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.
Can anyone provide color on the terms of the Liberty preferred?
merger:Effect on Liberty Broadband Preferred Stock. In the Merger Agreement, each share of LBRDP issued and outstanding immediately prior to the Effective Time would automatically be converted into and become the right to receive one validly issued, fully paid and nonassessable share of Charter’s Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Charter Preferred Stock”) (such consideration, the “Preferred Consideration”, and together with the Common Consideration, the “Merger Consideration”), except that each share of LBRDP (i) held by Liberty Broadband as treasury stock or by any of its wholly owned subsidiaries immediately prior to the Effective Time or (ii) owned by Charter or any of its wholly owned subsidiaries immediately prior to the Effective Time, in each case, will automatically be cancelled without consideration.
The ask on AILLI is 880. Oops…lol.
CNLHP ask $36.25 (~6.20%)
Ex dividend was 11/8
Got my MSEX dividend in the mail today, just like old times. I can’t remember the last time I cashed a physical dividend check.
Grid and I both decided on automatic deposit. We also kind of wanted the old school experience but it appears a check just meant more things that could go wrong. We will send to our checking accounts. I am waiting for the common dividend. I only got one preferred dividend a while back.
MSEX constantly seems to be having higher highs and lower lows. I did not try to hedge things and just let it ride. It would be great to see small caps continue to bounce and have a revival over the next several months. I am rooting for MSEX to get up to 100 which seems totally irrational but, hey, it happened before!
Re MSEX:
Has anyone sought an opinion of counsel that the holding period of 6 months should be eliminated because there’s no way these securities should still be subject to 144 given they were issued 30 years ago per MSEX general counsel?
I’m working on that right now.
I guess it’s only those of us that hedged who really care .
I think I have the only options trades in this security for months.
I was not really going to dig into it until Dec/Jan. Give the people at Broadridge/MSEX a break from all the emails. Perhaps they need more time themselves.
Also no matter what I want to wait a year plus a day to sell. So the whole 6 months thing would be nice to get it all resolved way ahead of time it is not exactly a mandatory condition for me personally. Getting an opinion of counsel sounds like it costs money to me right? Once again in my situation I would not choose to do something like that. Would I happily use the information if shared with me? Sure. I just don’t think I would be much help in getting something concrete to push it along on my own.
I can almost assure you the answer from opinion of counsel…”it depends”. Unless you pay to have an action taken, it’s useless. As well, you can afford the wait, so that is the easiest path, IMHO. I avoided because I read Grid and other threads after the bulk of the profit was gone, and I expected some hassles for the old issue.
Well, since it’s costing me to hedge, it makes sense for me to get the opinion. MSEX has said I need to prove I acquired the stock in a manner not subject to 144, which seems a little odd but my securities counsel has all the info.
It makes sense to do this (if it can be done )if I want to acquire more MSEXP–but the opinion would only apply to the client of the securities law firm.
My point is I think there is a path to shortening the time frame from 6 months to 45 days .
> Has anyone sought an opinion of counsel that the holding period of 6 months should be eliminated because there’s no way these securities should still be subject to 144 given they were issued 30 years ago per MSEX general counsel?
Please let us know what they tell you, but my read of it is that it doesn’t matter when the MSEXP was issued, Rule 144 makes you wait the six months on the newly-issued MSEX that you converted it into.
(And Middlesex could’ve avoided this issue if they actually registered the MSEX underlying the MSEXP in the 30+ years since MSEXP came into being, but for whatever reason they never did.)
AILIN looks like it will open at an ask of 6.0136% yield. The next ex-div is probably about January 10, 2025.
Ameren issue above 6% on ask:
UEPEP at ask of 75.5 should give 6.0397
Cnthn at $41~6.05%
Wake me up when it gets closer to 6.7%
I’d like that wake up call too in case I somehow miss it. Ha
Irish, Charles, YH –
6.7% if it was $37.23 today. Good luck, gents!
mbg, it was lower than that a year ago. $37.10
I can always dream!
Dream On, Charles!
Aerosmith, huh – what is this, the 70s?
I still think cost averaging into these ill liquids well under par is a smart play at 6% or better. You have preferred that have paid out reliably for several decades in some cases. Tax efficient being QDI. If one day called the cap gain will be incredible and some ills we thought would never get called in the UTE space have. This makes one think it could be possible. We are seeing prices for these that have not been seen since the GFC or 20+ years ago.
It is not exciting. It is not sexy. It is actually dreadfully super boring purchases. Exactly what a person wants to sleep at night.
MSEXP:
arb spread is now $100.
I’ve done 100% of the volume in the preferred today.
I’ll do more at this price or higher, given we have the procedure down pat.
Two dividends to pay, but the synthetic can be done to capture some of the interest component. This is 25-30 % apy with what I perceive to be zero risk.
