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.

571 thoughts on “Illiquid Securities”

  1. Anyone look at CCZ? It pays 2% on face (~$71) and trades around $56. Interesting thing about these is that they mature in 2029. So if willing to hold to maturity, they will give you a ~6.5% IRR on unsecured debt for a IG credit. Not bad….

    1. Caveat emptor on CCZ. Do NOT buy it in a taxable account. It has some very nasty surprises come tax time.

  2. Its not the path to instant wealth or cap gains, but if someone is wanting about 6.25% HQ illiquid (basically stripping out divi which occurs in 2 weeks) QDI ute CNTHP has over 1000 shares available at $52.95. I took 200 myself, but I recently bought some at $53 also, so I certainly dont need any more. Unusual to see that many just sitting there on an apparent individual sell.

    1. thanks grid. I am good for a 100 shares. call price is 51.44 so not much risk there with the div almost in the pocket.

      1. Funny Fc, but 1000 shares have sold and the same 1190 shares shown on ask havent changed, so its a bigger sell order apparently being hide. Yes, there really is no call risk. Connecticut state regulators mentioned in a recent rate filing that CLP has no interest in redeeming the preferreds and wanted them in their capital structure so they approved the rates including the preferred cost of capital.

          1. Fryman, this is probably not known (and probably never needed as history has shown) but the Connecticut Light and Power preferreds are one of the very few preferreds left that get to take majority control of the board if their dividends are suspended for a year.

            1. Grid, thanks for the additional info. This truly a “sock drawer” issue for me. Hopefully, the Fed will calm down soon. He has already made me wash, rinse and reload my socks at least once this year!! I am sick of doing dirty laundry!

              1. Any brokers not charging a commission for this OTC? Schwab and Etrade both do. Only $5, piddling when it comes to a long term hold, but there are other options.

                1. Ally is free but I have no idea why I continue to use it. Just old habits from tradeking days. It is really not that good.

                2. I opened a fidelity account just for free otc after vanguard disallowed them and tda charges.

    2. Thanks Grid. I had just added a few other illiquid recently including sister issue CNLPL at 52 but I added 50 more to my existing CNTHP stash at 52.94

      After focusing mainly on higher quality 7% plus yielders the last 6 plus months, I started this month to add some more illiquids or higher quality under par issues yielding slightly above or below 6% to balance my holdings. So I have now added

      more CNLPL to existing position
      more CNTHP to existing position
      and new positions in :
      CTA-B which you previously mentioned here
      EAI added today
      PSA-H added today

      Of course I could also not resist adding 50 more WCC-A on the late day drop today to round out my existing position there

      1. Mav, WCC-A has been a helluva flipper for me many many times this year. One of the few. Thanks for the reminder, I wasnt watching it today, will look tomm.
        Fryman, CNTHP and CNLPL were my first preferreds I ever bought maybe a bit over 10 years ago or so. So they always have that soft spot in my heart, lol.

    3. Grid, Saw some unusually large bid/ask positioning yesterday for example outsized 18,000 share bid for USB-S, fortunately after our trade was competed. Yesterday’s add goes ex today, providing a de facto yield boost.

      Score for the day was a pickup of 200 CNTHN @45; within a few hundred shares of a ten-year low price for the issue. Embracing the lower coupon as a defense against future calls (but they are 60+ years outstanding) – though loving your Inspector Clouseau findings re CNTHP. That’s some darn good inside intel, almost like you were sitting in the room with the regulators.

      1. Alpha, you just had to be bored enough to read a regulatory rate increase filing, ha. I try not to make a habit of it, but I have a few times. One being making damn sure PECO (Philadelphia Electric) was totally ring fenced from Exelon before buying up their 2028 and 2033 trust debt.
        I bet several own CLP preferreds but have never read what protections they have.. Probably the best protections I have ever read.

        1. oh man…do I have to read that thing now?
          Actually I will – and thank you for posting it.

        2. Short and to the point. Excellent protections. Reads as if written by the preferred shareholders…

      2. Alpha, I read the other day that 1 in 6 households are behind on their utility bills with an average of about $700 behind on. That is totally amazing. Probably equally as much an indictment of valuing buying the smokes, booze, and Iphone bill over paying their basic bills than economic problems. But still that is eye opening…But with companies such as CLP its no big deal. If you look on their financials they just accrue all this “bad debt” then come rate filing time get to recover the costs to be bourne eventually onto the people who actually pay. What a nice reward for the responsible bill paying customer, ha.

        1. Grid, Gotta say – that is an amazing ratio and I am surprised. Knowing no actual statistics, hard to imagine there are 1 in 7 who can’t actually pay their utility bills. Always some yes, and we need to help those folks. The others…it sometimes seems we’re enabling that outcome.

            1. It would be a crime if we weren’t allowed to sit on the couch and be as wide as 2 axe handles and stream Netflix, you tube, etc. Gotta get those cell bills paid somehow. 🙂

  3. Sold one of those Fat finger trades today. A couple months ago was trying to buy 250 share of RMPLP typed in instead RMLPF
    Called right away and tried to get it cancelled no go. Must of made some traders day at Pershing. Put it back up for sale with a limit order .10 more than I paid for it. Just stubborn, didn’t want to sell at a loss. No hits.
    Finally gave up and put out a sell order at market. They only let it good for the day. Actually sold for .17 more than I paid for it. But still a loss since OTC I had to pay a commission.

      1. River North Baby bond Tim has listed here. The other one is some company in England sells college software

  4. A rare laying there for the taking crack at a Hawaii Electric 5% $20 “par” preferred is there at $17.20. Goes .25 exD next month. Unstripped 5.81% illiquid yield. I really want 6% but there has been a hard wall there. I toed in for about 10k worth. HAWLN is the ticker if one is so inclined.
    Edit….Well never mind that was quick. Those 900 shares showing were gone a minute after I bought mine….Maybe another day.

    1. Well, the comments–including mine–imply that someone is a bit looney for buying BACRP shares at a 3% yield. I guess we’re wrong. Shares traded today at $275, or a 2.55% yield. I can’t imagine anyone having a motive to pay such a high price other than the issuer (B of A, which owns the original issuer). Trying to eradicate the 7,000 shares outstanding? Anyone want to venture a guess as to any other reason such a high price is being paid?

      1. Sorry Grid. Meant to place this under the BACRP discussion. Enjoy the holidays (someone selling the BACRP shares at $275 should have a great dinner–and $295 is the lowest current ask).

  5. So who here is buying or selling BACRP at 243 a share? 6 sold today. lol. crazy. Down from 268!

    Bid is still 186 giving a 3.7% yield I think it is. 7 bucks per year.

    1. FC—I follow BACRP and don’t understand the price action either. Wonder if BAC is buying them back as small amounts hit the market. It’s probably just one buyer. Previously, I had a very low bid for 200 shares, filled at $102 and sold them many months later for $175. Looks like I should have held on for more—just kidding. Seriously though, I don’t have any clue as to why it sells so high.

    2. At year-end 2021, there were 7110 BACRP shares outstanding, some of which, I suspect, were B of A owned. The bank would seem to be the only party that would pay the equivalent of a 3% yield to buy these shares to eliminate a nuisance (a fly spec on its balance sheet)? Why now though? I sold a few shares at $182.50 earlier this year and wondered why anyone would pay such a high price.

      1. You put me to shame, Oldman. I bought a little over a hundred at $110 a longer while back and sold at $170 a couple weeks later and thought I was doing good, ha… The near mythical 6% purchase price yielder and well under par to boot illiquid ute is getting close to returning.
        1941 issued UEPEO of the now named Ameren MO utility with preferred profit coverage ratio of over 150 times has a bulk seller out again. They are laying there at $78 but I got 100 more at $76.50. Strip that out at $76.50 and its a 5.95% yield so its getting close. I need it to drop more or one of its sisters to buy more.

        1. And, today, a few hours after BACRP had several shares trade in a $240-$268 range, 72 shares trade at $112.5! What?

          1. Ha. And here I thought it was a waste of time to put in a bid yesterday as a lowball since it was selling so high.

        2. Several of the Ameren preferreds had some “odd” trading recently. AILLM, which seldom trades, moved at 83 and change yesterday. With a 4.92 coupon, yield is 5.9%. Before yesterday, the year low was 91 or 92. Still available around 87. No Ameren news of any consequence. Dumping? Tax loss harvesting? Not an efficient market.

