READER INITIATED ALERTS

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329 thoughts on “READER INITIATED ALERTS”

  1. Bought new Sempra “note” cusip 816851604. Called in order Etrade $25.20. Maybe Merrill cheaper, they were an underwriter.

  2. This is OT and while politically related, it has the potential to have a profound impact on everyone who buys and sells stocks

    A fan of low cost trades? Well better watch out if Bernie’s plan gets any traction. In his attempt to buy votes by paying off all existing college debt (not even getting into the absurdity of that), Bernie would tax all stock transactions at a rate of .005. So you buy 400 shares of a preferred at $25 – on your $10,000 transaction, you would pay Uncle Sam $50. Same when you sell.

    Ouch

    Hopefully never comes to pass – but something to watch

    1. Please show your qualified reference. This is not a worry site. Most refer to their source of diligence. Thank You.

        1. Alpha, my personal taxation policy preference is the old saying…. Dont tax you, dont tax me…Tax that fellow behind the tree!

          1. Grid and Alpha, the Beatles said it best…
            Let me tell you how it will be
            There’s one for you, nineteen for me
            ‘Cause I’m the taxman, yeah, I’m the taxman
            Should five per cent appear too small
            Be thankful I don’t take it all
            ‘Cause I’m the taxman, yeah I’m the taxman
            If you drive a car, I’ll tax the street,
            If you try to sit, I’ll tax your seat.
            If you get too cold I’ll tax the heat,
            If you take a walk, I’ll tax your feet.
            Don’t ask me what I want it for
            If you don’t want to pay some more
            ‘Cause I’m the taxman, yeah, I’m the taxman
            Now my advice for those who die
            Declare the pennies on your eyes
            ‘Cause I’m the taxman, yeah, I’m the taxman
            And you’re working for no one but me.

            AUT VIAM INVENIAM AUT FACIAM,
            Nomad

              1. The greatest tax abatement incentive plan of my lifetime is in Puerto Rico. For US citizens! I advised and had many many client and their corporations move to Puerto Rico once their OUTSTANDING tax law passed. I urge everyone is do your own “tax moving” deep due diligence:
                https://nomadcapitalist.com/2018/06/02/puerto-rico-tax-incentives/

                Please send Nomad a postcard, Nomad

                PS. BTW, I am NOT the Nomad that wrote this article

                1. Yeah, there are lots worse things than having to pay taxes. Living in some places I can think of just might be one of them.

                  So if anybody makes that move, I don’t need a postcard. Just post here after a year or so there & let us know how you like it.

                  1. Well, I’m on the plan. I purchased a condo in PR for the purposes of retiring there. My parents live there 4 months a year and we usually get there for 2. We LOVE it and can’t wait to be there full time.

                    1. Mrinprophet – Though I can’t speak for living in Puerto Rico specifically, I can say that there’s a huge difference from spending 2-4 months a year on a Caribbean island and living there year round….. Having lived 12 years on the island of Montserrat, I’d suggest anyone thinking of living in the Caribbean ought to be sure to read, Wouk’s “Don’t Stop The Carnival,” then read it again a few years after you’ve lived the dream…. It’ll make you smile once then doubly smile the second reading..

                    2. 2WR- thanks for the tip and I ordered the book. The “plan” is for us to be there 6 months and a day per year. I doubt we could leave our social network and kids for that long… and it’s enough to catch the tax benefits and still get to experience the Fall in the Midwest. I greatly appreciate the tips.

                2. Leaving the damaging hurricanes and crippling government debt aside, what is the quality of healthcare in Puerto Rico? For anyone considering retirement in an exotic locale that should be an overriding concern.

                3. Certain authorities in P.R. are under indictment for fraudulent activities. I will keep my $ in the U.S.

              2. And the Beatles weren’t the only Brit guys writing about the high levels of progressive taxes in Britain… Ray Davies of the Kinks took a shot too

                The tax man’s taken all my dough
                And left me in my stately home
                Lazing on a sunny afternoon
                And I can’t sail my yacht
                He’s taken everything I got
                All I’ve got’s this sunny afternoon

            1. Pshaw. Given all the tax breaks of the 21st century, my taxes have never been lower. And I bet that’s true for many here.

              Also, I wonder if that’s in any way related to citizens who have birthday parties for the potholes in their streets.

              Here’s another quote for those who seem to like them:

              “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…”

              1. We get tricked into thinking about income tax rate only. So it really depends upon ones jurisdiction for total tax. In retirement I really have no where to hide, so I pay as much now as I did when working. Not complaining as it is what it is, and I am programmed to pay anyways after many decades.
                I would suggest probably any income tax reduction in recent decades from federal level has largely been negated for most lower to middle class people people from the ever increasing sales taxes, and fee based taxes added on that no one even looks at that are more regressive in nature for such people. Such as on all the various utility bills, sin tax levies, gas tax etc. that are more imbedded into the structure.

                1. Well, speaking just for my own jurisdiction, you understand, my sales tax rate hasn’t changed in decades, nor have my property taxes.

                  Of course, we make up for it by cutting services, but not so people like me feel it much. That’s just the way it is ’round here, pardner.

                  I’m sorry for your tax woes, GB, but I been telling you for a while now, you oughta git outta the show me state & head on down here. lol

                  1. Camroc, Im a big fan of Texas. My NFL money is on two Texas teams. The Dallas Cowboys 8.5 ovr and Houston OILERS (Some call them Tennessee Titans now for some reason) 7.5/8 over…..But it really isnt bad here. We got the second lowest gas tax in nation. I drive a lot and we always are in running for lowest gas prices in nation. Property taxes are dirt cheap here. But you may get a senior discount in high property tax Texas that I will never get here. Factor in relative low cost housing too, I suspect cost of living is actually lower here than Texas. MO is a relative anti tax state. State has lowest cigarette tax in USA at 17 cents. Less than a quarter smoke, but when it went to ballot for cig tax increase 70% of state voted against it even though it had no bearing on them.
                    Remember everything is relative. When a persons tax goes from $1 to $2 its scream from the rafters. But when a person of same income is paying $10 and it goes $9, they think they got a heck of a break. Despite the fact they are still paying 4.5 time more than the guy complaining, lol.
                    Every state has bills to pay so it largely boils down to who it is shifted upon. I would suggest Nevada does it as good as anyone. They really tax the strip hotels and casinos and such which is largely paid by the tourists. Or in this case me since I frequent the place often via sports betting or skiing.

                    1. Camroc, I would rather take this over Waco in the summer any day, lol. Besides its all I have ever known so I am used to it. Plus it makes one appreciate those 68 degree days more when they come, ha.

