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GSLD – With call announced for 7/18 @ 25.50 there’s a seller in the mkt at 25.64. Accrued presently is 16¢ approx so GSLD 6% can be bot below par + call price.
https://www.globalshiplease.com/news-releases/news-release-details/global-ship-lease-announces-full-redemption-its-800-senior-notes
Caution on SI-A! IIRC, some III’ers hold or have held SI-A this year. Silvergate Capital owns Silvergate Bank. Their claim to fame is that they cater to the crypto industry. You are probably aware that the crypto family has significantly sold off the last few months. This is in addition to at least one “stablecoin” (TerraUSD) that was supposed to be worth $1 US dollar that is now trading ~ 1 CENT. The second largest crypto specific “lending company” (Celsius Network) has halted all redemption, i.e. you can’t get your money out. A company called MicroStategy apparently has a majority of its assets in Bitcoin and it is leveraged up
Quote from an article:
***********************************************************************************
Last March, when Bitcoin was changing hands at roughly $57,000, Saylor encouraged investors to liquidate their assets in order to buy Bitcoin on leverage in an interview.
The MicroStrategy CEO went as far as urging people to mortgage their houses so that they could invest more. The irresponsible remark came back to bite Saylor following the recent market crash.
***********************************************************************************
Today’s quote for Bitcoin is $21,457 so if you mortgaged your house to buy it at $57k, you have a problem.
Apparently Saylor borrowed $1 BILLION from Silvergate to invest in Bitcoin @ $30k and is reportedly way under water. If you think we can’t forecast interest rates, we are likely worse at Bitcoin prices. In the last few days, Saylor has called for US regulators to step in and regulate the crypto area, which seems pretty ironic.
I am far from an expert on crypto, Bitcoin, Silvergate and Saylor. With that stipulation, my 30,0000 foot view is that if Silvergate had to eat a $1 BILLION writedown, it would be a significant hit since they reported total assets of ~ $16 billion last quarter. If the loan defaults, you can easily imagine them halting SI-A payments, particularly since it is non-cumulative.
If you own or are considering purchasing SI-A, I strongly suggest you do a thorough risk analysis to see how/if this scenario is likely.
BTW, in theory it cannot happen, but there is some percent chance that a cyrpto meltdown spills over into the regular financial markets. Think margin calls and forced selling regardless of price, ala 3/2020.
What bank would lend $1 billion without collateral?
Where did you get the 1 billion dollar amount of the loan? I thought it was 205 million back in May. Are you adding in the notes they issued?
“Here’s how it works. A crypto company, or investor, owns bitcoin and wants to borrow dollars. It goes to a bank, which may lend between 40% and 60% of the crypto-assets’ market value, according to a person familiar with the business. A third-party custodian holds the collateral. If the borrower defaults, it sells the bitcoin for dollars and sends them to the bank.”
So yes… if microstrategy defaults SI can take a hit but not to the amount you are talking about. So if bitcoin was 42K in Apr/Mar of 2022 and if they borrowed 50% of what the bitcoin was worth.. the max loss might be nothing if the margin call happens at approx 21K for BTC. But I am sure some small loss would happen when the third party tries to unload that much BTC at once.. or something. Timing wise of things. Etc…
I have not read of people getting to borrow more based on BTC current value.
FC, I have read two different versions of the story:
1) Saylor is sitting on a $1 billion loss on Bitcoin
2) Saylor borrowed $1 billion from Silvergate
I have also read the loan was $205 million like you said. MicroStategy claims they have NOT received a margin call on the loan and even if they did, they claim they can meet it all the way down to ~ $3,500 Bitcoin. Reminds me of the Celsius Network CEO that said all was good, then suspended withdrawals within a few days and is apparently preparing to file bankruptcy a few weeks later
The concern I would have on Silvergate is how many other loans on their book are potentially underwater like the one to Saylor? If Saylor goes BK and Silvergate has a low recovery, they can probably survive it. But if Saylor defaults, you have to think some of Silvergate’s other customers are at a higher default risk. Stated differently, if your entire business model is predominately lending for an imploding crypto ecosystem, how sure are you that they will NOT stop SI-A dividends?
I have about a 0.1% knowledge regarding Saylor/MicroStategy/Silvergate so the Si-A dividend security might be fortress like, maybe like a Berkshire preferred. I just don’t know but if you own it, hopefully you do know.
Tex,
I am pretty sure on this info. SI borrowed 205 million to microstrategy in exchange for mostly bitcoin as collateral.. 19,466 BTC to be exact.
19,466 BTC x approx price of 42,000 at the time = 817,572,000 USD value.
4 to 1 basically with a margin call activated at 2 to 1. Microstrategy most likely added more BTC to the account to avoid a margin call and avoid the bad press.
Phong Le of MSTR Q1 earnings transcript:
“As far as where Bitcoin needs to fall, we took out the loan at a 25% LTV, the margin call occurs 50% LTV. So essentially, Bitcoin needs to cut in half or around $21,000 before we’d have a margin call. That said, before it gets to 50%, we could contribute more Bitcoin to the collateral package, so it never gets there, so we don’t ever get into a situation of March call also.”
