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CSWCZ at risk of losing money if called. It is a 7.75% coupon with first call date of 8/1/25. It will pay interest of 0.48 then, but it closed yesterday, 7/3, at 25.55. It requires 30 day call notice which I did not see posted. But it is continuously callable after 8/1. A troubling sign is that they had $140 million in 4.5% notes due in 2026, they called early in Q4 2024. So if they called 4.5% coupon notes, might indicate these 7.75% notes are in their call list near term.
Tex, I am looking to fill in a few gaps in my wife’s income so I was looking at Tim’s lists that show payment month and that was one that caught my eye.
Have to do some more digging.
GAINL is another one to be aware of. Callable on 8/1/2025 though I am not sure of the exact terms. I am in it at under $25 so I will be safe in the event of a call. Assuming it is still possible on 8/1.
Sixth Street Completes Acquisition of Enstar
Enstar intends to voluntarily withdraw its depositary shares….
https://finance.yahoo.com/news/sixth-street-completes-acquisition-enstar-123900683.html
Anyone buying? ESGRO at 19 per share is a 9.2% yield. Interesting.
fc – If Enstar had some baby bonds or perpetual debentures such as the Brookfield issues, I would be all over this at that yield.
But you can tell the way the preferred is reacting here, leaning toward a legit probability it joins team Darth Vader in the dark market.
Oh for sure it is going to the expert market. One has to consider that as a 100% probability in my mind. I just find the expert market not to be the deciding factor if the preferred will get paid on time and possibly one day redeemed. I have already dealt with this exact situation successfully.
Now this is non-cum which is definitely a big minus but a couple of low ball bids won’t hurt. Below 19 for sure. A few layered bids hoping for sheer panic. Not backing up the truck but a few hundred shares will not hurt to juice the old higher risk bucket yield. Expert market is full of preferred still being paid like clock work.
Frankly I doubt I will own any unless people recklessly dump it.
fc, I’d be onboard with some type of definitive maturity date. Having said that, its tempting to put a very very small amount into this to the point of not really caring if it goes belly up.
Besides the initial sell off by someone driving the price below 18.50 for a moment in time it is looking like there are enough interested buyers at approx 19 where I will not be getting any shares. Almost like the days of a preferred going dark meant selling at any price is over with. Enough people seem to have become more comfortable with the concept and this gives support right up until it is taken off the major exchange.
But yea. I am on board with how you are thinking. Both you and theta make excellent points. The situation is less predictable then it could be if this was a slightly different security situation.
Press release indicated July 14 (or thereabouts) as when their delisting notice would be filed with Nasdaq. Maybe buyers will slow down as we move closer to that date. 10% would be a nice round number, lol
Keep in mind that Enstar was in bed with the Zyskind and Karfunkel cabal that controled Amstar when they went private (and when they killed Maiden holdings). Preferred holders got screwed in both cases, IIRC.
Enstar was the company that got to purchase all the productive maiden assets in a sweetheart deal (as part of a bigger payoff from Amtrust) and left shareholders with nothing. All stank pretty badly (as you would expect from slimy Zyskind and Karfunkel management).
I wouldn’t trust Enstar one inch. Once they go dark, I would expect that they would follow the playbook from Maiden and screw shareholders every way possible.
Just an opinion. DYODD
Private, Good point. I had forgotten all that. It will definitely dissuade me from buying this I think.
Thanks for the reminder Private. I got out of Maiden without getting burnt.
The recent LNG shipper that stripped all the assets and left a shell to cover the preferred was another I passed on. I was tempted to put in a low ball order until you woke me up
Delisting is 90 days post-filing, if I am not mistaken:
“Following the effectiveness of the Form 25s, the Company intends to file with the SEC a certification on Form 15 requesting the termination of registration of Enstar Ordinary Shares and the Depositary Shares under Section 12(g) of the Exchange Act and the suspension of reporting obligations under Sections 13 and 15(d) of the Exchange Act. Such deregistration of the Enstar Ordinary Shares and the Depositary Shares will become effective 90 days after the filing of the applicable Form 25 or such shorter period as may be determined by the SEC. The Company’s reporting obligations under the Exchange Act will be suspended immediately upon the filing of Form 15.”
Thanks Costasco
Prefs are Non-cumulative, why would they keep paying dividend once delisted….?
I will approach it from the angle that a company that is functioning normally and is profitable will pay the dividend because that is the correct course of action if the company wants to be considered trust worthy. Especially in the arena of banking and insurance.
Now I am getting a bit outside of my area of expertise and I will probably explain this poorly. If they stop paying 4 to 6 dividends there is often a vote for 2 additional seats on the board.