                    2. Waco? Yep, worse than taxes. But we do have a/c mostly everywhere, even in Waco.

                      Lemme tell you a short story: My nephew lives in a nice beach town on the West Coast. He’s got a degree in PolySci, but of necessity works as a barista in a juice bar tucked in the corner of a gym. No a/c. It’s been so hot out there that, whenever possible, he sits in front of a little fan attached to his order screen and sweats, daydreaming about the ocean 3 blocks away. His apt. doesn’t have a/c either…

                      Sound like fun? Prolly not so much, huh? Not to mention the taxes, oh my…

                    3. Grid and Camroc, I live in one of the “Good 7” states that have no state income tax. Unfortunately, my main home property cost $33,000+ in just taxes and maintenance for 2018. I’m self insuring the property because I paid cash for it about 15 years ago, am not forced to take home owners insurance and only have flood insurance through the Fed’s. I would definitely like to move but am waiting for my son to see what Medical School he gets into. I will move to wherever he is in school. He’s currently a senior at FSU (Go Noles!) and I’m hoping he gets into a Med School in a warm climate. I doubt I will buy another primary home for sometime; when I run the numbers (taxes, insurance, maintenance, opportunity cost) I would be much better off with a luxury rental instead of buying. BTW, one of my friends keeps pushing for my son to apply to a DO school in Missouri, (I’ll move there if that’s what he wants), but that doesn’t check off the “warm climate” box…
                      I’d be curious to hear from many here that decided to move or not move in their retirement and why…
                      Aut viam inveniam aut faciam,
                      Nomad

                  2. Camroc, I do my best to pump cash to your parent of AILLL. But Ameren has reasonable rates here in Mo. In fact I just leave it on 71 all day and night in my house and never mess with it. Still waiting for the first $100 AC bill this summer…Maybe the July bill in August will break the hundo mark.
                    Nomad, you have to speak English for me to understand…I cant make any sense out of the $33,000 property tax/cost. That is a totally unfamiliar language that I cannot personally comprehend. 🙂

                2. Living in New York State exemplifies your statements. The State tax is oppressive, and folks that live in the Big City pay extra for the pleasure. and of course there are numerous other taxes, as you mentioned.
                  They even tax toilet paper here , because that is not a necessity ? Bottom line is the State is run by Socialists who
                  could care less about the citizens. Both National Grid and Con Ed cannot add new customers because the Gov hates fracking and pipelines.
                  Of course, he has no problem with his utilities. He talks a good talk but his actions are contrary to his talk. He will viist an emergency site for the photo-op, even outside NYC.

        1. Nomad – I have been thinking about the potential move in retirement

          I retired early a year ago. My wife is working part time
          We live in a cold climate (PA)

          On one hand the appeal of a warmer climate and no state income tax is enticing. On the other hand, I am not sure Florida in July when the heat and humidity is unbearable is enticing. And PA does not tax IRA withdrawals – so I just have to worry about the tax on dividends and capital gains

          Plus we are lifelong residents of this area

          So it is a difficult decision. I have thought about just doing the snowbird thing in the winter and renting a place. In fact, last spring and this spring I will spend a month in Tampa / St Pete in March. Love that area and spring training baseball.

          So I am still very undecided and curious to hear what went into others decisions on this subject

          1. People who move to FL crack me up. I have several friends there. Bugs, humidity, hurricanes. No thanks. One of my old buddies takes a nine iron with him when he walks the dog. Says he never knows what’s gonna come outta the bush.

            Again, no thanks. I’ll take TX. You can have any weather you want: coastal tropics, high plains desert. Low humidity, high, whatever. Piney woods, Marfa, Terlingua. Cosmopolitan cities, small towns, the whole gamut. No state IT, etc. If you have a secure income, you’re set. I’m in one of the top retirement small cities in the country and we love it.

            To each his own & we’ve found ours…

            JMO

            1. Camroc, to each his own is exactly right. I have no interest in Florida. But one of my best friends who basically lived in small town of 1000 nearby from me his entire life moved with his wife to south of Daytona and bought a 2000 sq ft condo in a high rise when he retired two years ago. They absolutely love it there. I thought they would be back in a year.
              On the other hand a man in his early 70s in my golf group moved back to where I live in Mo after being in Florida for 30 years. Couldnt wait to get back and he and his wife are glad they came back to their home town.
              As for me, I have lived in state all my life. My girlfriend wont leave this place which is her home town. I like my house and my friends, and my golf group. So outside of maybe some winter snow-birding in AZ for a month or so, that will probably be the closest I get to moving until death, or the “Home” takes me away without my consent.

            2. Camroc, I’m 30 miles north of Austin in the largest 55+ community in the state. Sounds like we might be neighbors.

              mikeo

              1. Mikeo, I assume you like it there? I have no experience living in one, but I have had some dreams about it living in a smaller scaled one. That would be the only slim chance of moving (Arizona or Nevada) would be to one of those.
                No children or their monstrous sub species off shoot called “teenager” if I remember correctly. Pickle ball, tennis, booze, golf, and pool time galore…Sounds ideal to me…And maybe a few “get off my lawn” signs thrown in for good measure, lol…
                My only worry would be the aging in place thing. In other words moving into a community in say my early 60s only to find out most people are in 80s and not very active.

                1. Grid, we moved here from Santa Fe, New Mexico two years ago to be closer to my son and and I must say living in Geeserville does require some adjustment. However, the amenities here are mind blowing: 3 18-hole golf courses, three huge recreation centers (a fourth coming), 14 miles of hiking trails, and on, and on, and on. Frankly I’m amazed how active we old-farts are! There are special interest clubs for every conceivable activity. Here’s a link to explore for more info.
                  https://www.55places.com/texas/communities/sun-city-texas

          2. Sounds familiar (west coast version)

            I retired early two years ago. My wife continues working part-time.
            We live in a cold climate ( North Idaho 60 mi south of the border)

            Over the last five years we’ve spent a week or two in Arizona during the winter and like you, that spring training baseball is a draw. But we opted this year to spend January in Hawaii and we ended up buying a condo there in April. No spring training but plenty of golf to be had. A beach and an ocean right in front of us.

            I don’t think we would ever be interested in being full time residents. Like you, we like where we live. You can’t beat the summers here plus family is here (kids and grandkids). No rain (July – September) and no humidity here and not many days over 90 degrees. Sunshine, mountains and lakes.

            Those other places sound great until you spend a summer there. Florida is hot and humid. You’ll sweat just standing still. Arizona at 110-120 degrees is not my cup of tee either. Try spending July in Florida before making a permanent move but I think you’re suggestion of being a snowbird a few months of the year is the right approach. That’s what we’re doing with the condo in Hawaii. Stay here with family through the holidays, then Hawaii from January till mid April.

            Good luck with your decision.

            1. Thanks Retired

              Yes, our thinking and scenarios are very similar.

              Can I ask – what do you do with the condo in Hawaii the rest of the year you aren’t there? Rent it out? If so, do you have someone manage it? If not, do you have someone look after it?

              That has always been my hangup about getting a 2nd place. Who do I have look after it when I am not there. Obviously renting it out would help pay for it too – but then what potential issues can you run into especially being an absentee landlord. I know there is AirBnb – shoot I rent off their site when I stay in Florida – but most of the places have the owners living nearby.

              So just curious what your approach is with your Hawaii condo

              1. Your concerns were also our concerns.

                About 40% of the 172 units are owner occupied and the rest are seasonal users or owned as rental investments. We bought it as our winter get away and for use by family members. We have no plans to rent it out but may allow close friends to use it at no charge. Not renting means we don’t have to worry about the quality of tenants, issues arising from using AirBnb, VRBO, cleaning services, repairs, rental taxes, etc.. The income would be nice but we just don’t want the headaches. Not our idea of a peaceful retirement.

                Our HOA has a management company and an on sight property manager. It’s gated. You need a key fab to get onto the property and security is onsite at night so we’re not worried about leaving a vehicle or someone gaining unauthorized access to our unit. If you’re serious about a 2nd place in Florida as an absentee owner, I’d certainly evaluate your access security first.

                The on sight manager has a key to each unit and most non renting seasonal owners simply leave keys with a friend who resides year around. We haven’t addressed that yet. The friends we’ve made are also seasonal owners, lol. We’ll probably do whatever it is they do when we see them again next winter.

                Our unit is older and being an absentee owner, the first thing we did was hire licensed plumbers and electricians to address needed upgrades to avert any problems. I can’t imagine what would necessitate a sudden trip to Hawaii to address a problem that wasn’t electrical or plumbing related.

                If Florida during the winter is your retirement dream, I certainly wouldn’t let the issues you raise hold you back. A lot of people make it work.

