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.

619 thoughts on “Illiquid Securities”

  1. Local website cult preferred stock TECTP just declared divi yesterday payable 2/4. I picked up a 100 more on scrap money at 10.56 yesterday (or day before cant remember) and they also declared a common stock divi, too. This is second consecutive quarter the private common has recieved divi so I assume things are going well besides the solid profitable earnings reported (who the hell knows, as no one but PendragonY can deep dive bank financials) in their SEC filings…

    On January 25, 2022, the Board of Directors of Tectonic Financial, Inc. (the “Company”) declared a quarterly cash dividend of $0.225 per share on the Company’s outstanding shares of 9.00% Fixed-to-Floating Rate Series B Noncumulative Perpetual Preferred Stock. The dividend is payable on February 15, 2022 to shareholders of record as of the close of business on February 4, 2022.

    On January 25, 2022, the Board of Directors of the Company declared a cash dividend of $0.0625 per share on the Company’s outstanding shares of common stock. The dividend is payable on February 15, 2022 to shareholders of record as of the close of business on February 4, 2022.

  2. Two EXTREMELY illiquid issues today stood out:

    VNORP, 6.5% coupon, $50 par, busted convertible, down 38.11 to 50.00 on 13 shares. That is a 43.2% drop

    BMYMP, 4.0% coupon, $50 par, strongly convertible into BMY common, down 794.00 to 1106.00 on a single share. That is a 41.8% drop.

    Third largest drop today was TELZ, down 6.0%, but it is NOT an illiquid. Traded 55,262 shares so it seems more like an honest market opinion compared to the first two.

    We have no positions in any account for these issues. We held TELZ in a few accounts but sold it a while back based on some conversations here on III.

    Median preferred lost -0.40%, so these were outliers. On prefs/babys/terms that traded today, 553 were down, 206 were up and 0 were unchanged.

    1. Just messed up the up/down stats for today:
      528 down
      179 up
      27 unchanged

      Also this excludes any issues that closed @ <10.00

      My apologies for not editing the first post sooner.

      1. Why guess, can just check on quantum. Its a deep itm convertible so the liq pref doesn’t really matter

        1. I have never played with this late 1960s issued convertible largely because their guidelines state they can redeem it at $50 anytime. Now the issue has over the years been bled down to only 3-4k thousand shares (cant remember off top of head) so it doesnt trade much. Im sure loosely off current conversion value, but I never have tracked that down, though I never really tried either.
          d) Redemption. The Corporation at its option, at any time, or from time to time, on or after December 23, 1972 (except as otherwise provided in paragraph (b) above), may redeem all or any of the shares of such series at the following applicable prices:

          If Redeemed During
          the 12-Month Period
          Beginning December 23,
          Per Share
          Redemption Price
          1972 $ 53.00
          1973 $ 52.50
          1974 $ 52.00
          1975 $ 51.50
          1976 $ 51.00
          1977 $ 50.50
          1978 and thereafter $ 50.00
          together in each case with an amount equal to any dividends accrued and unpaid thereon to the date of redemption.
          Read Appendix A in link if you want more dynamic intellectual stimulation.
          https://www.sec.gov/Archives/edgar/data/14272/000119312511040120/dex3b.htm

            1. They had a pretty powerful provison of the preferred (being its only one) they needed knocked out in 2015. They didnt want these shareholders holding up anything of importance.

              SECOND REMINDER

              April 20, 2015

              Dear Preferred Stockholder,

              You should have received proxy materials in connection with Bristol-Myers Squibb Company’s Annual Meeting of Stockholders to be held on Tuesday, May 5, 2015. According to our records, your vote has not yet been received. Your vote is extremely important, particularly for Proposal 5 to amend our Amended and Restated Certificate of Incorporation to remove the supermajority voting provisions applicable to Preferred Stockholders. At last year’s annual meeting, a stockholder proposal requesting the elimination of all supermajority voting provisions in our Amended and Restated Certificate of Incorporation received support from a majority of shares cast. The Board, in its continuing review of corporate governance best practices and after taking into account the…….
              BMY does their best to hide info on this. Typically any convertible I can find the conversion multiple in yearly filings. Not with these guys. They list shares outstanding and that is it. I had to dig out Appendix A just to find anything.

  3. Is UEPEN on the forbidden list? I own a small number of shares via fidelity in my 401k account. I am not looking to add or sell at the moment, but I was just wondering if it had been blacklisted in an effort to protect me?

  4. New 52 week low for SLMNP @ 955.00, down 30.00 from previous close of 985.00 on 12/29/21. Only 15 shares traded @ 955, but there were two 876 share trades @ 997.5 and 995. It goes ex-dividend tomorrow 1/13 for the 15.00 dividend. Don’t know if any more shares are available @ 955 or not. It is one of the forbidden fruit SEC Rule15c2-11 issues, so it is not clear that mortals can buy it.

    We have a micro-micro-microscopic number of shares in one account and NO open orders in any account. We were NOT involved in today’s trades.

    1. Tex the 2nd,
      My 30 units of SLMNP took a big drop today. i dont belive Lyondell is at risk of defaulting again. Is this a sell or it is best to hold on to them and keep collecting the interest payment?

      1. It was only 14 shares sold. Some small holder decided to sell and probably put in a market order or kept lowering the price until they hit a bid. We cannot see what is going on but I have a feeling if there was a 500 shares available to buy at 1000 we would see a nice pop back up. The people who own this, I included, have come to the conclusion we will hold for a very long time. I don’t even look at it until it is payday every 3 months.

        LYB is a very profitable company.

      2. The drop is neither interest rate related or LYB related…. It’s strictly SEC Rule15c2-1 related where you’re allowed to sell it if you own it, but you can’t buy it… Buying is restricted severely to a limited group of “experts” who fully know that they have no competition from those who would willingly and knowledgeably be willing to buy sans SEC Rule15c2-1 so they take full advantage and rip the lungs out of anyone who feels compelled to sell.. So thanks again for the protection, SEC…

        1. As with KTBA, I say if you can find something else investment grade, non-callable, and yielding 7%, then sell. Until then, I’m holding. The current prices of KTBA and SLMNP established by the “experts” are just not reflective of their values.

  5. Grid and 2WR—thanks for your info on tectp. This preferred evidently was issued by a private company, which I think is why I was confused. There is really no info on Tectonic Financial. My question—how does one perform any due diligence?

      1. That reports mentions common shares—so they must be privately held and non traded?
        Weighted average common shares outstanding
        7,021,953

        1. Yes, or at least shares traded are through private transactions. Some of my local banks have common shares, but arent allowed to be traded, and can be tendered back to bank at specific times, limits, and procedures.

    1. Randy, if you are a drive by reader, here is the overview from 2WR’s link.
      About Us
      Full Service
      Financial Services
      Banking/trust
      Wealth management
      Private equity
      Insurance

      Serving Wide
      Array of Clients
      High net worth individuals
      Small businesses
      Institutions
      Registered investment advisers
      National
      Footprint
      Clients in all 50 states,
      with a concentration
      on fast-growing
      Texas markets
      Proprietary
      Software Platform
      Proprietary technology to onboard and manage loans, open operating bank accounts and 401(k) plans​
      Tectonic Financial is a financial holding company that offers several intertwined verticals: banking, trust, investment advisory, securities brokerage and insurance services to small businesses, 401k/defined benefit plans, institutions and high net worth individuals in all 50 states.

      The largest asset, T Bank (a Dallas, Texas headquartered community bank), was ranked among the Top 200 Banks in the United States in Lending Tree’s 2020 annual analysis and is an SBA Preferred Lender. The Bank’s loan portfolio has specialties in SBA originations and medical practices. The Bank contains a trust department, which has medical professionals’ retirement plans as its core.

      Tectonic Financial also owns a registered investment advisor, Tectonic Advisors, which provides money management for many of the medical professionals whose 401(k)s and similar vehicles are trusteed by the Bank. In addition, a dually licensed securities firm, Sanders Morris Harris, generates private investments for clients and provides institutional execution and deposits for the Bank. Smaller parts of the holding company are successful third-party administration and insurance practices.

      We believe that we can leverage this combination of financial services and our integrated next generation financial services platform to benefit those we serve: our clients, our employees, our communities and our shareholders.

      1. Speaking of “high net worth individuals”… I wonder if any of their clients can trade on the expert market scooping up some pretty impressive buys the last few months.

  6. Three illiquid, $50 par, Connecticut Light issues had >5% selloffs today on microscropic volume. Do not know if there are any more shares available at these prices or not. Two of the three made 52 week lows:

    CNLPM 4.12% coupon, @47.00 down 5.5% on 200 shares
    CNLTL 3.80% coupon, @ 45.00, down 10.0% on 111 shares
    CNLTP 4.40% coupon, @49.88, down 9.3% on 100 shares

    We have no positions or orders for any of these in any account.

    1. Now ills have some advantages that are not always apparent at first glance as Grid would say but I would be hesitant to buy them even at those prices. CNLTL @45 is still only a 4.2% yield with some nice call protection upside. Paying 45 today might sell for 40 18 months from now. I would personally want at least 4.65% which means I would bid 41 today. Now I realize it is an ute. IG. Stable business but one should be able to do better then that in this current env. I would rather just by NSARO at 103 and take my risk of losing .20 cents per share if called. At least I get 4.65% today.

        1. Grid, I thought these investment grade illiquid utilities were your bread an butter…what happened?

          1. Citadel, I do have a lot of illiquids, just not the traditional IG ute perpetuals. I have a nice chunk in various Indianapolis Power various issues and that is about it outside of untradeable BANGN. The low 4% perpetual stigma is just too risky for me right now.
            Have more illiquid stuff like TECTP, KTH, WTREP, CRLKP types now, along with various term dated and adjustable stuff. But if I can get a sell off, I will be back those!

    2. That is the life of an illiquid and why they make good trades on good entry and lucky exits. Take CNLTP the price drop was distorted as it really only returned to previous range considering it just went exD a short while ago.
      CNLTP
      TRADE DATA
      DATE TIMESTAMP PRICE $ CHANGE VOLUME
      01/10/2022 12:58:21
      49.88
      -5.12 100
      12/31/2021 12:08:35
      55.00
      -1.07 257
      12/31/2021 12:08:31
      56.07
      5.62 100
      12/31/2021 12:08:17
      50.45
      0.45 100
      12/16/2021 11:49:25
      50.00
      -0.25 100

  7. A few shares of NMK-B offered for sale @ 99.00, down from 102.00. 3.6% coupon UTE immediately callable @ 104.85.

    We have NO positions in any account.

  8. So many good preferreds here that the government is protecting me from buying. Sigh.

    Who exactly is deemed to be expert enough to buy these and how much did they pay the government to make them off limits to commoners like me?

  9. Anyone buy into the KTH mini sell off on huge volume dump of 10k today? I missed the 31.20s bottom but got in at the $31.45 and under range. That is about 4.5% YTM, so not earth shattering, but I have to keep a certain amount of IG utes and this having the 2028 backstop at least mitigates the perpetual infinity problem. I dont know if any more are available at that price range or not.
    With rates creeping up it would be a tough one to chase higher. Its been a historical fun one though for me. Just last month I bought and flipped for a buck gain a share holding just a few days. I was on a little getaway with an old friend and remember buying them at a mall and selling them in a bar, ha.

          1. Study hard! I remember many years ago when I first traded it, I was studying deep into PECO’s public service commission reports to make sure it was ring fenced from then dirtbag parent Exelon. I wanted nothing to do with that company. Probably isnt so bad now, but PECO is ring fenced so it doesnt matter. If memory serves you have to deal a bit with OID phantom tax if held in tax free account. I have always held in tax free, but a few people told they got clipped a small amount in taxable.

          2. 2WR, By the way, in case you are curious, as I think you loaded your IBond account with me in September, they are now showing one months interest credited to your Ibonds (last 3 months are withheld of course).

            1. Thanks, Grid – No real reason to even really look at Ibonds at Treasurydirect until re-upping on this year’s max later this month.

    1. “With rates creeping up it would be a tough one to chase higher”

      Not sure about that if the new OXLC 2027 baby bond prices at 5-5.25% lol. I wasn’t as quick on the draw as you, but cleared out what was remaining at ~ $31.50

      1. I personally agree with you, 730, just trying to maintain some caution in post. Im a ute preferred honk so I dont need pumped up on them, ha. Also, I dont mind having a high/low barbell in income issues holding this type of issue and the SB type preferreds on the other end. My average total income yield is around mid 6%. But, out of my 30 or so issues, not one of them is a 6% current yield issue. So I definitely work on both ends.
        If you got the $31.50 ones, you may have cleaned up the rest. As I am pretty sure the ask jumped back to $32 before market closed did it not?

        1. Yes, after I cleared out the seller at $31.50 the ask was $32.10. But I’m trying for a quick flip Gridbird special on a few of my shares @ $32.00 lol.

          1. I will wait for you first to clear. Its easier to sell higher when liquidity dries up, so we dont want to compete, ha!

      1. Alas…even Schwab now rejects any orders.

        I suspect this is to some extent tax loss selling…a security that swoons in the last month in a very strong market. Expect a bounce in January…buy how to buy??

        1. I thought there was some “trick” to buy there. Like you had to walk up your bid until you hit. Something like that. Even that is gone?