In the arbitrage World we call this a “do.”
I hope the pressure on FIDO continues from our friends here w Fidelity, today I had to place 3 limit orders on a pfd to get out of it! lol. ((Just kept hitting ‘trade’ finally they hit. dumped the HOVNP (housing will be toast w these rates) which I shouldn’t have been in anyway, small loss and a few divs on top of it..hunkering down personally..sold lots of things, after two huge years am not going to lose that capital and happy to collect 4-5%, expect short term/mmkt rates to go up. Sold a little GMRE-PA..came up ‘call desk!’ unreal. A FED pause to me is a real possibility if not in the announcement 11/7 at 2pm then in the ‘dot’ plots. Bea)
Bea good point. Makes me think about what might happen down the road with mortgage REIT preferred.
Help me pls..what are the terms of conversion (ratio of common shares to pref) on MSEXP…? TIA!
1 preferred equals 12 common.
Jerrymac. Conversion requires a 6month waiting period after you make demand on the company through broadridge. Touch base if you buy and need instructions.
PREJF yielding 7.7 if you account for the dividend.
I can’t even recall if I posted on this yesterday.
I bought just a little more becuz it seems there’s a seller around
LT, thanks for the heads up. I need to average down. Good chance it tests its lows again.
IT, I see that company is essentially a subsidiary of EXOR N.V. listed in Netherlands. Is there any foreign tax withholding?
Exor sold Partner re to Covea, which is , I believe , a mutual insurer.
None that I’m aware of. PRE is , however, based in Bermuda. It’s something I did not consider.
Thanks, LT, for the response. If it is based in Bermuda, most probably there is no withholding. We will see when they make next dividend payment.
CNLHP ask $37.50 (6%)
Ex-date is 11/8 (~6.09% after accrued)
I got in at $37.1875
Thanks!
Yes, thanks, Ken. I got in too.
At 76.00 ask, UEPEP = 6.01% (after accrued). Ex-date is mid-January, so just a little bit has accrued thus far. Just went ex on 10/18.
Raised some cash in the past week which was burning a hole in my pocket. Bit the bullet and picked up more SLMNP for the long term. Bid $937 and paid $935. A big jump from my previous buys around $850, but still paying 6.4% QDI and downside limited to $848. Funny Fido let me buy 10 at a time with no issues. Earlier in the day they wouldn’t let me sell 100 of a much more liquid stock. What’s up with that! Good luck to all.
Fryman, it’s offered at 935. Just a suggestion:If you wait until just before an ex date you’re effectively buying at 920. The offer didn’t budge at the last ex date.
I agree it’s a decent buy anyway
LT, thanks for the good advice. I could have collected interest on the cash until January before buying. It is a bit of a black box for me as Fido does not show bid/ask. When the price was around $860, I bid $865 to try to shake some loose and it was filled at $848. As they say in England, I was “gob smacked”!
Fryman,
I’m getting worried that corporate baby bonds and many preferreds that are in the preferred etf’s are not reacting to the move in long rates.
It’s sorta crazy. I wish I could get filled on this at 848.
There were plenty of chances to get filled at 848. It was at that price for over 2 years. That was when I got my 200 shares.
Just sit back and collect the dividends and interest payments.
I will try again with another “story”. Grid knows all this stuff but if I keep doing it I will make some mistake that he will not be able to resist chiming in on.
Most of us have heard of NCR. A super old company that made cash registers, decryption gear back during the WWII era, computers, ATMs, etc… AT&T came along and bought them back in the 90s which sounds like deja vu for Ma Bell because they spun it off per the norm of them having no idea what they are doing after losing enough money.
Now it is difficult to really wrap your head around this company who dives into many different things. How about we just toss up the wikipedia page for the history, eh?
https://en.wikipedia.org/wiki/NCR_Voyix
Well if you want to see the status of how they are doing now days use the ticker of VYX. They had a really rough quarter earlier this year due to some “ACH fraud” that makes their current earnings look rough but most quarters they do “ok”. Also appears they spun off a company. Basically what I am saying is that you need to dig in to understand what is going on and where they are going. Not exactly trivial to do in a few hours. NCR is nothing like they were in the past as it was broken up again and again. https://seekingalpha.com/symbol/VYX
Well that is great and all but why the story? Yea.. they have a preferred. NCRRP. Approx 300,000 shares outstanding. Last sale was 1100-1200 per share. $1000 par, 5.5%.. but the first 16 months it was paying in kind which is over but could come back but cash now days… cumulative, penalty of not declaring divs of 8%, and drum roll… convertible… and has put rights!
Now this is a beast to explain. Lets give a link to the annual report.
2023 annual report.
https://investor.ncr.com/static-files/51770cb5-9c21-403b-8f5d-7ba2b2d9fa09
Lets try to understand the really crazy put rights first. I quote from the bottom of page 25. I read it as every 3 years there is a 3 month period you can force them to buy it back from you. Next put date is March 16th, 2027.