          1. Oldman, this is why I like them. They are basically non correlating assets within the same investing sub-sector. It was very easy for me to get out at low yields when the liquids were foretelling long prior where the yields were going. Now its time to start toeing back in $20-$25 cheaper. They are kind of at a disjointed stage some various ones havent traded enough yet to bring the price in line with others. Could certainly go lower as compared to liquids, thus my slow nature getting back in. But many are already at 2004 ish pricing.

  6. We often talk about preferreds/babys/terms being “illiquid.” Clearly one of the requirements for any issue to be classified as “liquid” is that it must trade every day the markets are open. The exact opposite exists for many p/b/t’s. Here are twenty four issues that last traded before November 1st 2022. They are in two large buckets, first is utilities that Grid has probably owned. The second bucket contains issues that have stopped paying dividends/interest and are trading for pennies. More of a curiosity than an actionable buy list IMO.

    Ticker, Company Name, Paying status, last trade date

    SMANP, SMAN CAPITAL TRUST I, Deferred, 9/24/21
    DMRRP, Dayton & Michigan Railroad, Paying, 11/9/21
    OCESP, Ocean Spray Cranberries, Paying, 12/6/21
    PARDP, PONIARD PHARMACEUT, Deferred, 2/3/22
    AILIO, AMEREN ILLINOIS CO, Paying, 5/23/22
    AILIM, AMEREN ILLINOIS CO, Paying, 6/24/22
    MNESP, MSA SAFETY INC, Paying, 7/1/22
    MSEXP, MIDDLESEX WATER CO, Paying, 7/20/22
    AILLN, AMEREN ILLINOIS CO, Paying, 7/28/22
    AILIN, AMEREN ILLINOIS CO, Paying, 8/18/22
    AILLM, AMEREN ILLINOIS CO, Paying, 8/19/22

    Best I can recall, we have never owned any of these in any accounts, nor do we have open buy/sell orders for any of them.

  7. Somebody really wanted IPWLP this morning. Up 41% on over 600 shares to $112 currently. It is redeemable at $118 FWIW.

    1. If everything is getting redeemed its worth it. But I cant locate any info at all. So if its just IPWLK, that was a bad buy.

      1. Grid, I asked about this in reader’s alerts but I also cannot find any information. I would have thought Edgar could pull up the document stating such. It raises questions in my mind that I obviously do not know the right sources to find this out.

            1. I didn’t notice, but according to Quantum Online, the redemption for IPWLK is 100; for IPWLP $118.

              1. I confirmed w E*TRADE corp actions those are the prices named in the redemption notices on DTCC.

                  1. Dec 30 is call date
                    mcg, can you pls confirm that all five IPL pfds are being redeemed? Thank you!

  8. Ameren $100 face 4.25 preferred (AILLO), rated Baa2/BBB-, made a new 10 year low @ 75 on 300 shares, down -13.3% (11.50) from the last trade on 10/5 @ 86.5. Definition of an illiquid. Current yield =5.67% so it is not exactly the highest yielder in IG world.

    We do not own it in any account.

    1. I have been watching those type of preferred and I do see them slowly going down a bit more on average each month. My issue is right now I cannot just let 5-15 good till canceled orders just sit around for months on end to capture less then 6% yield. It just makes zero sense. Thus bids where I can earn 6% or more would be sitting for a very very long time.

      With that said I own some of these types of issues and yes I have taken a paper loss but they are the type of preferred I do not even think about. Plus when you own stuff like OCESP/expert market ilk which is valued in my account as zero and I cannot even see bid/asks you kind of become immune to some minor paper losses. Time marches on and just pay me. I will use the money to buy better yielding stuff. Anyone who owned almost anything for more then 12 months is most likely sitting on some losses. What matters is during a deep recession who pays and who does not.

    2. Yeah, I used to have >30% of my portfolio in these kinds of ute illiquids, thinking I was set for the duration. Then inflation shook me out of almost all of them. I’m still waiting for them to fall enough to get back in, but alas that time is not yet here. I did buy some SR-A in the 22s, but I’m already out again. I just don’t trust this is even close to over. I feel safer in a monthly year-long ladder of treasuries and wonder if I want to buy more I-bonds come January. Certainly not buying any crap preferreds I have to worry about. Oh, what to do, what to do…


  9. Southern California Gas (Sempra subsidiary) has two nonredeemable 6% preferred issues: SOCGP and SOCGM. Both are thinly traded with comparatively few outstanding shares. The Quantum Online summaries are identical and I haven’t searched for prospectuses. Small volumes of SOCGP trade fairly regularly and seem consistently to trade at lower prices than SOCGM. My suspicion is that this is volume-based, with SOCGM having fewer shares outstanding. But, I can’t find anything else that might cause the M issue to trade at higher prices consistently. Does anyone know of any differences between these two?

    1. Oldman, M series has a significant smaller float and trading float. The immediate original holding company owns the vast majority of the float. I cant remember off hand but only a little under 30k is amount of tradeable float shares. Terms of each are basically identical. Less shares equals generally stickier price until any dump would ever be needed.

    2. Additional thought/questions on the two SoCal Gas unredeemable preferreds. There are news reports of the Calif Utility Commission and Legislature requiring SoCal Gas to convert its power generation sources to non-fossil fuels by 2030. Anyone know more about this and/or want to offer an opinion if this happens what might happen to the two SoCal Gas issues? Today, SOCGM was trading at par for the first time in many years. A reaction to higher rates? The potential elimination of gas? Something else?

      1. OldmanRb, in a nutshell the word california is the reason I never considered buying them. I like UTEs a lot and I realize my concern is probably irrational but why buy them in that zany state? There are better choices out there (or at least close/similar quality/yield wise) but not non-redeemable.

      2. Oldman utes get return on capital costs. They will be fine on mandate. I think you meant SOCGP. It actually dove down there a month or so ago, I bought and quick flipped them as price was bouncing back over $26. Actually went to $27 so I kinda blew it being early.
        Anyhow uncallable or not 6% is not very high as you can get senior unsecured make whole utility bonds with better yields than that, which I also own The uncallable feature is not really valuable….at this time. Of course it could down the road. If this or sister goes below $24 I will be personally interested again. Right now, I still see more pain ahead, so sticking in live floaters and resets (mostly).
        Charles, sorry, just now noticed your above post, so no I do not own now.
        Oldman, you may keep an eye on PLDGP. This has been one of the few perpetuals I have been trading profitably lately. One day a week or so ago, I bought I think 400 at 54.50, sold a few days later at $56, and bought right back at $54.25 same day. I bought another hundred amount again today at 54.25. Strip that out and accrued your looking at almost 6.5% YTC, with a present 7.8% or so yield at $54.25 with a bloated 8.54% par price to induce a par call in 2026. Prologis is as strong as they come and the premier industrial reit of the world.
        Im trying more to position for cap gains down the road with well below par resets and a few fixed, plus own live floaters riding the wave. But holding this one in my pocket aint the worst feeling in the world.

  10. The illiquid trade winner today was Hawaiian Electric, HAWLN. $20 face, 5% coupon, callable any time. It traded 1,749 shares @ 17.00-17.04 which gives a current yield ~ 5.88%. Before today the last trades were on 9/13/22 @ 22.00, so that is a $5.00/-23% change. It closed today @ 19.65.

    We do not own it in any account nor were we involved in any of today’s trades, but I am thinking 5.88% for a UTE is fairly attractive.

    1. Tex, why not consider NI-B.? It is a more liquid IG utility yeilding 6.8% at yesterday’s closing price.

  11. Another Grid special, FIISO, traded a whopping 100 shares today @ 130.00, which ~ ties the 5 year low price. It is a $100 face, 8.46% coupon, non-callable with a current yield = 6.52%. It appears to be a true perpetual, but Grid will have to chime in. Previous last trade was 26 shares on 9/8, so it is REALLY, REALLY illiquid. . .

    We have no positions and/or orders in any account nor were we involved in this whale trade today.

    1. I own about 5 or 8 shares of this. I forget. I pretty much gave up on it. Getting a decent yield on small banks is trivial now days. Still I hang onto those shares because selling them will most likely be a hassle since I do not own 100 shares.

      The bank does buy them back but in tiny amounts. In 2021 they bought back 43 shares of FIISO. Wow! Heh. About 171,000ish outstanding still. And yes.. it cannot be redeemed.