          1. Yes, that used to work. Now an order is immediately rejected.

            “Your order cannot be accepted. This security KTBA is accepting closing transactions only.”

            Of course this is not true, as someone…a so called “expert” is buying….

        2. Even if you could place an order at a particular broker, it doesn’t mean you’ll ever get a fill.

          The bigger question is: do you really want to buy it just because it’s cheap? What if it becomes unsellable in the future? You need 15 years of interest just to get your $25 back. And then there will still be 59 years more to maturity!

          I appreciate that it is a theoretical steal if you could buy it at $25, but if it’s not going to mature during my lifetime, I’m not sure the payment stream itself is worth it. But hey, it’s all hypothetical because I’m sure I couldn’t buy it even if I wanted to.

          1. Karma…you are assuming the SEC problem will not be solved. Or perhaps the trust will be dissolved and the underlying bonds distributed. Or ATT might decide to buy for their own account.

              1. Unsellable is the only issue we have not had to worry about so why bring that up? That is the one thing we can all currently do. At a certain stage hypotheticals can be dismissed because the reality is wr can sell today and tomorrow. A rule change won’t take place instantly.

      1. Tim, Those are old abandoned last day it traded (pre SEC regs) bid and asks. Many brokerages appear to just left them frozen in time with no relevance.

  10. OCESP paid my wife and I our dividends on 12/15/2021. Ally, in two different accounts, pulled the dividends back on 12/28/2021. Now based on past reading here at this fine website I knew to keep an eye on this situation as this is not the first time it has happened to others at different brokerages.

    I called Ally to open a ticket. Ally did their normal dance of putting me on hold and explaining that OCESP does not pay a regular dividend. I expected them to say that and I am not surprised. Just pop in “”ocesp” dividend” into google and it quotes the wall st journal’s fabulous useless info of: “OCESP is not currently paying a regular dividend.”

    I went on to explain the conversation that took place from other users from this website. Obscure preferred, paying faithfully for decades, my wife and I might be your only account holders who own it, Ocean Spray sends the money, yada yada.

    I just wanted to let others know to keep an eye on their holdings if they own it. You might have to open a ticket to get the money back. Always check your div/interest! This site has taught me that. Last time it was OXLCL only giving me 1/3 the amount because they thought it was monthly instead of quarterly.

    1. I hold my OCESP at Schwab. The 6/15/21 dividend was not credited to my account until 7/15/21 after going through “the same type of dance” fc. So this time I am simply going to wait until 1/15/22 before I contact them and waste any of my time.

    2. I got mine at TDA on the 15th. Today they took it away. Same thing happened last time, but I did end up getting it back, so I suspect the same will happen this time too…..?

    3. Ally paid out OCESP a few business days ago last week. I imagine the whole process will repeat like this again and again but in the end you get your dividend. Just wanted to post this to tell the end of the story.

  11. “Big” day in illiquids! MSEXP , Middlesex Water, traded a whopping ONE share @ 106, down 27% from the last trade of 5 shares on 9/22/20, or 15 months ago. Gotta be the featured Poster Child for 2021 Illiquids.

    FIISO, Financial Institutions, traded 82 shares, down 32% @ 144.88. Last trade was ONE share on 11/29/21 @ 177.00 Only had to wait one month between trades.

    Not exactly candidates for a quick flip with either of these issues.

    We have never owned them or had any orders for either in any account, nor do we plan to add any orders, till death does us part. . .

    1. 144.88 for FIISO was my bid that sat there for many many weeks. I did not get a single share. Whoever sold it had their order go to someone else and of course it was snapped up. Annoying but what can I do? I was so ticked I canceled my GTC order and now my 5 shares of FIISO sit there mocking me. Whoever sold it priced 82 shares at exactly what I was offering I reckon. OTC is truly opaque and unfair at times but I have to admit it has gone my way a few times as well.

      I also bought that 1 share for 177 in an attempt to shake some apples out of the tree. I was going to post about it but felt too frustrated. lol

      I had nothing to do with MSEXP…

      1. fc, I have 99 shares of FIISO that I’m looking to offload. Let me know if you are interested in them. I wasn’t the one you shook the tree on, lol.

        1. I would be interested in them between 142-145 per share. My goal was to attempt to get them at a 6% yield but that does not seem doable over the last months. So I raised my bid so the yield was a touch below 6%. It almost worked on that last 82 shares.

          One issue I have is that ally does not allow greater then 10K purchases of OTC securities so I always have to place two bids of 50 shares each to show up on anyone’s radar. That could cause a problem?

          Either way.. I would place a bid for that amount and you can sell anytime you want. If I get them.. I get them. If not.. we tried. What broker do you use?

          Ugh. Ally wont allow me to place a bid at 145.10 to beat the other person. It is like I have to wait until someone has an active ask above that. I get this message.

          “The limit price you have entered is too aggressive either buying at a limit above the current Ask, or selling at a limit below the current Bid. Please adjust your price based on the current quote.”

          So it is like you would have to put an ask out of 177… get it active.. and then I put my bid. Or we wait for someone else. Getting annoyingly complex.

          1. Thanks for replying so soon. Unfortunately not looking to sell for that low of a price. Can certainly understand you wanting to get it mid 140’s. Weird about your OTC limits. Haven’t experienced that myself.

            1. I don’t blame you for wanting to hold them. If I had to pay a price which gives a 5.3-5.5% yield there is so many other options to explore. I want a “bargain” of course. But go ahead and put them out for bid and tell me your price and maybe I will snap them up 🙂

              Ally is like a broker on training wheels. I am used to them since I am an old tradeking customer and Ally bought them out to become a broker. My old account is still grandfathered in many positive ways but some odd OTC rules did get pushed over from the new Ally interface which is a negative. Either way the work around of multiple orders does result in showing up in Level II so I can live with it. Having a bid for OTC securities is never a guarantee to get the shares as I have learned.

          2. FC, I have dealt with Ally before, and presently liquidated to close them out. That being said those sub 100 share orders are more likely to get jumped on OTC unless it shows the odd lot ask (a few do). Or this has been my experience anyways. What you do is call the order in and have the rep put a 100 share order in. They can override that limit. I had to do that on more than one occasion with them..

            1. Grid, thanks for letting me know. As always it depends on what person you get on the phone I suppose. I have tried to call in and was told no in the past. I guess I should try again. Take OCESP when it dropped. I was like hurry.. 1000 shares at 14! stat! They said no.. I was like ok.. 500 and then another 500 for goodness sakes. Then hang up and call back in for a different account where I had to do the same thing all over again with a different phone support person because my wife just happened to walk in the door at the right time.

              I have been tempted to move to a diff broker a few times now. I hate the idea of having so many accounts. I already have 3-4 as it is for different things.

              1. FC, The rep needs to contact “boss” to approve it. They always did for me. If they are just saying that is the limit maybe these are rookies and unaware they can get approval.
                They are just so damn dumb, I threw in the towel with them. Now that new gray market IPOs are getting hard to get in on, my need for this brokerage went to zero. The last straw was when I was trying to sell an issue and it would cancel. They said it was market maker. I said that is wrong, as I have it in other accounts and could put sell orders out. He didnt believe me so I made him watch the screen and I would tell him the price I was going to post and then I did. I did it a couple different times to prove it. So he got on their incompetent tech staff and they fixed it that day.

  12. Yesterday, I bought 200 IPWLK at $101. If a lasts a year, my yield to call would be about 4.6%. At 2 years, it’s a little over 5%. I’ll take my chances.

  13. CNLHP buyable at par of 50. 4.5% IG.

    Who here is upping their bid by a penny with me? 😛 I want a lowball end of day dump. I already own some of this so I won’t chase very hard.

    1. Thanks fc for the heads up. Picked up a couple hundred @ 50 which is at the low end of it’s multi-year chart. This suits my goal of having a largely “sock drawer” portfolio. Along with 10 -15% riskier high yield issues and trading I shoot for a 7% annual return. This has been a good year as I’m up 9.3%. I try not to compare to the market at its depressing. I’m sure others here have done much better this year as I’ve made a couple somewhat costly boo boos. That said, can’t complain too much since my retirement budget is only 6%.

    2. IPWLK dropped a buck and a half today? I know it went ex, but is AES calling this baby home?

      1. Grid posted some info that gives an impression that over the next two years they could be called. I cannot seem to find it. Nothing solid but it seemed like a “clue”.

  14. can’t sell KTBA in schwab – my sell orders are canceled seconds after being accepted. Called them and they are “inquiring”….

    1. @ dd
      I have no problem entering a sell at Schwab. I entered an order to sell at 31 and it it is still there 5 minutes later.

      Of course, I’m not selling at what pass for current prices….

      1. Interesting, RetiredBroker, lack of consistency in their ops?

        This is what they wrote to me:
        “KTBA is an expert market only security. Sells must be entered through a rep like myself and only in a certain way.”

        Needs to be “Not Held” and you have to answer 3 questions.

        I was trying to change an old order, not placing a new one.
        Can you change your order?

        1. Strange indeed dd.

          Perhaps it has something to do with your “risk tolerance”? Brokers have to ask such questions on account opening. Maybe Schwab is “protecting” you?
          FWIW, my sell order is still there. I have had Schwab cancel buy orders on KTBA (seemingly for no reason…some orders stay put and some have even executed) but never a problem with a sell order.

          1. I like their “protection” concerns….

            BTW: schwab has no bid and ask for KTBA (and same in M.E.), while in TD they have ask at $31.10, yet you get no execution…. and last trade listed is $27.05.

            Maybe we simply have to forget these illiquids, enjoy the divs, and leave the shares to our grandchildren

            1. DD, KTBA is a total market distortion caused by SEC and OTC. KTBA is simply the 2095 7% Bell South bond (assumed by ATT of course). This actual bond also trades on the bond market. Its last trade 2 days ago was 155. It is trading 55% over par! KTBA is trading what 8% over par? Its the same thing. Of course its value that cant be unlocked at this time and maybe never, but if they changed the rules it would. I wouldnt try to dump it now, just keep it as an annuity and assign any value you want to it. 🙂 Here is the KTBA bond in true bond trading pricing.
              http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C32618&symbol=T3668086

              1. Grid,
                I like the idea of considering it as an annuity (forever?), and simply do NOT look at the quoted price. In fact, in my spesaheet I have separated all the illiquids so that I compute my account performance WITHOUT them.

                This raises the converse question: IF you find a broker that would accept buy orders and you have more $ to place as annuities, isn’t KTBA at around $27 a great deal?

                1. Is there a future for KTBA?
                  To put its terms in perspective. It matures in 74 years.
                  going backwards in time 74 years was 1947, which is about the same amount of time before area codes were introduced (8 years) as the birthdate of someone who would be retiring on the date the bond matures in 2095.

                2. DD, Justin brings up a good point assuming you want residual value for whomever you leave it too. I think it can be treated like an annuity, but not bought in a manner annuities can be, because of singular company concentration risk.
                  I own a couple of “annuities” in BANGN and WTREP. Im personally not worried about them. You almost have to assume its a private issue untradeable and if you want to stick heirs with it…Though personally there appears to be a market with KTBA at the present fleecing level it is at, so being “stuck” with it isnt likely.

                  1. Big difference. WTREP is callable. BANGN is not .
                    There are only two types of investors that should buy these things.
                    Insurance companies and dynasty trusts because they can collect the income in perpetuity and won’t be fazed by buying something that will be around like those hundred year old railroad issues and 60 year old Ocean Spray preferreds.

                    1. Yes, but near term its irrelevant because the ability to sell now is out of your hands, so it doesnt matter if its callable or not since you cant do anything about it once it went private. So this is why I percieve as the same. However it does have a 2034 owner optional redemption which I hope to be alive still. BANGN, well there is a 3rd type…Me… I dont care, I own it and wont sell it anyways. 🙂

                  2. If brokerages are not allowing to place buy orders, who am I going to sell to?
                    Who is allowed to buy?

                    And regarding “perpetual annuities”, these would be fixed annuities, meaning that with time, the fixed income you r receiving is worth less and less — not a great gift to heirs…

                    1. You can enter orders to close open positions. The designated “experts” can buy it from you in the so-called expert market.
                      I have a large (for me) position in KTBA. My cost is ~$30.50. I would not consider selling it for $27. In fact, if I were offered $30.50, I would not take it in the present market conditions. I am getting 5.7% yield on my cost (nearly 6.5% on the present $27 price). Considering that KTBA is not callable, you cannot find anything now of comparable investment grade that gives you that kind of return. As Grid correctly notes, the underlying security trades for an equivalent price of $38.75. There is a serious disconnect here between the value of KTBA and its price in the expert market. I’m content to collect the interest until conditions change.

                    2. The greatest gift is probably not being around when your kids say that you could have left them 4.8 mil, but you instead gave them only 4.2 because of some annuities you were invested in.

                    3. Mr. Conservative,
                      I like your approach!
                      In my case they would say in addition to “only 4.2M because of some annuities you were invested in”, they would say: “with a stupid annuity that can’t be sold and pays only $1.75 per unit per year, which by then due to inflation it may be equivalent to $0.45 per unit per year”.

                      I guess the best, in order to avoid sourness, is to donate all the remaining KTBAs to some non-profit, and thus they will only say: “the old man left me 4.1M , even after his philantropy!!!!”

