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Past 1st Call and Trading Above Liquidation Preference–Until It Isn’t

Markets are dangerous for snoozers and dreamers.

Data center owner Digital Realty (DLR) has called their 5.875% perpetual preferred today–effective 10/15/2020.

The issue went ex-dividend yesterday for around 37 cents.

The issue has been redeemable since 4/2018, but yet was trading near $26 a day or two before ex–it went ex for 37 cents but bounced right back up toward $25.90. The company dropped the call this morning and shares are now trading at $25.06.

It is interesting that DLR is selling Euro Note debt at 1%–hint–don’t be fiddling with investment grade preferreds past call dates.

Of course we all mostly know this, but I post it as one more example of what a newer investor should not do.

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