      Such a goofy preferred. I would be a buyer at 110 now days but I am not going to leave that kind of order open for months on end. No thanks.

      1. Well I guess I fibbed. I bought a whole 6 shares of FIISO yesterday for 132. I am not sure what I was thinking. 6.5% yield. At this rate I might have a whole hundred shares in a couple of years. I want the next 6 below 132…

        I was mostly buying PSA, GDV, and EAI as they were fading down though. So a yield of 6.5% was my higher risk purchase. 😐

    2. Yes, Tex, its largely illiquid because the bank founding family owns most of the perpetual, cumulative, noncallable shares. It was privately issued at banks inception and a few have leaked out on OTC over the years after a ticker was assigned. I bought some many years ago in $90-$100 range and sold off at $150 a couple years ago.

  12. Fyi, Quantumonline changed 3 Hawaiian Electric Co preferreds that had incorrect call prices if the company redeemed them. I referenced the last 10-K on page 110. They have made the corrections as stated below.
    1) Call price for HAWLN (series I) should be $20 and not $21.
    2) Call price for HAWLM (series H) should be $21 and not $20.
    3) Call price for HAWLI (series J) should be $21 and not $20.

  13. Large block of WELPM offered at 108 today. Yield of 5.56% for a 6% coupon, noncallable and IG. Get ’em while they last (yes, I know there are many IG or close to IG preferreds available at higher yields, but this one is annuity-like from a partially-regulated, rock-solid utility; sock drawer material).

    1. Oldman, I saw that too. I only bought enough to round up to get to an even 500 shares. I got most of mine at 106 a few months ago and it was too easy to get these to top off the tank, so I just paid asked.

    2. How do you know a big block is up for sale? How can I learn to obtain this information also. Thanks

      1. A lot of brokers let you know how many shares are available for sale at a certain price. Often you see the number next to the asking price.

        bid 25 (100) – ask 26 (10,000)

        Some brokers give even more detailed information. How many shares available at 27, 28, etc.. as well as the opposite. It is useful information if you are a whale.

        As for WELPM.. I am still holding out for better deals yet to come or maybe I am confusing that with summer laziness.

        1. fc, Regarding WELPM…you cannot be lazier than me, or know less. For these reasons, we’re adding long-hold WELPM and others judiciously as they drop and one day will know we bought/added at the bottom.

          1. Alpha, Its very possible it may bleed down more at some point, but its possible it wont either. Or somebody might get 100 at say $106 and nobody else as liquidity dries up. There are only 42,247 shares tradeable from a 100 plus year old issue. So availability is not always there at a reasonable price.
            There are many more issues with higher yield and safe quality also. But an issue like this serves as a core none the less for me. Im past a full position mostly at $106, but if some miracle happened and some spilled under that, the pain trade for me would be to buy some more, also.

            1. Hey Grid, Exactly….hoping for plenty of that pain trade going forward. On some issues have up to 7 tranches spread over a handful of years, each tranche larger and better-priced than the previous. Staying in my lane as an accumulator, not flipping or selling, and only buying high IG; so lots of waiting as many positions still priced under current market. Recently initiated positions in the high-FICO, low-coupon issues. When they got fear-dumped, multi-year bargains were flying like expired racetrack tickets. Maybe counter-intuitively, would welcome the opportunity to add to every single holding at a lower price. Though like you mentioned, if that opportunity does not present itself, then we added at the bottom.

              1. Alpha: Doing the same thing. I sold off at the beginning of the year, bought back in June, sold a bunch during the rally ( although a bit early, before the highs). I was %55 in cash, been buying last couple of weeks, now only 45% cash. As far as I can see, as long as the Fed keeps raising, we should hit lower lows. My question is how far can the fed go, the treasury has to pay higher interest on the debt at some point something-gotta give. Anyway hopefully we got at least another month of buying opportunity.

                1. Sounds good Libero! Seems we have two possible near-term “events”. 1) If the equity market reverts to mean as some believe, that 20%+ haircut would surely have some baby-with-the-bath water days. 2) QT. This one is a mystery, but one would think liquidity hot-spots would create some volatility.

                  My position is I know nothing. The market will tell us when it’s time. See you in the tranches!

          1. Glmpa, You can see it on your brokerage platform, but on OTC you see also that 530 shares were still available at $108 at market close. It gradually whittled down throughout the day.
            Although this was accurate, most times brokerage sites tend to “hide” the total share availability, even level two hides a lot also. Many times they will just post a base “100” share availability when there are actually more. And that is not even counting the computer bot intercepts that front run the sell order.

      2. GLMPA, to answer your question (and to expand on Grid’s explanation which, as always, is the gospel and is accurate), my less than foolproof way to know if shares are available is to keep active “watchlists” on several brokerage sites. Those sites show, among other variables, the asking price for any available shares, volume available, the current bid, the date and price of the most recent trade, etc. Brokerages are not immune from manipulating data, so you can’t, necessarily, rely on the information. Sometimes, seemingly out of nowhere, a small block of illiquids will trade and there never was an indication of availability, There also are numerous websites that show bids for shares versus pricing for whatever is available, along with volumes; these require that you input ticker symbols one at a time, so it’s not an efficient way to effortlessly monitor activity. I find the watchlist method to be easiest for me–particularly since I want to monitor several issues simultaneously.

  14. You might ask: “How big is the illiquid opportunity space?” For the sake of simplicity I defined any issue that did NOT trade last Friday 8/19/22 as being “illiquid.” I could have based it average shares traded daily or another measure, but this is a reasonable assumption.

    Here are the stats from the database of issues that I track:

    Total= 672 issues
    Currently paying dividends= 599
    Suspend payouts= 72 (One issue SENEM never paid dividends)
    Illiquid= 234, 34.8% which is a HUGE percentage IMO

    Total= 220 issues
    Currently paying dividends= 213
    Suspend payouts= 7 (Two of these pay in stock per Justin)
    Illiquid= 28, 12.7%

    For the III’ers that play in the illiquid sandbox, there seem to be plenty of buried treasures to search for. I still think that most investors should NOT be in this sandbox. Maybe we need a new classification that limits trading to “Illiquid experts!”

    For the record, we rarely go into the illiquid sandbox with any orders. We hold microscopic amounts of a few issues that went dark.

    1. Personally I agree, Tex, and their just really isnt any relative value as a whole either. A few could possibly be birddogged at a good price if an issue doesnt have a reasonable bid floor under it possibly. The illiquidity is generally from 2 camps. 1) Relatively big floats that were meant for institutional purchases and are mostly institutionalized since issuance. 2) Tiny floats from issuances of 50-100 plus years ago. And most having various tenders over the years that shelled the float even more. One uncallable old OTC issue has only 780 shares outstanding $100 par. And who knows how many of those got “lost in certificate form” eons ago from deaths and such.

      1. I think the key words are relative value at the moment. I would guess NSARP did not trade on Friday but if it yielded 6% right now I would be buying it. No reason not to if your goal is “reliable/stable” income for a long period of time without worrying too much about a call risk if bought under par. And on top of that high IG rating from an ute. But since it yields 4.6% @92 right now I have lost all interest in tracking it until I notice these ills dumping truly hard. Just looking at it’s price it only hit a 5% yield when bought at 86 in the recent past.

        With available data now days being much easier to find for people who are used to digging this info up I feel there are many safe plays to buy. But no deals which is the key to accepting such an illiquid security. So that means common sense dictates gravitating to the more liquid and “fresher” options then a preferred issued in the 1950s when you can get more yield for similar risk.

        Pretty boring area right now about sums it up when seeking a deal. With that said I hung on to quite a few ills for the sake of having some diversity, stability, and reliability from key choices.

  15. General rule is that NOBODY should own illiquid preferreds/baby/terms? Or more specifically ones that are only tradeable on the “expert market.” I see more and more cases where someone that holds these securities gets taken to the cleaners when selling. I usually do not post about them because most III’ers (MCG excepted) cannot buy on the expert market. So there is no point in posting that XYZ traded at a great price when most cannot enter a buy order.