                1. Thanks Retired

                  That is helpful info/ Yes, the gated aspect and onsite security would help address a lot of questions

                  Appreciate the info

          3. Hi Mav. I’m in NEPA and retiring in October. My wife is retired and we both love Naples, FL. Spent two weeks this past February and loved it. Looked at some properties but not ready for a full time move and can’t comfortably keep two places going. Going to VRBO this winter for a month in Naples. We ve got a nice place here and I might move eventually but for now, that s my answer to crappy, interminable winters. Good luck!

            1. Hey Timdman

              Thanks. Yes, we need to escape those crappy PA winters !

              i really have come to love the St Pete area. But I am also in no rush. I rented a place off Airbnb last year for a month. Doing the same in 2020 in late Feb – most of March.

              Maybe on my next trip there I will casually look around at some options for down the road if i want to purchase a 2nd place to get away to

              Thanks

  3. SCCB to trade starting Friday. They just announced the closing of the offering. Start your engines…

    The Notes rank pari passu with the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The Notes are expected to be listed on the NYSE American under the trading symbol “SCCB” and are expected to begin to trade on June 28, 2019

    7.125%

    1. Affinity4Investing – my engines are already started today I have Pole Position with 900 shares already purchased. Special thanks to Nomad for letting me know the security was already trading with a CUSIP.

  4. $NRZ (New Residential), a favorite of the SA crowd, will be offering its first Preferred. Will be FTF, no other info that I see yet. This should see some decent interest, depending on the terms. Pays a high common divvy but has been a good performer. I haven’t owned the common in a while but did very nicely with it when I did.

    1. New Residential Launches Public Offering of Preferred Stock

      Business Wire Business WireJune 25, 2019
      NEW YORK–(BUSINESS WIRE)–

      New Residential Investment Corp. (NYSE: NRZ; “New Residential” or the “Company”) announces that it has launched an opportunistic underwritten public offering of Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Preferred Stock”), subject to market conditions. The terms of the Preferred Stock are to be determined by negotiations between the Company and the underwriters. The Company intends to apply to list the Preferred Stock on the New York Stock Exchange under the symbol “NRZ PR A.” The Company expects to grant to the underwriters a 30-day option to purchase up to an additional 15% of the shares of the Preferred Stock being offered to cover over-allotments, if any.

      The Company intends to use the net proceeds from this offering for investments and general corporate purposes.

      BofA Securities, Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Keefe, Bruyette & Woods, Inc. are acting as joint book-running managers for the offering.

      The offering will be made pursuant to the Company’s effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). The offering will be made only by means of a prospectus and a related prospectus supplement. Prospective investors should read the prospectus supplement and the prospectus in that registration statement and other documents the Company has filed or will file with the SEC for more complete information about the Company and the offering. You may obtain these documents for free by visiting EDGAR on the SEC’s website at http://www.sec.gov. Alternatively, copies of the prospectus supplement and the prospectus may be obtained from BofA Securities, Inc., Attention: Prospectus Department, 200 North College Street, NC1-004-03-43, Charlotte, North Carolina 28255, email: dg.prospectus_requests@baml.com; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 1585 Broadway, 29th Floor, New York, New York 10036, email: prospectus@morganstanley.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, email: prospectus-eq_fi@jpmchase.com; RBC Capital Markets, LLC, Attention: Equity Syndicate, 200 Vesey Street, 8th Floor, New York, New York 10281, email: equityprospectus@rbccm.com; UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, New York 10019; Citigroup Global Markets Inc., c/o Broadridge Financial Services, 1155 Long Island Avenue, Edgewood, New York 11717, email: prospectus@citi.com; or Keefe, Bruyette & Woods, Inc., Attention: Capital Markets, 787 Seventh Avenue, 4th Floor, New York, New York 10019, email: USCapitalMarkets@kbw.com.

      This press release does not constitute an offer to sell or the solicitation of an offer to buy shares of the Preferred Stock, nor shall there be any sale of these 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.

      ABOUT NEW RESIDENTIAL

      New Residential focuses on opportunistically investing in, and actively managing, investments principally related to residential real estate. New Residential primarily targets investments in mortgage servicing related assets and other related opportunistic investments. Following the acquisition of Shellpoint Partners LLC (“Shellpoint”) in 2018, New Residential now also benefits from Shellpoint’s origination and third-party servicing platform, as well as a suite of ancillary businesses including title insurance, appraisal management, real estate owned management and other real estate services. New Residential is organized and conducts its operations to qualify as a real estate investment trust for federal income tax purposes. New Residential is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.

  5. The baby bond IPO Of (SACH) Sachem Capital Corp CUSIP 78590A208 due 6/30/2024 is now trading. I initiated a position of 500 shares at $24.65 at Vanguard and had to give the the CUSIP not the eventual NYSE symbol of (SCCB). Please do your own deep due diligence before investing your money…
    Because gold is honest money it is disliked by dishonest men.
    Smile, Nomad

    1. Nomad, I was also able to get Schwab to trade the new Sachem Capital Corp bond, but they took an extended period of time to get back to me and charged an additional $25 to complete the “broker assisted” trade. However, it’s very nice to get in well under $25 per share.

  6. SLMNP:
    Sorry to break the bad news but according to LYB Investor Relations, the SLMNP is NOT convertible into $1000. It is convertible into $802 plus 19 CVR regarding the only litigation regarding the Schulman acquisitions of Citadel and Lucent. I would treat this like a perpetual preferred with the one benefit that it will always be worth at least $802. If the CVR is ever worth anything, then it might get closer to $1000 in value.

    1. VA, yes unfortunately we figured that out a month ago and already discussed it here. A fellow poster got the confirmation from US investor relations. On the positive side I guess the $800 floor is better than most perpetuals that have no floor, lol. Price has been firming up a bit I see. Probably because its impending exD date in a few weeks. Like a marriage, for better or worse, I am holding.

  7. A read-it-to-believe-it redemption in the current rate cycle:

    Ventas is offering $450M of 2.65% senior notes due 2025 and will be redeeming 2.7% notes due 2020.

    Smart management. The 3% or so reissue cost spread over 6 years puts their effective cost of capital for this tranche at 3.15% all the way out to 2025.

    1. Alpha, harder for me to believe somebody will buy it. Not sure how close you follow Ventas but the CEO was hailed as a visionary by calling the 2008 crash and positioning the company for it.

    2. Does anyone know why MCX (Medley Capital Corp. 6.5% Notes due 2021) is
      dropping? It was down to $23.18 today and no recent news. Looking for a short duration buy but not if MCC can’t survive 18 months. Appreciate any insight on this one.

  8. ARB: For those who may be holding NGHCZ just paid div, sister NGHCN cheaper and going xdiv (slightly better div) on Fri…one year call difference.

    1. I did a crappy job on the above: Details: NGHCZ is a bond holding just paid interest payment (non-qual pmt)…NGHCN is a pref which is approaching xdiv and a qual dividend, below par and two years+ call coverage. Not a true arb, but same company and the moving out a a very long dated bond if that makes a difference to one’s strategy.

  9. Synovus Announces Commencement of Preferred Stock Public Offering

    Business Wire Business WireJune 24, 2019
    COLUMBUS, Ga.–(BUSINESS WIRE)–

    Synovus Financial Corp. (SNV) (“Synovus”) today announced the commencement of an underwritten public offering of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E. Synovus intends to use the net proceeds from the offering for general corporate purposes, including share repurchases.

    BofA Securities, Inc. and J.P. Morgan Securities LLC are serving as the joint book-running managers of the offering.

