereto, the “Redemption Transactions”), including using commercially reasonable efforts to:

  50. Can someone give me a quick refresher on cnlhp
    i see it closed at 50.66 and its a little over 4 percent yield wise
    thanks in advance

    1. Bob, for illiquids that last trade is about 4.4% with a BBB+/Baa2 rating. That will be about top end for any old ute that is right around redemption price. Like all CLP preferreds they are old and small floats. Redemption price is $50.50. Been callable for about 50 years. So at that price point of $50.66 call loss risk is not there but long end yield rates backing up would be your big enemy. 8 year low is about $45 and all time high is $51. When 10 year was near 6% in early 2000s, it was trading sub $30. ….It didnt trade today. Current ask is $51.25 and current bid is $50.66.
      I dont own this one, but I own a couple other CLP sister preferreds.

      1. thanks for the quick response. i was curious what the redemption price was.
        Might put on a small position if i can get it under 51 and just hold it indefinitely. Higher rates are coming but probably will take a year before they start to take off.
        my daughter bought a house today. i think she got quoted 2.8 percent for a 30 year. My first house was at 9.5 percent. And i thought that was a good rate at the time LOL

        1. Bob, sounds like your first house in 1979ish? Mortgage rates pretty much killed the housing market back then. Rates peaked higher than you 9.5%, so you got a bargain at the time. Hard to have imagined 2.8% 30 year rates back then. The average for all Freddie Max rates last week was 2.72%

          1. 1979 is about right. Bought a house then got transferred down south(from chicago). It took a long time to sell it, though my company making payments was part of the moving package so it was more a mental thing that a real money thing
            Fun times LOL

  51. There’s quite a bit of selling in NSARP today. The current ask is $101.99 which gives a yield of 4.17%. The redemption price is $103.63.

      1. Justin, “non mandatory” redeemable means the company decides. Eversource controls the board of NStar but hasnt shown any preference to force them or CLP to redeem yet. But one never knows. This is why I rotated out of my NSARO at $108 and plus yesterday which was around $5 over redemption price.

  52. Somebody wanted some NSARO at $108 and plus…I was glad to help accommodate. Thanks Dick for the liquid sell tip a few weeks ago in $103 range as I took advantage of it.

    1. Happy to help you out since you’ve been a huge help to me and many others. I saw the $108 bid on NSARO but I decided to just keep mine. At $108, it’s still a yield of 4.43%. I’d need a slightly higher price to sell…plus I’m trying to limit the capital gains for the rest of 2020. I definitely understand why you sold though.

      I did end up buying some PPWLM for $150. I’ll be getting a noncallabe 4.67% from a BBB+ utility.

      1. Dont worry, Dick, I will find that money a home somewhere in illiquidville, lol. I saw the PPWLM trade. Solid buy for you to lock in a non callable there at that yield. I sold another illiquid today at $1.25 a share more than I even asked for it, very odd but I aint complaining there either.
        I largely have been playing with the other part of the stash in the high yield trash and its been good there too. Pedal to medal like its been all year…for now….

        1. I have no doubt you will. I’ll probably end up kicking myself for not pulling the trigger.

          One another note, whoever is continually buying WELPP at $98 should stop it. That’s a yield of 3.67%.

          1. Someone is thumbing their nose at me…the ask on WELPP is now $98 x 400. If you have these shares, I strongly suggest selling.

            To whoever is buying at $98, I dare you to buy the ask of $150 x 200. 🙂

          2. Dick, It took me two days as I tried to bird dog down even more but to know avail. But over past 2 days I replaced my NSARO at $108 with APRDO at $104. It goes exD in weeks and redemption price at $103.14, so effectively its under par. Same credit A3/BBB+ but eliminated any call loss risk. This one worked out well as I bought 400 of these day before previous exD at $103. Sold with divi in hand a couple days later at $105-$106 transactions, and now repurchased back at $104 and didnt miss the divi either. Didnt buy as much only taking a couple hundred, but I didnt want 400 this time either.
            Effectively APRDO was bought at same yield and infinitely better credit rating that new Selective Insurance that just went to market. It wont matter much to the upside, but it sure will on the downside….
            Private- The title to the house still is in my name, but two weeks in for practical purposes I have lost total control of it already. There clearly is a new sheriff in town…
            Razor- Higher ed is an incredible cost. When I went to college, my Dad told he he had the first two years. And I had the last two. But he told me to take out max student loans first 3 years and put them in CDs and the fourth year would be “free”. Sure enough it was. Those 13%-16% CDs were money makers! Try doing that now with student loans, ha!

