JMP Group to Partially Redeem 8% Notes

JMP Group has announced a partial redemption of their 8% Senior Notes (NYSE:JMPB) which became redeemable on 1/15/2016.

The redemption will be $10,000,000 of the $46,000,000 outstanding so the majority of the issue will remain outstanding.  The redemption will occur on 7/31/2018. It is likely that holders will receive a notice of a partial redemption of their shares.

A press release announcing the redemption can be found here.

If any new positions are initiated in this security one should not pay more than $25 plus accrued interest on these notes.

Shares closed today at $25.45 and just went ex-dividend on 6/29–thus they have a bit of excess premium in them right now–likely will see a 10 or 20 cent drop tomorrow.

 

11 thoughts on “JMP Group to Partially Redeem 8% Notes”

  1. If I were to grab a few shares would it be wiser to purchase after 7/31/18 or anytime now, assuming it drops to par? Guess I’m wondering if I purchased say today would any of my shares qualified to be redeemed? which I would not want.

    1. Rich–per the prospectus here is the method used to redeem–but it is not very helpful.

      On and after any redemption date, interest will cease to accrue on the notes called for redemption. On or prior to any redemption date, we are required to deposit with a paying agent money sufficient to pay the redemption price of and accrued interest on the notes to be redeemed on such date. If we are redeeming less than all the notes, the trustee under the indenture must select the notes to be redeemed by such method as the trustee deems fair and appropriate in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances.

  2. Hi Rich–good question and I am not sure what the correct answer is. I suspect that there is a record date used and it may be today or yesterday and all shares bought after the record date are safe from redemption this time.

    Maybe someone will weigh in on the answer.

    1. I read in another forum, Tim, that one persons to be redeemed shares were segregated out already in their account….Anecdotal experience from me showed the to be redeemed issues were already segregated when announced. I bought a slug of AHT-D after partial call last winter. None of mine were redeemed from me, so the shares that were trading then for that issue were the ones that remained as part of the smaller outstanding float.

      1. Thanks for that reminder Grid. I thought that they might have a date (the announcement date) after which one is free to buy.

  3. Thanks Tim.. Hey GB.. This is BlueClaw. I too had AHT-D partially called during that time frame and also recall some of my shares carved out for redemption. however, I didn’t repurchase any so I wasn’t sure. Kind of makes sense that once carved out, any new purchases would be left alone.. (note I wrote it makes sense but what really happens is what matters :-)…
    JMPB is around 25.45 now so unsure if worth doing anything unless it drops further.. need to further check it out.

    1. Hey Blue! You mentioned price which I was thinking about also. I suspect the pricing further indicates the shares tradable under existing ticker are probably the ones remaining outstanding. Some issues have partial calls and the other shares remain outstanding for years on end. Example RNR-C which did a partial 5 years ago. Others will swoop up the rest in a divi cycle or two. While even others such as what AHT has done with D is multi dribs and drabs partial calls.

  4. Interesting that JMPB ended the day with a slight gain @ 25.54

    I also noticed that the shares marked for redemption are currently priced at $100 which makes for a nice unrealized gain. I’m sure it will be adjusted, but meanwhile I’m enjoying the temporary sense of prosperity.

    1. Citadel–yes it is interesting JMPB are trading with this much premium. Enjoy your feeling of wealth while you have it–just don’t spend it on a new Porsche.

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