    Synovus is conducting the offering pursuant to its automatic shelf registration statement on Form S-3 filed with the SEC on August 4, 2016. Before making an investment, potential investors should first read the prospectus supplement and accompanying prospectus, the automatic shelf registration statement on Form S-3, the documents incorporated by reference into the forgoing and the other documents that Synovus has filed with the SEC in connection with the offering. A copy of the preliminary prospectus supplement and accompanying prospectus can be obtained by contacting BofA Securities, Inc., NC1-004-03-43, c/o 200 North College Street, 3rd Floor, Charlotte, NC 28255-0001 Attention: Prospectus Department, email: dg.prospectus_requests@baml.com, or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by calling (866) 803-9204. Investors may obtain these documents free of charge by visiting the SEC’s website at http://www.sec.gov.

    This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

    About Synovus

    Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $47 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 297 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee.

  10. Armour Residential REIT (NYSE:ARR) expects its July 2019 cash dividend to be 17 cents per common share, down from 19 cents per share in June.
    Plans to redeem all 2.18M outstanding shares of its 8.25% series A cumulative redeemable preferred stock on July 26, 2019 at $25.00 per share.
    7.875% series B cumulative redeemable preferred stock hasn’t been called for redemption.
    Ends series B at-the-market offering program of up to 2M shares and authorizes a new series B preferred ATM offering program of up to 9M shares available for sale.
    Authorizes new dividend reinvestment and stock purchase plan covering up to 2.5M shares of series B preferred.
    https://seekingalpha.com/news/3473164-armour-residential-cut-dividend-11-percent-redeem-series-preferred

    1. The 7.875% coupon ARR-B has been trading around par for a while…this news should give it a boost since it is doubtful ARR will be making another redemption call soon.

  11. It looks as though quantumonline has now managed to fix their dates problem. No longer are all issues listed as called 1/1/1900.

    1. Looks like they are dropping or changing, maybe still working on Call Date Box as it is necessary to actually have to READ the synopsis of the prospectus they provide. How much work do I really have to do!@!
      Start using Timmy’s site more!

  12. For anyone who has interest in OFS Credit, who recently issued the OCCIP preferred monthly payer:
    They just issued report that has vital and pertinent information with a report indicating their current internal structure:
    https://materials.proxyvote.com/Approved/67111Q/20190607/10KWP_400036.PDF
    Also/FYI: Mr Tim, do not see the preferred symbol on the parent company sheet link: OCCIP, only the Exchange Traded Notes, two issues.
    I had bot to collect a few monthlies and sell off lots in a phase out. As I move forward with a heavy pref percentage portfolio, it seems the preferred environment is best managed with somewhat active management and some trading. I was thinking of a sleepy little pref town, but there is a lot going on and more tourists keep showing up to move in. Over time, it may evolve into more of that but this interest rate rodeo keeps pumping…seems like the Japanese model may be pertinent?

    1. Joel… I scanned through it and had noted the NAV change for the positive. I do own this issue and would consider it the highest risk preferred position I have. Anything I missed that concerned you? Thanks

      1. For me it verified three basic things: a junk to junkier fund, leveraged and heavy operating expenses. As I have mentioned before I am not an accountant type analyst but that stood out. JA

  13. I have two related generalized questions that maybe someone can answer definitively. Is it possible to SHORT preferred bonds and/or baby bonds in general? And secondly, if one shorts a preferred AFTER the ex-dividend date but before the coupon payment date, would you be responsible for that one coupon payment if you held until after that single payment? I’ve actually never tried shorting much of anything but in my quest to maximize what I do while I essentially do nothing, I was thinking there may be more ways to take advantage of announced call dates on high coupon preferreds after the announcement if one can short….

    1. That strategy has also occurred to me, 2WR. Of course the preferred or baby bond would need to be owned by your brokerage to enable you to borrow then sell it. I have never checked with my broker but I doubt the volume of these securities sufficient to interest them doing so. As to the second part of your question I have no idea and could be the monkey wrench in the whole concept.

    2. 2whiteroses – yes, it is possible to short a preferred/baby bond if your broker will let you. It can be profitable, but your broker could also make you close out a short position before you are ready – so there is a little risk.

      A number of years ago I shorted a baby bond, GAT, when it was trading at $30 per share. It was an 8% baby bond issued by Georgia Power during the financial crisis of 2008-09 (QuantumOnline still has the specifics of the issue once their site is back up and running). It was trading at $30 at the time, but I calculated the number of interest payments to be made for the call date and there was only about $3.00 left – so if the security was called at the five year anniversary I was going to have to pay back the $25 plus $3 of interest during the period I was shorting the security. So I shorted 1,500 shares through TD Ameritrade at $30. It was probably the easiest $3,000 I ever made. Investors who were buying the security must have only been looking at the “yield” and had no idea the YTC was negative.

      1. Thanks, Kapt and mikeo – I’ve got a call in to TDA that can’t be completed until Monday regarding shorting what may be in their “HTB” or Hard To Borrow Dept. We’ll see what they say however they did confirm that in the case of shorting after the ex div and covering after the payment date I would NOT be responsible for that particular payment. However, another question occurred to me since I’m thinking about trying to do this only on preferreds with announced calls… What would happen if I couldn’t cover by the call date? Would I only responsible for the par value plus accrued up until the call date or would there be more serious consequences? We’ll see what they say…. I also talked to Fidelity but I got the feeling the guy I was talking to there was making it up as he went along without really having a clue.

  14. Hi Tim
    Anyway to sort the Reader alerts in time order with most recent time stamp at the top. Hard to go back if missed the last 24 hours.
    Also, on the sidebar of homepage it shows last 5 posts, it would be awesome to be able to expand that to last 10-20 posts for easier monitoring of commentary.
    Just some feedback. I LOVE, LOVE, LOVE your site and use it all the time and don’t want to miss anything !!

    1. George,
      Awhile back, I discussed readers installing and utilizing a neat gadget in their browsers called “Feedbro”. It is easy to install and alerts you when new posts are made ANYWHERE here on the site. You can tag and save posts and be sure to never miss a posting. I’ll see if I can find and post a link to that discussion. Trying to track all new posts here is impossible with the number of users and running threads going on. I personally use the Firefox browser and have Feedbro installed to monitor numerous financial sites to get timely info.

        1. Thanks A4I – As I most frequently use Chrome, not FF, I’ll try Tim’s link first and see how it goes…. Feedbro is just for Firefox? If either works it will be a big problem solver imho.

            1. Then go to http://www.innovativeincomeinvestor.com
              Then click the Feedbro icon in the upper right of your browser.
              Now, click “Find Feeds in Current Tab”. It should give you two entries. Click the two little checkboxes for both entries and then click “Subscribe”. The “Feed” gives you alerts when Tim posts a new blog entry. The “Comments Feed” gives you an alert whenever anyone posts anything anywhere on the whole site. You will then wait shortly and a blue number will appear over that Feedbro icon. The newest posting to the site will be at the top. Click on the heading to read a portion of the posting. If you want to read it all, open it up. If it looks like junk, just click the trashcan icon to delete it. You can click the star to highlight items and save them. There’s really a lot you can do with it.

              This is how I have mine setup. This gives me all activity so I don’t have to hunt and peck for entries that may be buried amongst hundreds of entries somewhere.

  15. BRANFORD, Conn.–(BUSINESS WIRE)– Sachem Capital Corp. (NYSE American: SACH) today announced the pricing of its registered public offering of $23 million of 7.125% unsecured, unsubordinated notes due 2024 (“Notes”), which will result in net proceeds to the Company of approximately $21.7 million after payment of underwriting discounts and commissions and estimated offering expenses payable by the Company.

    The offering is expected to close on June 25, 2019, subject to customary closing conditions. The Company has granted the underwriters a 30-day option to purchase up to an additional $3.45 million aggregate principal amount of Notes to cover over-allotments, if any.