            1. Grid, I wish my Dad had shared ideas like that with me. We were a “talk of money is distasteful” family, and it’s taken me years to catch up! Thank goodness for communities like this.

    2. I did a swap today.

      Sold 100 UEPEM @ $100 ( yield of 4.00% ) and bought 100 NSARP @ $101.25 ( yield of 4.18 )

      A small improvement of 18 bps, both securities are illiquid and pretty safe. NSARP was bought below redemption price, so no fear of cap loss due to a call.

      Might buy back UEPEM if it dips to the $98 range, which is where I had bought originally.

    1. Thanks for the wake up, Dick. You caused me to check CNTHO that I am in and out of. Sold 300 of them a buck higher a month or two ago, than my $53.50 purchase today for 200. And didnt miss the divi either.

      1. Someone has ants in their pants to sell CNLHP. I bought some more today. I passed my limit in ES preferreds $10k ago.

  53. Ya gotta love the odd behavior of illiquids. Whenever I run out of trade ideas I usually buy some POS HL-B in $52-$53 range to play with. Bought some a few days ago and decided to reach up a bit in price on one last 100 lot at $53.10 today. So they intentionally trade me 1 share at my $53.10 bid and then fill it out instantly with 99 at $52.50. That seems very odd as I was willing to pay the $53.10. This kept the “official” price higher since a 100 lot did not trade. Then someone later bought 130 at $54.25.

  54. Somebody around here sold one share of BANGN yesterday @ 175.25, up 59% from the 110 trades on Tuesday . Not every day you see 59% moves in any preferred. Normally the only time you see that kind of percentage move is on a suspended payout ~ 1.00 ish issue

    1. Tex, that is actually about what is normally does….That $110 trade was actually more the anomaly as I wouldnt say it was exactly “trading” at $110, it traded 6 shares at $110. With previous trade before that was $176… Here is the trading volume and prices for past 12 months.
      Date/Time Price Shares Exch/Mkt
      11/13/2020 9:37:46 EST Z 175.25 1 OTCBB
      11/10/2020 11:15:15 EST Z 110.00 6 OTCBB
      10/21/2020 13:36:19 EDT 176.00 1 OTCBB
      10/21/2020 13:28:43 EDT 180.00 1 OTCBB
      10/21/2020 13:28:35 EDT 180.00 1 OTCBB
      10/07/2020 10:31:58 EDT Z 225.00 1 OTCBB
      10/07/2020 10:31:45 EDT Z 215.00 1 OTCBB
      10/07/2020 10:31:17 EDT Z 174.00 100 OTCBB
      10/06/2020 14:21:10 EDT 144.00 18 OTCBB
      10/06/2020 14:21:10 EDT 144.20 18 OTCBB
      10/01/2020 9:40:57 EDT 137.01 3 OTCBB
      09/21/2020 9:57:48 EDT Z 136.00 12 OTCBB
      09/18/2020 11:46:37 EDT Z 107.00 12 OTCBB
      08/07/2020 11:27:01 EDT 225.00 1 OTCBB
      08/07/2020 11:00:28 EDT 225.00 1 OTCBB
      08/04/2020 15:38:55 EDT Z 225.00 1 OTCBB
      06/08/2020 10:01:13 EDT 185.00 1 OTCPK
      06/01/2020 9:41:18 EDT 185.00 1 OTCPK
      12/17/2019 12:48:26 EST I 175.00 15 OTCPK
      11/18/2019 9:48:41 EST I 225.00 2 OTCPK
      11/18/2019 9:48:35 EST I 225.00 1 OTCPK
      11/01/2019 9:51:07 EDT I 175.00 1 OT

    1. Camroc that thing is goofy and it is what it is. It bounces from around there to $215 on lots of under 10. And usually by passes the bidder. Lord knows I have been bypassed several times over the years chasing it. I got what I need. The only time I ever got any was ask price. I noticed the lead bid was unchanged on shares…Who knows what happened this time.

