Mid Day Ramble

Trading in income issues is generally ‘normal’ today with the exception of blow-ups in the AmTrust Financial preferreds that are down $4-$5/share due to the delisting of the shares by AmTrust after the company went private. The preferred shares of Maiden Holdings, a sister company to AmTrust, which have suspended dividends, are following the AmTrust issues lower.

We do note that the Teekay Offshore Partners (NASDAQ:TOO) preferreds are off 75 cents to $1.25. Seems the shares of Teekay preferreds have turned into ‘hated’ issues–no particular new issue with company, but folks simply are ‘repricing’ the issues to the 11% current yield level.

There are virtually no new lows being created in the preferred stock/baby bond arena–except of course the AmTrust issues.

The average income issue is off a nickel today–normal noise.

7 thoughts on “Mid Day Ramble”

  1. I have found CFG-C issued in Oct 2018. Not impressed by fixed rate or the LIBOR float. 3.157% for issue C for this kind of IG rating is way too skimpy.
    Does not mean this new issue D will be the same but I am not optimistic since it was 3 months ago.

    PRIOR ISSUE C – issuance in Oct 2018 below

    Citizens Financial Group, Inc. is offering 300,000 shares of its 6.375% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference $1,000 per share (“ Series C Preferred Stock ”).

    Holders of Series C Preferred Stock will be entitled to receive dividend payments only when, as and if declared by our board of directors (or a duly authorized committee of the board). From the date of original issue to, but excluding, April 6, 2024, dividends will be payable at a rate of 6.375% per annum, payable quarterly, in arrears, on January 6, April 6, July 6 and October 6 of each year, beginning on January 6, 2019 and ending on April 6, 2024. From and including April 6, 2024, dividends will be payable at a floating rate equal to three-month LIBOR plus a spread of 3.157% per annum, payable quarterly, in arrears, on January 6, April 6, July 6 and October 6 of each year, beginning on July 6, 2024.

  2. Teekay Offshore (TOO) price target cut to $1.00 from $2.75 by Morgan Stanley is probably the cause of weakness today.

  3. Tim,
    The AmTrust baby bonds mature in 2055 and are trading in the $15s. Would you be a buyer of these at this point?
    Jay

    1. Hi Jay–I am not a buyer at pretty much any price. Just too conservative to want to have to babysit any security. I suppose if one has too much capital (more than there retirement needs) a little taste might be interesting. Be aware these might trade at the brokerage bond desks and the spreads (bid/ask) will likely be pretty huge.

    1. Gumfighter–I find no change of control provision in these shares. Additionally the Karfunkel and Zyskind families already had control of AmTrust.

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