              2. If I owned enough KTBA, I would be tempted to file a class action lawsuit to force Citigroup to cause the termination of the trust under clause iii.

                TERMINATION OF THE TRUST

                The Trust shall terminate upon (i) the payment in full at maturity, (ii)
                the distribution of the proceeds received upon a recovery on the Underlying Debentures (after deducting the costs incurred in connection therewith) after a Payment Default or an Acceleration thereof (or other default with respect to the Underlying Debentures) or (iii) the distribution in kind of the Underlying Debentures upon the tender by an affiliate of the Depositor of 100% of the Certificates in exchange for 100% of the Underlying Debentures.

                1. Justin, nothing you copied implies any cause for termination of the trust. Either way, the prospectuses always state that there may not be a public market for the securities, so you’d be out of luck just based on that.

                  1. I should be clearer on why. It isn’t that they aren’t making a market, it is the reason why it it moved to the expert market, namely, because the trustee hasn’t complied with the OTC Market rules regarding SEC disclosure because the underlying issuer is compliant with their SEC filings, and the trustee has a fiduciary responsibility to the beneficial owners and file with OTC Markets all AT&T’s (the issuer, now, as successor to Bellsouth) SEC filings and that not doing so is breaching their duty to the certificate holders.
                    The other problem is that the contract is one sided on the terms in how it treats the beneficial owners because it grants them no powers, but they need at least limited powers to do things like terminate the trust if the trust continuation is not in the beneficial owners’ best interest.
                    So the suit asks for two things:
                    1. Either the trustee can start filing with OTC markets the SEC filings, or 2. the court can order the affiliate to terminate the trust and distribute the underlying bonds to the certificate holders.

                    1. I should add, this is the only security that has this problem. All the other structured products that landed on the expert market had worthless JCPenney bonds underneath.
                      (for some reason Ladenburg Thallman’s securities are classified as structured products)
                      A supporting argument is there are a lot of of other structured products created by this same issuer that still trade on the NYSE, so the issuer singling this one out for the expert market while leaving the other certificate holders unaffected is a showing of bad faith.

                    2. “Terminate the trust and distribute the underlying bonds to the certificate holders…”

                      Yes! Wouldn’t that be grand?

                    3. Justin, the entire thing is a farce. Have you ever read an old filing of KTBA when it was on an exchange? All it said was to go to ATT financials to find them. So it never disclosed anything when they filed because there was nothing to disclose.

                    4. And they stopped doing even those bare minimum filings. ..
                      but they are current on the one linked to Peco Energy.

                2. There appears to be a reason….Once it was no longer Bell South, and now ATT from acquisition, this led to delistment.
                  As a result of such termination of reporting by BellSouth Corporation and BellSouth Telecommunications, Inc., it will not be possible to continue the listing of the CorTS Certificates identified above on the Exchange.

                  The Exchange also notifies the Securities and Exchange Commission that as a result of the above indicated conditions this security was suspended from trading on February 13, 2007.

                  …..PECO still reports earnings through parent. So this is probably why its so.

  15. UEPEP (part of Ameren) ask at 101. Redemption at 102.47. 4.56% coupon at 100 par. Could tank if rates rise but an IG issue with little call risk.

    1. Sold my last shares of UEPEP at 102 recently on the third of fourth try. Not really worth the effort for such meager returns (imo). The proceeds will likely go into i-bonds, or something else a bit more liquid earning a better dividend.

  16. WTREP Groupies…. A.M. Best which is a respected insurance credit rating agency, put this out after Watford acquisition was completed. Preferred is a solid bb rating.
    AM Best has removed from under review with negative implications and affirmed the Long-Term ICR of “bbb-” (Good) and the Long-Term Issue Credit Rating of “bb” (Fair) on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of Watford Holdings Ltd. (Watford) (Bermuda), the group’s ultimate holding company. The outlook assigned to these Credit Ratings (ratings) is stable.
    The ratings reflect Watford’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
    https://news.ambest.com/newscontent.aspx?refnum=236848&altsrc=23

    1. Grid—is there any gossip or any rumors about the intentions of the three firms owning this company? Are they raising funds to call the prf stock? Just ignoring it for the moment because of other more important matters? I guess we’ll wake up one morning to find it has been called. In the meantime, let’s just enjoy the nice dividend checks.

      1. Randy, dont sell it as we are about to get another dividend! Wait you cant, never mind, ha. No, they mentioned they were looking at financing this and redeeming but that was at beginning of going private.
        $52 million is a drop in the bucket, so I dont know why they redeemed $200 million of it several years ago and left $50 outstanding and then gave it a trading ticker at that point (it originally was a private insider issued preferred).
        So who knows, if its still outstanding come summer, I guess they just want to strand it and worry about overpaying on yield.

  17. I found this newsletter by accident. I don’t pay for newsletters. I have no idea if their track record is any good.

    There was some free stuff though that I did read that was interesting. They seemed to have a pretty simple model for the micro cap banks they cover.

    http://www.oddballstocks.com/

      1. What would you call this?

        “In the previous Issue, we ran a feature called “Small Bank Snapshot,” wherein we presented what wethought were two small bank ponds that were worth fishing in – a “cheap” one with low price totangible book value and also a “quality” one with higher return on equity banks at reasonable prices.”

        I guess we will agree to disagree on this one. I was trying to make it clear there is no “vouch” from me is all. I did find one little bank that looked good to me, but the div was 4% and to low for me.

        I know that newsletters think they are clever, but the SEC was crying about freakin’ Wall St Bets chat rooms but no recommendations there! Even that Roaring Kitty fool was questioned.

        Anybody that tries to induce me to do or believe what they want me to do especially if I am paying said person to do so to me is a recommendation.

  18. Just checking my Schwab acct, and a sudden boost in total value from our old friend OCESP coming back to life. Apparently 1500 shares have traded today, last price 16.85 and ask is 17.00. Just under a 6% yield at those prices..Think it just went Ex-Div …
    Schwab only place I know of that can be traded, but maybe others..

  19. Someone can scoop up 100 shares of CNLHP for 50.70 if they want. That is about 4.47% and call price is 50.50 so hardly a concern. Just does not interest me to buy more even though a bit below my own cost basis. I require more yield now days!

      1. Yea. I don’t understand who is buying that along with CNTHP. 10 dollar call risk on the last purchase. I guess they like to live dangerously.

        CNLHP went unsold. How things have changed. I reckon that would have been bought up quite fast just 6 months ago.

    1. I dont like these low yielders now necessarily (dont know if I like anything really for that matter, ha), but I have to own some as stabilizers and trade some bouncers. For example I snagged a full position for me of noncallable SOCGP today and yesterday at 31.50-80. It finished with a trade over $33 today. I will play bouncers such as these. 4.75% non callable ute aint anything to beat chest over but I was buying way below 52 week lows.

  20. SEC jerks strike again. I see AWRY was forced to be sold at $50 today or a 12% yield. This being a railroad issue that has paid consistently since the 1890s. The $50 price today was lower than its been since at least since 2003.

    1. I gave up looking at them it is so frustrating. I can picture brokers basically buying them for themselves. Not clients.

      1. It’s not the brokers buying for themselves, is it? Isn’t it more likely the “experts” who have been created to protect us from ourselves while giving us an opportunity to get out of the mistakes we have made by previously having been stupid enough to buy highly risky securities such as AWRY at terribly inflated prices obviously not reflective of the risks involved? Thank you, oh great experts, for saving me by ripping me off as you have been given the right to do by our heady protectors…….

      1. It has no prospectus because its not a preferred. But it basically is because its a “guaranteed stock”. See railroads issued these back in the 1800s. And there were hundreds and hundreds of rail companies back in the day. This one avoided bankruptcy that many did and kept getting bought out taken over by other rail entities.
        CSX is obligator of payment and owns the majority of the common float. Its buried deep inside the bowels of CSX financials. They eliminated the sham company in the 1990s and just folded it into CSX at that time. It originated in the late 1800’s and has dutifully paid ever since.

        1. Grid, what dividend does it pay and how frequently? I see you refer above to a 12% yield at $50, so that implies something like an annual dividend of $6.00/share?

            1. For AWAY, the current bid / ask on TD Ameritrade is $108 / $121
              With a $6 annual payment, the yield is ~ 6%

              1. Those are dead stale bids, back when it could still trade and have been there ever since. Its an expert market issue now. Those bids were showing when over a hundred shares traded at last week at $50.

  21. Inspired by Grid for another round of: “Stump the Chumps.” (Comes from the NPR program CarTalk ICYDK)

    1) Illiquid but trades most days
    2) Past its first call date, so immediately callable
    3) Current yield ridiculously low
    4) If called you will lose more than 12 years of dividends and suffer a >25% capital loss
    5) I don’t recall this issue ever being discussed on III
    6) Maybe I am missing something, but I do NOT see any reason to own this under any circumstances. In lieu of that I would be a seller today if I held it.

    Name that ticker . . .

    1. No idea but I love the reference back to CarTalk. What an excellent show that was. RIP Tom Magliozzi.

      1. Grid, lets add that it has an unusual, non-standard par value and leave it at that.

        Bur, many years ago I was at Harvard for an event and decided to walk the two miles over to the “Good News” garage. Lo and behold, Ray was there covered in grease working on a car. Got to talk to him for a few minutes. Came across exactly the same in person as on the radio. Could not have been nicer, but he had to get back to work and finish up a car before the end of the day. I was a little surprised because I thought he might have retired to being a king of the operation, but he was working just like the other mechanics.

        The garage is still open for business:
        https://goodnewsgaragecambridge.com/

        1. Well that leaves out KSU-. It is trading around $37, but it is about to be redeemed at $37 from a merger. And that isnt non standard anyways. And it definitely isnt an old convertible that has changed its conversion number and you werent aware of that?

            1. I get a one off crazy trade well above par, but not from a daily trader. So you will stump me here if that is what this issue is doing.

              1. Definitely NOT an one off trade like I report on from time to time. Trading at these crazy levels, day in and day out. Easy to understand how a crazy one-off mini flash crash can have strange returns, but even stranger to see it as regular trades. . .

                I would NOT have posted it like this if it was a on-off . . .

                Another clue: trades on NASDAQ, not a pink-sheet “no info” issue.

                  1. Grid, it is not the weed REIT IIPR-A that I highlighted a few months ago. Maybe some of the holders have been hanging around here and sold their holdings since it has come down a bit. It is still showing ~ a $4.37 loss if it is called on its first call date. This new issue which I have never mentioned before makes IIPR-A seem like a “value, deep discount” preferred!

    2. I feel like you might be missing something. It is convertible or what not. To use some basic math a 100 par with a 3% yield… that can cause such a loss would trade for 136 and if bought yields 2.2%. After all, 12 x 3 = 36 bucks.

      With a 4% yield on 100… it would sell for 148. etc.. and etc…

      It almost always ends up being the ones which are uncallable or convertible.

      Otherwise I am stumped. UEPCO comes close in a way for it’s last trade but definitely does not trade often.

      1. FC, like you, I assumed this had to be a convertible, but it is NOT which makes the pricing even more bizarre. . .

    3. Willamette Valley Vineyards Series A Cumulative Redeemable Preferred Stock WVVIP

      Par= 4.15
      Coupon yield= 5.30%, single payment in December every year @ 0.22
      Closed today (11/29) @ 7.00 for a yield of 3.14%
      First call date= 6/1/21
      Pays a 3% premium if called
      Assume you receive 1.03*4.15= 4.2745+ .22 dividend= ~4.50 if called today
      Would lose 7.00-4.50= 2.50 or 11.36 years of dividends and suffer a 36% loss

      Prospectus:
      https://www.sec.gov/Archives/edgar/data/838875/000119983516000654/wvvi_424b2-16772.htm

      Certainly do not understand the pricing of this one. . .

      Obviously we do NOT hold this in any account nor have any open orders. Plus we have NEVER had any open orders. Matter of fact, we didn’t really know this existed until recently because we usually exclude all issues that close under $10.00 from all of our analysis. We just happened to be looking at all data without the $10 limit and noticed this odd Oregon duck. Certainly high up on the strangeness list, kind of like the marijuana REIT IIPR-A offering.

      1. Ok. I would have never guessed that one unless I did a lot of work with a very very good list of preferred shares and some excel calcs. Never heard of it.

      2. You got me there, Tex. I dont see anything to contradict what you stated. If there is a reason why it is so, its beyond me.

      3. There is one thing in the prospectus that stands out as a potential reason for the pricing:
        “Special Benefits for Holders of Series A Redeemable Preferred Stock. Each holder of Series A Redeemable Preferred Stock will be entitled to receive the following additional benefits:
        · priority wine allocations from the two new estate vineyards funded by this offering beginning with the 2017 release;
        · rights to purchase a portion of the Founders’ Block Pinot Noir beginning with the 2018 release;
        · a 25% discount on wine purchases made directly from the winery;
        · priority access to winery suite reservations;
        · reports on winery developments seeking shareholder feedback and involvement;
        · priority access to appointment only vineyard tasting experiences; and
        · certain other items of nominal value.”