  55. Ameren Illinois announced $375 M of low coupon mortgage bonds maturing 2030, the proceeds will be used to pay off short-term debt.

    AILLL ( now callable ) is my biggest holding, so I’m considering selling off some, in light of this news. My cost basis is about $28, well above call price.

    Any comments from AILLL holders would be appreciated.

    1. Inspy, If you want to sell at $28, lemme know. Maybe we can work sumpin out at that price point! As Im not reentering at present price… Your decision to buy or hold should be based only on your risk comfort level owning something roughly 16% above redemption price…Howev’s a couple thoughts… You do know next divi has been declared, correct? And…Go to SEC filings and peruse the AEE debt filings from Ameren Illinois the past 10 years, and see if you havent heard this story before without any relation to the preferreds. The odds of long term capital asset being moved over to a short duration liability seems highly improbable and unrelated to what your decision should conclude.

      1. Grid, thanks for the input.

        Yeah, I know that in the past they had issued stuff and the preferreds remained. Good to be reminded.

        However, I decided to lighten up just a little, sold 250 shares @ $28.86.


    2. RE: AILLL

      Grid has addressed the no call issue on this and I agree with his reasoning. That said, stuff can happen. All it takes is one regulator to ask about the issue for it to be gone. Such things do happen. If there were truly no call risk on this issue it would trade much higher.

      I size my position such that my life won’t be ruined if it is called.

      1. Bob-in-DE, what you say is very true. Despite what has been said and/or done in the past, nothing is ever cast in stone.

        I have held AILLL for many years now, and thus far it has been a great investment, but very well aware that things could and can, change in a heartbeat.

        I feel that I am still a little overweight, but will wait for another opportunity to sell at $30 or higher to further lighten up.

      2. I agree, And one needs to remember though the AI preferreds are old, Ameren hasnt owned these since issuance. These were acquired 10-20 years ago, so they are bastard preferreds from acquired companies.

      1. Bur, No they arent. Ameren never has paid the dividend. That is the holding company. Union Electric is the original company before Ameren became a holding company years go. Union Electric has been renamed to Ameren Missouri. Which is one of two subsidiaries Ameren owns. So, subsidiary Ameren Missouri (Union Electric) is the obligator of payment.
        BTW, Most people get confused here on that. And in general this is a good thing getting the dividend from the subsidiary instead of the holding company. As in general most ute subsidiaries have better quality than the holding company. Because the holding company would die on the vine without extracting dividends from the subsidiary. So in short you get paid first before the holding company does.

        1. Thanks! So that explains why I see no pfd dividends on the AEE Cash Flow Statement…

          1. If you pull up the Ameren 10-K and do a Control F for “preferred”, there should be an entire section devoted to discussing the preferreds.

          2. Additionally Bur, the subsidiary preferreds are under the auspicious supervision of the local regulatory commissions which lay certain financial guidelines the utility must comply with. This varies state to state though. The holding company is more at arms length in terms of their financial structure. For example, one subsidiary preferred I own, they went as far to force holding company not have majority board of director control of subsidiary utility, need regulatory permission to extract for than $31 in annual dividends, must maintain an investment grade credit rating, and have complete and separate untangled financial relations amongst many other controls.

              1. Camroc, This one is so illiquid even you arent interested which is a miracle in itself. Its BANGN. The float was issued uncallable with 25,000 shares back in 1911 when it was a rail line/utility combo company. They stated they have over 99% of the shares so that only leaves a bit under 250, which I have a 100. I overpaid but being it only traded one 100 share block once since 2008, prior I wasnt going to lose my shot being I have chased it for 7 years.
                A lot of the tight restrictions placed on holding company (also included forced donations to many local charities, no job losses, headquarter remains at same location, etc. etc.) was because this is the second time a foreign entity has owned the utility and the locals are pissed. And the damndest thing is indirectly the City of Calgary actually owns this Maine utility now called Versant Power.

