Yesterday, while I was out taking care of some family medical issues, there were new issues announced.
Aspen Insurance announced a new 7% non cumulative perpetual preferred with proceeds to redeem their F-to F preferred (I assume the AHL-C issue) which is now a fixed rate issue with a coupon of 9.59%. We had some snoozers on this one as it was trading at $26.60 last month and new is at $25.43. Aspen is now owned by Apollo.
The preliminary prospectus is here. The pricing term document is here.
Ramaco Resources (METC) sold a new baby bond with a coupon of 8.375%. The pricing term sheet is here.
Thanks to J (as always), Peppino and others who made note of new issues in the Readers Alert Section–always the best place to get an immediate ‘heads up’ on new issues.
Tim; I have a question for an expert such as yourself. Regarding Aspen Insurance which you said is owned by Apollo. So down the road if the shit hits the fan and Aspen were to run into trouble would Apollo come to the rescue and make the payments for them or would they say the old cliche of “Not my Problem”???
Good question Chuck. I don’t have an answer as I don’t work for Apollo,
But history looking at say BDC’s and P
.E. Companies leads me to think if there’s any problems I have seen where they will combine different funds that are under performing to make a stronger entity. I have also seen where a company has moved all the poor performing assets and dumped into a separate entity.
That has happened with Blackstone and a recent combining of separate funds of either a BDC or CEF not sure which as Im in the waiting room at the doctor for my wife.
Apollo got into trouble a long time ago but recovered. I think if you go to Quantum on line they mention it and you can Google it.
Chuck—I think there’s a risk that Apollo would find a way to strand Aspen if it got into trouble. Others say Apollo would step up to the plate to maintain their firm’s reputation. When your back is against the wall, it’s every man for himself. I personally tend to mostly stay away from BDC and PE related firms. I was burned once, which makes me twice cautious.
Chuck, we already have a precedent for this question. Brookfield in Canada is highly regarded. That did not prevent them from letting Altera Infrastructure *Teekay” go bankrupt. Altera was losing money, but Brookfield could have easily kept on subsidizing the losses. Their three preferreds ALIN-A,B,E were wiped out. Obviously Brookfield was not concerned about any reputational damage. No reason to think Apollo would be any different IMO.
Private equity firms have a reputation for having sharp elbows. Very few limits on what they would do to make or keep a buck. .
Tex—this is the one (where I was burned) that I was referring to above. Companies like Apollo and Brookfield will smile, look you in the eye, and just say “it’s only business”.
Temp ticker for AHL-F: ASIHV Not yet in Fido’s system.
https://otce.finra.org/otce/dailyList?viewType=Additions
Trading OTC.
https://www.otcmarkets.com/stock/ASIHV/overview
Moody’s summary of it’s Ba1 rating on AHL-F:
https://www.moodys.com/research/null-Moodys-Ratings-assigns-Ba1hyb-rating-to-Aspens-Series-F-preference-Rating-Action–PR_1000010636?cid=GAR9PTU7VKT2671&emailToken=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJVc2VySWQiOiJkYzVkYjczMC01NTBiLTQ3ZjctYjhjZi05NzY2ZjAxZmU0MzMiLCJEb2NJZCI6IlBSXzEwMDAwMTA2MzYiLCJjcmVhdGlvbkRhdGUiOiIyMDI0LTExLTIyVDEyOjM3OjAyLjMyNTcyNjQtMDU6MDAiLCJleHAiOjE3MzI1NTYyMjIsIlVzZXJOYW1lIjoiY3BhbWlrZW1iYUB5YWhvby5jb20iLCJVc2VyVHlwZSI6IjIifQ.C5eq3SMJX3a7nRwFjM_3cn4_7O0s1I6MNAZgf7hiuSg
ASIHV now up on QOL.
Don’t recall such a low underwriter’s percentage (METC) 0.875%
Owned it ages ago- was declining ’17 to ’21 , slowly up / down since then.
My error– it comes to 3.5% – doh!
hope all is turning out well personally
I have some AHL-D which is paying less than 7%. Not good news for that issue.