    The Notes will rank pari passu with all the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The Notes are expected to be listed on the NYSE American under the trading symbol “SCCB” and begin to trade on June 28, 2019.

    The Notes will mature on June 30, 2024, and may be redeemed, in whole or in part, at any time, or from time to time, at the company’s option on or after June 30, 2021. The Notes bear interest at a rate of 7.125% per year payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning on September 30, 2019.

      1. To borrow a phrase from the legal profession Egan-Jones would give an IG rating to a ham sandwich.

    1. Taken from the prospectus…. Our loans typically have a maximum initial term of one to three years and bear interest at a fixed rate of 5.0% to 13.0% per year and a default rate for non-payment of 18% per year. This company has 18% of its loans in default???

      1. David, the 18% interest rate is for loans that are in default. The number of loans in default with the company currently is much, much lower than that.

    2. Thanks for mentioning this issue, Affinity. I have been selling off some of my common shares of SACH due to the recent price increase and these notes will fit nicely into my portfolio.

      1. You got it Kaptain! I actually got the alert from Ladenburg as they are running a lot of new stuff to market it seems. The financials didn’t look that bad at first glance for SACH. I do plan to add SCCB to the stable when it begins trading.

        1. Affinity4 – I actually did an article on Seeking Alpha last September and listed SACH as a possible investment, but their shares were trading at $4.20 at the time. I’ve reviewed the financials a number of times and they are pretty clean – if investors are comfortable/familiar with “hard money” lending. Today I sold out most of the rest of my common shares of SACH at around $5.40 and will plow all the proceeds into their new baby bond. The common has run up over 25% since then and is just too pricey right now.

  16. The Great Elm Capital notes recently discussed will begin trading today.
    Symbol: GECCN
    Coupon:6.5%
    Matures in 2024.

  17. Had sent a note to QOL/Don Doan re SR-A not appearing in their SR stack. He returned the following which I suspect will resonate with most here:

    “I appreciate the information and will incorporate it to the website as soon as I can.

    If you don’t know it, Thursday evening, June 13th, our website was hacked again and completely shut down. The website that is currently operating provides the data from before the hack. At the present time we are unable to update the website data but of course our programmer is working to resolve that problem in the near future. He is working on a more secure form for updating of the website data so it is taking longer than we would prefer but we think it is necessary for security purposes.

    We have now moved the website to a newer, faster and hopefully more secure server. We have updated the server operating software, the Cold Fusion software, and SQL Server database software for more security. We will be adding https security to the site and working on a number of additional security items to see if we can stop future hacks. All this is quite expensive so you might keep this in mind when you consider a contribution to QuantumOnline.

    Don Doan
    QuantumOnline.com”

    1. If ever there was a website that accepts contributions that deserves one for those of us who watch this kind of stuff, it’s Don Doan’s quantumonline…the site is invaluable. And Tim, with thanks, we’re just waiting for you to accept contributions as well.

    2. They are having some major issues. All their Preferred Listings currently say they were called in the year 1900.

    1. Thanks. Have you seen any pricing info?
      As of this moment, Series C is still trading at a negative YTC.

        1. Fabrib, Thanks for the symbols. I ended up calling Vanguard desk. While item is on NYSE, there is no market. The trader is purely speculating all the issues were purchased. I wasn’t that eager as credit worthiness is not in my comfort late.

  18. BRANFORD, Conn.–(BUSINESS WIRE)– Sachem Capital Corp. (NYSE American: SACH) announced the commencement of a registered public offering of unsecured, unsubordinated notes due five years from the date of issuance (“Notes”). The Notes will rank pari passu with all the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The Notes are expected to be listed on the NYSE American under the trading symbol “SCCB” and to trade thereon within 30 days of the original issue date. The interest rate and other terms of the Notes will be determined at the time of the pricing of the offering. The Notes have a private credit rating of BBB+ from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.

  19. Sachem Capital Corp. Announces Registered Public Offering of Notes (SACH)

    The Notes will rank pari passu with all the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The Notes are expected to be listed on the NYSE American under the trading symbol “SCCB” and to trade thereon within 30 days of the original issue date. The interest rate and other terms of the Notes will be determined at the time of the pricing of the offering.

    https://www.sec.gov/Archives/edgar/data/1682220/000114420419031567/tv523503_454b5.htm

  20. Thanks to Affinity4Investing for the tip on CNP-B.

    Flipped it and made 4% in three weeks time. Did my due diligence, liked the risk profile, and got lucky and bought on a short-term dip identified by A4I. Would be happy to buy back on a dip in the future.

    This is a great site. Thanks Tim, Grid, Nomad, Bob-DE, etc. as I’ve learned a lot from you all.

    1. Glad you’re doing well, Gum. I’ve decided to hold my CNP-B for now and am continuing to watch it for another dip down so I can scoop-up some more.

  21. from Y!

    The Federal Reserve did not move on rates at the conclusion of its policysetting meeting June 19, but committed itself to acting “as appropriate to sustain the expansion.”

    The Fed elected to keep the benchmark interest rate within its target range of 2.25% to 2.5%, but new economic projections show more Fed officials seeing the case for a rate cut — or two — by the end of 2020.

  22. CPE-A It’s interesting where it’s now trading after the call announcement… Right now it’s 50.03-04. The way I figure it, that’s a 5.25% annualized yield for a 1 month hold on what is now a AAA credit…. once they announce a call, the funds are set aside so it’s no longer a CPE credit… That’s a pretty happy way to stash some cash short term….

    1. sadly, ‘QuantumOnline’ has been down again since yesterday, that’s 6/18 and 6/19. That site has been down more than any other site I have ever accessed.
      I send donations by mailing a check.

  23. I just received a notice in the mail that the (KMPA) CUSIP 488401209 Kemper 7.375% due 2/27/54 was going to have redemption at a total of $25.209982 (I thought it was slightly lower) on 7/8/19.
    Smile, Nomad

  24. Notice from QuantumOnline.com

    The QuantumOnline website has experienced a server failure or a successful attack on the website today (Thursday, March 21, 2019) and the website is down probably for the rest of day. We are working on a solution and the website will most probably be back in operation today.

    3/22/19 UPDATE — This outage affected both our website server and the server’s basic operating system and will be considerably more time-consuming to fix than was originally anticipated. At best we will have to reinstall all the software on the current server. At worst, we will have to replace the server and reinstall all the software on a new server. In the process of reinstalling the software on the server, we will be upgrading some of the server and website software. This is liable to reveal portions of our current website programming that incompatible with the Microsoft program updates after the website goes back online. If or when this happens, please let us know if you do find errors and give us as much detail as you can on where and how they occur so we can fix them. In any event, we should be back in operation by Monday at the latest and hopefully earlier if all goes well.

    Don Doan
    QuantumOnline.com

    1. I wondered why my credit card was used in AZ last month or so.
      Maybe the Quantum site hack divulged the info.
      Anyways, i have a new card now.
      But the Quantum hack may have been the cause.
      Anyone else get affected?

      1. Why would QOL have your credit card info? I thought the way to support them was to mail a check.

        Sounds like they got hit with ransomware, but not sure. Reinstalling all of the software, including the OS – is usually required when ransomware encrypts all of the files. I’ve remediated a lot of this stuff.

        1. Sigh, i used a credit card to donate 2x over a years time.
          Guess i’ll be more vigilant next time i use credit card.
          Old Joke……
          My wifes card was stolen 3 months ago
          ” why didn’t you report it?
          The thief was spending less than my wife..

