Yesterday was kind of flattish in the income issues marketplace–some issues up ,some down–although some of the regional bankers took a pretty large leap up. Customers Bancorp (CUBI), Valley National (VLY), Zions (ZION) and others saw their preferreds jump 2-8%–no particular reason for the jump except time has passed and each day that passes without a collapsing bank signals a potential end to the ‘crisis’. On the other hand–in a giant overreaction, Allstate (ALL) preferreds tumbled with the announcement of a new preferred issue.
Today I see the 10 year treasury is at 3.48% this morning which is 2 basis points below yesterday’s close. I am thinking we continue to see rates in a narrow range until the debt ceiling issue can be resolved so things should be flattish for the balance of the month.
Home Depot (HD) earnings were out this morning and comparable store sales were down–is this a proxy for the economy? Certainly it is meaningful for home building and home improvement – I have no answer but these pieces of information add talking points to recession speculation. We will have retail sales ex automobiles released here in a few minutes and this will add a little more color to the recession (potential) story.
I won’t be doing anything again today except potentially going ahead and buying either the new Allstate issue OR one of their currently outstanding issues. I sat on my hands yesterday.
I’d appreciate opinions, but I think it is difficult to state that the drop in existing Allstate preferreds is an overreaction. After everything settles down, shouldn’t we expect that the current and new Allstate preferreds will trade at a similar current yield? The underwriter for Allstate advised that Series J had to be offered at 7.35%. If it trades near par, isn’t that a sign that the others will have to drop in price? Perhaps it will trade for a substantial premium, which may raise questions about underwriting or management. But even it settles at a modest premium, don’t the existing preferreds have to drop in price? Thanks for your thoughts…
We still have the ALL-B issue not being called at 8.4% if I’m looking at that correctly.
Myself wondering why the other low coupon issues were not smacked when this went to float this past January. Could be the callable put.
I have a full position in the ALL-I issue at a few dollars under par.
I’m holding as I doubt I will get the new issue at a good price. And once interest rates drop I plan for ALL-I to keep paying for a long time while the new 7+% issue will get redeemed.
So for me no rush to sell out of the lower coupon issues.
However, I never thought I would grab the LNC-D issue under par after the initial spike.
We do live in interesting times.
Be well, Stay safe.
Its not the worse idea, Pickle. If it is, then I am guilty too. I bought a few hundred more of H series at 20.32 and hope to buy more if it drops more. In the near term the new issue may hold up better, but long term who knows. I may still buy some of the J series if I can get in around current price. Certainly am not chasing and would be fine buying more of H or even I (but it needs to drop a lot more for my interest.)
Yeah, this is the only move I got at the moment.
It’s been a nice year picking up positions as the Fed raised interest rates.
Better than waiting for stuff like IPLDP to drop near par back in the day so you feel like you got a deal.
Be well, stay safe
This is no surprise. BP wasn’t going to pay 8% or more on debt.
Thanks Fab. Hmmm..goodbye old friend, do I really want to hold you for 7.5 years at 8%?
https://seekingalpha.com/pr/19334479-travelcenters-of-america-inc-announces-intention-to-delist-8_25-percent-senior-notes-due-2028
WESTLAKE, Ohio, May 16, 2023 /PRNewswire/ — TravelCenters of America Inc. (Nasdaq: TA), the nationwide operator and franchisor of the TA, Petro Stopping Centers and TA Express travel center brands, announced yesterday the completion of the all-cash acquisition of TA by BP Products North America Inc.
https://mma.prnewswire.com/media/1161454pg
Notice of Intent to Delist and Deregister Senior Notes (Nasdaq: TANNI; TANNL; TANNZ)
In connection with the closing of the transaction, TA announced today that it has notified The Nasdaq Stock Market LLC (“Nasdaq”) of its intention to voluntarily delist from the Nasdaq Global Select Market and deregister its 8.25% Senior Notes due 2028 (CUSIP Number 894174200), 8.00% Senior Notes due 2029 (CUSIP Number 894174309), and 8.00% Senior Notes due 2030 (CUSIP Number 894174408) (collectively, the “Notes”) and its intention to file a Notification of Removal from Listing on Form 25 on or about May 26, 2023 (the “Form 25”) with the US Securities and Exchange Commission (“SEC”). As a result, TA expects the delisting of the Notes to become effective on or about June 5, 2023, from which time the Notes will no longer be listed on the Nasdaq. TA has not made arrangements for the listing and/or registration of the Notes on another national securities exchange or quotation medium.
Notice of Intent to Redeem Senior Notes
TA announced today that it will redeem all of the Notes outstanding on June 15, 2023 (the “Redemption Date”). The redemption price for the Notes is equal to 100.00% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, to but excluding the Redemption Date.
TA has instructed the trustee for the Notes, U.S. Bank National Association (the “Trustee”), to distribute a notice of redemption to all registered holders of the Notes. Redemption with respect to book-entry interests in the Notes represented by global notes will be done in accordance with the standard procedures of The Depository Trust Company.
This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
TA reserves the right, for any reason, to delay any of the filings described above, to withdraw them prior to effectiveness, and to otherwise change its plans in respect of delisting the Notes and the termination of its reporting obligations with respect to the Notes under applicable U.S. federal securities laws in any way.