        It is not hard to imagine a wine lover willing to fork over a few dollars to get such benefits. However, the prospectus is clear that these benefits are “…not associated with the number of shares of Series A Redeemable Preferred Stock one owns.” So it seems that if you own 1 share, you have just as much right to the benefits as someone owning 1,000 shares. So for those who like to look at such things, is there any evidence of a large number of 1 share purchases? If so, that can’t really explain the $3 premium over par, so maybe there is something else going on.

        I have a feeling at least one person on this site is going to buy 1 share soon and find out more.

        1. I saw that as well but I felt since it did not mention how many shares you needed to buy as you said it could not account for such a long standing high level of purchasing. Not like it was bought at 7ish once or twice. Day after day it has sat at that level for a while now.

          My guess would be a wealthy individual(s) who are buying it up for some reason. Like a status symbol. While at a cheese and wine tasting event you can humble brag you own many many shares. That everything you do at these events are paid for with dividends.

          1. I’m wondering if there really is some portion of these benefits that depend on share count. Like if you get entered into some sort of drawing for priority allocations, maybe you get one ticket per share. Something like that could could easily explain the preferred price.

        1. Well, there you go. The market is efficient, after all, but some times you need to be a wine insider to know it.

          1. I love that link. I have never read a company actually pleading to buyers that they will not redeem their redeemable preferreds, ha.

            In order for the Company to exercise this provision to redeem, it would have to repurchase ALL the Series A shares at once at $4.15 plus a 3% premium. Now, this would require the company to pay back more than $25 million in cash, plus the $10.7 million cash raised in this offering (and still have cash to run the company). There is no possibility this will happen. Why would the company repurchase the Preferred Stock when we are raising money by selling Preferred Stock to fund expansion? Where would we come up with that amount of money at once and at what cost? Why would we incur the wrath of more than 19,000 wine enthusiast investors in doing so when our sales model depends upon their support of the winery? (Preferred stockholder direct purchases of wine and winery services were $2 million last year, covering the cost of the Preferred dividend and administration, making this a self-funded form of capitalizing the company).

            One way to solve the redemption price issue is to start a new Series B with a new registration filing. This would mean we would have to pay more than $100,000 in new legal fees and file for a new Series listing WVVIPB with the NASDAQ and pay those additional annual listing fees. We would also have to go back and earn a nationwide registration for the Series B as we did with the Series A. That’s a lot of work, reducing the total trading pool of the Series A, potentially lessening those investors’ trading price growth as well as those of the Series B — all to solve a redemption price issue that will never be exercised.

            1. Yeah, I smell legal trouble for this company down the road. I can’t believe they say “there is no possibility” of a call. If you own this thing, you better monitor that website frequently because if they ever remove that language, it will be a strong signal that they’re going to call it.

              The prospectus also claims that these special benefits are immaterial to the value of the shares, which has clearly been proven false.

  22. Lets play a game of…Can you name this company that is recently been authorized to do this?
    authority to execute and deliver promissory notes and other evidence of secured or unsecured indebtedness relating to such long-term debt, including but not limited to, loan agreements entered into in connection with such long-term debt;
    13

    c. authority to issue fixed or variable rate secured or unsecured long-term debt in the aggregate principal amount of $65,000,000 to retire, refund, or redeem any or all of the existing five series of cumulative preferred stock (which amount is included in the $740,000,000 of New Debt authorized in Paragraph (1.a) above) and to account for premiums paid in connection with the redemption or reacquisition of the preferred stock as described in Petitioner’s Petition and evidence submitted herein;
    authority to treat all costs incurred to redeem long-term debt that is refunded pursuant to the authority granted herein, unamortized issuance and discount expenses associated with such redeemed issues and the cost of interest rate risk management transactions as described in Petitioner’s Verified Petition and evidence submitted herein;
    i. as an alternative to the sale of all or a portion of $65,000,000 in principal amount of the New Debt described above, authority for Petitioner to issue and sell, from time to time through December 31, 2024, in one or more series, shares of New Preferred Stock with an aggregate par value up to $65,000,000; and
    j. authority to use and apply the cash proceeds and account for the related costs arising from the issue and issuance of the long-term debt, the issuance of new series of preferred stock, and Capital Lease obligations for the purposes of and in accordance with the terms set forth in Petitioner’s Verified Petition and evidence submitted herein.

    1. I will take INDPLS PWR for 1000 Grid. Applied Energy Services? The 5 preferred mentioned made me guess this quickly. Prob wrong. That seems like a large amount of money but I would have to reread it again.

        1. Isn’t AES the parent who owns all of the INDPLS PWR preferred now days? Oof. Is it AES Indiana actually… my bad. Either way it is my guess.

          1. Ha, I have always just called it AES for years and long ago forgot its formal name. . I re read it several times but I couldnt figure out if that was what you meant as your IPL abbreviation through me off, also. They always went under IPL as the abbreviation before AES Indiana was inserted this year.
            So yes you did win $1000, congrats!
            I would be very nervous owning IPWLK now if avoiding call loss is a concern. As document states they have 2 years to do it if they so desire.
            Here is the document. AES Indiana had to get regulatory approval which apparently they did this spring and commission just approved their wishes last month. It seems like they want to do some redeeming, because they specifically requested two different ways if issuing debt was not allowed. The commission gave them their blessing either way.
            https://iurc.portal.in.gov/_entity/sharepointdocumentlocation/e0384bcd-b126-ec11-b6e6-001dd802dc28/bb9c6bba-fd52-45ad-8e64-a444aef13c39?file=45575_IPL_Submission%20of%20Agreed%20Proposed%20Order_100621.pdf

          2. FC, BTW, do you know that the old IPL has 59.7 million in par valued preferreds yet are requesting $65 million to redeem or reissue?
            Exactly $50 million is the 5.65% series. The other 9.74 million is a mishmash of 4 other old previous tendered floats. And guess what? Their redemption prices are higher than the par value.
            …….and to account for premiums paid in connection with the redemption or reacquisition of the preferred stock as described in Petitioner’s Petition and evidence submitted herein…
            You dont think they really will offer $118 to redeem those old 4% shares do you? Nobody knows and if they even do, when…. But the math implies they are requesting more than the par value in above reference. A potential 18% type cap gain over some period of time versus getting stuck with a 4% perpetual in a potentially rising yield environment. Talk about a possible binary risk outcome!

              1. Grid:

                Great stuff and thanks for the update on the IPALCO preferreds. Obviously, with this new filing, the only series I will be looking to buy is the 4% IPWLP – which is callable at $118/share. Hoping somebody dumps them to me well below $100, but there are only 47,611 shares outstanding.

                The big one (5.65% IPWLK) is callable at $100 and it would be crazy to buy it at current bids of $103.75.

                1. Rob, I own about a couple hundo each of O, P, and G. We shall see. It may take a while.

  23. For those that like to trade the illiquid OTC names, higher commissions are coming from Schwab:

    Over-The-Counter trade pricing will change on December 6, 2021

    You are receiving this communication because you traded one or more Over-The-Counter (OTC) securities within the last 180 days.

    Please be advised that OTC trade pricing changes are taking effect soon. We are making this change due the complexity of trading these securities and to better match broader market pricing.

    This change will only impact U.S. OTC securities. You will continue to pay $0 for online commissions for U.S. exchange-listed equity securities*.

    What this means for your account(s).

    Online commissions for U.S. OTC securities, including unlisted American Depository Receipts (ADRs), and Canadian securities will increase to $6.95 per trade. The new rate will be applied to trades executed starting on December 6, 2021.

    Online trading commissions for OTC securities will be as follows:

    Non-National Market System (NMS) Securities Previous Rate New Rate Effective 12/6/2021
    U.S. Over-The-Counter (OTC) Securities, including unlisted American Depository Receipts (ADRs) $0 $6.95
    Canadian Stock Transactions $0 $6.95

    * In addition, the standard online $0 commission does not apply to transaction-fee mutual funds, fixed-income investments, or trades placed directly on any foreign exchange. Options trades will be subject to the standard $0.65 per-contract fee. Service charges apply for trades placed through a broker ($25) or by automated phone ($5). Exchange process, ADR, and Stock Borrow fees still apply. See the Charles Schwab Pricing Guide for Individual Investors for full fee and commission schedules.

    Which trades will be impacted by this pricing?

    This change will only impact U.S. OTC securities, including unlisted American Depository Receipts (ADRs), and Canadian securities. There will be no changes to online pricing for Foreign OTC securities ($50) or U.S. exchange-listed securities ($0).

    How will I know if a trade is subject to the $6.95 online commission?
    The $6.95 commission will be reflected in the order preview screen for applicable trades. The commission will also be reflected on trade confirms for any executed trades subject to this pricing.

    How do I know if a security trades OTC?
    You can look up a security on the Research tab of Schwab.com. If it trades over the counter, you will see an OTC flag next to the symbol.

  24. I see CNLHP is available at 50.50

    Connecticut Light & Power 4.50%
    it is callable at 50.50

    1. It is getting to the point 4.5% is not enough. Now if you want diversification, cumulative, QDI, etc.. It might make sense. In a few months it might sell for under par at the rate the slow decline is going. I feel it is time to get picky. I want to target 4.75% minimum now. Almost 5% is better.

  25. I am not sure what others think but there needs to be a “great reset” in asks for almost all ills as many prepare for interest rates to go up in the near future. I used to watch quite a few but now days that list has shrunk in a dramatic manner as most are pointless to buy slightly above par even with that decent IG rating. On top of that a few good ones are expert market as well shrinking the list more.

    Who exactly is buying NMK-B at 102 that will pay approx 3.5%? Many others at 4-4.25% as well. Oh sure they sell below their call price in many cases but how does that add any protection when they have been outstanding for ages? Does anyone have an opinion what might happen to these over the next 12 months? I feel if you cannot at least get 4.5% and up at their call price there is not much point to them as this stage. I think it will be a quick event where they all reset in pricing to that level. They will have to yield 4.6-4.8% in a hurry to be marketable.

    Or am I wrong here with this line of thinking?

    1. I am concerned about the same risks which is why I only follow a small subset of illiquids that have coupons of 4.75+. I also only try to buy the more liquid illiquids that trade a bit more often than some of Grids favorites. It requires ridiculous patience but it has been a steady performing group and are at least somewhat pinned to par. Occasionally you get lucky like my recent sale of APRDM at 115.

      1. Are you wanting to day trade liquid il-liquids?
        Buy pinned to par and then hope that they are not pinned to par and sell for 15% gains? This has to be a few hundred shares and for a steak dinner or two, right? I have orders out there for months on il-liquids on hoping to buy them, and a few hundred may hit every 2-4 months… I do have 15% sell prices on some of them… but they rarely hit, and if they do i sold well under 100 shares, and might buy a dinner. It has taken several years to accumulate over 7,000 shares of various ones, and does take a lot of effort to get them back if you ever sell them.

    2. FC, I think you have to be cautious here. But the beauty of these is they are a quasi non correlating preferred asset. Yes, there can and will at some point be reset in pricing. But, unlike the market liquid sisters they will not do so in tandem. So if you see some dovetail that could give you warning. Also as long as their yields are above market liquids ala, the CMS 4.2% as an example they wont move much. But if or when liquids dovetail, you should use that as a warning sign if you arent looking to just hold.
      I still own several, but still tweak back and forth for amusement gains. But recently my focus (like many) is leaning towards stretching for yield in higher payers that have some pinned to par past call traits. I dont see it as a cure all, I would rather have everything I got in those 7.12% annualized Ibonds near term. Or better yet some of Camrocs 9-10% Ibonds bought with a couple percent fixed component added on!
      As far as NMK-B and C goes, I have a theory of why they trade so high in terms of their puny yield. They are one of very few illiquids that actually trade on NYSE. And no I have no interest in these two either.

  26. Possible buys/sells? Many III posters discuss their strategy of “playing the spread” on preferreds/baby/terms. They might look for issues that have a “wide” aka large difference between the bid and ask prices. This is another metric used to quantify how “illiquid” an issue is. If the bid/ask spread is wide, it indicates that there is not an active market, otherwise competitors would drive down the bid/ask spread. For those looking to play the spread, maybe they can raise their bid and/or lower their ask until a trade is consummated. Some of the spreads are truly remarkably wide IMO and MIGHT offer an opportunity. Obviously there are other factors that would enter into any decisions, but it you are interested in buying any of these OR selling them, this list might be a good starting point.
    At ~ 3:45PM NYSE time today (11/12), I took a snapshot of 776 issues to study their spread. I purposely waited until the end of the day giving issues more time to trade. Plus broadly speaking, spreads narrow over the course of the day. It goes without saying that this data was only accurate at the exact instant it was captured. Wait literally one or two seconds and the data will be different. Wait a day or two and it will be even more different. Understand that all of the 15C2-11 issues will NOT be included since they do not have bid/ask prices displayed. I am showing the 35 issues with the widest spreads which range from 75% down to 4.7%. Highly liquid issues trade with ~ 0.1% spreads, so these 35 are real outliers.
    I am attempting to get around the III spam filter which killed my last big data post, which accounts for the strange format I have chosen. It is:
    Ticker, “Did it trade on 11/12?”, % of how wide the spread is, Last trade price, bid, ask.