“The holders of our Series A Convertible Preferred Stock also have certain redemption rights or put rights, including the right to require us to repurchase all or any portion of the Series A Convertible Preferred Stock on any date during the three months commencing on and immediately following March 16, 2024 and the three months commencing on and immediately following every third anniversary of such date, at 100% of the liquidation preference thereof plus all accrued but unpaid dividends, and the right, subject to certain exceptions, to require us to repurchase all or any portion of the Series A Convertible Preferred Stock upon certain change of control events at the greater of (a) 100% of the liquidation preference thereof plus all accrued but unpaid dividends and (b) the consideration the holders would have received if they had converted their shares of Series A Convertible Preferred Stock into common stock immediately prior to the change of control event.”
Now lets try to understand the convertible aspect.
“Prior to the close of business on October 17, 2023, the Series A Convertible Preferred Stock was convertible at the option of the holders at any time into shares of common stock at a conversion price of $30.00 per share, or a conversion rate of 33.333 shares of common stock per share of Series A Convertible Preferred Stock. As a result of the Spin-Off, the conversion rate of the Series A Convertible Preferred Stock was adjusted pursuant to its terms to 57.560 shares of common stock per share of Series A Convertible Preferred Stock, effective immediately after the close of business on October 17, 2023. As of December 31, 2023, the maximum number of common shares that could be required to be issued upon conversion of the outstanding shares of the Series A Convertible Preferred Stock was 15.9 million shares, which would represent approximately 10% of our outstanding common stock as of December 31, 2023, including the preferred shares on an as-converted basis.”
57.56 shares huh? VYX is currently selling at 12.91. Hm. Do the math and that is only 743 dollars. Horrible deal but if you look at the last trades for the preferred and compare to the common you get into a more reasonable ball park.
As times goes on one never knows if magic will happen and you could buy low enough, have proper timing, and make some money on this. Once again I have a low ball bid just sitting there but eventually I will get tired of keeping an eye on it. Maybe someone else can capture some upside when a unique situation appears?
Another very interesting story. Thank you for all of the research, posting and sharing.
FC,
Thank you so much for this analysis!!!
Fc, I tried to resist posting. My dad worked for CDC as a R & D machinist. The engineers were working on a stacked magnetic platter hard drive. The failure was they were using a hydraulic powered read/ write arm. With the pressure and movement it was constantly springing leaks. My dad said they could bring him a drawing on a napkin and he would make it for the engineers. Cost overruns were not helped with one of the boss’s asking him to make a replacement model T part on company time. He was lucky enough when NCR bought out CDC to get offered a job. The second time he was not so lucky when NCR shut down and sold to Northrop he wasn’t one of the few offered a job. The war was ending and the Apollo program was finished and the government was cutting back on spending. Southern Cal was hit pretty hard in the Aerospace industry and support related businesses.
A lot of the Ameren issues have had some trades today at yields above 5.9%. AILLO, UEPEM, UEPEP currently as ask yields above. UEPEO was and possibly some others for those that are keen there is some movement here.
YH, thanks.
I was one of the people who bought AILLO today. I had some loose change sitting there and I do not seem to have much Ameren compared to others. Since it was not a lot of money I just bought at the ask since it was more active then others.
A post for fun. Maybe grid will comment on it cause he likes this stuff.
Skytop Lodge. SKTP. https://www.skytop.com/
This 192 room hotel is situated on a 5,500 acres wooded site in Skytop, Pennsylvania, at an elevation of 1,500 feet in the Poconos. The property includes a 75-acre lake, 30 miles of hiking trails, and an 18-hole golf course
“A member of the National Trust Historic Hotels of America and Green Hotel Association, Skytop Lodge sits atop 5,500 acres including deciduous and evergreen forests, scrub oak forests, rocky outcroppings, a rhododendron swamp, glacial bog and small grassy meadows, all of which have been held in conservation since 1928.”
A very interesting and illiquid common stock. 9822 shares outstanding and they currently sell for 1500 bucks a pop if you can find a seller. So we have approx a 14 million market cap.
But why are you posting here about common stocks you ask? Well… they have a preferred. SKTPP. 9433 shares outstanding, 100 par, cumulative, 7%. What makes this interesting you ask? Well… they owe holders of this preferred about 231 dollars of missed dividends. And in 2024 they paid 7 plus 7 more in an attempt to start catching up. They also paid 7 in 2022 and 2023. Last trade was at 187 but one never knows what might happen with such a illiquid over time.
It is just a very interesting case of a very obscure preferred. I have a low ball GTC order just sitting and sitting but in case I grow tired of it… maybe someone else here can snag some shares at 104 or some very low price. Get a piece of history. If they don’t catch up with payments in a few decades the preferred shareholders could end up owning the hotel! Backed by 5500 acres of conservation land and the hotel! If they continue to try to catch up this preferred might yield something very decent even if you have to pay well above par.