    Today’s example is on old Grid favorite: AWRY (ALLEGHENY & WESTERN RAILWAY) It is a $100 face, 6% coupon issue that traded as high as $135 in 2021. Today 162 shares crossed @ 80.00 down from the last trade on 1/21/22 @ 91. This gives a current yield of 7.5% and I am guessing that many III’ers would jump on that if they could enter a buy order. Of course, it is not as extreme as the 50.00 trade back on 11/30/21.

    The question is why someone would sell the 162 shares @ 7.5% yield? The possibility that concerns me is that someone HAD to sell. The other choice is that someone held it before it went to the expert market and decided to sell thinking nothing has changed. We do not know, but I am thinking most investors should NOT ever buy illiquids like this because you never know when you will HAVE to sell it.

    We were NOT involved in this trade and do not currently hold AWRY in any account.

    1. BTW, yesterday’s example which I did not post about was HAWLM (Hawaiian Electric) which is a $20 face, 5.25% coupon. It traded down to 15.00 which is a 7.0% current yield. Down the the previous close of 21.31 on 7/11/22. The 15.00 trade was a TEN YEAR low. . .

      1. Tex, HAWLM and a couple other Hawaii electric preferreds were screwed up for Tuesday and Wed. They were showing bid price of 0.01 for 10,000 shares.
        I tried getting in bids several times in 2 different accounts and they wouldnt “show up”. Very odd so that probably caused the odd trade. Today it was working fine and showing bids. Some of these need to crack. Many are still off in 4% land and need a good ass bustin’.

      1. mcg how can I reach you directly? I am not looking to sell any of the very few dark positions I hold (thanks to this site, I knew what I was holding and made an informed decision). But if there is in fact a process to do so, I’d like to know more about it.

        1. Bur – how much of what do you want? Some 144A I can not touch but most securities are fare game. Most are basically impossible to gather any significant quantity as they are locked up.

          Email @

    2. Tex, probably naively, part of me thinks many of these issues will eventually become tradeable again, mostly becuase the current restrictions appear so nonsensical. I let a few drift in knowing they were becoming annuities, but yes would love to have access to this gold mine, even if they remain locked in. The ultimate sock-drawer.

      Look at KTBA debentures (ATT) at 7.92%. Good grief.

    3. “Someone” (estate planner, probate attorney, financial advisor, stock jockey, your cousin, etc.) ended up looking at illiquid shares and didn’t know what to do. Happens frequently w/“illiquid REITS”, I can only imagine the lost opportunity resulting from “expert market”/illiquid securities novice panic.

    4. Hello Tex, trying to wrap my mind around these illliquids. I think we all have a strategy or looking for one to build up our nest egg and have the best of both worlds, capitol preservation and income. I appreciate what you and Grid have shared over the years . Grid’s strategy was working great until this 144a ? ruling came along. A few people here accepted taking some of these stocks over to the dark side and I think others have expressed regrets.
      I myself had one and one only (WTREP) and it was called recently. I took the risk for 2 reasons. One, it was a high dividend payer in a low rate market at the time and Two, it was a floating rate that if rates went higher (which they have) there was a chance it would be called and I would be out of the stock , which did happen.
      Also consider some of these stocks mentioned had few shares left in the market even before this ruling so it was a limited market to begin with and now even more so.
      I guess what is murky here, is I think there is now two illiquid types of stocks. Ones that only the experts can trade and ones left on the OTC or pinks that have low volume that some of us can still trade in depending on the broker.

      1. Charles, so much has occured the terms get confusing. Concerning 144a, those have always been around. Basically only big wealth or funds are allowed to buy. Somehow over time for whatever reason unbenownst to me, a few of the shares “leak out” onto OTC. They are almost like private issued preferreds which in past have had more money in them than public issued ones. A lot of companies have private placed untradeable issues we never even know exist unless you dig into their financials.
        Anyhow, 144a issues are unrelated to experts market because they werent supposed to be traded OTC or on a market to begin with.
        The experts market has a lot of good in it. It just ensnared a tiny microsubsegment that tended to be these safe old issues. It originally involved companies being bought out turned into subsidiaries and then the financials from the specific subsidiary of preferred are not being reported.
        But now more can get ensnared especially if they are vulnerable to be taken private, or an entity like a shipper where a few own the majority of shares.
        The best way to avoid all this is to make sure there are protections in prospectus that have redemption clauses on a change of control. But even those can be manipulated as done by CDR preferreds recently.
        There are several that have been bought out but companies have expressed intent to keep on exchanges. But intent and long term follow through are not the same.
        Utilities are not safe either. The old consolidation game. Some private entities are buying them up. And if they dont leave on exchange they wont trade on OTC if they dont release financials. The fact the financials are pubically available through various public means is irrelevant. Several are untradeable now and more could be in future. You have to be careful. The way the yield market is now, there really is no benefit to owning illiquid utes as most are sub 5% anyways. You can get close to that in the debt market, and higher in the liquid market.

        1. Grid, your example of the shipper is a good one. Since the majority shareholder is taking over there is no change in ownership so no reason to expect them to be called. The saying no plans to de-list and actually doing so after the take private can change. Yes some funds ( see most recent list on Yahoo) would have to unload and allow buyers to jump in at lower prices, but the majority holder of some of the preferred and note ( Fairfax ) wouldn’t have to. They might even buy more at the lower cost

          1. Also Grid, I agree we are coming to a time were there will be the opportunity to pickup new issues with a higher coupon than the old illquids

    5. Tex – fully agree everyone should create the simplest path to wealth possible.

      -No expensive money managers
      -No fancy strategies
      -No exotic, hard to understand investments
      -No weekly, monthly or even yearly management of securities.
      -No effort; just keep adding to the pot.

      Most of a persons wealth should be concentrated in the lowest costing index funds.

      1. micahc,
        After comparing my account (up 21% in a yr ) to a SP500 fund up 33% in a yr. I have to agree with you as to growth. A lesson I wished I had learned when I was younger. But now looking more at stability and income.

  16. Guessing an III’er won the illiquid lottery today. UEPCO is @ $100 face, 5.5% coupon electric utility. Closed Monday 8/8 @ $100. Next trade was 1 share today @ $175. Due to inflation, a steak dinner without wine is probably $75 in most US cities, so this buys one. 10 shares later traded back at the earthly price of 100.01.

    Point being every issue you hold should have a “for sale at” price, particularly illiquids. We did not and do not hold UEPCO in any account, but if we did, I would have been happy to sell any and all @ $175. I suggest having way above market standing sell orders on illiquids. You never know when it will be the winning lottery ticket. Not very likely, but as this trade shows, has a small finite probability. We held one nameless illiquid a few years ago that we sold for 2X face. It was less than 100 shares so did not show up in the high/low for the day, but did count at the steak restaurant.

    1. Hi Tex the 2nd
      i own this issue. Everywhere i look the share price is listed at $175, including TDA. The bid price is $102.03 and the unrealistic $175 price is messing up my account, as it holds a mammouth gain in that one issue and will do so until another trade is executed. Hopefully soon. Thanks.

      1. Howard – With today’s trades, I’m so sorry for your huge losses…haha It must hurt deeply….

        Is this messing up of your account only when viewing thru ThinkOrSwim?

        1. Hi 2Whiteroses
          The inflated share price was causing my portfolio value to be ‘off’.
          Big gain on the day the share traded to $175 – and offsetting big loss
          when the share price dropped into normal range. It was all irrational movement. What can you do when a $100 issue trades at $175, unless
          the same buyer who pushed it there is still making mistakes ? which I
          expect it was. I once bought $40K of a stock that I wanted $4K of. OOPS.
          Reversed that one in less than one minute. That is the only drawback of having a margin account that I can think of, the ability to buy much more
          than I wish to , in error. The moral of my story is ‘ slow down ‘. Love reading all the comments here ( at least the ones I understand ). and the private messages with a few folks that I accomplish on S.A.

    2. Tex, you appreciate this stuff… Here is an example of where 144a preferreds intersect with the OTC pink sheets … CBKPP… 4 trades today… two 50,000 share block trades three minutes apart. Then one 100 share trade and a 40 share trade….

  17. The strange trade of the day is Connecticut Light $50 face, 4.08% coupon, CNPWP, which was issued in 1949. It closed up $8.00 today @ $50.00 on 133 shares. There were 38 shares that traded @ $54.00. The last trades before this were on 7/18, so this is really, really illiquid. I get that this is an electric utility, but it is not clear to me why somebody would buy any preferred today currently paying 4.08% . .