  56. There’s been a bunch of selling of NSARO today. Someone is showing $105 x 1,700 shares currently.

        1. Happy it worked out for you. Gridbird and others here have helped me a lot so it’s nice to be able to try to do the same for others.

          You got yourself a 4.59% yield from a A3/BBB+ utility. That compares very favorably to anything new issued recently.

          1. Dick, For an income hold and quality that is a good purchase, esp compared to new liquids coming up sub 4% and exposed more to the market gyrations. The separation in all these illiquids has narrowed alot. So its really just looking for liquidity for a respectable hold entry point. Basically I would just be switching 2 quarters for a 50 cent piece where I am presently in the ute illiquids, so NSARO wasnt a real option for me. And my belly is kinda full with the quality illiquids, so I would need a sell off somewhere to do a switch off.
            PNM is being bought out by Avangrid. I worry they could redeem PNMXO which is a subsidary to PNM. As many times when another hold co takes over they redeem the old issues and rid themselves of it. Entry point was $102, and basically the price sits there so no material call risk at that point I bought back whenever. It seems to sit around $102 most of the time when it trades anyways.

        2. The ask for NSARO now is $104.50 x 1000. Over 1,800 shares of NSARP moved today too. Maybe someone worried about the election or liquidating an estate but in any case, it looks like a pretty good value.

          1. Dick, thanks for the heads up this afternoon as I wasnt around. I am worried there is a shot AGR could possibly force PNM to redeem PNMXO down the road since they are acquiring PNM. So I bought the last 100 shares today of NSARO at $103.90 as an insurance policy. NSARO at $103.90 is an example of not buying at a premium, as that is 1% lower than 12 months ago when the 10 year was 1.90%

  57. Someone is selling shares of UEPEP for $102.50. That’s a yield of 4.45%.
    Redemption price is $102.47

  58. Here’s a fun one: BMYMP:
    -way past call at $50
    – Priced last at over $1,000
    – Convert at any time is pegged to common within reason
    – A bunch has probably been redeemed over the past
    – 4% to the company, 0.19% to the holder
    – Seems this was a preferred done right in the old days, but still lingers
    This market sorting is starting to feel like a game of solitaire where I’m counting the jewels on the king’s of diamonds cape instead of playing the game. I’m sitting in the perfect place too, a coffee shop in Raton NM that used to be the Silver Dollar Bar…silver dollars laid into the floor…when does Clint walk in?

    1. BMYMP is really an open ended, deep in the money call option on BMY. It will not behave like a preferred issue.

  59. I picked up some more UEPEP today for $102. There was a lot of selling today with the volume being much higher than normal. Sometimes these selling sprees tend to last multiple days so it’s possible the selling continues Monday. At $102, it’s a yield of 4.47%. Redemption is $102.47.

    1. Dick, I wasnt around yesterday so I had to check. The last traded purchase was for 2000 shares on the nose $102.10. So is that your personal definition of “picking up some more”. 😁.. Hey if you dont mind for the benefit of the illiquid haters here, could you give them a little advanced warning of what you are going to say. This will allow time for the Paxil to kick in and keep ‘em regular.

      1. I definitely wasn’t buying lots of 2,000. I’m just a guy with a job so I picked up another 200.

        I really appreciate the ability to get 4.47% under redemption price. I definitely don’t understand the hate. I think a lot of these people haven’t followed these issues closely enough to really understand them.

        I don’t see how they see utilities and think bad and see REITs and think good. For a good CPA, I think writing paid articles on Seeking Alpha is one of the worst ways to make extra money. Delivering food through Uber Eats would probably be more lucrative.

        1. Congrats on the buy, Dick.

          Purchasing under redemption price is great because you have a cap gain if called.

          I have owned UEPEP for about a year now, bought it at around $101.50.
          Only a small amount, unfortunately.