2023 annual report.
https://www.otcmarkets.com/otcapi/company/financial-report/395132/content
https://www.otcmarkets.com/stock/SKTP/overview
https://www.otcmarkets.com/stock/SKTPP/overview
https://www.otcmarkets.com/otcapi/company/dns/news/document/74697/content
Grid… come on man… you cannot resist to chime in on this zany example right? I know you are reading this! 😉
I love this stuff fc. Thank you for posting!
Thanks for posting this. I don’t know if I’d want to actually buy it, but I love the stories.
34 years of deferred dividends!
I did not know skytop was a publicly traded company. I live about 30 miles away and have golfed there frequently. My wife and I have stayed there and it is a top notch Pocono resort, kinda reminds me of the Catskill resort in Dirty Dancing. I would recommend playing golf or having lunch there but I don’t think I would go near the stock. The place is always busy, just not my cup of tea. Thanks for the information.
CNTHP getting run up the flag pole again! Perhaps this time it’s a forced short covering? I know, it’s a stretch, but this is cray cray.
I had my shares for sale all day at 80 and no one wanted them. 18 dollars off the recent high! I will probably slap myself for not letting them go and getting too greedy.
Are they convertible? Lol. Maybe I should check the old prospectus. 😉
I had the same thought, but it’s an issue from 1968 so the prospectus is not easy to find.
From old 10-Ks it doesn’t look like CNTHP is convertible. No idea why it’s seeing these high prices. It’s very strange.
I noticed it has for some time. The short covering idea is interesting. There is some short interest:
https://www.otcmarkets.com/stock/CNTHP/quote
Ok, just to add to the intrigue, I had a limit order to Sell, (greater than 100 shares), at $70.00 that I put in at the open. I received zero fills on that order despite all of those shares trading between $74-$96.78 off the OTPK exchange. At some point you have to believe there is intent and it’s not just the folly of automated trading. Someone is purposefully screwing someone else for reasons we’ll likely never know.
CNTHP closed at 54 today. I have yet to see a reasonable accounting for the recent run-up and now the return.
UEPEM is available at CY 5.9% or better. UEPEP printed 71.8 (CY 6.35%) below the spread. Small cracks.
Just bought a starter position in CNLPL @53.51 for a yield slightly above 6%.
$53.51 is above the call price so upside might be limited. But a 6% yield is nice.
I agree but the difference is not that high; willing to take the risk of a call for holding such high-quality issue with 6%+ yield.
IIRC, it has been callable for decades. Probably not a huge risk of it being called soon
After Alabama and Indiana called all of theirs.. I always felt there might be a reason out there that I don’t quite understand that both of those happened to go poof and others might get called as well.
Thus skipping a tiny bit of yield for those well under par seems a wise decision to me. Then a call becomes a magical moment of a really large gain.
r2s,
I snagged some UEPEP at 75.25. I calculate a 6.06% CY (current yield?).
It was on a GTC bid that was out there several days before that 71.80 trade, but even though my bid was higher, I got none that day. Called Fido – they said with limit orders, my order goes in a queue and those in line before me got those shares.
I had bot some before the 10/18 ex-date but the current bid is below my breakeven on those purchases.
I got a bit giddy imagining these utes realizing a lot of upside as we get more Fed funds rate cuts, but then I remembered the prices of perpetual preferreds are affected by the 10-year Treasury, not by short-term rates. A rising 10-year is a risk (see link below). At least I get 6% on my cost. Plus, I recall hearing that many illiquid utes held up very well during the COVID crash. Something for me to check.
https://www.chathamfinancial.com/technology/us-forward-curves
6%+ is a score. I calculate the same yield as you 6.06% at that price. That’s interesting to read about the inner workings of Fido’s queue system.
I got in somewhat on this one. There is some opportunity to swap around Ameren issues as well as Eversource and sell off lower yields to get better yields if one assumes that all issues are equal and will not be called in the near term.
It seems like someone needs to sell and there could be opportunity with this ticker in the next trading session at a similar yield.
ANOTHER WAY “THE EXPERT MARKET” CAN SCREW YOU:
My situation thankfully will not impact many but I want to share it anyway….