    We do not own it in any account and/or have any open orders. If we did own it, we would be more than happy to sell them all @ $50!

  18. I bought OCESP just before they went to the dark side (obligatory curse on the SEC here), fully aware of the risks. But I can’t for the life of me remember what their nominal liquidation pref is (nor can I find it anywhere). I *think* it’s $50. Can anyone confirm?

    (To be clear, I’m asking only to double-check the dividend I’m being paid, *not* because I expect it to be called…)

    1. Bur, you really should call Ocean’s CFO DANIEL CUNHA at their corporate offices in Lakeville-Middleboro, Massachusetts. He can be reached at (508) 946-1000 Weekdays, 9:00 a.m. to 4:00 p.m. Eastern Standard Time. Please report back to us, Azure

      1. That’s just kind of out there enough I might do it…

        “Hello Mr. Cunha, you don’t know me but I hold a tiny position in OCESP. Can you please remind me what the liquidation preference is for that issue?”

        I’m sure he’s a gentleman and will be happy to speak with me…

        1. Bur, the “par” value is $25 being they are 4% perpetual preferreds. I can not remember if that is different from liquidation value. These are very old. I found them dating back as far as the 1960s, but Justin here I remember found them to be dated considerably further back in time.


            You can trace them back to 1947 easily. Page 13 says how many outstanding at the time. 8900 approx. Page 20 explains why they were created. To level out coop ownership based on actual deliveries.

            I imagine they created a new preferred later on so they could issue more or bought someone out who had the same setup.

            What I would like to know is how many outstanding of each now days and if they still issue them? This forum could easily own > 10% outstanding or more.

            micahc, how would we even buy them anymore? Are you able to place bids?

            1. If 8850 is correct then I own 6-7% of them myself that I picked up for a bit over $14 after it went dark.

              I can’t imagine there aren’t more than that floating around though if I was able to get that many. We could probably make a good run at that 8850 shares if everyone here totaled what they own.

            2. The P series share count went up from that early period. The participating preferred O series went down over time after it was issued. It is considerably smaller than P. The only real way for an accurate share count is to email the above link and see if they will find the answer for you….You can possibly buy more shares if you can somehow get yourself declared qualified to be an “experts market” trader.

              1. You certainly have to be more creative if your brokerage wont allow the transaction through them though.

    2. Notes: $25 – 4% ($1) – paid 6/1 and 12/1

      Let me know when you want to let them go will provide liquidity @ $16.

      1. aha! I was missing the frequency–semi-annual rather than quarterly. All clear now, thanks.

    3. BD
      A 10 year chart for OCESP shows that it has never traded over $25 so that must have been the par value at issuance. I would expect the liquidation value at $25 , but I am basing that on the chart, not on any ‘proof’.

  19. Grid, I finally sold my last 100 shares of AILLI @ $103 (a bit sad), I bought most of my position much cheaper in 2008-2013 and I know you follow this illiquid and others their parent backs. You still holding? All the best, Azure

    1. Hey Azure…Soooo, it was you thumbing your nose at my 94 bid the other day. You wouldnt budge off that $103 you cheap b@stard, so I gave up, ha. I havent done much in old ute section lately. I got a shot about a month or two ago to bag a decent amount for me of NEWEN and WELPM in $106-$107 range and took advantage since that was basically a 10 year or so low. I have a couple others but they havent traded since last year. If a good sell off would occur, I would like to buy more.

      1. Ha, it was my last 100 shares to take profit and money off the table on a lower yielding perpetual Ute. I figured someone out there would want it at 103. I remember trading the old Hawaiian Electric illiquid preferred with you and being soooo happy when I finally sold the last of them. Here I’m a bit sad, but I have a feeling we will get another shot well under par… someday
        Hoping you and your family are well, Azure
        BTW, anyone that wants to reach out to me, I’m on Reddit under Azurebluenomad 🛸

  20. Shares of FIISO appeared on the market today at $150. First availability since late April. Coupon is 8.48% and yield @$150 is 5.65%. Upstate New York Bank holding company (“FISI”) is the issuer. Non-redeemable. Unrated but “feels like” just below IG. Most of these Class B shares are owned by the bank’s owners and execs. I’m not advocating a buy; just informing. Do your own due diligence.

  21. Interesting move today in illiquid PNMXO which is a $100 face, 4.58% cumulative ute rated SP BB+. It traded 202 shares @ 84.01 down 9.99 from the last trade of 94.00 on 6/21. Current yield is 5.45%. It was issued in 1965 and is immediately callable @ 102, which holders would love if it happened. There is a question that any potential purchase MUST do diligence on. Public Service of New Mexico agreed to be acquired by Avangrid on October 2020. Appears that New Mexico regulators did NOT approve it and it has gone to court. I have no idea if/when the merger will be approved, but you would need to understand how PNMXO will be treated, if the merger finally does go through.

    No positions and/or orders in any account.

      1. Ya, I tried to fine tooth comb it months ago. No angle here. Avangrid is trying to actually buy PNM Resources in which the actual utility is the subsidiary. There definitely wouldn’t be a change of control triggered because this preferred has been acquired at least once previously. So if it didnt trigger it then it wouldnt this time either.

  22. Any Central Parking 5.25% Debentures (CRLKP) holders still out there and have you received your 2Q 2022 interest payment yet?

    Last I checked there is only 44,000 shares of CRLKP outstanding. I have owned this security in the past and usually got paid by the 7th day of the following month, but not this time.

    Still nothing at Schwab, but they are of course always dead last to post the funds.

    1. Rob
      I have a position in Central Parking (CRLKP) as well and have not received payment yet. I’m with TD Ameritrade.

      1. Guys you all will get it damn well on their time not yours, lol.. And dont blame the trust company who pays as they always distribute cash to DTC on time. It will be random but it will come…For example in January for TD was 1/20…Probably New Years Eve hangovers contributing to the near 3 week delay. In April they feverishly worked overtime to deliver the interest payment 4/13. Less than 2 weeks late that time.

    2. Rob—I also own this issue. where does one look to find the # of shares outstanding? Thanks.

      1. Annual filings under debt…. Divide by approx 1.1 million outstanding by 25 gets you the approx share count.
        Subordinated Convertible Debentures
        The Company acquired Subordinated Convertible Debentures (“Convertible Debentures”) as a result of the October 2, 2012 acquisition of Central Parking Corporation. As of October 2, 2012, the convertible debentures were no longer redeemable for shares. 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 years ended December 31, 2021 and 2020, respectively. The approximate redemption value of the Convertible Debentures outstanding as of December 31, 2021 and December 31, 2020 was $1.1 million.

        1. Grid—thanks. I bought 863 shares at $23 recently after it went xd. My YTM is 6.89%.

      1. I called schwab about the central parking payment. After 90 minutes on hold while they “researched” (and I pruned apricots), they came back and said they would need to do even more research and would email me.

        I suspect it was just time for the guy to go to lunch — no email, 2+ hours later, but we shall see.

        1. At least it wasnt a total waste of time for you, ha. Its useless pushing on the string. They know nothing (at least the front line boys). It will come in due time. I didnt get mine until the 20th this past January. Inquiring only 13 days after you should have been paid? That is calling way too early, lol.

        2. You are right, Gridbird.
          Got an email back this afternoon.

          “We expect the July 1st dividend to arrive within the next week or so.”

          Not very helpful.

  23. CNTHP went xd today and I bought 500 @ $52.48 which is a 6.25% yield on a perpetual rated Baa2 and BBB+. Someone wanted out and just hit the bids. It traded as low as $51.59 and closed at $54 on above average 1.3K shares.

  24. SLMNP is showing in TD as bid-ask of 1017-1130 with a last trade of $990.

    Is this real, or just junk info in TD?
    Some brokers would not even allow you to sell , and others do not execute sell orders even below 1017.

    I guess, we will have to hold SLMNP until eternity?

    1. On the OTC site looks like some “expert” bought 105 shares starting at $802 and ending at $990. Some lucky folks sold it at a reasonable price. See here I owned a bunch but got out before it went to grey market. However, I do hold quite a bit of KTBA so am in the same boat. Might be worth keeping a standing sell order in case lightning strikes twice.

      1. I own two shares of it. For the one share in my fidliety 401k plan, I have an open limit order to sell that the price I paid. I may lower that some after I collect a few more dividend payments, but I don’t think I will set it below $1,000. Who knows, maybe some crazed buyer might take it from me someday.