    2. sadly, ‘QuantumOnline’ has been down again since yesterday, that’s 6/18 and 6/19. That site has been down more than any other site I have ever accessed.
      I send donations by mailein a check.

  25. The new FORD baby bond started trading yesterday and I managed to buy at an average price of 25.36 per share. Guys, what is your opinion about it? I think 6.20% nominal yield for a baby bond is kind of juicy now.

      1. Anyone, please correct me if I’m wrong. But it looks to me like there are several Ford Motor Company regular bonds that have shorter maturity and slightly higher yield. The baby bonds have superior liquidity. The disadvantages of the regular bonds include (1) many brokerages still take advantage of individuals on bond pricing, (2) a minimum investment of 10 bonds or so applies more often than not, and (3) some investors don’t like paying a premium. But if you want to buy just to hold, I see alternatives like:FORD MTR CO DEL NOTE 7.75000% 06/15/2043ISIN #US345370BM12 SEDOL #B0141M9 with a maturity in 2043, no call and a YTW at the current ask of 6.36%. There is FORD MTR CO DEL BOND 7.40000% 11/01/2046ISIN #US345370BR09 SEDOL #B010WF7 with a maturity in 2046, no call and a YTW at the current ask of 6.61%. There is FORD MTR CO DEL BOND 9.98000% 02/15/2047 with a maturity in 2047, no call and a YTW at the current ask of 6.69%. If you can accept the lower liquidity and other disadvantages of regular bonds, these might be alternatives to consider.

        1. Roger, you summarized it well in my opinion. I hold bonds as part of diversified portfolio. I use several different brokerages but Etrade is my hands down favorite for bond trading. I love their pickups and bought a new F150 recently but that’s my limit on buying Ford.

          1. P – I had an ETrade account for awhile and am usually active in the true bond market because that’s my background… I found ETrade’s platform is similar to but not as good as Fidelity’s. Have you looked at F’s? I found ETrade is hit and miss on their ability or willingness to allow you to bid on an outstanding bond where you can always do so on a bond shown at Fidelity provided there is an offering out there on it and you’re bid is no less than 5% away from the best offering price…. Their listed bid and asked prices and available offerings seemed to be comparable, but to me Fidelity has the best straight bond platform.

            1. 2WR, I have Merrill and Etrade. Etrade hands down. One time I made appointment at Schwab, scribbled down Etrade offerings and headed over to Schwab. Etrade hands down. Bids under ask on Etrade are almost never successful for me but I’ve never had an issue with trying. I usually am patient somebody wanting liquidity rather than just buying any time, deals do pop up and don’t last. It’s mostly ultra short IG utility and financials I buy. Hold to maturity. Right now it’s just pitiful and I am not buying. If I could shave a couple percent off at F that would add up but guess I’d have to open up at F and start bidding to know more.

  26. Callon Petroleum 10% Series “A” Preferred (CUSIP 13123X409) wil be called in full on 18 July. Highly unlikely to find a replacement with such a juicy yield.

  27. JMP Group Announces Partial Redemption of 8.00% Senior Notes Due 2023

    JMP Group LLC (NYSE: JMP), an investment banking and alternative asset management firm, announced today that its wholly owned subsidiary, JMP Group Inc., has given notice of its intention to redeem $11.0 million principal amount (440,000 Units) of its 8.00% Senior Notes due 2023 (CUSIP No. 46629U 206; NYSE: JMPB) (the “2023 Notes”) on July 18, 2019 (the “Redemption Date”). As of June 18, 2019, $36,000,000 in aggregate principal amount of the 2023 Notes were outstanding. The redemption is being made pursuant to the terms of the 2023 Notes and the indenture governing the 2023 Notes. The redemption price per 2023 Note will be $25 plus accrued and unpaid interest up to, but excluding, the Redemption Date. The redeemed 2023 Notes will be cancelled and not subject to reissuance.

    JMP Group Inc. instructed U.S. Bank National Association, as the trustee for the 2023 Notes, to distribute a Notice of Redemption on June 18, 2019, to all currently registered holders of the 2023 Notes. Copies of such Notice of Redemption and additional information relating to the procedure for redemption of the 2023 Notes may be obtained from U.S. Bank National Association by calling (800) 934-6802 (toll-free). JMP Group Inc. will use available cash to redeem the 2023 Notes.

  28. New BofA offering

    06/17/2019 12:26:32 Addition 06/17/2019 00:00:00 BKMRY BANK AMER CORP Depositary Shs Repstg 1/25th Int Non Cum Pfd Ser JJ Fixed (To Fltg) Other OTC

  29. Yesterday, Monday, 6/17, I wanted to place am order for INBKZ for my Merrill Edge IRA account. I found that Merrill did not recognize the symbol. I looked in streaming quotes, the symbol search panel, and the purchase and sell platform. I tried to enter the symbol as a buy. The symbol was accepted , but an error message told me it was an invalid symbol. I continued completing the order and submitted it. All along the way, I was told I could not make the purchase on that trading ticket. Damn the torpedos, I proceeded and the purchase was completed. This morning, The confirmation was available and the stock appeared in my account holdings.

    1. Jag, yesterday, I all but broke out in a cursing match with my premium elite rep (again) as this was the 6th out of the last 7 items I’ve tried to get an early jump on with Merrill – but haven’t been able to buy until days after others at Schwab/TD/Vanguard have been able to buy the same. I also finally got in, but not till this morning. They really are stinking as of late with getting new offerings up and running in a timely fashion.

      1. A4I
        They did a similar thing to me when I wanted to buy SOHON. Then, the error message said that it was too risky to purchase stocks with such a low price. I called them, and had no success after talking to two agents. Both of them put me on hold while they talked to supposedly, a higher authority. By the time I could purchase the stock, it was priced higher than I wanted to pay. After more squawking they agreed to make an adjustment if I would not transfer any assets until September. I really like the Merrill trading platform as opposed to that of Vanguard, but not having access to the early purchase of stocks is a real irritation. Anyway, yesterday I found a way around it and wanted to share it with all.

        1. Have you signed and submitted the ‘hold harmless’ type form back to them? It basically states that you won’t sue them if you get burned dealing in OTC/pink sheet type issues. I was recently made aware of this and completed the form and sent it in. I now have a little less of a hard time dealing with the trading restrictions regarding the low priced securities. I’m also having the issues further investigated with why they are pricing things like DOMGL as ‘penny stocks’ when it is rated IG, a large cap company, and so forth. I feel like some progress is being made.

    2. picked up a micro-position in F-B (the new Ford 6.2% baby bonds maturing in 2059) for $25.32 per share. These are at the low end of IG.

    1. Wondering if someone has a firm understanding of the current VER-F partial redemption? I had a notification through FIDO of the redemption, see my holding has been reduced — so far, so good. Company website says the redemption date is July 5th. My question is: if I add to my remaining position, will part of that be redeemed as well. Or is “safe” to buy back in — it’s done well for me and I appreciate the yield. Thanks to one and all. D

      1. Same issue here, D. 10% of mine were called. If they have already reduced and segmented your holdings, I ‘think’ it would be safe to get in now, but I am waiting until the actual redemption occurs to see if the price dips – so that I can try and buy back some shares.

        Had a partial redemption happen recently with ECCA. Waiting for 6/28/19 to see if it dips so I can buy more shares back.

        1. Thank you, A4I, I’d rather exercise caution in a process I don’t understand. Funny thing, I also had the partial ECCA redemption, like that one too, but now will wait till the redemption date and decide whether or not to get back in. Thanks again and best of luck with both. D

          1. If I cannot buy any VER.F back at a decent price, I’m ok with that. To hedge this event, I went into the new AHH.A, which came on at a similar yield of 6.75% and has 5yrs call protection.