    IPWLN No 75% 100.01 95.01 170
    UEPCN No 51.9% 106 100.01 155
    IMPHP No 38% 15.8 15 21
    CETXP No 23.7% 2.15 2.13 2.64
    UEPCO No 22.9% 156 110.35 146
    IPWLP No 20.4% 98 95 115
    NMPWP No 20.1% 82 72 88.5
    NEWEN No 16.8% 132.75 132.75 155
    IMPHO No 16.3% 3 3 3.49
    IPWLK No 13.9% 105.5 105.38 120
    CTLPP No 13.8% 38.85 33.65 39
    SBNCM No 13% 17.35 17.35 19.6
    HAWEM No 11% 23.2 22.85 25.4
    AILLM No 10.5% 103.26 103.4 114.25
    SOCGM No 10.4% 35 34.36 38
    PCG-C No 10.3% 25.94 25.26 27.94
    CNLHP No 10.1% 52 50.75 56
    CYCCP No 9.9% 7 6.81 7.5
    FGBIP No 9.2% 26.55 26.55 28.99
    PPWLM No 8.8% 170.63 155 170
    PCG-I Yes 8.1% 23.84 23.84 25.78
    CNPWM No 7.3% 49.24 47.8 51.4
    HAWLN No 6.5% 27.5 24.7 26.5
    CNLHN No 6.2% 52 48.8 52
    PCG-G No 5.8% 24.34 24.32 25.74
    CNTHP No 5.8% 58.97 58.27 61.7
    PEI-B Yes 5.6% 9.79 9.62 10.17
    PCG-B Yes 5.6% 27.42 26.7 28.24
    PCG-H No 5.6% 22 22.25 23.48
    CNLPL Yes 5.4% 61 58.15 61.45
    WHLRP Yes 5.3% 8.42 8.05 8.5
    PYT Yes 5.2% 24.75 24.65 25.93
    NSARP No 5% 105.5 99.53 104.85
    NM-H Yes 4.9% 14.37 14.35 15.06
    HAWEN No 4.7% 21.09 20.9 21.9

    We do not have any open buy/sell orders on any of these in any account we manage, so we are NOT your competition.

    1. IMPHP/IMPHO does not currently pay a div. The preferred are in lawsuit land. A mess. CETXP div suspended as well. PCG-C, PCG-I, PCG-H, and PCG-B all suspended. WHLRP suspended. PEI-B ditto. NM-H no div. Maybe more. Those I just recognize or quickly looked up.

      Now some have such small floats they barely trade. IPWLN for example. If I can trust quantum there is only 13,000 shares left out of 50,000. A Tender offer by IPL sucked so much up. There was only 50K shares to begin with. Here is a SEC doc of interest to get an idea of how many existed in the past.

      https://www.sec.gov/Archives/edgar/data/50217/000091205797029567/0000912057-97-029567.txt

      My point is the spread will always be there for these situations especially when current holders do not want to realize rates are going up and they have to start recognizing the fact to sell them they have to come down quite a bit. People with bids know this. IPWLN is worth 105 tops right now and even that is over paying a bit considering the call risk. One can find easier pickings for less call risk and perhaps a touch higher yield with the same IG rating. But why sell at all when it pays and pay and pays unless some “chump” will over pay which is getting less and less likely as each day goes by right now. But to circle back.. only 13K shares… Not much to sell eh?

      So I would have to whittle your list down quite a bit to begin analyzing it from the beginning to see if any opportunity really exists. Heck.. I see one last trade price is me because I wanted an invite to the summer BBQ. Let me see if I have the energy in a moment to redo your list removing some suspended.

      1. Now I realize if someone owns suspended paying preferred trade opportunities can still exist but they need a different type of analysis I am not ready to get into. I hope this helps. Lets take a peak now.

        IPWLN No 75% 100.01 95.01 170
        UEPCN No 51.9% 106 100.01 155
        UEPCO No 22.9% 156 110.35 146
        IPWLP No 20.4% 98 95 115
        NMPWP No 20.1% 82 72 88.5
        NEWEN No 16.8% 132.75 132.75 155
        IPWLK No 13.9% 105.5 105.38 120
        CTLPP No 13.8% 38.85 33.65 39
        SBNCM No 13% 17.35 17.35 19.6
        HAWEM No 11% 23.2 22.85 25.4
        AILLM No 10.5% 103.26 103.4 114.25
        SOCGM No 10.4% 35 34.36 38
        CNLHP No 10.1% 52 50.75 56
        CYCCP No 9.9% 7 6.81 7.5
        FGBIP No 9.2% 26.55 26.55 28.99
        PPWLM No 8.8% 170.63 155 170
        CNPWM No 7.3% 49.24 47.8 51.4
        HAWLN No 6.5% 27.5 24.7 26.5
        CNLHN No 6.2% 52 48.8 52
        CNTHP No 5.8% 58.97 58.27 61.7
        CNLPL Yes 5.4% 61 58.15 61.45
        PYT Yes 5.2% 24.75 24.65 25.93
        NSARP No 5% 105.5 99.53 104.85
        HAWEN No 4.7% 21.09 20.9 21.9

        Out of the only two that traded CNLPL buyer sure does not mind call risk to get higher yield and PYT is a truly odd 3% plus 3 month libor which is garbage to me. 3 month libor will never amount to much ever again in my humble opinion if I understand the prospectus properly.

      2. FYI, the IMH lawsuit was finalized a few months ago. IMPHP had all of the cumulative dividends back to 2009 or so restored. Alas, the company doesn’t have the capital to pay them, but that’s a different story. IMPHO no longer has a dividend and never will; it just has a $25 liquidation value.

        As FC pointed out, these are high risk issues and playing the spread could be a bit dangerous.

      3. FC, thanks for the comment about separating paying/non-paying issues. I maintain that data and should have included it with the list, possibly separating them into two lists. I will do that if I ever post a revised list. That said, many non-paying issues have been discussed on III. The IMPHO/IMPHP and PCG-* issues in particular. The last comment from Justin on CETXP about a year ago was that it was paying its dividend in stock, but I am not sure it is still pertinent. Bottom line to me is that some III’ers do trade in non-paying issues which is why I included them on the list.

        The list still might be useful. For example, if we held IPWLN, which is still paying its dividend, would we consider selling at something less than $170 for an issue callable today @$101? We do not hold it in any account, but if we did we would be willing to sell for <$170.

        1. CETXP still does pay in stock.
          the other one that pays pretty consistently in stock is NCRRP.

    1. I’ve requested that Schwab make IPWLO tradeable online. However, you can now call in trades for IPWLO and they’ll waive the commission.

      Bids and Asks are now being displayed as well.

  27. AILIM for 102. call price is 103. Pays 4.7% at 100. so approx 4.6% at 102. Not bad for IG rating, not great. I picked some up and appears more for sale.

    Wanted to alert anyone who may be interested before 4pm.

    1. Looks like TD Ameritrade would charge me $6.95 to buy AILIM but the cost at Ally.com is -0-..

      1. It rarely trades but it got down close to $101 today. I put lead bid in at $101.25 after that and I saw 100 shares sold, so I assumed they were mine. I got screwed somehow and didnt get them, and then I gave up. Interesting there have been over 2000 shares available for over a year at $104. The old float is less than 20,000 shares.

        1. Hi Gridbird,IPLDP has been trading fairly weak lately,will they come calling maybe?Thanks for your insight B/L

          1. Lou, I think this one is toast. A week or so ago someone here posted it was served a redemption notice. So I doubt there is much meat on the bone left here.

              1. IPLDP is going to be redeemed for ~ $25.32 on 12/15/21. For some reason, somebody decided to sell 100 shares @ 23.33 yesterday (11/12) morning @ 6:35AM before the regular open @ 8:30AM. Seems like a strange time to throw away ~$200 to me.

                We were not involved in the trade in any account.

    1. You beat me SN. Sold mine @ $111.70. I’ve always assumed these occasional gifts happen when market orders are placed by accident. Yet, after my sell order hit there was over 500 shares on the bid @ $112.00. Who in their right mind would consciously bid so much higher than the trading norm? Not complaining though. Got lucky on NSARO last week too

  28. KTBA has been trading between 28 to 29 all day. Somone unloading
    I know its now on OTC market list, but still a bargain at these rates (6-6.2% yield), with semi annual ex Div coming up at end of Nov too. Jumpred in with couple hundred more

    1. Sadly I cannot buy even if I wanted to. Closing only for me. I imagine you are using schwab.

    1. Bur, I thought it went exD in May and November if memory serves. Dont remember specific date, and there was quite bit of lag time between exD and payment. I wouldnt worry about getting paid, but it will take a while.

  29. How do people handle things like these illiquids in their estate planning? It seems having a few of these $0 items scattered through ones’ regular and retirement accounts could be a valuation and tax basis mess when its time to split things up.

    1. Make sure that you bequeath them to the heirs and not leave them to be sold by the executor, because they 1. Will have to sell them if you don’t specify otherwise, except with the court’s permission, which can be obtained but it is costly in time and money
      And make sure they are an even number or a multiple of the number of heirs, if more than 2.
      And because they are illiquid, they are like other things that have to be planned far in the future, like African Grey parrots and some species of turtles kept as pets.
      Just make sure you tell the lawyer drafting the estate plan.
      it gets tricky when one of the heirs doesn’t want them, because it throws off the equalness between the beneficiaries.

    2. To Justin:
      I suggest you sit down with an estate attorney. Each State has different laws and often the laws change.

  30. If anyone cares to know UEPEP has a small sale going on. 100 pref. Callable at 102.47. IG rated and not a financial… Pays 4.56% if you bought at 100. Currently a nice amount of shares are available at 102.25. So right now that would be about 4.46%. Now ex-dix just passed so the first payout is approx 3 months away.

    So if you thought about buying those new bank preferred like WFC/BAC/JPM/MS at 4.25% this might be a viable choice for a small boost. Most are perpetual anyway. Or if you have a small gain you could switch if the ex-div dates play along with the game.

    I bought a small slug to track it more closely in case the person dumps with some low ball orders.

    1. Fc, unless someone is trying a flip, I dont understand an allure of 4.25% IG banks or fair quality 4.6% bank non cums, when one can get better and safer yields in illiquid utes. I picked up 100 shares yesterday of 4.72% par APRDP under $102 that has a $102.18 redemption price. The yield was higher and the credit quality higher too.
      Of course a reasoned aurgument would be to avoid them all. But I presently buy these as counter balance purchases to my high yeild issues I own.

    2. UEPEP @ 101. Seems like a few hundred shares if anyone cares. I bought a few to round out my position to an even number.

  31. WTREP… I forget what I have here and maybe others do also. So I will post this. We should be receiving an annual yield of 7.6785% presently. Plus remember it has an owner optional 2034 redemption also, if it has not been redeemed.
    Dividends accrue (i) from (and including) June 30, 2014 to (but excluding) June 30, 2019 (the Fixed Rate Period) at 8½% 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.
    Optional redemption by the holder
    Each holder of the preference shares may at any time on or after June 30, 2034, at such holder’s sole option and election, require us to redeem in cash any or all of the preference shares held by such holder at the $25 per share liquidation preference plus an amount equal to all accumulated and
    unpaid dividends thereon to the date of redemption, whether or not declared (an Optional Redemption).
    To effect a redemption of the preference shares, the holder of record thereof shall make a written demand for such redemption to us at our principal executive offices setting forth therein the number of preference shares to be redeemed and the certificate or certificates representing such preference shares, if any. If we do not have sufficient funds legally available to redeem all preference shares which the holders thereof have required us to redeem, we shall redeem a pro rata portion of each such holder’s preference shares out of funds legally available therefor, based on the respective amounts which would otherwise be payable in respect of the preference shares to be redeemed if the legally available funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after we have funds legally available therefor.

  32. CNLHP which is 50 dollar preferred… which can be called for 50.50 is selling for 51. It is 4.5% IG rated and QDI. I realize it is not the best deal but better then 4.25% which is going around right now. Seems to have quite a few shares available which is not readily apparent when looking at level II.

    If you are worried about interest rates rising this is probably not a great choice. CHTHN will get you more yield but greater call risk downside.

    Things have been pretty boring lately for ills. Deals have been hard to find. I always welcome any hot tips!

    1. NSARO which is 4.78%. 100 pref, callable at 102.80.. high IG rated QDI.. selling for 103.25 which is not terrible.

      1. NSARO available at 103.40. Once again sitting around longer then normal from the past. While this pays above 4.5% I already have enough at a lower cost.

        1. My buys for NSARO hit every 3-4 months at $102, but takes patience. For same investment grade, CBKLP is better value in my opinion for the current ask of $101.75

    2. CNLHP available at 50.75. Sadly it does not pay more then 4.5% so I no longer want to add. Callable at 50.50. Pays 4.5% at purchase price of 50.

      Here comes the revaluation of ills. This would have been snapped up instantly a while ago.

    3. This isnt no deal, but I sold an illiquid the other day and tried to snag IPWLG mostly out of boredom not doing much recently. I wanted a 100 but only got 65, which is mostly useless. Its 4.6% at $100 with $103 redemption. Its last trade was Feb. 2020. There isnt many shares. I dont consider this a great deal, but I wanted it so I own it. At least it wont get redeemed at a loss like CBKLP.
      But it may drop to $50 at some point which is worse, than a call ha.