Also since ESGR is a holding company this comes into play:
“Because Enstar Group Limited is a holding company and substantially all of our operations are conducted by our main operating subsidiaries, our ability to meet any ongoing cash requirements and to pay dividends will depend on our ability to obtain cash dividends or other cash payments or obtain loans from these subsidiaries.”
So would not Enstar being bought out now become a subsidiary of another holding company who cannot get any money from it unless a dividend/distribution was paid out to the common shareholders and thus the preferred get first shot at that money? They can get money out of it in different ways like services rendered, leasing them certain assets, etc.. but that only goes so far. I mean the sub has to distribute profits somehow and that is broken up by who owns what share of the company. The sub cannot just give that money out to the common shareholders without paying the preferred first right?
Someone please correct me if I am wrong. Naturally fraud or under handed shenanigans will make everything above pointless. Like skipping just enough dividends to not cause a vote for additional board seats and then paying out dividends to everyone thus saving some money. Or recklessly stripping the company of all value and leaving a shell of a company behind with preferred and common shares near worthless.
Hi FC,
There are LOTS of ways to screw preferred shareholders.
Lawyers keep writing ever more complicated offering documents to say how the company won’t be able to do so, but there are always highly paid folks on the other side who get paid a lot of money to find ways to get around the documents.
The thing that keeps most companies from doing bad things to shareholders is that they will need to go back to the public market at some point to raise new capital/debt. if they screwed shareholders the last time, they will have a hard time selling their shares the next time.
Once that need/ability is gone (like when they delist/go dark), the practical protections for shareholders shrink.
If you want to see an example, go look through the history of Amtrust/Maiden Holdings from a few years ago. Amtrust went private/dark and screwed preferred holders.Then the folks that controlled Amtrust raided Maiden (which was public, but controlled by the Amtrust owners) by selling off all the productive assets to Enstar in a “sweetheart” deal (and Enstar was apparently involved in the Amtrust transaction to pay off the Amstar management folks). Didn’t appear to violate the Maiden contracts, but certainly screwed the shareholders.
I am sure others can name examples too.
To me, once a management team has taken any action to “cheat” like this, I simply won’t have anything to do with them – either as an investor or as a professional. Our companies try to maintain a “we won’t work for scum” -policy, even though it costs us money – it helps us sleep better at night.
How did Amtrust screw the preferred holders? I held mine and they have not missed a payment yet.
https://www.tenlaw.com/wp-content/uploads/2019/08/AmTrust_FinancialServices_2019.pdf
Well on the bright side the case was resolved to the tune of 13 million.
https://www.wolfpopper.com/cases-investigations/AmTrust
I guess that means companies have to be slightly more careful pulling this stunt when they know exactly what will happen in courts?
I lost thousands when they delisted (with no warning). I have just about got the money back now in dividends but it was one of my biggest hits.
They are rated by Fitch /S&P / AM Best.
How can they afford not to pay their preferreds without hurting their ratings, which, in my opinion, is going to harm their ability to conduct their insurance business?
Because the ratings agencies will give an A rating to a dead cow or a company on the day before the bankruptcy filing if you throw a lot of business their way.
Hate to admit it Private, I bought 200 shares Dec 26th in my Fido account ( not my wife’s) for $15.25 just to prove Fido was allowing transactions. Funny thing is with all this discussion I had an open limit order and sold the last today for $16.35 so I collected 2 dividends at about 12.25% and a 1.10 a share in capital gains.
To be honest, this is not something I wanted to hold hoping I would collect in 30 yrs.
As expected, FHN-B is getting called before it floats:
https://www.prnewswire.com/news-releases/first-horizon-corporation-announces-redemption-of-series-b-preferred-stock-and-corresponding-series-b-depositary-shares-302496068.html
US Dollar Index ~ another 52-week low hit today at 96.81. Value has dropped from Jan 9 high of 109.65.
Not breaking news. Just a notice. ATH-C, (which is listed on the F-to-F and Floating page as redeemable on 9/30) was actually redeemed yesterday.
Yeah Roger, I took the money and rolled it over into the SEAL PB yesterday. Shipping wasn’t what I was looking for, I wanted another insurance preferred but it was unexpected so I hadn’t been looking for a replacement.
Thank mjtroll for that one.
im looking for replacements for it. thinging of 1/2 into RCC and the other half into rjf-b
RJF-B would be nice if it were floating- but 2 yrs off even though callable a yr ago- an oddball.