            Did the same type of hedge with ECCA, by moving into the new LTSH.

      2. D, I doubled my position in VER-F the morning after the redemption announcement resulted in an instant jammed exit door discount of .25/share while the small 10% redemption penalty would translate into only a .025/share nick against the purchase at $25.25. VER financials reveal a steadily improving picture. Will be sitting/add on opportunity as long as the past call status keeps the issue honest and tethered near par.

      3. D – I believe the answer is you can’t buy or sell the called shares (they have been segregated) so any shares you buy from this point are uncalled shares.

        Very strange to see such a small call. Just 9% for me.

        1. Bob, this seems to be a relative new phenomena. When issues get announced for redemption (the entire float), they change the ticker symbol until it is redeemed. Up until 2 years ago they would continue trading on same ticker and I would wear them out making easy money. People would dump then leave meat on the bone, or be totally ignorant to the fact the redemption price was several dollars higher than the par price.

  30. @Mikeo
    Thank you. I purchased at TDA using the designated symbol on the first day it traded, still under par. Sorry for late response, but this board is not in date sequence and I didn’t know you had replied to me.

  31. HOUSTON, June 18, 2019 /PRNewswire/ — Callon Petroleum Company (CPE) (the “Company” or “Callon”) today announced it has given notice for the redemption (the “Redemption”) of all outstanding shares of the Company’s 10.00% Series A Cumulative Preferred Stock (CUSIP: 13123X409) (the “Preferred Shares”).
    The redemption date of the Preferred Shares will be on July 18, 2019 (the “Redemption Date”). The Preferred Shares will be redeemed at a redemption price equal to $50.00 per share, plus an amount equal to all accrued and unpaid dividends in an amount equal to $0.24 per share, for a total redemption price of $50.24 per share (the “Redemption Price”). On and after the Redemption Date, the Preferred Shares will no longer be deemed outstanding, dividends on the Preferred Shares shall cease to accrue, and all rights of the holders with respect to such Preferred Shares will terminate, except the right of the holders to receive the Redemption Price, without interest.
    Regular dividends on the Preferred Shares for the second quarter of 2019 will be paid on June 30, 2019 to each holder of record on June 13, 2019.
    https://seekingalpha.com/pr/17547145-callon-petroleum-company-announces-redemption-10_00-percent-series-cumulative-preferred-stock

  32. From Randy Durig:
    The significance of the Strait of Hormuz is defined by numbers – 21% of the world’s daily output of oil travels by tankers out of the Persian Gulf via the strait. This body of water, only 24 miles wide, sits just south of Iran, a country that has been in the crosshairs of US economic sanctions since November 2018. Attacks on 2 oil tankers in the strait last week brought an immediate reaction from the US military. Concerns that the flow of oil through the passageway could be disrupted didn’t immediately translate into higher oil prices – the price of oil instead fell last week – in part the result of record supplies of crude oil coming from the US shale oil industry (source: BTN Research).

    The renewed rally in the US stock market would suggest that investors are betting that the Federal Reserve will come to the rescue and lower interest rates, maybe not at this week’s Fed meeting but likely within 3 months. As of the end of trading last Friday (6/14/19), the probability of a Fed rate cut at this week’s 2-day meeting was just 23%. The probability of a rate cut jumps to 87% for the Fed’s 7/31/19 meeting and 97% for its 9/18/19 meeting. The Fed’s last rate cut was on 12/16/08 (source: CME Group).

    The ongoing 10-year economic expansion in the United States is one for the history books, not only for its duration but for its late stage characteristics. Most market strategists anticipated that 2019 would see higher interest rates as the Fed would be forced to slow down rising inflation. Instead interest rates have fallen as low inflation persists not only in America, but around the globe (source: BTN Research).

    Notable Numbers for the Week:

    JOBLESS RATE – The last recession in the USA began at the end of December 2007 and lasted 18 months through June 2009. The nation’s unemployment rate as of 12/31/07 was 5.0%, climbing to 9.5% as of 6/30/09 (source: National Bureau of Economic Research, Department of Labor).

    BUDGET REVIEW – During the first 8 months of fiscal year 2019, i.e., through 5/31/19, tax receipts are up +2.3% from the previous year to $2.27 trillion while outlays are up +9.3% to $3.01 trillion (source: Treasury Department).

    TAKING THE KEYS – Banks repossessed 10,634 homes nationwide in May 2019. Banks repossessed 93,777 homes in May 2010, the 2nd worst month ever in American history (source: ATTOM Data Solutions).

    YOUNG AND OLD – By the year 2035, the number of Americans at least age 65 (projected to be 78.0 million) will exceed the number of Americans under the age of 18 (projected to be 76.4 million), the first time in our nation’s history that has occurred (source: Census Bureau).
    Be well my friends, be well, Nomad

    1. Nomad, It sounds like a generic tome from Durig, but from one man’s real experience…be wary. Nuff said.
      In regards to other ‘reports’ below, caution is warranted esp when problems are treated with old tired salves that come in tubes of special interest rhetoric. We seem to be unwilling to strive for new solutions because they are non-electable? That may be different now, we will see. It will take significant bravery and trust in the generation we brought up. We sit and stare at problem ghosts that are old friends. That is the way the human animal brain works not our spirit minds. I hope we do not walk down and follow leaders on the worn paths of the past.

  33. I am in the 100 @ $101 club too. Went through Fidelity.

    Oddly enough, this is the only thing I have had any luck buying near par lately. Everything else shot up too high out of the gate.

  34. The World Is Facing A $400 Trillion Retirement Shortfall By 2050

    by Tyler Durden
    Sat, 06/15/2019 –
    Though many Americans are probably more worried about an immediate financial emergency than their long-term prospects for retirement, the World Economic Forum, an organization comprising jet-setting billionaires and corporate captains of finance and industry, has published a study to remind ordinary Americans they better get used to the idea that they will be working until they die, unless Elizabeth Warren improbably succeeds in her campaign to be the next president and simply bails out everybody who is drowning in student loan debt, millennials will likely continue to see the ‘retirement gap’ – the ‘shortfall’ between how much money one has saved, and how much one will need to make it to the end of their lives – expand. Put another way, millennials are going to have a hard time making sure their money lasts longer than they do.
    According to BBG, the size of the world’s collective savings gap could be larger than $400 trillion by 2050. That’s up from $70 trillion in 2015. In further bad, though not surprising, news, the US is forecast to have the biggest retirement savings gap at $137 trillion, followed by China ($119 trillion) and India ($85 trillion).
    Some are saying this issue now requires “action” from “policymakers, employers and individuals” before droves of the elderly find themselves in the worst financial predicament of all: broke, and too old to do much about it.
    Unless something is done, older people will either need to delay retirement, or learn to get by on less.
    According to the data, in the US, 65-year-olds have enough savings to cover just 9.7 years of retirement income. That leaves the average American man with a gap of 8.3 years, while Women, who live longer, face a 10.9-year gap.

    Under their methodology, which seems fairly conservative, the forum assumed retirees would need enough income to cover 70% of their pre-retirement pay. But on the other hand, they didn’t factor in Social Security or other government welfare payments, which method might overestimate the true number.
    Still, millennials have gotten so used to the idea that they will never retire, that they make resigned jokes about it. Unfortunately, with birth rates dropping, we could end up with a situation where there’s masses of old and broke elderly without children wealthy enough to intervene, meaning that the state may inevitably step in.
    Japan
    But there’s one developed economy that’s doing worse than the US, and that’s Japan. Japanese women (who have the world’s highest life expectancy, 87.1 years) face a retirement gap of 20 years, while man face a gap of 15.

