Large insurance company Assurant Inc (AIZ) has announced they will be selling some $25/share subordinated notes.
The $44 billion asset company will sell notes with the typical terms–including the ability to defer interest payments for up to 5 years on one or more occasions. The interest deferment is a relatively typical provision in insurance company issues.
The issue will mature in 2061 and have an optional redemption starting in 2026.
I believe this issue will be rated Ba1 (a notch below investment grade) by Moody’s, although I don’t see a specific rating as of this minute.
The preliminary prospectus can be read here.
mcg was right on this one.
Why are we doing this? Picking financials with no or long-term maturity, with near +/- 5% payouts.
Why are we screwing around with individual issues, instead of just picking a preferred CEF like FLC?
Gather your PFD records together, and see if they match this puppy:
6.88% distribution; with average NAV deterioration ~0.5%/yr
(CEFConnect)
10yr TR 10.41%
5 yr TR 10.14%
3 yr TR 7.37%
–33% leverage – totally desirable with stable holdings like IG/BB PFDs
–Nice global financial reach most of us can’t access
–Currently at 5% premium, but nice historical alternation between Prem/Disc
–Some bonds and convertibles, but we’re game if it makes $$
–You like to trade? Great, that’s what the price chart and P/D’s are for, nibble low, swallow high.
–Hate ER’s? Total returns are total returns
I’m sure this discussion’s been had before on this site, but I’d ask it again. I’m looking at my array of holdings BB’s and PFD’s, and the average payout is like 5.40%, and that’s with a limited exposure to the Riley’s and Prospects for YTM and fixed maturities.
Ba1 (Stable) (Moody’s) / BB+ (Stable) (S&P)
5.25% Subordinated Notes due 2061 (the “Subordinated Notes”)
FWP link :
https://sec.report/Document/0001193125-20-294813/
Company has a sub note in the institutional market yielding 6.31% and YTC slightly lower.
Recent rating of BB+.
To fault my own work, the existing sub note is a fixed-to-float, so is not a good comparable.
https://www.sec.gov/Archives/edgar/data/1267238/000095010318003679/dp88499_fwp-subnotes.htm
Last trade on friday was $110.93.
AIZN (Assurant)
Hearing
5.5-5.625%
$150mm deal size
Seems about right. Thanks EB
Here is the page showing the Assurant ratings by S&P and Moody’s
https://ir.assurant.com/financial-information/ratings/default.aspx