mREIT ARMOUR Residential REIT to Sell New Preferred

mREIT ARMOUR Residential REIT (ARR) will be selling a new perpetual preferred in a refinancing transaction.

The company has 1 outstanding issue of monthly paying preferred, the ARR-B 7.875% issue which will be at least partially called. It has been redeemable since 2/2018. The ARR-B issue has been trading right around $25 for many months, but moved higher 5-6 days ago and is now at $25.34.

The new issue will carry on the tradition of paying monthly dividends and will be cumulative, but non qualified.

The preliminary prospectus can be found here.

Thanks to EarlyBird and Ptrader for being on the ball this morning and spotting this new issue only minutes after it was posted.

20 thoughts on “mREIT ARMOUR Residential REIT to Sell New Preferred”

      1. Not to cool. Oh well, I will lose a whole $6.93 worst case since I brought shares today a little under $25.17

    1. Bought ARR-B @ 25.17. When it’s called I’ll just buy something else. Better than taking the lower rate.

      1. did the same at $25.17. A 25% position for me (after 30% redemption or call). Will keep ARR/B for dividend capture. Plan to buy a 25% position in the new issue to flip for capital gains.

  1. Not sure about ‘soon’ on being called– they have declared payments for jan-feb-& mar. Could that stretch it a bit, or mean nothing?

    1. Good question Gary–with a monthly payer that is a potential snafu I suppose. Guess we will wait and see. I don’t know the answer to this one–we will learn something new all the time I guess.

      1. Their press release does state that their intention is to use the proceeds to redeem approx. 30% for record date 2/15, and the Feb monthly payment of $.164 will be paid on 2/27. So as I see it, for the 30% that will be called, I will break even or only lose a couple of pennies from the current price of 25.16-25.20. I will let the balance of my shares ride and hope that it’s awhile before they do another redemption. May even buy more.

    2. Trading around $25.20 today. If 30% is called then it’s priced fairly based on where it’s been trading. if called soon. If call is delayed then it looks like a good price.

  2. Press release says approximately 30% of ARR-B will be redeemed. Price dropped a small amount this morning.

  3. Question for you guys if I may? How safe is this particular company in general??? My CPA of 25+ years owns this one and told me to buy it but I never did. When I saw the words “Residential Reit” I got what you would call “Gun Shy”. I have many many memories about 2007 to March of 2009 where these shysters were “bundling” this junky paper and selling it to anybody that had a pulse. Would love to hear some detailed info from anyone and I will keep an “open mind”. THANK YOU.

    1. The only MREIT I invest in are NLY & AGNC preferreds. Nothing wrong with flipping this issue. Colorado Wealth has a risk rating of 3 on this out of 5. 1 being the safest. ATB.

    2. I wouldn’t buy this one, but I stay away from most unrated issues.

      It might not be fair to judge this company by retained earnings, but it is one of the first things I look at. I see it has a deficit of 2 billion, much of which was accumulated in the last 5 years.

      I’m guessing if their preferred stock had a rating by one of the majors it would be very deep into junk territory.

  4. Do all REIT preferred share offerings generate a K-1 or do some do a 1099? Thinking of the hassle of K-1 in an IRA.

Leave a Reply

Your email address will not be published. Required fields are marked *