Well it isn’t a panic, but folks sure want out of equities–whether common or preferred shares.
My accounts have taken a licking – at the low for the year.
As I suspected I would I did get in a nibble on the Liberty Broadband 7% preferred (LBRDP) (mandatory call in 2039) when it tumbled down to $23.75 earlier today (now back to $24.02).
Well the last hour should be interesting today–maybe there will be an all out panic–or maybe we are holding that for another day.
Buckle up your seatbelt for the ride–I know it is really tough to hold on, but there is a pot of gold at the end of the rainbow for the brave (not sure how brave I am, but we will find out).
Bought some VLYPO on the drop. Should be over 8% though the floating rate isn’t showing yet. Could be another CUBI-F without the casll risk.
I did the same yesterday with VLYPO. Fidelity shows the new rate as 7.25214% so yielding about 8.2% or so now which is in the Cubi-f and MBINM ballparks
With core PCE jumping up to 4.9% y/y, another .75 hike should be coming at the next fed meeting.
Somebody humor me as I try to create a bogus credit rating for this company, and tell me if this is remotely in the ballpark.
Charter senior secured is Ba1. So slot the senior unsecured stack at Ba3. This effectively makes this preferred a “B” ish rated entity since most of its enterprise value resides in Charter stock and the common is subordinate to all above. How far off the mark would I be? Of course there are some smaller active moving part enterprises within Liberty’s active business. But it would seem hard to have a slotted rating much higher would it if there was a rating?
A fav. movie scene of mine, Take her away Ernie, Its goin to be a bumpy Ride !
This Friday has set up to possibly be the same as last Friday.
A losing week and going into the weekend people might not want to hold to see what Monday brings.
My concern is caution by buyers both Friday and Monday could this lead to panic next week?
Tomorrow will be a nice payday with dividends and interest. I look forward to deploying all of it to lower average cost per share and increase income. I view many compelling buys in short duration baby bonds.
I am lowering my average cost every time cash is available. Even if it is 5 shares at a time. I don’t know where the bottom will be, but I plan to buy through it and after it as long as I am lowering my average cost.
Yes.
I may run cash a little lower than I want to for the next 3 months but I can’t resist some of these IG issues.
Even the Ford notes and WFC/L may look attractive by January.
I will not buy the commons but T and VZ common are yielding close to 7% – the market may be giving us a gift or has gone off the rails.
NewToThis, Good plan – and good way to not try to time the market!
Buying at strategically lower prices over time will lower your average purchase price and increase your overall yield. Best done with higher-rated issues so that you have less of an aversion to building out the position if rates continue to rise.
Too bad we can’t buy KTBA. Underlying bond trading at par which equals 7%, Somebody evidently placed a KTBA market order for a large number of shares. Priced at $16.50 which imputes a yield of 10.6% not including accruals.
I think NSS was ex div today.
NSS was. But at $23.91 I couldn’t resist nibbling
IHIT discount is most likely over 7% again today. Looks interesting here with only a little over a year until liquidation.
Maybe this is the cause of today’s selloff?
https://www.bloomberg.com/news/articles/2022-09-28/yellen-tells-white-house-officials-she-ll-stay-as-treasury-secretary-past-midterms
(Just humor – Not trying to be political)
Issues off >=5.0%. must double check before trading since prices are changing rapidly in some cases.
AAIC-B
AFSIM
AGM-E
AIRTP
CHMI-A
CHMI-B
CIM-B
CIM-D
EFC-B
EFC-A
EPR-C
FTAIP
GMLPF
HT-C
IVR-B
IVR-C
MITT-B
MITT-C
NYMTL
NYMTM
PSB-X
PSB-Y
SQFTP
TWO-A
TWO-B
TWO-C
APTV-A
QRTEP
BTW, MREITS are down -7.7% today. REALLY ugly and I assume that is spilling over to their preferreds.
IMO this is a rare generational buying opportunity. Whatever the strategy – average in, trade up, wait for better prices – high conviction will reward immensely. Cheers!
I agree with you
Yes.
I added some PSB-X today…The company (PS Business Parks) was acquired by a Blackstone affiliate.
https://ir.psbusinessparks.com/news/press-releases/detail/269/affiliates-of-blackstone-real-estate-complete-7-6-billion
BUT will psb-x be moved to the expert market?
I’m hoping it gets redeemed before that happens. I am too far underwater to sell it. I was able to get out of SJIJ with a gain that was equal to two dividend payments. I already have SLMNP trapped there and there is a good chance PSBX will be there too. I am trying to limit that situation.
No. I posted about that yesterday. It is an irrational fear. Blackstone already stated they would remain on the exchange and would only go dark if the amount outstanding fell to a low defined level. They are no where close to that level and won’t be unless there is a call / tender offer or they Blackstone buys a ton in the open market
Maverick, I tend to agree with you and odds certainly favor it being BX is public. But it didnt say they “would” they said they “intend” too. If it drops a bit more, I may buy a small amount myself. Being the leverage they intend to put on this prior mostly debt free company and very low cost of capital preferreds are (cheaper than debt now for company purpose) I dont see a call on horizon.