    Elderly people who are forced to re-enter the workforce often take low wage jobs, like working as a cashier at McDonald’s, meaning that many former professionals must adjust to a lower standard of living.
    Make sure you are making tremendously beneficial investments (don’t lose), Nomad

  35. Alpha – at the risk of stating the obvious these are Canadian issues and there are differences between US and Cdn markets. You have a lot of Cdn prefs from high quality companies that trade at 50% of issue price. For a good reason! Many people were burned in the past and as a consequence the (required) rate of return is higher than what you see in the U.S. for comparable credits.

    Look at a chart of the 5-year BOC rate and see just how low it can go. It has been under 60 bips as recently as 2016. At that rate EBGEF would rest to 3.42%, versus the current 5.38%. And if it resets low, it sits there for 5 years, not 90 days like most US floaters.

    That said, in a diversified portfolio I like the risk. I own EBBNF and EBGEF, rather a lot of each. I also own BCE, Fortis, and Transcanada issues. All are flagship companies trading close to 52-week lows.

    I don’t own it but CDUTF is an interesting issue. Low coupon but likely to be called in 17 months. Sort of a Canadian version of KYN-F

    1. Bob, yes CDUTF trades fairly tight to par. A large kicker for its quality but if 5 year CAD is at 1% or lower they could leave outstanding at the 4.5% floor. I bought this issue this winter near par. Picked up CNUTF this week which is a pure fixed perpetual from Canadian Utilities this past week as a counter play to its reset sister.

    2. Bob, The negative sentiment on the CN resets is I think creating an opportunity not readily available south of the 49th.

      I’m only in EBGEF which of course is tied to US 5yr and am at peace with risk v the 7%+, IG, QID yield for the next 4.5 years. Also though, I very much like the risk aversion built into the current pricing.

      Agree it’s impossible to predict the future permutations of the rates/resets, though if the reset drops to 3.42%, I’d expect the price to be no further south than 16. From today’s pricing, that would still be a yield to reset of over 4% (near 5% taxable equiv).

      That’s not a barn burner, but it would also be a tightly wound spring in the event rates rose. That provides a fabulous rate risk aversion setup.

      I’ve planned for a 5yr at 0%. If so, EBGEF should hit the nadir around 15 as the 0% 5yr + 2.82% margin would translate into a 4.7% (5.875 taxable equiv) yield at that price. If the 5yr is at 0%, that will be an outstanding yield. This will require some averaging down so I think it’s important to leave some sizable price gaps between buys.

      No one should be using grocery money for these as the holds could be for many years, but the setup appears quite interesting, though importantly, they’ll need to stay at least semi-liquid and the OTC tickers can’t fade to grey.

      1. Alpha, all we have to do is contact Amy and she will get the ticker working in no time…To add to your thoughts…We discuss and assume 0% as the biggest problem, but we dont consider the other side. The fixed perpetuals will not stay static to this development. Outstanding issues will get redeemed and descend towards par in anticipation of a call and then quality issues will be issued in 3.5-4.25% pereptual fixed range if history is a lesson.
        So then you have same yield with actually zero chance of any upside or price protection while the resets cant go lower yield wise. I also agree this is a contra play and needs to be a measured investment if one deems it worthy to do.

        1. Grid – Assuming a 0% 5yr, I’ve imagined the ENB board locking in fixed perpetuals at 3.5%-4.25% during the 5yr period, then at reset use those funds to eliminate exposure to 5yr moving off 0%. Of course in that scenario, the pfd reset holders would have a windfall. Counter-intuitive to think of an well-under par issue being called, but the calculator says it could happen.

          Regarding the fixed, I’m distracted by the YTC of the likes of KTN, DUK-A and NRUC already in the 4s while many new issues are priced/structured for failure…well, at least to the holder.

          A key issue I think for us here is marginal IG yields are dropping, but the risk is not.

          I’ve been increasing cash of late and am increasingly content to wait for the next event.

          1. As you know, these are equities, not bonds. So interest rates could be totally static and a separate unrelated market event can provide buying opportunities dragging everything down with it.

      2. This is all so fascinating sharing/theorizing on what would happen in worst case scenario on these issues. What makes it all the more fascinating is it’s all based on what already seems to be the marketplace’s single minded premise of interest rates going down from here even though we’re so much nearer to historical lows than highs on rates…. I love your summary, Alpha, and I of course love being able to share these ideas on III.. Lotsa fun and educational… I agree, gotta leave lots of room for averaging and not play with rent money, but I’m figuring on being in these for the long term based on how they’re priced these days and the prevailing sentiment.. Thanks, guys, for sharing your thoughts and for exposing this world of Canadians. Love the mental exercise and hopefully profitable ideas… Now about CDUTF: Your premise, Bob, on its being called in 17 months is that the 4.50% floor will be so high that it’ll be cheaper to call than to let it stay outstanding? That makes it a whole lot different than KYN-F with its stated maturity, but I like the theory….So far I’ve only played the US dollar based Canadians, not wanting to add yet another moving part such as exchange rates, but for a cash alternative stasher (like KYN-F is for me), this deserves some more DD on my part.. Thanks for pointing it out.

        1. 2WR, I own the 4.5% floor issue, but am not as positive on a call. The 3.5 kicker means little if floor yield is in effect. It would seem unlikely they could reissue one lower as a reset or perpetual under 4.5% yet. So they still hold the cards and could redeem in 2025 and forgo underwriting costs. This resets in 2020. The price is several divis above par now. I am more likely to sell this and buy more of the fixed or the reset sister than buy more of this. One is currently paying a high premium for a 4.5% floor currently priced above par.

            1. Grid, that is the Modern Economic Theory being put in practice varying degrees around the world. It applies negative interest rates on people who have money and then pays interest on borrowed money to people without money. It also has interesting features that boost liquidity by printing ever more money and buying lots of things to manipulate values so the market can’t function. I was reading about this in depth before bed the other night. I went to bed and immediately started getting bills in the mail from a bunch of different companies. One was for $137, another $477, and so on. I knew rates had gone quite negative of course but I wasn’t expecting this. I called investor relations departments and they all were adamant I owed them the spread on the reset and they would pursue payment. I scoured the prospectuses finding no mention of this I called them back to point that out. They said it didn’t matter as it was well established in case law and I should pay up or else. One of my boys owns a law firm so I called him and he said “of course you have to pay them dad, you shouldn’t need me to tell you that”. That woke me up before I started cutting any checks.

          1. Gotcha, Grid – I’d only looked at the CDUTF last price, not TSX.com where as CU.PR.I it’s more recently traded @ 25.75. Last CDUTF trade @ 18.87 implied more like 25.27.

            1. Something to be aware of …….

              These Cdn prefs trading with US tickers trade infrequently. DON’T use the US ticker price for trading. It may be a month old. Or more. Go to the TSX, use the Cdn ticker to get current price, and then convert to US$ and place the US trade at that price.

              Else you might look silly!

    1. Thanks for the article. It correlates with David Sanger’s book “The Perfect Weapon.” The book seems to be well researched at least what can be made public.
      – Dave

  36. Last comment for now. Schwab didn’t tell me anything useful. The rep bought it up on Bloomberg (I think) and only focused on the preferred part of it. He was not familiar with the issue or anything like it, I tried to explain my understanding of the prospectus as best I could, but it became clear that I wasn’t going to learn anything from him.

    1. They were only allowing institutional shares in the morning. Huge lots only, were trading. I got some late morning.

  37. What is the world coming to when Blues win NHL and Toronto wins NBA?

    Next thing you know Maiden will start paying on its preferred.

  38. I got 100 @ 101 on wednesday through Schwab. Initially they were showing a quote but not allowing trade. I called them and within an hour, trading became available.

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