Primo Water Looking to Call and Refinance Debt

Primo Water (NASDAQ:PRMW) which purchased Glacier Water Service a couple of years ago is selling common shares with the intention of “paying down debt” and refinancing the balance of their debt.

While it is not known for certain if the old Glacier Water Trust Preferred (NASDAQ:GWSVP) shares will be called it is likely that the 9.06% coupon is a target for this move. REMEMBER that trust preferred stock is essentially debt as the Trust bought subordinated debt from Glacier and this dividends received are treated as interest.

Shares are trading at $26.75 so there is plenty of downside to $25 (plus accrued interest) if I was a holder I would look to ‘sneek’ out ASAP.

While there is NO GUARANTEE the old Glacier Water Trust shares will be called, there certainly is an intent by Primo to reduce rates.

The preliminary prospectus for the common share offering is here and vague references to calling debt and refinancing can be found in the “use of proceeds’ section.




13 thoughts on “Primo Water Looking to Call and Refinance Debt”

  1. Darn! Well at least I have the dividend that will be paid tomorrow. Not real happy that two of my issues are being called. Friday Fidelity notified me that my Boston Private Financial preferred is being called at it’s first call on 6/15.

    Another one bites the dust (make that likely two). The stuff being offered lately is not too exciting. Rates are rising but returns on new issues are dropping. I for one am looking forward to the next crises so I can purchase some decent returns.

    Thanks though for the news Tim. I will have to see where it trades tomorrow.

    1. HI RW–it is just a guess – maybe they won’t call it–will have to wait and see. If I still was a holder (I sold when Primo and Glacier merged) I would be looking to sneek out early tomorrow–it can always be bought back.

      1. I have been in and out of this mysterious thing for several years. I have been out for a while. Its been a year and a half since they said they were not redeeming it when they acquired Glacier. I read National City was the source for Glacier revolver and they had to grant permission to redeem it. Outside of the venerable AILLL, I have moved away from the way above par issues as I have kept avoiding calls despite largely being in them. I instead switched to the high yield past call issues such as currently BGCA and CPE-A where I recently got in under call price plus next accrued divi. And now dare them to call.

      2. I was just thinking out loud here with no insight…But Glacier is a subsidiary, it was not merged into Primo. So this capital raise could just be offered for parent holding debt, not subsidiary. I certainly wouldnt bank on that idea enough to hold this and its ridiculous 9% plus par yield with a $1.50 plus call welt possible though.

        1. I gotcha but it is tough to let this one go. Monthly payer with a real nice yield. They aren’t making those anymore. I may look to sell tomorrow if it doesn’t drop much. Thanks Gridbird for the National City qualifier. I’ll have to see what I can find on that.

          Maybe they’ll call it maybe they won’t. They haven’t issued a call yet. I too have BGCA and also AHT-D which I picked up after the partial call. Any thoughts on Callon Petroleum calling the preferred ? Now trading at par plus the next dividend.

          1. I got in a few weeks ago at $50.78 gambling they wouldnt call 5/30. The 5/1 deadline slide buy and I am good til exD approx 6/15 to snag the $1.25. I have no true insight to lead me to know how long it will trade. They didnt mention it at conference call. It has been slowly trending upward since I bought. You run the risk of a 6 week dead money play here if called at next divi date. I would watch daily to see if they declare next divi without call notice and then dive in if it doesnt appreciate before then. They declared previous divi 3/5 so around first week of June you should know its fate……
            I wouldnt put a lot of faith in the bank holding the revolver balking at a redemption if it meant a lower refinace though…Oddly if memory serves from deep SEC filing reading, Glacier is sitting on a $6 million or so profit when they do redeem as they are holding them, presumably purchased some open market shares when they were low.
            We are about sneak through an interest payment on BGCA. If they are looking to redeem it on payment date it will have to occur by tomm. I suspect they are holding back until they get the credit ratings clarified from ratings agency since Newmark and BGC are largely seperating and having their own credit ratings. Conference call alluded that this hasnt been determined yet.

  2. Hi Tim Thanks for the Primo /Glacier Water update guess that aligns well with my question a few days ago. Will be a interesting morning for Gwsvp holders like myself. If it was going to be called any way of knowing the time line for the call typically ? 1month 6 month a year etc after the selling of share by Primo
    Thanks Tim appreciate all you do
    G

  3. Rather than take the hit if GWSVP gets called, I went ahead and sold my entire stake at the open at $26.70. I’ll continue watching it.

    1. Hi DaveR–I don’t think anyone will know for sure until they can get the common stock offering done. When they announced the offering they described it as ‘proposed’ and with a 30 day over allotment option. With this in mind I think it will be at least 2-4 weeks before anything firm is known.

  4. Sold this one in April as part of a portfolio refresh into more tax-advantaged issues. One of my favorites, but was always nervous about a call.

    Goldilocks scenario here would be heavy selling on the call rumor, driving the price down to par + one div payment. I’d be back in at that point, assuming I can get enough shares at that price.

      1. Hi Tim, I owned for awhile. I got out after your post. Thank you very much for the heads up as i retained my gain. Although i will miss the monthly gains, the capital gain i exited with was very nice to keep.

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