        My other shares is in a Merrill Lynch Edge account which doesn’t seem to want to accept a limit order for this stock. I think I might be “stuck” with that share forever.

        1. At ~$800, slmnp yields >7%, so maybe, as was mentioned before, we should consider it a perennial annuity, hoping slmnp continues to pay the distributions.

          I wonder if there is ANY broker that actually executes sell orders for slmnp

          1. I have done multiple google searches about this topic and there is no way an ordinary person can buy expert market securities from a normal online broker. Now this does not count special client services I do not have access to or any such thing but it is a hotly discussed topic on a few forums and everyone has failed that I know of. There my be a few exceptions of certain securities but beyond that if there was a way it would spread like wild fire among people like us.

            P.S. Ocean Spray paid this late June/July like clock work.

            1. Fc,
              Thanks 4 ur reply. So, no known way to buy slmnp, but what about selling it if u already hold it? It seems this also can’t be done , at least in the brokerages I have tried: either the order is rejected, or stays “open” without execution even if the ask is low.

              1. I have to admit not trying that lately. I did in the past with ally and the order was open when trying to sell but it has been many months since I last tried again. I thought it was perfectly fine to sell expert market securities but it would be odd doing it. Meaning if 1000 was rejected you might have to try 950 next. And so on. Until the sell order sticks. Perhaps. Just guessing. Not something I wish to try. Knowing my luck it would get sold doing the experiment at some low price.

                I plan on keeping my SLMNP, OCESP, etc… I knew what I was getting into.

              2. You can sell if you match against a buy order. These names are usually very thin without a real orderbook so the odds that you match against a contra-bid or offer is low.

                1. I still have some shares of AATRL. I have had a standing order to sell at $54. It actually traded through that a couple times a while back. But I never got an execution. No NBBO, so my order must have been sitting in the wrong place.

                  1. I’m happy to hold my position in AATRL. With a 52 wk high of +$190, AMG’s conversion strike of $254 is not so far off that inflation or a buy out wouldn’t deliver a +$100% capital gain based on my buy price. Meanwhile ROIC is been ~7%/yr in an IG issue.

      2. Thanks for this link, Fryman. Somebody got hit hard at the close, getting only $662 for 10 shares of SLMNP today.

    2. Don’t forget, there is an always optainable absolute floor on the price of SLMNP due to your ability to put it back to LYB at any time… The exact price according to TDA Corporate Actions is $848.2742. I double checked when an “expert” paid someone $785 on May 24. It was reassuring to discover Corporate Actions had the info at its fingertips and a simple phonecall could initiate that backdoor escape if need be. As far as the 1017-1130 quote, I know looking at my TDA account via ThinkOrSwim has always shown a price that was what SLMNP was the day it went dark, so has never been accurate since then. I do not remember if that number equated to 1017-1130.

  25. Mid-year thoughts. All of the Alabama Power “legacy” preferreds are gone–a curious time to call a bunch of 4-5% issues. Nothing this year thus far on Ameren or Connecticut Light & Power and, with rising rates, it seems unlikely that any redemptions of these issues will occur–though a few high coupons hang out there. The non-redeemables and busted convertibles (Pacificorp, Wisconsin Power, New England Power, Southern Cal Gas, RP, etc.), with a few exceptions, trade at much lower prices than has been the case for a decade (perhaps excepting for March 2020)–but available shares continue to be infrequent and are gobbled up quickly. Their yields are, generally, a bit lower than other IG preferreds but still look pretty attractive IMO. And the few bank non-redeemables (B of A and Wells) are trading at 6% yields give or take. Anyone have thoughts on these for the balance of the year?
    For me, the most disappointing aspect for some of these legacy issues is that Fidelity, in its infinite wisdom, now restricts their trades–even though none have moved to the Experts Market. It’s ridiculous and screwy. A great example is NEWEN, owned by National Grid. When you dig down on the Fidelity website for a quote on this IG, the company profile speaks about Novagold Resources–a mining company having nothing to do with NEWEN. Fidelity also cites this issue as being variable rate; it’s not and has never been. Can’t fight city hall or Fidelity! Happy 4th to all and, as always, thanks Tim for conceiving of and maintaining what is far and away the best preferred stock website in the industry!

    1. Yes, Oldman, WELPM had close to 3000 shares gobbled up the other day in a couple minutes at $107.50. I already had 400 I just recently bought at $106, so I passed. Besides that is a decent amount for me to hold anyways. I also have a couple hundred of NEWEN bought at these low levels also. It only has a 13,000 or so float so they are available less frequently typically than WELPM with a 44,000 share float or so. I purchased these at the 5.6% ish range and scalping a quick divi too or about to with WELPM.
      I prefer the subsidiary preferreds over hold co, but most despite recent sell off are still pitifully trapped in the 4% yield range. Too low to stomach for me, being perpetuals, but I watch none the less.
      Keep an eye on this one if it gets below par. PECO 5.75% 2033 subordinate debt that trades on bond desk. Its basically like KTH except different maturity, yield, and a bond desk issue. This is noncallable. But you have to decide at what yield is satisfactory for a 11 year hold as I view it as a marriage with an expensive divorce if you want out. I recently bought some near par and am just holding, looking for a better price to buy more. For me it helps balance out the other crap I hold.

    2. Oldman—I follow BAC/L and WFC/L and have lower price orders on both of them. I just think they’re too high and will go a lot lower if/when yields rise. If/when some fund (or other institution or individual) wants out, they just hit the bid. One needs to be patient. I just renew my orders every 60 days.

        1. Bill–BAC/L at a 6.5% yield. WFC/L at a higher yield because I already own a bunch of it and recently bought some more on 6/22 at 6.5%.

  26. HAWEL, Hawaii Electric $20 face 5% coupon, immediately callable @ $21, hit an 8 year low on 200 shares @ 19.29 today. Not sure if any more are available at that price or not. Down 4.61 from previous close of 23.90 on 5/2. That is a 19.3% drop. . .

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

  27. GMLPF made the highlight reel today. Every since it went to the “expert market” related to the Rule 15c2-11, it has shown increased volatility, like many others that went there also. Today it closed @ 22.50, but had a 400 share trade @ 19.00. Last year on III, some speculated it would be called on its first call date of 10/31/22, 6 months from now. I don’t follow the company close enough to have an opinion, but if it were called, obviously it would be a home run.

    The reason I bring this up is that it is buyable on some platforms as others have reported. I am not sure why this expert markets issue is buyable and others are not. If you are interested, your broker might let you buy it. . .

      1. Not allowed on eTrade either:

        “Opening transactions in Pink No Information, Grey Market and Expert Market securities are not permitted due to the inherent risk associated with these products.”

        Thanks for the safety net eTrade…

      1. Likewise. I’ve only heard of random buys where an order might be accepted today, but not tomorrow. I’d be ok with buying more at $19!

        1. FWIW, I was actually allowed to place a GTC (limit) order on Fidelity that just expired last week. Price as listed has above and well below, but nothing every happened.

  28. Old PFX update. Landlord and I discussion got my curiosity going as I know several here own the old PFX (Phoenix Life now renamed Nassau Companies of NY). I have owned it for years and just collect the 10% plus coupon quarterly interest payment and dont really follow it being its private. But…here is some good news as AM Best a few months ago (AM Best is an insurance co. rater) gave it a credit upgrade…It got a double notch positive bump I see.
    Nassau Companies of New York—
    — to “bb” (Fair) from “b+” (Marginal) on $300 million 7.45% senior unsecured notes, due 2032
    Every since I purchased it years ago, its been hold until 2032 maturity, or bust, or untimely death whichever comes first.’s-Insurance-Subsidiaries
    Looks like its last trade was $18.15 yesterday which puts it at a present 10.26% yield. Its YTM of 2032 is considerably higher, but Im not bothering to do the math. I just want my next payment on time again in July. And judging by credit upgrade this seems to be a reasonable outcome.

  29. Fidelity has restricted NEWEN (6%), one of the few noncallable Ute preferreds. The only explanation I can get is that as part of its consideration to remove its trading restrictions on fixed to floating preferreds, it decided to restrict any preferred for which it could not locate a prospectus! NEWEN’s parent is Nation Grid (NGG), and the issue is decades old. NGG covers NEWEN in its 8K. When you look at the detail on Fid’s website for this issue, you find narrative about “Novagold Resources” in the “Company Profile.” My efforts to get this rectified fell flat. Anyone have more info about this and suggestions for getting the restriction removed. I’ve written Fidelity and, without success, tried to get to someone in its Compliance Dept.