    1. jb:

      I was just happy to see the bid up to $110 (put the yield down to 3.64%). Finally waved goodbye to my 4% non-redeemable INPAP. Wish I could send a dozen roses to the “fat-finger” fellow that put in a market order that caused this 40,000 share issue to trade at $150+.

      It has been a helluva ride.

      1. Rob, actually it is redeemable. Quantum is incorrect. I checked their annual SEC filings a few years ago. Doesnt seem like a call is any concern though I would suspect.

  33. Ask on CNTHN is 52.25. That’s a 4.75% annual return (div of 4.96% annual). Ex Div passed last week, which may be why the ask is relatively low. Redemption is at 50.50 so there is a bit of principal risk but the issue has been out there since 1958. Real risk, like for all issues discussed here, is interest rate increases. At times over the past 10 years, CNTHN has traded in the 90s. I have a full position and not ready to buy more. Quality institutional issue (BBB+ by S&P) with very little downside, I think.

      1. The trade off of the risk is that 5.5% QDI yield at that approx price. No one can predict what they will do but I would pass on it myself. I would not want to lose more then 7 dollars per share to take a swing at it.

        Plus if they were to redeem a few preferred series that would be the MOST likely candidate to go first. Knowing my luck a few months later they call it.

    1. Please allow me to correct an error. CNTHN is a $50 par issue. When rates were much higher, it traded in the high 30s and 40s. I said it traded in the 90s (correct for a $100 par issue). The opportunity to buy at $52.25 has passed. It will resurface eventually.

  34. Did anyone manage to snag those 100 shares of DMRRP at 66 today? Ticks me off I cannot easily place day orders online. I would have to call daily, I assume, to place orders. That was a 6% yield right there.

    LTSA is trading for approx 11 dollars a share. There are people out there vacuuming up daily deals.

  35. There’s a standing ask of 102.50 for UEPEP-redeems at 102.47, goes ex next week. 4.47%

    1. That is a lot of shares available. A metric ton. 4.45% yield. Someone is getting out of this somewhat lower yielding util preferred. Interesting but not sure I want to bite. Amazing how interest rates go up a tiny bit and now all of a sudden an IG rated ute with a reasonable yield becomes so much less desirable. Only 150 shares out of 20K offered traded so far when I looked.

        1. Sure that changes things a bit but if interest rates go up UEPEP might be selling for a 100 even in 6 months. Covid really changed things and it is a big question mark how this will all play out. More opportunities may come about. Put in a GTC bid of 100-101 and you might get it when the seller of 20K shares gets tired of so few bites. Better off skipping the div in that case.

          1. Some of these are sagging and others arent so I trade the swings on them for easy but modest gains. For example last buy was a couple says ago of APRDP. Its a 4.72% par, $102.18 call price I bought at $100.83. So like you said, FC keep eyes out on liquidity and you may catch a drop.

  36. Ktba went double black diamond. How do you become an expert liquidity provider.

    Called my broker they profess to only electronically processing orders now. Called the bond desk they can only gauge me on corporate or government debt.

    Nobody got the how does expert market work crayon book.

      1. Kept upsizing my orders until they stopped getting rejected immediately.

        Buy Open 100 – slmnp
        Buy open 4000 – ktba

        Will be interesting if I get some fills.

        1. Interesting. You mean we can buy these securities if we place a large enough order? Maybe that makes one an “expert”. Which broker are you using?

          1. Royalbank.

            Proof will be if an order actually fills. Essentially the order desk person hinted at increasing my order size. So I kept increasing.

            Orders are still active set expiry in December.

              1. Yes, Micahc, could you specify the broker?

                I’ve had some luck getting a small partial fill on SLMNP at Schwab.

              2. Have 2 account full service brokerage and dominion securities account with rbc.

                No fills so I will call the desk again to check status.

                1. I assume that the only reason you can enter orders is because it’s full service. What are the transaction fees?

                  Keep in mind that this is grey market trading now and the normal trade execution rules don’t apply. Trades can be executed at other brokers that are lower than your bid and that’s just the way it is because they don’t have to share bids and offers with each other. It can be wildly frustrating thinking you might be able to buy something cheap and it never actually comes your way.

                  1. $10 per trade. I have a feeling that manually calling on clients behalf between brokers to setup trade is beyond the staffing availability of many brokerages.

                    1. Micah, when it worked for me, I had a good broker by luck, and he would work for me. When I said “call down to the floor”, he knew what that met and called all dealers to see if he could round up some. But, when I got the wrong broker…..a waste of time!
                      Im not even trying because my brokerages wont allow trading only sells. So calling wont do any good here as the old ones werent banned, they just needed effort behind the scenes to try to round them up.

                  2. That is correct, Karma. Back when there were a few nice grey market issues, it was great adventure. Some of accounts could hit on certain issues and others not and vice versa. There many times were not quotes but “indications” when I would try the call in route. Some were accurate and some were dry wells when the order was placed.
                    For people who are unfamiliar, a crude example is this… You are inside a mall and you need to get to The Apple Store for a specific Apple only sold product. But you are blind folded and keep stumbling into the wrong store. No matter what you grab, it isnt going to be in there.
                    If your brokerage is not “The Apple Store” you arent going to get a purchase.

                2. Called helpless desk. Agent could not locate any ask prices. Said typical otc disclaimer.

                  When I flipped my orders to Market order for fun they immediately got rejected. Just discovered a brokerage bug.

                  1. A) Due to the lack of liquidity, you can’t place a market order in grey market.
                    B) Good lord, you are lucky that you can’t! You could get filled at ridiculous prices.

    1. I am keeping my eyes on it. It has dropped from 8 years of dividend premium to 4+ years. Still not at a 3yr low, so I am still on sidelines.

      1. NEWEN is not callable. With a 6% coupon and a $125 price, essentially you’re buying an institutional bond at 4.8%. They’re not making these any more! What’s more, the last National Grid filing (New England Power is owned by the British “National Grid”) indicated that there were slightly more than 11,000 shares outstanding. NEWEN seldom trades. Seems to me to be a great deal. Have bought on the dips over the years, but today’s dips are about as good as it’s gotten over the past decade (bought a slug at $125 and a few shares at $120–all lower than any price I previously paid). There was one trade today at $105. Probably one or two shares and, likely, a mistake on the ask. Get ’em while you can!

        1. Nothing wrong with the purchase. I just think a lot of us are looking for that 5% and up opportunities. Good solid payer though so that has to be considered versus a slmnp at 5.8% for example. I would sleep much better with your purchase for sure.

          I would be a buyer of newen at 110 in a heart beat.

  37. Rule 15c2-11 dooms day is almost upon us.

    Strapped in waiting to help anyone out with liquidity.

    1. Hi All – Relatively new to the world of baby bonds.. I notice that on the database there is no mention of YTM or YTC. Just curious on how one determines the effective yield when making a buy – no buy decision?
      Thanks
      Steve

      1. What database? The “Sortable Sheet” has a Yield to Worst. Personally I typically steer clear of anything trading well over par and near or past call. And those that I make exception to, is with eye on the YTC/YTM/YTW.

    2. This doesn’t show on Rule 15c22-11 list from AmeriTrade. Yet ETrade won’t let me trade it (had to trade on Fidelity). LYB is parent and they are reporting their financials.

  38. Grid, did you mention IPWLK in a post in the past couple of days? Thought you wrote something about a $102 redemption price. But I must be dreaming because the prospectus clearly states $100…

    1. Bur, No I havent mentioned it recently. But it admittedly is my biggest hold. Im not really looking to buy or sell now but need to. Been fortunate all divi cycles to flip them all and rebuy a few times for $1-$2 each divi cycle and not miss the divi either. So basically its a core hold for me. But no, its $100 redemption, no bonus. I think you are referring to AILLN yesterday with $102 redemption that had a seller out at $103.10. After I posted it they were gone in minutes though.

      1. Noticed IPWLK dropped a buck and a half or so I think yesterday, just a couple hundred shares. I have a lowball GTC buy order hanging out there. It’s been hanging for quite a while now.

        1. D, You can get some drops every now and then. But rarely below $100. Even around 2013 Taper Tantrum it was around ‘hundo.

          1. Grid, thanks for the info. You may recall that there were a couple of days in April 2019 with relatively higher volume of IPWLK – shares traded under $100. If my memory serves me, Inspy, you and I (and several others) bought some of them. I still have mine.
            Thanks again and BR, No. 4 + 8

            1. Brett, I remember that now. Ya it was like a controlled 12-15k dump over 2 days. Wouldnt go below $99 if memory serves. I bought so much I thought I owned IPL, ha. Sold most quickly for $3-$4 gain after seller was empty. Wish we could get another one of those days. But you made $20 million plus QBing Vikes for 2 years so you dont really need to flip to goose returns.

  39. Ocean Spray again, but this time OCESO.

    Last trade $10 for a 10% yield.

    Stating the obvious, but not available through Fidelity.

    1. I put in an order for some at 10. I do not have much hope for it. Someone had a lucky GTC order on it that I can no longer seem to do as of recently on these situations. It would be a nice score.

      I have a list of other odd balls that these new rules might cause people to dump but so far only Ocean Spray has really dropped from what I can see.

      1. OSECO had this lot of shares available at $14 yesterday. Out of uniqueness and rarity I called Ally to place an order for those shares this morning. They said they could not place an order for it, but could OSESP. I just have too many issues border lining this new rule so I passed. Its a helluva annuity for those that bought! Congrats.
        BTW, OSECO is a participating preferred, but it is not really participating. I bought a test share this past year or so and it only paid the same 50 cent divi as its sister OSESP does.

        1. Oh really. It did not pay anything extra? That is disappointing. Now I don’t want them because they are even more ill then their sister P. The past year Ocean Spray made a lot of money so if they were going to enjoy anything extra it would have been 2020. Maybe they pay the extra at the end of the year instead of the middle?? Did you get two divs from it?

          As for ally.. they placed my order just fine for OCESO today. They must have a note under your account that states “act like fools when grid calls and make his life difficult”. 😉

          1. FC, I guess its just who you get. The lady I contacted worked hard for me…Just not very smart I guess. This was no 10 minute call. It lasted 30 minutes, she was trying. Just not in the right spot. The fact she offered OSESP meant she was giving it her all! 🙂 Im not upset, because I tried. Because I have sooo many dancing close to that new ruling, I really just dont need any more.
            I cant remember and maybe you can dig in old links here to find out clearer. But it particpated only if common had a greater than 4% yield if memory serves. I have no clue what the common pays. There really arent many of these shares left. Less than 2500 shares have traded since 2008. And that is including todays volume.

            1. OSESP Shares outstanding by year…

              83,000 shares in 1956.
              62,000 shares in 1972.
              61,500 shares in 1974.
              60,800 shares in 1978.
              58,800 shares in 1979.
              ??? shares in 2021.

              In 1979, only 30k OSESO shares were outstanding…down from 118k in 1978. Does someone have access to an annual report in the 2000s? We need to find out the current outstanding for both of these issues. I would certainly be interested.

              https://content.wisconsinhistory.org/digital/collection/cran/id/2088/rec/1

              1. Let me correct the tickers.

                OCESP Shares outstanding by year…

                83,000 shares in 1956.
                62,000 shares in 1972.
                61,500 shares in 1974.
                60,800 shares in 1978.
                58,800 shares in 1979.
                ??? shares in 2021.

                In 1979, only 30k OCESO shares were outstanding…down from 118k in 1978. Does someone have access to an annual report in the 2000s? We need to find out the current outstanding for both of these issues. I would certainly be interested.

                https://content.wisconsinhistory.org/digital/collection/cran/id/2088/rec/1

                1. While I was waiting to do some night work tonight on a piece of telecom gear I tried for about 40 minutes to dig up an annual report from the last 20 years. I failed. I consider myself pretty good at digging but nada.

                  We really should just email them. This forum probably owns 20% of the preferred shares now days. We are the closest thing they have to shareholders besides the farmers themselves. No voting power tho!

  40. APRDM from AL Power has been trading right around redemption price today and yields around 4.75%. More volume than usual. BBB+ rated by S&P and A3 by Moodys.

    1. 600 shares of AILLN sitting there at $103.10. 4.9% par with $102 redemption, but goes exD in 2 weeks so no call loss risk if one is interested in these types.
      I picked up 51 shares to add to mine fwiw.

  41. OCESP – Who was providing liquidity at $14 today. Hopefully the movement continues tomorrow.

  42. There is an assload of HAWLI at ask for $20.65. Redemption price is $21. 4.75% $20 par old issuance from Hawaii Electric if one is looking for below redemption price electric ute issues. Goes exD next month early.

    1. Grid:
      – Any idea why HAWLI is not listed with the other HECO pfds at https://innovativeincomeinvestor.com/master-list-utilties/?
      – Are you sure the liq pref is $21? The others have a $20 liq pref, and preferredstockinvesting shows HAWLI at $20 as well.
      – Do you have a link to the prospectus for HAWLI? Couldn’t find it based on an admittedly quick search online. I reached out to HECO IR, we’ll see if they respond…

      1. Bur, I appreciate the fact you are back checking and researching. That is very important! Unfortunately they are wrong and or uninformed….or both.
        Its backwards, all the HE preferreds carry a $1 premium redemption with exception of HAWLN which doesnt.
        Also note the fact preferreds take majority control of HE board if dividends suspended 4 quarters. Its never happened and the preferreds are 70 plus years old.
        https://www.sec.gov/Archives/edgar/data/46207/000035470720000045/heexhibit4vi201910-kus.htm

        Redemption Provisions.