When you have a joint account and the joint account member dies, 1/2 of your owned shares get stepped up to the value on the day of death…. That happened to me on Fidelity AND IT INCLUDED SHARES OF SLMNP. In round numbers, even though not one share of SLMNP I own was bot for a price below 848, Fidelity stepped “up” my cost basis on SLMNP to 832.30. Why? Because there were no trades on SLMNP on that day. So Fido said they were required to go to where the stock trades, aka The Expert Market for SLMNP, and have the market generate a “market value.” The Expert Market valued SLMNP at 815, despite the last trade prior to 2/15 being 850. So half my shares which I owned at approx 848, got stepped “up” to 815, and my overall tax basis cost went from an actual 848+ to 832.3. So the process of getting “stepped up” means in this case that after the step up, my tax basis gets lowered approx 16 points BELOW my actual cost…. Thank you, Expert Market, for screwing me royally. Fido claims they researched thoroughly and sited some exact SEC reg to justify the way they handled this…. BIZARRE! I thought a “step up” in cost basis could NEVER be detrimental. Fido says elsewise.
2WR – Sorry to hear about this nonsense. Just another example of the brokerages and regulators (FINRA, SEC) screwing the little guy (us) all the while saying “we know best what’s good for you”. It’s getting ridiculous.
I wonder if you produced the original trade confirm, with the actual price you paid, that the IRS would accept that as proof?
2WR, that is super unfortunate, I am sorry to read this. At the end of the day, can’t we report actual tax basis to the IRS or probate? Maybe the shares can be transferred to IBKR and they can adjust the basis properly?
For the sake of research, I asked two different AI LLM models about it (take this with a grain of salt) but they suggested that OTC stocks are considered non-qualified property as the market value cannot readily be determined and non-qualified property cannot be stepped-up. The nature of relationship in the joint account may matter.
If it were me I would consider asking for a second opinion from an expert on Expert Market. I have gotten many different answers to the same question from Fidelity support.
Sorry for your loss.
Oh my, those CNTHP closing prints today! 90?!? -NCSI
And the bid at close was 75. Can’t imagine a cause for this spurt, but I took sell orders off on the few other CPL issues I have just in case 4.35% is the new norm for CPL issues (lol).
If my memory serves me, a similar crazy event happened with Ameren’s AILLL some years back. AILLL was a 6.625% coupon. Someone or something was buying at extremely high prices. Grid, missed and a favorite to most of us here, surmised bots were the cause.
In the absence of Grid, perhaps Tex can chime in.
We miss you Grid! And just for you (hoping to provoke you):
10ve ain’t favrever though a similar interception machine
The only thing I can think of besides a fat finger market order is that they thought it was a 100 par preferred. Maybe someone bought 10K shares and they have reinvest dividends enabled? Lol… I have no idea when they pay date is. Let me take a peak. Nope. Pay date is 11/01
the bid is now 85 in AH!
Hm. I see it as 58 but I can no longer trade after hours. Ally only goes to 5 PM I think. Oh. otcmarkets.com does show 85. Man.. i so wanted to unload. Darn it. I called and no luck. Ends at 5. Sucks..
I don’t think fat finger(s): 5420 shares traded above $74 after 15:41:35 EDT today:
https://quotes.freerealtime.com/quotes/CNTHP/Time%26Sales
Of course CNTHP is one of the issues I don’t own. That price action seems crazy. I don’t see anything similar on the other issues.
The previous all time high looks to be around $65. I don’t see anything that would make it get bid up that high. Quantum says the call price is $51.44. Would market markers be chasing the bid to replenish their inventory if it got depleted on that 4600 volume today?
HAWLN looks like it is going to open at 6.25% yield on ask price. I hold some of the HE preferreds. The HE preferreds generally had a few tickers at 6.25% or above until recently and they You have to be comfortable with their ability to resolve the Maui wildfires.
I believe they have agreed to a settlement number to be split and HE issued more shares trying to generate the cash. Does anyone have other updates on that resolution?
In August, HE announced that a $4.0 bil settlement had been reached on the Maui wildfires. HE was responsible for $1.99 bil (pre-tax) of the settlement agreement. Their equity raise brought in $558 mil.
It will be interesting to see their 3rd quarter results which will be available on Oct. 30.
I think they took an impairment of 1.29 B last quarter related to it but I don’t know what’s been paid out. Oct 30 def will be interesting.
I signed off too early and it looks like some of the HE preferreds started trading at 6.6 and 6.7% yields. A report came out saying short interest is down but maybe people aren’t too enthusiastic about the upcoming earnings.
I am trying to find the prospectus for CKNQP (CoBank Series H preferred). 1st call date is 1/1/25. If not called, it will float at SOFR + 3.7 +.26 adjustment. Can someone point me to a copy of it?
I’m trying to look at the language around when COBANK needs to declare if they are going to call the issue or let it float. Thanks in advance.
I no longer own it at the moment. I obtained a copy of the prospectus by emailing the company. Here are the email addresses that sent it to me:
burlagd@cobank.com
ahodges@cobank.com
Thank you, Mr. Whitman (the greatest-ever screen name.) I emailed Mr. Hodges previously and received no reply. I will try again and include the other email address you gave.
I’ll forward the email if you don’t mind posting your email here or if you would like to message me on Seeking Alpha.