    1. O – This probably won’t help much but maybe you can convince Fido that this could be considered the prospectus for the issue…They’ll probably then come up with some other excuse anyway, but See Article I on It mentions that N/C 6% specifically and then goes on with language very similar to a prospectus that would cover not only that preferred but another as well…… It’s grasping at straws, but maybe it’ll help. Sorry I don’t see any page numbers but the Article is easy to find……

      1. Thanks 2White. I’ll see if Fid will accept this…IF I can speak with anyone empowered to do something (unlikely). I’ll write to them again, if necessary.

    2. Oldman, Just thought of you. I just bought 100 of NEWEN today at $108. Used to buy and flip in the 120s to 140 range a while back. $108 though not inspiring in yield at 5.56% is running around about over decade pricing low. Plus it was one last chance to spit in the eye of Vanguard, because they are shutting down all OTC trading real soon.

      1. As usual Grid, Nice Buy! Fidelity still restricting NEWEN purchase. Probably going to move my trading elsewhere. Last I looked, NEWEN ask is back up to $127.70. Opportunity lost for the rest of us!

        1. Oldman, I dont have a Fidelity account but occassionally I get preferred info from their quote site. And for many issues like lets take UEPEN as an example, they have the call date and issue dates and such there.

          Now notice they dont have anything on NEWEN, thus showing why they are balking on trading.

          $127 IMO is not serious offer to sell. But with a tradeable float under 10k shares and most institutionalized, your going to get that often. And then these can dry up where buyers lose interest also from lack of trading opportunites.

          1. Can you challenge Fidelity to update NEWEN, by showing them where to look?
            Not sure If moody’s or S&P have a rating for it, but some of the rest of the information is available.

            1. Thanks Justin. Already sent them the 25 year old data on the old NEWEN info (from New England Power Co.) as well as several links to 8ks, etc., most recently from National Grid, the parent–some of whose filings reference the issue and provide some detail. Fidelity shows this as a “fixed to floating” and it’s not. As previously mentioned, when you look at the NEWEN detail on the Fid website, under “Company Profile” they show info for Novagold Resources, which has nothing to do with NEWEN. It will not matter what I provide unless someone internally decides to own the problem and fix it. It’s so minor, that my chances of accomplishing this is remote. They erred with this but….

    3. Oldman, I thought you would appreciate this. The preferred was originally issued in 1913 so the prospectus paper maybe a bit yellow. Also, the float is roached out with little left now and New England Power issued a tender for $116.50 in 1997.

      Public Offering=Baker Ayling & Co. offered 10,000 shs ($100 par) at 96 in Mar 1913. Company offered to stockholders $250,000 at par in Feb 1914. Baker Ayling & Co. offered 2,500 shs at 97 1/2 in March 1914. Baker Ayling & Young, Boston, offered at 95 in Jan. 1919. Baker Ayling & Young, Blodget & Co. and Arthur Perry & Co., all of Boston, offered $1,250,000 at 100 in July, 1921
      Purchase Offer=11-97 by New England Electric System for all outstanding shs at $116.50 per sh. Offer expires 12-12-97

  30. Vanguard tightens its grip on the Nanny State!
    Beginning April 28, 2022, Vanguard will no longer accept purchases and transfers in of most over-the-counter (OTC) securities. This change allows us to better support a targeted, enduring suite of products and services rooted in Vanguard’s time-tested investment philosophy and built to help secure the long-term success of investors.

    1. That is my cue to close those accounts. I will miss their bond assortment though. The 401k for my LLC will be the toughest thing to move. More hoops to jump through.

      I have TD, Merrill Edge, RBC, and Fido accounts so I might as well go for an International Broker account now since TD and Schwab are combining.

      1. I have TDA, Fidelity, and IBKR. I have been buying lots of Canadian oil and gas stocks via IBKR so I like it. They are not as polished as TDA, but their margin rates are minuscule. I play the ex-div sometimes since margin rates are so low. Here’s a referral link if you are interested.

        I did the pro version purely for the lower margin rate. I started with the lite until I got familiar with it. Let me know if you have any questions, if we need we can take it off here.

        I only use Fidelity for HSA and 401k.

      1. Lou, as long as none of the other walking penquins try to fall in line here, it should be immaterial. Vanguard hasnt been a fan of these anyways. They dont allow foreign OTC issues such as Enbridge already. Hell they never allowed any OTC transfers in to begin with, as I tried several years ago. Vanguard didnt charge for these trades so I assume it cost them more. So they are just ridding themselves of issue instead of applying a charge.
        I only had one in it to begin with. The few others are in another account to begin with. Most illiquids I tradk are only now starting to cave and need to cave more for me to get back into.

        1. Grid:

          Remember the good old days when an illiquid preferred ute like CMS+B hardly caved at all during the March 2020 preferred carpet-bombing?

          Those days have gone the way of the dinosaur. I’m finding the current environment much more challenging than even that Spring 2020 period.

          On a different note, PFF continues to get hammered with outflows. Now nearly $1.5B in 2022 for this $16.8B preferred behemoth. They did something noticeable two weeks ago. They took their cash position up from only 24 basis points to 220 basis points – and have kept it there since.

          With nearly $400 million of cash on hand (the fund’s 2nd largest position), it seems like they are preparing for even more outflows.

          Keep your head on a swivel in preferred land!

          1. Hey Rob. They did what they were supposed to do. They gave you time to get out as the liquids started their descent. I have been out of them for largely 4-6 months now. Just own a couple that I wont sell…And BANGN I cant as I took it to the dark side, lol, being its experts now.
            In fact I would suggest most are still priced way too high compared to what is happening in liquid land of 5% par issuances. I basically rotated into term dated, adjustables and way above market yield for their relative quality (ala, CEQP-). But every trade or buy brings on a sell to raise even more cash.
            The preferred market overall is performing in a very logical if not predictable manner lately. I just have to keep staying disciplined. Im doing enough trading to make up for a few Im a bit early in….And letting my adjustables and term dated issues run.
            Im not interested in CMS-B, but am very much so in CMS-C if it can dig down to 6% land.

  31. WFC-L just hit 52 week low and now has hit the 6.0% mark. The beatings will continue until the morale improves. I have resisted the urge to play perpetuals except for a few trading issues for quite a while now… Would someone please kindly ring the bell loud for me when the perpetuals have bottomed out, so I can reenter, lol.

    1. Grid—I bought 15 today at 6%. Just going to buy high quality issues periodically as they drift lower as I somehow doubt they’ll ring a bell at the bottom. However, if God comes to me in a vision and announces we are at the bottom, I’ll post it here first after I load up.

      1. Dont forget to Randy, I am holding you accountable, lol… Historically speaking 6% for HQ perpetuals has been a reasonable hold. So I definitely understand your toe in process. Overall, we just havent got a wash out that occurs considering the environment we are in. During 2013 taper tantrum, when Funds rate were still at 0% and 10 year briefly popped above 3%, WFC-L went well under $1150… Heck, I was just looking at 5 year CD yields. Still under 3%. I helped buy my parents a 5 year CD just 4 years ago still paying that is 4.5%. Terrible!

        1. Last time inflation was this high they had to raise interest rates a lot higher than they are planning to this time.

          We just have to hope that coming out of a pandemic things will be different this time.

          But if it is not different, prices on these perpetuals have a long, long ways to fall yet.

          1. While prices can fall more we were almost desperate for yield 12 months ago and now here it is on a silver plated platter (not solid silver yet 😉 ). Eventually one has to start buying. Normally when people are fearful to buy has been the best times to start buying. So WFC-L has not been at this level since 2016-2017 ignoring covid. So I try not to over think things here. 6% is pretty good for sitting around on your rear just collecting dividends from a solid company. Might it be 7% 12 months from now? Could be. But missing out on that is not exactly life changing. You just have to open up your brokerage account, ignore the paper loss, and life goes on.

            And just now I finished slowly buying up my 100 shares of SR-A using just dividends and interest paid out recently. Feels good. Now to find the next target. 6% seems decent to target next.