        2. Dick, Im dissapointed in you that wasnt your 2000 share block late day trade. You are “small ball” like me, ha. Ya I dont get the reit superiority thing. I own a few reits and certainly dont judge one over the other. But I owned ones that didnt drop like CDR preferreds into single digits, off 75% while these illiquid utes hung right around par if not over it during that panic. And you and I both know there were panic sells from that reit rout.
          Everyone can think anything is a great buy when everything is fine and dandy. But when s##t hits the fan people panic, and having a ballast that sits like the Rock of Gilbralter in the center of a storm suddenly becomes a welcoming friend.

      2. Me thinks some of those trading illiquids are on lithium. Or should be. Definitely not a place to learn to walk.

  60. I think it would be great if our discussion topics are focused on the topic so that everyone benefits for that topic. For example, this topic forum should be focused on $50+/share investments, investments that trade very little, and similar topics. Tim has posted a paragraph that defines each topic forum.

    When we start posting random thoughts, non topic ideas, etc, they need to be posted in the Sandbox section. I am reading posts from obsessive compulsive behaviors. I do understand that we all go through challenging things in our lives like divorce, etc, and things can be overwhelming and cause compulsive behaviors, stress, hate, fear, need of attention, and a full range of roller coaster reactions. That is what Dr’s. are for.

    I asked for this topic to be created, and I got it, and I feel that it is becoming cancerous. This site is for many interested parties, and not the needs of a 1 person to continue to post warnings about illiquids. I really don’t need to read 4 posts a day warning me about them. Let’s move along and get back to investment ideas please.

  61. Tim: I have been contacted my many investors on SA that apparently want me to post more on your board and continue great discussions on preferreds and common stocks. However, there is a very large concern about Pump and Dump issues going on here now, and I can certainly provide examples on the board. If time allows, I am respectfully requesting that a new topic of Pump and Dump thread be posted on your message board. It’s actually a very valid topic and may help to improve and clean up some of the issues on your valuable website. Thanks for your consideration.

    1. And just another note to investors that like illiquid securities: Generally speaking there are no issues with securities that don’t trade very often. They may be solid companies. Personally, I have a trade order on a security that trades about once a month and will sit back and be patient to see if my order will fill.

      However, it is something else to buy an issue, promote the thinly traded stock on four message boards, claim that I will “never sell” and then dump the issue on novice investors. And this is exactly what has happened here over the past couple of months. Wishing everyone here the best on their investments!

    2. Hi kaptain–just put a caution on the illiquids chat page–will consider the pump and dump page

  62. Reading the lower court opinion(if it upheld), those things should be trading at $.80, not $8.00 a share.
    Talk about a lottery ticket. The Supreme court could either make them worth 30-35 a share with the 10 years of missing dividends, or make them worthless if they uphold the Treasury’s Third agreement.
    IMHO, worthless is probably the way it will end up, but shorting them is ridiculously risky, as there is no telling when the decision would come down.

    1. Justin, could you be so kind as to specify which particular issue you are posting about?

      I tried scrolling up the thread to find out, but was not able to.

        1. Thanks! I have not looked at Fannie Mae for many years now, and at this time prefer to direct investment resources toward illiquids of the Grid universe.

    2. Yes, I agree this is just lotto gambling as the evidence Justin just mentioned seems to not be positive. There is an entire subset of speculators playing these various issues all the time and posting thoughts on SA. Remember these or most anyways (havent checked) are non cum so there are no accrued dividends. Of course the stock would pop big time if they were reinstated though. These are out of my investing relm.

      1. Yes. both say non-cumulative in their description, so no back dividends, so yes, probably 20-25 a share. (they are fixed to float)
        I should dig up a prospectus and see if there are any other surprises.

  63. Randy, I just noticed I didnt fully answer your question yesterday. A. Schulman was bought and folded into some of LYBs subsidiaries and has been consolidated into one subsidiary now. Its now called LyondellBasell Advanced Polymers, INC. I guess you have to give LYB credit for having enough energy to notify OTC of the name change earlier in the year. Ticker never changed but name of the preferred did though.