I’ve got a copy of H in pdf format….. PM on SA and we can swap emai; addresses
Voner – did you ever find your answer on CKNQP? I’m back in this one at $100 as of a few minutes ago.
Dick,
2 Whiteroses give me a PDF of the COBANK prospectus. I emailed those two addresses that you posted, but I have not got a reply yet.
I did not get a crystal clear answer to my question about notification prior to redemption of CKNQP. Here is the section for the prospectus I thought was relevant:
////////
… “We must notify the FCA before we redeem any of the Series H Preferred Stock. Furthermore, if the FCA adopts capital regulations that require prior notice or approval by the FCA for System institutions to redeem stock (including preferred stock), such requirements may apply to the Series H Preferred Stock.
So long as the full dividends on the Series H Preferred Stock for the just completed Dividend Period have been paid or declared and a sum sufficient for the payment thereof set aside, the Series H Preferred Stock may be redeemed, in whole or in part, at our option on the first day of January, April, July or October (or the next succeeding Business Day if such date is not a Business Day), beginning January 1, 2025, subject to Regulatory Limitations (as defined below).
The redemption price for any redemption of the Series H Preferred Stock will be $100 per share,”….
///////
I could not find any relevant information about the FCA rules for notification about redemption so I ended up taking the last option available to me which was asking Google’s Gemini AI, which spit out this verbage:
//////
…”The Farm Credit Administration (FCA) does not have a specific policy regarding notification to holders when redeeming preferred stock. However, the FCA does have regulations that govern the issuance and redemption of preferred stock by Farm Credit System (FCS) institutions.
These regulations do not explicitly require FCS institutions to notify holders of preferred stock when redeeming their shares. However, they do require FCS institutions to provide certain disclosures to investors, including information about the terms and conditions of the preferred stock, including the redemption features.
It is possible that an FCS institution may choose to notify holders of preferred stock when redeeming their shares as a matter of good corporate governance. However, there is no legal requirement for them to do so.
If you are a holder of preferred stock issued by an FCS institution, you should review the terms and conditions of your investment to determine whether the institution is required to notify you of a redemption. You may also want to contact the institution directly to inquire about their policies regarding notifications.”….
//////
so my take is that there’s no guidelines as to notification of redemption on CKNQP.
I am a babe in the woods in this subject area, but perhaps there’s somebody out there that has experience with notification of redemption of FCA governed issues? I would love to hear others chime in on this…
In case it helps, CoBank redeemed CBKPP on 1 October 2022. The announcement was on 19 August 2022:
https://www.cobank.com/corporate/news/2022/cobank-issues-400-million-of-preferred-stock
Green-n-gold,
That definitely helps. QOL shows that CBKPP was redeemed on 10/01/22 and that news release was dated August 19, 2022, so that sets some expectations.
1000 shares of AILLO sitting there at $72.5, yielding about 6.05%.
Private, even with the Fed 1/2% rate cut. The 5yr Treasury is staying above 4%
I calc a yield of 5.86%. Yearly div is 4.25. Not a bad deal but that is the going rate for ills right now.
Private, how are you getting 6.05%. looks 5.85%: 4.25/72.5
next ex div is not until January. Still not bad, tho.
Maine,
I confess – I just picked the rate off schwab.com. I was on the road and didn’t have time to calculate it myself…
Private. Yeah, I’ve noticed similar mistakes on yields from other brokers. I’m not sure what is causing their issue, most likely a stale price, less likely the wrong div.
Anyways, just a good reminder to always check yourself. I know I’ve traded on this wrong info before.
Maine, I sold the last of my CNTHO at 48.95 gives the buyer 5.39% yield
Amazing!
Where are proceeds going?
I’ve been nibbling on ARGO-A below par.
Not sure yet. I had 6.2% yield on cost. So I am not going to get greedy think I will just go for the same yield.
Maine, Thanks for the suggestion and the 5yr resets are what I have been looking for but I think I will pass.
I did a little quick research and not much on ARGO. Preferred stock trader did an article 6 months ago. He did admit he is not an insurance company expert. He does respond to posts, but claiming 30 yrs experience is enough to defend his articles is a little weak.
I don’t have a good feel about Brookfield and this is their company. I googled ARGO insurance and they used to be known as Argonaut Insurance. FINRA still shows 3 bonds listed at 16% when issued but no trades so maybe they have been called. I see on Quantum it is a 5yr reset on 9-15-2025 with a high 6.7% and 5yr Treasury rate and was only a 6 million issue.
The risk for holding for another 11 months and hoping ARGO calls this when they are paying management fees to Brookfield, covering insurance payouts and then having 6 million left over seems a reasonable risk But not sure it’s a good replacement for the CNTHO I just sold.
NEWEN is bid 116 now for 100 shares. It traded as high as 124!