            1. FC, some here have reached out to me via email and asked what I was buying. I decided just to post occasionally, but these are not recommendations and I urge everyone to please do your own deep due diligence. I bought 30 busted convertible bonds of REDWOOD TR INC SR UNSECD NOTE CONV 5.625% 07/15/24 CUSIP 758075AD7 @ $97.00 YTM 7.092%. These are right for my portfolio, but that doesn’t mean they are right for yours. In Latin we say, Potes tantum decernere quid sit fas an malum, Azure

              1. Azureblue, Most grateful for your posts! Using IBKR I cannot locate the Redwood Trust note. Might I ask which platform you purchased from?

                1. Vanguard, you are best to call their corporate bond desk and gave them the CUSIP. I like Vanguard for corporate and municipal bonds because their fees are so low, the representatives are so helpful and they have a massive inventory. Hoping you find your treasure, Azure

  32. Can anyone provide information about BACRP? Cannot find a prospectus. A CUMULATIVE, perpetual, non-redeemable 7% B of A preferred. Very few shares outstanding and seldom trades. Holders have voting rights. Issued in June 1997. Any more info would be greatly appreciated. Thanks.

    1. I tried finding out about this one as an exercise Oldman. I didn’t get very far but what I did find was that it’s mentioned in the 10k from 1998 as having a “Specimen certificate of registered 7% Cum Redeemable Preferred Series B incorporated by reference to Exhibit 4(q) of registrant’s Annual Report on form 10k dated March 10, 1997 (the 1996 form 10k)”

      From I can see where there is a Exhibit 4(q), but good luck finding it….. It’s got to be there somewhere but darned if I could find it.

        1. xerty – just looking on the headlines, no details, on what you linked, that looks to be for an 8.75% preferred and BACRP is a 7% preferred… Somewhere in either one of the 2 10ks I was looking at it also said that the 7% preferred was issued in ’97… I was wondering the same thing though that maybe it’s an assumed preferred from either Nationwide or Boatmen’s… I eventually lost my interest in the exercise but hopefully Oldman took up the challenge.

    2. I own this issue after entering a low GTC order and waiting just less than a year to get filled. Someone sold a decent amount (can’t remember exactly but maybe about a thousand shares) and tripped off several GTC orders including my 200 at $107. The spread can be $50-$75 per share. I bought as a long term holding. I guess, following Grid’s plan, I could enter a very high sell order and just wait to see if it gets filled.

      1. OK, we’re getting somewhere – The issue is apparently one that was inherited from Boatmen’s Bancshares Inc as per Exhibit 99.1

        It looks like this issue is CUMULATIVE, has VOTING RIGHTS, and is REDEEMABLE AT THE SHAREHOLDER’S OPTION AT THE $100 PER SHARE STATED VALUE. How odd and seemingly extremely shareholder friendly terms:

        Note 15 PREFERRED STOCK
        At December 31, 1996 and December 31, 1995, there were outstanding 9,341
        shares and 9,609 shares, respectively, of 7% Cumulative Redeemable Preferred
        Stock, Series B, $100 per share stated value. Dividends are payable quarterly.
        The stock is redeemable at the stated value at the option of the holders and
        has equal voting rights with each share of common stock.


        NationsBank Series B Preferred Stock

        The NationsBank Series B Preferred Stock was issued in connection with the
        merger of Boatmen’s Bancshares, Inc. with and into NationsBank on January 7,

        Preferential Rights. NationsBank may, without the consent of holders of
        NationsBank Series B Preferred Stock, issue preferred stock with superior or
        equal rights or preferences. The NationsBank Series B Preferred Stock ranks
        senior to NationsBank ESOP Preferred Stock and Common Stock, but ranks junior
        to the NationsBank Series BB Preferred Stock with respect to dividends and
        distributions upon liquidation.

        Dividends. Holders of shares of NationsBank Series B Preferred Stock are
        entitled to receive, when and as declared by the NationsBank Board, out of any
        funds legally available for such purpose, cumulative cash dividends at an
        annual dividend rate per share of 7% of the stated value thereof, payable
        quarterly. Dividends on NationsBank Series B Preferred Stock are cumulative,
        and no cash dividends can be declared or paid on any shares of Common Stock
        unless full cumulative dividends on NationsBank Series B Preferred Stock have
        been paid or declared and funds sufficient for the payment thereof set apart.

        Voting. Each share of NationsBank Series B Preferred Stock has equal voting
        rights, share for share, with each share of Common Stock.

        Distributions. In the event of the dissolution, liquidation or winding up
        of NationsBank, the holders of NationsBank Series B Preferred Stock are
        entitled to receive, after payment of the full liquidation preference on shares
        of any class of preferred stock ranking superior to NationsBank Series B
        Preferred Stock (if any such shares are then outstanding) but before any
        distribution on shares of Common Stock, liquidating dividends of $100 per share
        plus accumulated dividends.

        Redemptions. Shares of NationsBank Series B Preferred Stock are
        redeemable, in whole or in part, at the option of the holders thereof, at the
        redemption price of $100 per share plus accumulated dividends, provided that
        (i) full cumulative dividends have been paid, or declared and funds sufficient
        for payment set apart, upon any class or series of preferred stock ranking
        superior to NationsBank Series B Preferred Stock; and (ii) NationsBank is not
        then in default or arrears with respect to any sinking or analogous fund or
        call for tenders obligation or agreement for the purchase or any class or
        series of preferred stock ranking superior to NationsBank Series B Preferred

        1. Thanks to everyone. The Boatman’s/NationsBank explanation makes the most sense to me. It explains why there is no BACRP prospectus, per se. The 7% coupon is consistent. Best comment was Justin’s “..the non-callable ones must be driving the corporate treasurer crazy…” This issue is so small that it likely seldom is a topic of discussion, I would guess. I think that this non-redeemable, perpetual preferred with a comparatively high coupon is an unintended consequence of B of A’s aggressive acquisition strategy the last century. I only wish I had more shares (I came in on the tail end of the last “dump” and got about 30 sh on a year’s old GTC order). Again, to the III community, thanks for your research and for the comparative wealth of info you provided.

          1. There are only about 7k outstanding and been whittled down greatly over the years (especially 2008-09 crisis) Not any material effect on their balance sheet at all. There are several of these noncallables running around on a few companies balance sheets. MSEXP has a float down to about 800 shares being its an uncallable ilk too.

              1. I did a lot of research on this one when I snagged 100 around $110 last year, but somebody bought them from me at $169 a short time later. I only remembered parts of this all so I didnt want to dig into it again, so I stayed out. A lovely issue get for Randy. I gave up on trying again, and shouldnt have, but his persistence paid off and good for him!

          2. the driving them crazy was not aimed at the interest expense, it is the amount of work they have to on the corporate books because it is still alive and there is no way to get rid of it

            1. How is there more work with this issue than any old subsidiary preferreds of utilities that have been on the books since the 1940s and have been callable since WW2 and they havent redeemed them?

              1. Compared to a UTE, there really isn’t, but financial institutions generally know better than to issue non-callable.
                and that 100 redemption provision is interesting as it puts a floor under the shares, and allows anyone who knows about it could be a way to take advantage of a buy below 100.

                1. And it appears people took advantage of that put back during the bank crisis. As I remember researching a year ago, the float shrank more during that time. Bank preferreds were pummeled back then so that put was immensely beneficial.
                  Its hard to gather an opinion on whether the terms were appropriate or not because we would need to know the financial condition of Boatmens at the time, and who it was issued to. It could possibly have been an insider goody bag issue like FIISO was. And that came at the banks origination. Boatmens was a small regional MO bank at one time as I remember it. It was one of those a fish swallowing a fish, swallowing a fish, swallowed by a whale thing.
                  So its not out of the realm of possibility the issue was sold to the people who initiated the need for it.
                  As far as cumulative goes, it was not out of ordinary for cumulative to be issued a few decades ago. I notice a Fleet preferred acquired by BAC and a Citi one also that was cumulative that show on Quantum and that was recent past. 2008-09 new regs killed off the cumulative variety.

            2. Justin, I thought your comment was funny and great. BACRP is a very minor nuisance for B of A, but a nuisance nonetheless. Funny that they don’t float an aggressive tender offer to rid themselves of it. But, it is so small that any attention paid to it by B of A probably has become boilerplate in SEC filings.

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