But…More than one utility back in the 90’s did tenders for various 4% issues. All well below issue price of course. Many at 2/3rds or so of par value. So one could never discount that option. Especially since my opinion doesnt matter anyways to them, ha.
Grid – thanks. Yes if BX starts to do a tender on the outstanding PSB preferreds, then I would start to worry about any remaining outstanding. But I think if that is the case people would have plenty of time to get out.
I just don’t see a company like BX playing word games and saying well we said we intended to leave them on the exchange but too bad, we never said we would. Yes, nothing is a guarantee but I think most companies are reputable and mean what they say (although I am sure one can always find the outlier)
Amtrust pulled this stunt, so I guess I am more aware now. Maybe Amtrust getting thrown into court would cause BX pause.
The March 1, 2018 Press Release stated with respect to the preferred stock:
Each share of the Company’s currently outstanding preferred stock will remain outstanding and it is expected that they will continue to be listed on the New York Stock Exchange following the consummation of the transaction.
https://www.lit-sl.shearman.com/siteFiles/32533/Martinek%20v.%20Amtrust%20Financial%20Services%20Inc.pdf
…Three months after going private they delisted them.
Grid, do you know what happened next to the case? The judge did not dismiss the case and stated that the plaintiff showed that Amtrust engaged in fraudulent activity.
…the Court has already found that Plaintiff has stated a primary violation of Section 10(b) and adequately pleaded scienter. Plaintiff has certainly alleged facts showing that the Individual Defendants “knew or should have known that [AmTrust], over whom [the Individual Defendants] had control, was engaging in fraudulent conduct.”
——————-
The parties are hereby ORDERED to submit a joint letter proposing the next steps in this case on or before February 21, 2022.
In the interim, the Court expects that parties shall proceed to expert discovery. As reflected in the Court’s December 16, 2021 endorsement, the parties’ opening expert reports are due within 30 days of this Opinion and Order; rebuttal reports are due 30 days thereafter; and all expert discovery shall conclude 30 days after the exchange of rebuttal reports.
@Mr. Conservative + @Gridbird
The Martinek / Amtrust case has been settled for what looks like just above nuisance value, with a reasonableness / approval hearing scheduled for November 16, 2022. The settlement is for $13 million in total, with 33.33% going to the attorneys, and lead plaintiff Martinek receiving $15K when he alleged he lost ~$180k.
Notice of settlement (PR from plaintiff’s law firm):
https://www.prnewswire.com/news-releases/wolf-popper-llp-announce-a-proposed-class-action-settlement-regarding-amtrust-financial-services-inc-preferred-stock-301613836.html
Latest judicial action:
“More recently, on July 21, 2022, the Court granted preliminary approval of Plaintiff’s proposed class action settlement pursuant to Rule 23(e)(1)(B) of the Federal Rules of Civil Procedure and scheduled a final review hearing for November 16, 2022, at 3:00 p.m.”
August 9, 2022 Order:
https://storage.courtlistener.com/recap/gov.uscourts.nysd.521871/gov.uscourts.nysd.521871.98.0.pdf
Docket:
https://www.courtlistener.com/docket/16122189/martinek-v-amtrust-financial-services-inc/
Plaintiff law firm summary of settlement:
http://www.amtrustpreferredstocklitigation.com/
Hey ES, So are you saying the lawyers won again, ha.
Mav, you beat me up and wore me down, I surrender. This morning I bought a several hundred each of Y and Z this morning. I bought 10k of the 2028 PECO bond that most of which is actually in KTH, but this wasnt KTH. So I dont feel as dirty buying PSB knowing I balanced it with some safer debt, lol.
Looks like this is a class action and why it was at least 13 million. If you bought the preferred stock between the below dates, you must
To: All persons who purchased or otherwise acquired AmTrust Financial Services, Inc. (“AmTrust”) preferred stock on a U.S. open market during the class period of January 22, 2018 through January 18, 2019, both dates inclusive.
SUBMIT A CLAIM FORM, POSTMARKED (IF MAILED), OR ONLINE NO LATER THAN DECEMBER 13, 2022
You must submit a Proof of Claim and Release Form (“Claim Form”), either by mail or online, pursuant to the instructions below, to receive a payment under the Settlement. If you submit a Claim Form and supporting documentation, the Claims Administrator – A.B. Data, Ltd. – will determine if you are entitled to a payment under the Settlement.
Yes, Mr. C I knew it was still ongoing, but havent followed details. That is kind of why I left if open ended on what was presently going on. I wonder how long this is going to drag on? I think many investors have changed their name from Amtrust to “Notrust”. Of course the cast of characters there might not be considered top 10 quality, ha.
This is where Maverick was getting to though. DX has a pretty decent reputation (at least that is my base assumption), while no one ever said that about Amtrust even before this stunt!