6/116= 5.17%
Wish I had some to sell!
It looks like someone is selling UEPEM. Current ask is $68.50 (5.84%).
Ex-date is 10/18
Now it’s 68.35. If you knock if $1 for that dividend it’s around 5.94%. 1900ish shares traded so far. I filled a few at 68.275
AILIM is at 5.80 yield on ask. Ex-Div Date just passed on 10/11.
Dick, I just noticed UEPEM and came here to post it. Seems like a gift!
Concerning MSEXP and MSEX.
I have received a letter in the mail from Middlesex/Broadridge. I have read it over once so far. It is titled a “DRS Book Entry Statement”. It contains the amount of book entry shares, restricted book entry shares**, total shares, total account value, etc… The document might also be called a “Direct Registration Statement”.
** Restricted book entry shares maybe represented in your book entry shares.
At the bottom of the first page it has a section where you have the option to convert enclosed stock certificates to book entry in DRS for safekeeping. You just cut the bottom section like you are paying a bill, sign, and enclose physical certs. I think I can safely ignore this because I have no physical certs and my shares are labeled as book entry shares already.
The 2nd page has contact info, important info, additional info, etc.. for sending in physical certs.
The 3rd page says this about “restriction type**” and actually lists the amount of shares I have. It has this blurb of info underneath the amount of restricted shares.
The shares represented by this cert have not been registered under the securities act of 1933 as amended or said shares cannot be sold transferred disposed or pledge or hypothecated in any manner whatsoever unless registered with the SEC or if in the opinion of company counsel an exemption from the registration requirements is in fact applicable to said shares.
Well… I have to say this is about as clear as mud to me and I may have to call and ask about it. Anyone else get this letter yet?
Thanks.
I haven’t received that yet, but do you recall the company will be issuing restricted shares in exchange for the MSEXP, and you can’t sell them until the restriction is removed, which will be done 6 months after the demand on the company to convert?
LT,
I recall you posting something about that and I will need to reread your post but I am not 100% sure of what I have to do and when. I need to get a better understanding of the whole thing. I get the gist of it all but not how to make it happen as soon as possible.
For example in just a couple days it will be 3 months from the date on my conversion demand letter. Should I start the process to get them unrestricted now so when the 6 month mark hits I am ready? Or do I have to wait until 6 full months have passed and only then can I make the request? Who knows. I need to reread and probably call them.
FC,
For me, I’ll hit the “six months at Broadridge” threshold next March.
I’m going to reach out to Middlesex’s GC maybe a month before that to start the wheels in motion to removing the restriction.
this was one of the messages I received from the GC Jay Kooper, but I though BR was going to send you something about removing the restriction. I’ll locate that email soon
.
“Thank you for your continued patience as I have been working with Broadridge and our own outside counsel to drill down into your questions, make sure we are getting this right before we start our conversion process, and exploring whether we are able to accommodate all of your preferences especially whether you are able to avoid retaining a securities counsel on your end to have to write an opinion letter. You will be receiving a separate notification from Broadridge on this in the coming days but I wanted to respond to you directly as well.
So with respect to the Rule 144 holding period: the holding period is 6 months with the clock on that 6-month holding period starting to run from the date your conversion demand letter was received by Broadridge (as that is the earliest date where we can verify your ownership of the preferred shares).
That 6-month clock carries through the conversion to common stock, meaning that (strictly for example), if Broadridge received your first conversion demand letter on August 30, 2024, then the six month holding period starts on that date. Your preferred shares would be converted to common shares on October 14, 2024 (approximately 45 days from date of conversion demand), they would land as common shares with the restrictive legend on them, and I can then issue an Opinion of Counsel to remove those restrictive legends effective March 3, 2024 (the first business day following 6 months from August 30).
In order to remove the restrictive legends after that 6-month holding period, Broadridge will need 2 items when the time comes: (1) My Opinion of Counsel (which I can provide); and (2) a Shareholder Representation letter from you (which you need to provide and will accompany my Opinion to effectuate the removal of the restrictive legends).
In the event you wanted to make a case that the Rule 144 six-month holding period started earlier than the date the conversion demand letter was received, then in that case Broadridge will require your retaining your own securities counsel to obtain a legal opinion from that counsel. That Opinion would be submitted to Broadridge and I would be presented a copy of that Opinion to review and (if I thought necessary) object. So, for example, if you were to argue to me that you purchased the above-referenced preferred shares on August 1, 2024 (with the conversion demand letter received August 30, 2024), then in that circumstance you would be required to present an Opinion from your own securities counsel.
I hope the above makes sense to you and we are committed to making this process as seamless as we possibly can for you. Let us know if you have any additional questions along the way.