        Each series of Preferred Stock is redeemable at the option of Hawaiian Electric, in whole or in part, on any dividend payment date upon 30 days’ prior notice to the holders of the series to be redeemed, without redeeming in whole or in part any other series of Preferred stock, except that the Series I preferred stock may redeemed, in whole or in part, at any time upon 30 days’ prior notice.

        The shares of Preferred Stock of all series except the Series I Preferred Stock are redeemable at a redemption price per share equal to the par value of each share plus all accrued and unpaid dividends thereon, plus a premium of $1 per share. The shares of the Series I Preferred Stock are redeemable at a redemption price per share equal to the par value of each share plus all accrued and unpaid dividends thereon, without premium.

        1. So HAWLN is the Series I and HAWLI is not? That kinds of irks me and my sense of order….
          And I am really surprised they were assigned a ticker of HAWLI, as that sounds really similar to the word Haole, which is a word with a checkered past.

          1. Justin, HE would probably cut my preferred yield 100 bps if they knew I was a Haole, lol. I dont think there is anything checkered about that word its derogatory, ha. Yes, HAWLI is the Series J, not Series I.

          1. Good morning Tim, The Series I (HAWLN) issue is not $21. Its the sole $20 redeemable price. Also you are missing HAWLM
            You probably missed it because Quantum never had it. They didnt have HAWLM either and I messaged them. They did such a poor job of describing HAWLM Im not telling them about HAWLI.

          1. thanks bur–changed it. Tossed them in on the fly–hopefully will get a little ‘meat on the bones’ this weekend

    2. Probably due to your comment, there is now an assload of HAWLI bid at 20.65. I need to check the illiquid securities board more often for alerts! This was available at the open and missed it by about two minutes.

      1. Who knows, Landlord. This big sell order came out very very late in day, and the ask volume wasnt hidden which it almost always is. It showed over 10,000 shares available. And then they all get plucked instantly. I have seen this a few times before and it always ended the same. They got bought in mass and quick. I know because I have before pissed around trying to get lower and then they were all gone.
        I decided to buy 100 more to what I got what at close and what I previously owned. Look at the other HE preferred bid and asks. I wonder if they think they are $25 par issues.

        1. I remember the days when people were tired of discussing this subject and finally got a thread created. Nice work Grid as this is the top x buys for this year for preferred in an overpriced market.

          1. With Friday’s closing price hovering around five year highs, HAWLI looks more like a sell, than a buy to me….especially if you had accumulated some long term gains from 2019-2020.

        2. Grid, thanks for the heads-up on HAWLI.

          I was able to grab 400 shares this morning at $20.65.
          Bid now at $21, ask $21.25

        3. Speaking of pissing around… I’m now kicking myself because last night I was looking at a 20.35-20.65 spread but didn’t pull the trigger ‘cos I wanted to confirm that redemption was in fact $21 (hey, I wasn’t going to pay 0.65 more than liq pref if you’d been wrong). Ha!

        1. Kapil, some fund must have exited the position. 20,000 shares traded. It can go years and not trade that much let alone in a day. Only 250,000 shares to begin with and that is assuming company doesnt possess any.

          Bur, I dont possess the understanding of legal reasonings for set up, but its pretty normal. Golden Gate Capital set something up to get Phoenix I remember, and currently CNIG is getting acquired by a newly created entity by private investment firm Argo to buy it.

            1. Yes, they were laying there for the taking about 10 min. before market close on Thursday. And then I bought 100 more at open yesterday. I already had some to begin with so I didnt buy a big amount. I try to stay balanced with a hi-low—yo strategy and largely was unwilling to part with what I had to buy more.

              1. I imagine you saw someone buy 100 of HAWLM the other day.. at 28. I have generously offered mine for future buyers at 27.50.

                1. Fc, I hope you get it! Unfortunately I “panic sold” mine a few weeks prior at around $24, lol.

    1. Justin, Thanks for posting! It seems that the changes were many as the July 21 list was trimmed from 162 to 56 pages in the Aug 21 version. On a cursory read, these illiquids are still listed: AGRIP, IPWLG, IPWLO, MSSEL.
      Best regards, No. 12

      1. I should have published it in the right section.
        I didn’t realize there was a section for it until now..

  43. The “Pink No Information” issue that fell the most today was the $100 par AWRY, Allegheny and Western Railway 6% coupon. It traded a whopping 100 shares @ 110.50, down from the previous close of 129.0 on 7/27 for a 14.3% loss. This was the lowest close since March 2020 at the depth of the Covid crash. Don’t know if there are any more shares for sale at that price. I assume that the same brokerages that stopped offering LTS* will not offer AWRY either.

  44. For some of the so-called “Illiquid” utes, like Ameren, CT Light and Power, and Pacificorp, there is little daily volume but, occasionally, a share or two may trade. Usually the single share will trade at or close to the most recent bid. For example, one or two shares may trade at, say, $138 which was the last bid, with a much higher current ask. What causes this? Is a buyer “fishing” for the lowest price that a seller might accept? When this occurs, seldom is there a subsequent trade at the price paid for the single share. I’ve wondered about this for a while and thought someone could provide an explanation and cure me of this ignorance (though I have much more!). Thanks.

  45. CRLKP… Well SP Plus FINALLY got it right latest quarterly filing, yippee! Maybe Karma kept the whip cracking on them….
    This is what they had Spring of 2020 and earlier, implying a wrong $19.18 maturity..
    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 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 periods ended March 31, 2020 and December 31, 2019, respectively. The approximate redemption value of the Convertible Debentures outstanding at March 31, 2020 and December 31, 2019 was $1.1 million for both years.

    The annual filing from this spring changed a word and implied maturity of $25 but didnt state it explicitly.

    Subordinated Convertible Debentures
    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.

    Finally last filing they finally stepped up and clarified to the way it should be and was when it was correctly stated by Central Parking and later when KKR owned it.
    Subordinated Convertible Debentures
    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 upon acceleration or earlier repayment of the Convertible Debentures. The Convertible Debentures mature April 1, 2028 at $25 per share. There were no redemptions of Convertible Debentures during the periods ended June 30, 2021 and December 31, 2020, respectively. The approximate redemption value of the Convertible Debentures outstanding at each of June 30, 2021 and December 31, 2020 was $1.1 million.

    1. My last communication was February when I told them the revised language still wasn’t clear. It takes a little time sometimes.

      1. They should just redeem this and put it out of its little 1.1 million misery and bury it into the revolver. But they are so disinterested in this, I suspect you will have to notify them in May, 2028 that it should have been redeemed a month ago, so we can collect our proceeds.

        1. I think the revolver has a covenant that subordinated debt can’t be redeemed without the lender’s approval. Perhaps the lender is very conservative and has blocked redemption.

  46. SLMNP…. Well I guess we can put this part to rest anyways. I emailed head of IR to find out if ultimate obligator of payment for this subsidiary preferred is LYB. He said it wasnt.

    Thank you for your ownership of the convertible shares. These shares are not guaranteed by LyondellBasell. But the issuer is a wholly-owned subsidiary of LyondellBasell.

    Best regards –
    David Kinney
    Head of Investor Relations

    1. Thank you for the info. Now I wonder how we can figure out a way to determine how safe these preferred are. It appears it is not as simple as just looking at numbers located in a doc saying the subsidiary is profitable. What if they strip out everything good from the subsidiary and leave it just a shell of it’s former self? I will freely admit this is confusing to me.

      1. Fc, I wish I was equiped to answer that question. Since they went to the effort and treasury to purchase A Schulman and then fold it into another existing subsidiary one would hope the parent and its strong finances support it.
        But other than “doing well” vague references, I have no insight to actual financials. It certainly is better off now than A Schulman was and it always paid then. But I cant counter or discount your concerns though.

        1. Well I took several minutes looking over their SEC filings and the $15 per quarter payment they owe SLMNP holders is a tiny insignificant drop in the bucket compared to the common. It is almost amusing how little money it is for such a large company. I compare how much they have to pay to the APS segment which Schulman seems to be part of mostly which is doing well.

          I guess what I am saying is that I could dig deeper for more info but what I saw in just a few minutes already makes me more comfortable. This is a pretty well ran company.

          1. “What if they strip out everything good from the subsidiary and leave it just a shell of it’s former self?”

            How much time, effort and cost would this require? And what would be the benefit? You can still put SLMNP back to the company at $800ish plus CVRs which I’ve heard have a value of $40ish.

            “These shares are not guaranteed by LyondellBasell. But the issuer is a wholly-owned subsidiary of LyondellBasell.”

            But on the plus side, SLMNP is structurally senior to all of LYB’s debt. So long as the subsidiary makes money or has asset value, SLMNP gets paid regardless of how the rest of the company is doing. And I don’t believe the subsidiary has any debt, so SLMNP is top of the capital stack at the sub.

    2. SLMNP issuer being wholly owned LyondellBasell is indeed comforting.

      Question for now is if this security is subject to the new SEC rule and will delist end of September. If so, what happens to us small investors? Do we get to go to our broker and have them liquidate the shares when we wish or will truelove become ‘illiquid’ and we keep getting the dividend but cannot redeem it!!!

      1. M, What broker you have and its procedures will determine that. Most have shown limit to liquidation trades if put on the bad boy list. Technically SLMNP has been delisted since LYB delisted it several years ago. Its potential lack of bid ask pricing and brokerage self imposed restrictions that are the potential problem.

        1. I hold SLMNP at Schwab. I guess the redeem value is $1,000, so we have $25-30 or 2 Quarters worth of dividends at risk?

          Anyone have experience of having dealt with Schwab Bond-desk for such illiquid security redemption?

          1. mSquare…it is my understanding that SLMNP is not subject to redemption. How about this: if LYB wants to get SLMNP off the books, they could try a tender…at a higher price. One can dream….

          2. Msquare, Its $1000 liquidation value, not redemption value. Big difference. It can be tendered back to company at close to $850 anytime though. As Retired Broker said they can tender with an offer. There has never been a mention or sniff of it though.

      2. According to the SEC Rule 15c2-11 Restricted Securities list put out by TD Ameritrade on August 2nd, SLMNP was not on the list. I make no warranties or representation as to the accuracy of their information.

        1. It is listed at OTC Pink Sheet Current Information. It should not be impacted. Hopefully someone gets scared anyway and tries to offload.

    3. I’m a holder. I suspect there would be lawsuits galore if LYB tried to skip a payment; more trouble than the dollar savings.

      1. It’s a preferred stock, so they can choose not to pay dividends at any time and there’s no legal case to force them to do it. They can’t pay any dividends on common stock during a deferral on preferred dividends, but usually that’s the only meaningful limitation.

        1. Karma, Im holding mine, no worries, but only because I traded it often when it was a dirtbag A Schulman issue playing with it in the $500-$800 range when I could snag a few shares (it was harder then).
          But here is the question, is the common divi of hold co directly held hostage to the subsidiary “special stock” payment?
          The old ute subsidary preferreds have written the standard payment before common. But those common shares being mentioned are the actual common stock shares held by hold co. The hold co issues separate common stock unrelated to the aforementioned common stock of subsidiary held on balance sheet. Of course the hold co needs the upstream dividends themselves to fund their debt and capital activities.

        2. Karma, of course you are correct. I didn’t mean that LYB could never choose not to pay, but could not choose not to pay while paying common. Thanks for pointing out my unclear post.

          1. I can’t imagine they would ever attempt to pay a common dividend when not paying preferred. But if there comes a time that they don’t anticipate paying a common dividend for some period, they can certainly defer the preferred if they choose to.

  47. Today’s big illiquid mover is FIISO. The difference is that it is “Pink Current Information” so will presumably NOT be subject to the new SEC rule.

    Today it traded a whopping 116 shares @ 148.50, down 36.9% from its previous close of 244 on 4/23/21. Still above most trades in the last year which were ~130-140. Does not seem attractive to me @148.50 and sure to heck NOT at 244.

    Never owned or had orders in any account we manage.

    1. FIISO has become a kind of trophy, like a Lion’s head you mount on the wall after Safari. Good conversation piece but not worth what it cost you.

      Point of comparison: BAC-L is uncallable and pays a qualified 5%.

  48. Good comments on Illiquid Securities the past couple of weeks. A friend of mine owns a few shares of Mortgage Oil Company(MGAG) that was bought in the past couple of months. The market cap is very small and they don’t trade often at all. Well, at least until the past year. Small owner of a number of REIT partnerships.

    The new rules on Illiquid stocks are killing the small investors. Small companies will now have to pay very large fees to CPA firms and attorneys to file documents with the SEC. Wishing everyone the best with the new rules.

  49. Today’s illiquid issue is: MSSEL, Massachusetts Electric Company, it has a 4.44% coupon, $100 par, callable anytime according to QOL @ $104.07. It traded 102 shares today @ $95.00 down 36.6% from $150 on 5/31/21. It is the lowest price since 2015. Topped the largest losers list today. Not sure if any more shares are available @ 95.00 ish. Would seem like a good investment IF you like illiquids. Appears to be on the “Pink no info” list and might NOT be tradeable after brokerages implement their rules. Might explain why someone dumped their 102 shares.