If anyone here has STRK, there are some fantastic after-hours prices right now if you’d like to sell. I just got $126 for mine, which puts it at a current yield of less than 6.5%.
Not sure what’s going on to cause the spike, but maybe an ETF had to lift all the asks near the close.
Given that MSTR will can start issuing more through their ATM offering I doubt this will last long.
O. Chongusu – Appreciate the heads up. I can’t believe all I did was buy these when they first came out and now have a paper unrealized gain of 50%+.
I don’t think this has ever happened before in the history of perpetuals, meaning this specific sequence of events i.e. just buying from issue date. Not buying during say a market collapse [2008/2009] when many preferreds dropped to single digits and then riding them back up years later.
I love the fight between Saylor and Chanos over crypto treasury companies
I bot seal/prb at 25 as the seal-b/sjnk pair has gone from over 2 sigma rich in march to over 2 sigma cheap today (1yr horizon) much of this can be explained by payment of quarterly dividend… although friday it closed at 25.89 and the dividends is 51 cents…good article on S/A
Seapeak Preferred Shares: Earning 8-9% Yields With LNG Shipping
May 04, 2025 10:40 AM ETSeapeak LLC 9% PFD UT SER A (SEAL.PR.A) Stock, SEAL.PR.B StockSEAL.PR.A, SEAL.PR.B
mjtroll – Awesome alert. I think, maybe, not sure, there is a K1 for this one.
Theta, you beat me to it. But mjtroll will probably flip for a quick buck. Hopefully that is worth it, as or if the price recovers over the next couple weeks or months. Today was x-divy and it didn’t drop the .54 cents for the dividend so I expect it will recover.
I don’t think there is a K-1
per quantum on line
As a result, effective January 1, 2019, Teekay LNG will be treated as a corporation for U.S. federal income tax purposes and common and preferred unitholders will receive Form 1099s instead of Schedule K-1s relating to distributions taxable as dividends commencing in 2019.
Charles M – That’s a fantastic update! I can’t believe it’s been that many years now since I last looked at Teekay. I’m completely out of the loop on this for at least 5+ years then. It appears these preferreds are good-to-go as I imagine they would have gone dark/expert by now.
New York Mortgage Trust, Inc.
% SENIOR NOTES DUE 2030
https://www.sec.gov/Archives/edgar/data/1273685/000110465925063875/tm2519350-1_424b5.htm
9.875 area…
Thanks…their incremental borrow rate is creepy up.
currently 605 basis points above the US5Y — I’m lucky I don’t own any of the previously issued notes
Thanks jerrymac!
Got it J – thank you.
Argo Blockchain has announced a restructuring plan:
https://polaris.brighterir.com/public/argo_blockchain/news/rns/story/w3y70yx
ARBKL bondholders to be fully equitized under the proposed plan.
Argo’s common shares in London are currently down 65% on the news.
(Posted here because SPAM filter would not allow it in the Sandbox.)
(A big day in the SandBox!)
Extremely rare event you should understand if you invest in individual Muni bonds. A microscopically small city in Washington State declared Chapter 9 bankruptcy. They have some general obligation bonds outstanding, so conceivably they could suffer losses. 26/50 states currently allow Chapter 9 BK, meaning 24 do not allow it. The elephant waiting in the BK lounge is Chicago, but Illinois law does not currently allow it. Would NOT be surprised if they changed the law, retroactively.
Recall that states/territories could not declare BK, but Congress passed a law that allowed Puerto Rico to declare. It has been an epic and I mean epic disaster. The Puerto Rico Electric utility is still not out of BK after nine years! All thanks to a single district court judge allowing it happen. In the meantime, they have spent roughly $500 million on lawyers/consultants with no end in sight. It is the toast of the town at BK lawyer conventions!
BOTTOM LINE is that even with GO bonds, you have to understand the risk. Uninsured Puerto Rico GO bonds suffered major losses. Just like Detroit and others.
Disclosure: We do NOT hold any of this Washington City (Cle Elum) bonds in any account. We DO hold substantial amounts of insured Puerto Rico Electric bonds in multiple accounts that to date have paid off on time and in full.
From Bondbuyer.com
A small city in Washington state filed for Chapter 9 municipal bankruptcy after an adverse ruling from the arbitrator in a development dispute has the city facing insolvency.
Cle Elum, a city of 2,157 roughly 84 miles southeast of Seattle, filed for bankruptcy Tuesday.
City officials said they couldn’t reach an agreement with City Heights Holdings, LLC, over payment of a $25.9 million judgment related to a housing development.
In November, an arbitrator awarded the developer $22.2 million in damages at a 12% interest rate, which has since grown to the current total.