Grid – yes I could see how some shady companies might pull this stunt but I truly doubt Blackstone would hurt their reputation doing so. As Rob-In-Vegas wrote
“Blackstone is one of the largest private equity firms in the world and their stock is publicly traded. Their reputation is of the utmost importance to this organization. It has to be – they are constantly marketing their services to pension funds, family offices, etc.”
thanks Maverick. i didn’t see your earlier post. I think i read on this site that Moody’s was no longer rating the psb preferreds because they weren’t supplied the necessary info. I took that as a sign it could be headed for the expert market. Curious what u say about this (if what i said above is accurate). gracias.
Franklin:
Blackstone is one of the largest private equity firms in the world and their stock is publicly traded. Their reputation is of the utmost importance to this organization. It has to be – they are constantly marketing their services to pension funds, family offices, etc.
I don’t believe that BX would sully that reputation to save a few thousand dollars in annual NYSE listing fees. Especially after they said that they intend to keep the PSB preferreds listed when they announced the deal back in April.
But even in the minute chance that they ended up on the “Terminator Dark Fate” Expert Market, at 8.5% yields – I would just treat my small position in PSB+X as a very well paying annuity.
Folks seem to also be forgetting that Blackstone doesn’t buy companies and their assets to hold them forever – eventually they will sell the PSB portfolio and may have to make the PSB preferreds “whole”.
That is why I wouldn’t be surprised at all if they were buying some of them back at current prices of $15+. Buying them back at current prices would theoretically lower their $7.6B deal cost for PSB by $300M.
thanks rob. Excellent points.
I read everyone’s thoughts. I read over the prospectus of PSB-X. Etc..
And I still cannot figure out why this is being punished so much price wise. I understand the fear of going dark. Got it. Right now that is unlikely as BX stated the point that could happen.
Is there some other fear I am not understanding like BX sells off PSB assets and somehow the preferred are left with nothing to pay them? Goodness… these are getting close to a yield of 9% now.
What the hell. Put in a couple of stink bids on PSB-Z and Y where it would yield 9% at my bid. If someone wants to unload in the last 30 minutes feel free.
Well.. 200 shares filled of PSB.Z at 13.55. I lowered the remaining orders for both by approx 50 cents. I do not need too much of this unless it is dirt cheap.
FC, What do you do when you toe in 200 shares of Y and Z and it drops 75 cents same day? Well of course you buy 600 more of Z right at 9%, lol.
Ok, I need to step back now.
Grid, I think 200 is more then enough of this for me. I should be buying BBB and up stuff right now! I have a feeling after people blow their incoming divs/interest early next week and worry about the fed starts up again it will be a good time to go shopping.
Yes, risk bucket and a bunch of headwinds no doubt. I just try to play all ends including cash being tied up in very short tbills, cds, and RZA again bought back in at 25.10 and under. But… I do crazy stuff too. I remember 10 years ago saying to myself if my local Union Electric 2039 make whole bond somehow got over 6% I would start buying. Well it finally got here, and at 6.18% for A1 credit senior secured I bought more today. Like Tim said. Toeing in.
Yeah – some people want out at any price it seems on some issues
I too nibbled on some LBRDP
Also nibbled on the following:
NSS when it dipped to $24
NRUC under $22
VLYPO there has been a big seller out the last 2 days (perhaps a fund dumping – maybe their mandate is they can’t hold floating rates as it is strange they are dumping right when it starts to float)- added more at $21.20
Swapped my last 100 CUBI-E for CUBI-F
Many posts about swapping.
What about having a “swap” section?
I always assumed the Flipping/Div Capture page also covered swapping, jmo
Not exactly a flip or div capture but there’s some overlap in the strategy so it fits in. I tried to get that site more active but not many people post there. Any ideas how to convince people to use it? Otherwise people won’t start a discussion that likely goes nowhere.
Yes Martin I have posted there in the past.
Lonely over there in the Twilight zone. Not many stop by.
I think that is why more posts in well visited sections.
Here is one for a possible safe place to hide out. COWN is being bought out by Toronto Dominion Bank. there are 2 senior notes
Maybe we could convince Tim to rename it ‘Flip-Swap-Div Capture’? 😉
That not too many people post there (or many of the other pages) supports for me the idea that there has to be a pretty compelling reason to create a new page, which is why I’m suggesting maybe just expanding the name. I get the distinction between swapping and flipping, but maybe there’s enough of a similarity?
Btw, this little meta-discussion is identical with the issues a work team faces when they build a wiki: everyone has their own idea about how to organize discussions, so either you need an extremely active moderator who’s keeping up with the evolving groupthink, or you keep top-level topics to a minimum. I’m sure Tim knows whereof I speak.
is LBRDP Charter?
Liberty owns a big chunk of Chartered’s stock. LBRDP liberty’s preferred. It pays about 7% (@$25 price).
Tim did a nice write up about it
https://client.schwab.com/secure/cc/research/stocks/stocks.html?path=/research/Client/Stocks/Summary&symbol=LBRDP
Buying below $25 is a gift.
Bob-here is an earlier article with all the poop.
https://innovativeincomeinvestor.com/take-a-peek-at-liberty-broadband-preferred-stock/
Thanks Tim
sorry about that – I put in the wrong link. Thanks for fixing me, Tim.