    Never owned in any account, never had orders in any account we manage.

    1. What does “no info” mean in this context”? Is the only info that counts is what is filed with the SEC? Because as an interconnected electric utility, Mass Electric files a “Form 1” with FERC, and that gives you just about all the info anyone could want, and then some.

      1. Nhcoast asks: “What does “no info” mean in this context”?”

        NH, we are all going by either by how a brokerage like TDA or OTCMarkets labels an issue. In this case, you see that OTC markets classifies MSSEL as “Pink No Information.” There have been a blue zillion posts here regarding the new SEC rule that will take effect in September. Many III’ers have taken issue with how a particular ticker is classified.

        I have NOT joined the group that is trying to correct some of the “wrongs.” More power to them. My approach is more as a disinterested observer. Like everyone else around here, I have NO earthly idea how this will all settle out. My highest probability guess is that most brokerages will go the way of Nancy Reagan and “just say no” and NOT allow trading. The dollar volume and number of people that care about our Pink No Info issues is infinitesimally small, say 0.000001%. (This is one in a million in case you are interested.) If I am a brokerage, why would I spend any time and/or money addressing this percentage of customers and/or dollar volume? All to be able to do more commission free trades for customers?

        Just tonight I am thinking about putting together a whole portfolio of PNI issues. I would attempt to do that by putting in below market buy orders for many of the issues, like MSSEL. Having really, REALLY illiquid issues goes against everything I have preached over the years, but it would make an interesting experiment.

        Link to OTC market on MSSEL:
        https://www.otcmarkets.com/stock/MSSEL/overview

    2. Mass Electric is owned by the multi-national public utility National Grid (NGG). NGG is current in all of its required SEC filings. Mass Electric’s performance is consolidated into NGG’s financials. MSSEL is a preferred stock, not a company with autonomous financials. And, of course, preferreds are, simply, a capital-raising mechanism for companies but they are not companies with separate financials or reports–they have no distinct SEC filing requirements! IF THE PARENT PUBLIC COMPANY IS CURRENT IN ITS FILINGS, THE 15c2-11 RULE SHOULD NOT APPLY TO ANY OF THAT COMPANY’S PREFERREDS (or to its subsidiary preferreds)! How can the SEC not see this?

      The absurdity of relegating any public company preferred to the grey sheets should be obvious. How MSSEL or any other public company preferred can be subject to the the 15c2-11 SEC rule escapes me. Like others, my principal concern is that the array of brokerages (their compliance departments) will embrace whatever protocols they want and, in most instances, they will be needlessly conservative–to the detriment of their customers. This topic cuts across almost all the “link options” that Tim provides. How can the group of readers here do something about the potentially erroneous and harmful (value diminution) application of the rule to public company preferred stocks? I doubt the preferreds of JPM, Wells, etc. or of the larger REITs will be impacted. It’s unreasonable to apply the rule to UTE preferreds. Most of us see this clear as day. The SEC’s silence about how the rule will be applied is scary (and the preliminary 162 pages of ticker symbols to which the rule, purportedly, will apply does nothing to address the question: to what will the rule NOT apply!). Hopefully the SEC will get religion, be rational in its application of the rule, and clarify this mess! And, the brokerage firms need to protect their customers from the unreasonable application of the rule (of course they will…NOT).

      1. Oldman,

        Don’t disagree at all with the substance of what you say. However, as a regulated public utility, Mass Electric files stand alone financial statements with FERC (Form 1) and with the Massachusetts DPU (Annual Report). The financial statements are not consolidated with NGG or with any other NGG affiliate. They are publicly available, although with a bit more effort than a 10-K or a10-Q. So the absurdity is perhaps even greater than what you describe.

        From what I can gather here, “No info” means whatever the SEC, OTC, or brokers want it mean. George Orwell meets Alice in Wonderland.

  50. On 7/12, a single share of BANGN traded @249.9999 up from the previous close of 148 on 6/28. I wrongly accused Grid of selling one of his shares, but it was not him.

    Today, 7/22, a single share traded @ 134.00. My guess is that it was the same share that traded on 7/12.

    My best guess is that the 249.9999 trade was a short sale by an “internalizer” like Citadel or Virtu. Recall that many retail brokerages, excluding Fidelity, route their orders to an internalizer, instead of directly to an exchange/trading network. The internalizer gets to decide what to do with the order, choices being fill it out of their inventory, match it with another customer order they are holding or route it out to an exchange like NYSE/ARCA/BATS.

    Internalizers are mostly known for holding securities for very short periods of time, say milliseconds to seconds. They typically end the day “flat” holding very few securities. They make their fraction of a cent per share on these very short duration trades. Which makes this BANGN round trip unusual.

    MCG and I have debated whether trades like this are from internalizers or “dark pools.” They don’t exactly divulge who they are and why they are trading, so we are left to hypothesize. Since the 249.9999 trade was “sub penny” we know that it was NOT from a retail customer, since most retail customers are not able to do sub penny trades. This is how we get the choice of internalzier or dark pool. Also dealers, like “specialists” or “designated market makers” are allowed to do naked shorting, while retail investors are NOT.

    The theory is that the internalizer, most likely Citadel, naked shorted one share @ 249.9999 and covered it today @ 134.00, for a tidy $116 profit. And since the internalizer is actually a software algorithm running on a server farm, there was likely no human involvement in either trade. So it was quite profitable.

    The real loser was the retail customer that was trying to sell his share(s) at 250.00. He thought he had the “inside” ask price, only to have the internalizer jump in front of him with $0.0001 less.

    A pretty unusual case which is why I did a little longer writeup. A broad characterization is that there are ALWAYS hidden orders between the bid and ask prices you see. You think you have the inside price, but should assume that somebody somewhere is lurking under the water. And this is very true even on the relatively illiquid preferreds/baby bonds that we talk about here on III.

    No positions or orders EVER on BANGN in any of the accounts we manage. So we are not the aggrieved would be seller.

    1. I guess the only question I have is that this preferred rarely trades. How long do they have to cover before they get hit with a failed to deliver? Is that done monthly or weekly now days?

      Also how in the world did they get someone to sell a single share at one of the lowest prices recorded in months?

      Otherwise I cannot really poke any holes in your thesis.

    2. This the SEC allows, but if you want to trade preferred shares of 100 billion market cap BAM on the OTC the SEC will jolly stomp on you.

      Makes me want to read Flash Boys all over again.

      I’m still not feeling protected.

      But I do like these posts. Knowing the inside baseball is helpful. Please continue.

    3. Tex, I saw that. And I told you I was certain to lose my ass on the next time it traded. I wasnt disappointed, I just lost 46% of my investment on a single share trade, lol.

  51. Finally picked up a couple hundred shares of SBNCM this morning. Can’t wait until the company BBQ.

        1. Stacking, this dolphin might wind up being caught in OTC/SEC fish net also, who knows. Its a company that bought out shareholders soley for purpose of delisting. Then they keep buying up common stock float and have already “went dark”. You think they are interested in paying $5k to OTC? I doubt it.
          But they dont give a rats arse. Insiders own almost all the common shares and a huge chunk of SBNCN and a large chunk of SBNCM. They are lifers and they dont care what happens as they arent selling.
          In fact the company keeps buying them up little by little each year.
          Bur, quick history if interested. They were issued in 1980s as convertible preferreds. The conversion expired 5 or so years after they were created. Notice I said created because they were never IPO’d, they were sold to insiders. A ticker was assigned years later.
          They are non callable $10 liquidation value preferreds issued at 9%. Both series have voting rights of 1 vote per 38 preferred shares. SBNCM is the bigger float of a bit under 250,000 shares, SBNCN is under 40,000.
          The company website says if you want to buy them, find someone who owns them and ask to buy from them. And they also said they dont keep a list so dont bother them.
          Stacking Nickels, we will save you a seat at the picnic table. Bring plenty of napkins as the BBQ sauce is laid thick on them boneless ribs!

      1. Buy some shares and they will send you a fat annual report and an invitation to the company BBQ. The trades you can get from https://quotes.freerealtime.com/quotes/SBNCM/Time%26Sales

        Be aware that the popularity of the issue outstrips its limited supply and there isn’t any fat on the bone. You can buy uncallabale BAC or WFC issues with almost the same yield. Just no BBQ.

        1. Yes, great unspoken point. It has to come to you. I bought 1000 of SBNCN laying by a seaside pool at Riveria Maya a couple years ago at $15. Still have them along with some others and SBNCN too. Damn good thing I dont mind unsecured open Mexico wifi as I knew I only had seconds. And that was all I had, as by time I went to reload to buy more, the rest were gone and found out later Camroc was the culprit.
          And to think several years prior, I got some several times under $10. The good old days…

  52. Call me a turkey before thanksgiving.

    OCESP payed $425 or .425/share on Thursday, July 15, 2021. Better late than never.

    No call back from brokerage on findings.

    1. Hum interesting micahc…I too just finally received my OCESP payment at Schwab on July 15th but mine was $.50 per share and classified as non-qualified.

  53. Grid, I assume that was you that sold the one share of BANGN today. It went for $250, up from $148 on 6/28. Should be enough to buy a steak dinner for two . . .

    1. Lol, Tex, I saw that, no it wasnt me. Somebody sent out a one share test probe and it went clear to that long standing ask price. I have a feeling Im going to lose a lot of money when it trades again, ha.

  54. Does anyone out there know if there’s an OTC market for the Fluor Series A Convertible Preferred issued last month? I have a symbol in the Fidelity system as (FLRAP), but it shows no market. Most services like Quantum don’t have it listed. Cusip is 343412508. It’s a $1,000 par institutional issue, but I’m interested in doing some work if there’s a market out there. Thanks if able to help.

    1. NCSI – it is a 144A issue. These rarely leak into the public market and certainly not so soon after issue.

      Depending on price I would be a buyer if I could get my hands on it.

      1. Yes I found that out after posting the Q. Thanks though for the confirmation, and agree with your general assessment. All the best. –NCSI

  55. Not sure where to post this…. but since it’s an illiquid… OCESP

    On 6/15, I got my $12.50 worth of dividends.
    On 6/24, TDA took back my $12.50

    Anyone else have this happen?

    1. Mark, I have traded in and out of it several times not really knowing the exD date. I had a couple of stray shares left over from a past sell. I just checked because I never noticed as its so tiny. But I received the dividend from TD on 6/15, and it was not taken back. If that truly is the case, you need to call them. And please let me know what you found out.

      1. TDA agent I talked to says OCESP no longer pays a dividend. I reached out to Ocean Spray and they confirmed they still pay the dividend. (She gave me a record date of 5-31 and 11-30 if anyone wants to keep track)

        It does seem that maybe TDA has not received the money from the transfer agent, and as micahc mentioned, maybe the transfer agent doesn’t have the money yet.

        Not sure where to go from here other than wait a few more days and see if the money shows back up in my account.

    2. Mark, some brokerages do “shadow posting” of interest and dividends on the day they are supposed to be paid. If the actual payment comes in, all is fine and good. If the payment does NOT come in, the policy I have seen is that the brokerage will pull it back sometime the same day before the clock strikes midnight. (It might be earlier but I cannot tell you the exact hour they pull it back.) Typically these brokerages will show the dividend/interest when you first check the account history in the morning.

      In the case where a payment gets pulled back many days to weeks later, that is something the transfer agent and/or DTCC has initiated. That is typically NOT a brokerage issue from what I have seen. On rare occasion I have had payments changed/retracted more than 30 days after they were originally paid. Obviously this is NOT the norm.

      Other brokerages do NOT post dividend/interest to your account until they have received it from DTCC. So they could also have the case where a payment is retracted days/weeks later.

      And a third group of brokerages somehow misplaces payments, particularly bond interest payments and lord only knows when they show up in your account.

      There is NO universal standard for all brokerages best I can tell.

    3. Called ocean spray grower finance and they indicated they made payment to transfer agent. DTCC indicated they are awaiting payment. My broker provided the same story.

  56. Bought a trick or treat bag of gridbird favourite otc listed stocks. Have never had as much fun creating investigations and escalations for resolution of dividend payments in my life.

    For $50-$100 dollar missing payment it’s priceless.

    Can believe gridbird when he said he has heard everything. Agent told me today I needed to personally register at the transfer agent. So I opened an account at dtcc and basically they told me the complete opposite of what the brokerage agent told me.

    My wealth manager in a different division than my broker is following up on all my investigations now.

    Pretty sure my broker has never had the pleasure of all these OTCs before.

    With covid and not being able to spend a penny this has defiantly been entertaining.

  57. Does anyone have a list of “busted” convertibles (or those very unlikely to be called)?
    A start: CBB-B, WFC-L, BAC-L, RLJ-A, EP-C,EPR-C, EPR-E, RPT-D (unlikely).

    1. Tom:

      Add RC+C to your list. But there is only a small slice left out there (335,000 shares) after RC tendered for some of them at $25+ interest back in May.

      Those that told the company to pound sand have done OK, as RC+C is now trading for $25.36 with a $.3906 quarterly dividend being declared on 6/29/21. I always try and add a little below $25.