  64. Wow, Dick, 900 shares today traded. That is a big dump, for that issue. Yes I like that. Actually AILIM I dont think I have ever snagged that issue before. Any time I have made a play for it, it was dead with no interested seller. It is actually one of the smaller floats AI has in its preferred series. I was out golfing today and didnt get to follow market today.

    1. I thought you weren’t allowed to say anything about golfing anymore, Grid… Shame on you…. 😉 😉

      1. Oops, But I actually played well today, ha… I was doing some old research and you will enjoy this being an old bond guy. An advertisement in a 1920 newspaper telling readers to contact ANY Central Maine Power employee about buying the 7% par Central Maine preferred at a price at $107.50 for a 6.5% “net”. Look at the huge ad on page 8 of this link (the last newspaper page) its hilarious…Want some preferred stock from the local ute? Why just get ahold of the janitor in the building he will set you right up! Ah, the good old days…

        1. I wonder how much of that $7.50 premium the lucky Central Maineiac got? And I thought today’s going issuance cost of around 3% was not justifiable……….

        2. There is a ton of info in that newspaper. They went through 90+ days lockdown on withdrawals from banks, etc.

          I also like the Castoria and the L.F. Atwoods medicines ads. They cured everything in the world. Just take 1 dose per day. Even cured acne, get the kids a good nice rest, so the parents can sleep. The Atwoods medicine was largely alcohol which knocked the kids out. But sure… it cured your liver problems too.

          1. Mr. C, Wasnt the “good old days” hilarious then? Heck I remember cures for baldness from that time period too. They must have lost the recipe somehow.
            2WR, I doubt Central Maine got it all. Remember the janitor who sold you the preferreds gets a commission cut, also. 🙂

  65. I’m not sure if anyone else here is following the PCG preferreds. Vlae Kershner has written some good articles about these on Seeking Alpha in the past. I messaged him to see if there were any announcements about the reinstatement of the preferred dividends. Here is his response:

    “There haven’t been any announcements. The next quarterly earnings report comes out Oct. 29 and the normal pay date would be Nov. 15, so I expect an announcement one way or the other at that time.”

    I happen to own a little PCG-D, which is redeemable for $26.75 (QOL has this wrong – see below). PCG-D has been trading around $25 as of late. I hope to hold at least through the date the dividends in arrears are paid.

    12. What are the call provisions for Pacific Gas and Electric Company preferred stock?
    There are eight issues of Pacific Gas and Electric Company preferred stock; three of the issues are non-redeemable (which means that they can never be called by the company), and five of the issues are redeemable. The redemption provisions of the five redeemable issues are shown below:

    Issue Description Redemption Provisions
    5% Redeemable First Preferred $26.75 after July 31, 1963
    5% Series A Redeemable First Preferred $26.75 after July 31, 1963
    4.80% Redeemable First Preferred $27.25 after January 31, 1965
    4.50% Redeemable First Preferred $26.00 after July 31, 1969
    4.36% Redeemable First Preferred $25.75 after October 31, 1975

    1. Dick, I will admit it, I am scared of them now. I noticed some news is saying they are already investigating PCG as being the cause of some of fires out there that is going on. I know there is a fire fund now, but fires and “CA Inverse Condemnation” scare my wallet.
      It may just be baseless fear on my part, but I think the preferreds are shaky B ratings already. I do trade them some, but I personally like to play them when CA is out of fire season.
      I wish they didnt have inverse condemnation and massive debt overhang wrapped around their necks. Because owning a 6% non callable basically at par from accrued dividends would be a gift from the heavens wouldnt it!

  66. Dogbite, you want some illiquid volume? There is one OTC issue that has traded less than 500 shares total in past 5 years combined. That is about as illiquid as one can get, ha!

  67. Hey Charles, I havent heard AMEX in a while, lol.. When I have researched old ute preferreds many were on like local exchanges such as Chicago or Boston. Heck even Hawaii had their own exchange back in the day.
    I saw an ad in a newspaper advertising a 8% $100 par Connecticut Light and Power preferred, with $120 redemption price. But unfortunately the ad was from the 1930s if memory serves, and of course the issue has been redeemed long ago.

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