UEPCP ask $73 ~5.89%
Ex date 10/18
CNLHN at 5.7% ask yield currently. I’m long it. Caveat emptor
It looks like someone is selling UEPEO for $77.99 (5.77%)
Thanks, Dick. I just snagged some at $78.5. Can’t be too picky.. works out to about 5.8% div adjusted, assuming my math is good.
AILLO has been sold down to the $72-$73 range. Not a bad buy considering the upcoming dividend. Almost 6%. I picked up 100. I am a sucker for these illiquid utes. Good luck!
Did anyone catch some of the CNTHO on sale Friday. dropped $2.60 a share on 600 shares
Hey Charles, that was me selling at $46.90.
Am showing about 5.7% current yield when including the div, which seems about fair value, maybe a tad expensive.
If someone bought at that, still a good core holding for income.
Definitely. my overall position is still above average. Just needed to free up some funds to purchase a few MREIT common names.
Will you be selling any Monday?
I still have 70 shares on offer for $46.90. Maybe I should increase the price!
FWIW, I think the lower coupon issues that trade at a higher discount (to par) w similar yield are better.
Maine,
Sold some of my CNTHO at 48.95 today. Someone got a deal with your sale.
God bless you!
Someone bought a whole 9 shares of my UEPEP today at 82.00
there is more out there if anyone wants them!
I have a feeling 5.5% for these UTE ills are going to quickly become the norm. 5.8% right now is fair. 6% is a really good deal. I am basing this on what is trading and the bid/ask. A lot of competition to buy this stuff right now. People are placing bids slightly above each other over and over again.
On a different topic I spoke with Ally about FIISO. No matter how I explained it to them how it is on the pink, publicly traded company, financials are shown on OTC, etc… And even after the rep called me back after reviewing with higher ups they won’t allow me to buy it. They even see my existing shares of FIISO in my account.
Can anyone place bids on it?
Hi fc,
I have a small position in FIISO through Schwab. The bid has been 108.01 for quite a while with a recent ask and subsequent trade @ 145.
Clayton,
I can see the bid/ask fine. I just cannot place a bid. I would gladly pay 115 or so. I just am not allowed to buy it.
Also OTCmarkets.com has full details on it. It is pink.
Like me you probably bought your position years ago. Can you still buy it? Meaning place an open bid? I am closing only at Ally.
I have been placing buy bids @ 110 intermittently without success. I have also placed sell bids @ 150, also no dice.
So yes, Schwab has at least accepted my orders, unlike OCCIM, which was rejected due to SEC 15c2-11.
E*Trade also let me enter a limit order for FIISO.
fc, Ok with me I was early to the party 1-1/2 yrs ago and feel now I over paid when I bought to balance out some riskier buys but I have been collecting the divy’s
I know several people here have been involved with ills a lot longer than I have and have seen these stocks get as high as par or higher. But in the universe of illiquids that has only been a few.
My crystal ball is still in the shop but I feel the days of ZIRP decade are gone and we could be looking at a decade of higher rates. I want to move over to some preferred paying similar rates but higher volume .
Fidelity permits trades in FIISO.
I think 5.5 is coming also. The Hawaii Electric preferreds are still above 6%, some of them anyway. I understand that HE is releasing some more common shares to handle the fire settlement. I wonder about others feelings on these issues.
I see HAWLN and HAWLL above 6 at current ask. CNLPL appears to above 6% yield on cost but I think that is a couple/few dollars above the liquidation/call value.
I just cannot push myself to buy any additional HE preferred. What I have is a hold but not an add at these prices. Too many unknowns for the current price which is not distressed enough to warrant it. I realize some of the unknowns are fading away but it just does not seem like a great deal for an extra .5%.
I’m seeing a bid of $27.45 for KTN. I’d sell all of it at that price. KTH looks priced a lot better at the moment.
CNPWP at $39.99? Is there a legitimate buyer out there at that price?
Someone bought 100 shares yesterday at $39.99. It must have been a newbie or a fat finger mistake. I put in a sale order at $39.95, hoping to get lucky and no action.
You have to be really careful with orders for illiquids. Unless you specify a minimum order size, the sales charge on a few shares can also drive up the price by a significant amount.
Love those fat finger fellows. That was my $39.90 sell order filled. Unfortunately I’ve also had the fat finger a few times over the years.
jsh, love it!
BTW, someone just paid $49 for CNTHO. Mine are on offer for $50! These names are slowly making their way to ~5.5%.
Sounds like it might put some high price limit sell orders and hope for the best.
I’ve fat fingered some Eversource preferreds in the past. So many issues with nearly the same ticker names but significantly different specifications. Akin to Amerens
I have had some interest in Eversource, but even though my state and our government has been pushing and supporting renewable sources I think it a high priced option that probably takes a lot of debt and the resources are high maintenance and short lived. From Oct 1st.
Eversource sees $520M loss in Q3, with lower proceeds from offshore wind sale