So lets just say if BTC falls SI will get paid. Unless BTC falls to 5K instantaneously or some such thing. Now SI is looking at a 100 million loss. So sure anything can happen but they have quite a bit of protection in place.
From the Silvergate website: https://ir.silvergate.com/news/news-details/2022/Silvergate-Bank-Issues-205-Million-Loan-to-MacroStrategy-Collateralized-by-Bitcoin/default.aspx
“The Silvergate Exchange Network (“SEN”) handled $142.3 billion of U.S. dollar transfers in the first quarter of 2022, a decrease of 35% compared to $219.2 billion in the fourth quarter of 2021, and a decrease of 15% compared to $166.5 billion in the first quarter of 2021; Cumulative U.S. dollar transfers on the SEN crossed $1 trillion dollars
Total SEN Leverage commitments were $1,070.1 million at March 31, 2022, compared to $570.5 million at December 31, 2021, and $196.5 million at March 31, 2021”
Source: https://ir.silvergate.com/news/news-details/2022/Silvergate-Capital-Corporation-Announces-First-Quarter-2022-Results/default.aspx
So it looks like SI’s total exposure to crypto-backed loans is at least $1 Billion as of 3/31/2022, even if “only” $205 Million of that is to MacroStrategy.
Sailor,
That might very well be where the 1 billion number came from. I have read that from the report but did not connect that possible dot. If the loans are all similar to MSTR’s loan that means similar protections are in place with collateral amounts. Even Goldman Sachs is getting involved with these types of loans.
I am not a big fan of crypto myself. I was an early adopter and sold everything at the 10K mark for BTC personally. I was a miner in the early days with video cards before asics came about. I did not like the environment which was chock full of scum but even I have to admit it has stuck around longer then I thought. It seems people see some future for it. SI has approached it in a safer manner then I thought possible. Make exchanges your customers as well as everyone else. Another middle man raking in a bit with lowered risk. MSTR is the exact opposite. Extreme risk.
Clearly, I was wrong to say that MicroStategy had a $1 billion loan from Silvergate. Retired’s link to the Silvergate website shows the was loan was $205 million. Maybe I saw the $1 billion total to all Silvergate customers that Retired just posted.
In FC’s case of Bitcoin instantaneously falling to $5k, Silvergate would have a $100 million loss, and this is a company that made $27 million last quarter. So they wipe out one year of earnings with a single customer. You have to think if Saylor defaults, then a lot more of Silvergate’s customers will be in the same boat. I agree it is not the most likely outcome, but then again the TerraUSD and Celsius Network blowups were NOT thought to be the most likely outcome either.
As long as investors holding SI-A understand the interconnected risk of the crypto ecosystem, then party on. I just would hate to have some III’er post here after suffering a major loss and saying ” I had no idea . . . ” I have seen MANY messages like this for TerraUSD and Celsisus Network holders. And Saylor’s MicroStrategy (MSTR) is down 64% year to date, so not exactly reassuring
Well Celsius could be defined as a ponzi scheme and Terra as an undercollateralized stable coin. Both were going to collapse eventually but people ignored all the typical warning signs. Not much else one can say about that.
fc (and others)… Also involved in crypto world is SBNY and their related preferred SBNYP. With no crypto backed loans, but with deposits of crypto related institutional players, at first glance SBNYP seems to be lower risk than SI-A, and the lower current yield seems to confirm that. SA articles agree, but the author recommending the common was long the common, so a conflict exists. With a yield that has been as high as 7 1/4% recently, SBNYP looks interesting at Ba1. Any thoughts out there?
did they just go through the fed’s stress test
i don’t think any bank failed so there’s that
not that it means a hill of beans but lets see
bob
Good post Tex. I have never understood crypto and don’t have any desire to. I think of it as Las Vegas or worse.
Thanks to all the posters here on Silvergate and related issues like SBNY / SBNYP and crypto in general. It was very informative.
OT – and unrelated to SI and SBNY — the latest news is that a crypto broker just defaulted a hedge fund on a 665 million crypto loan, so there are still plenty of stresses in the crypto world. The broker VOYG (off 25% today) says it is looking to strengthen its balance sheet to meet customer liquidity requirements. Reports are that they started limiting withdrawals. Reminds me of Reserve Money Market Fund, 2008: whoever gets out first wins.
On the other hand, deep value investors can buy the dip and pick up a Bored Ape NFT for just $90.99 today. They went from $200 to $80,000 in 6 months before they came back down. If they only go back up to $40,000…wow.
Voyager, for anyone interested, was another ponzi like company. Promising high returns on crypto sent to them and obviously making high risk loans to try to keep up with what they owe their customers, grow the company, and most likely will go down in flames. They often never get past the phase that actual loan interest covers what they owe their clients or if it does it never lasts. That is how they operate. Promise a lot, grow, losing money, lower the promise, and try to become stable/profitable.
CAUTION on relying on Egan-Jones credit ratings! The SEC has sanctioned Egan Jones credit rating agency for the 2nd time.
On the basis of this Order and Respondents’ Offers, the Commission finds1 that:
Summary
1. These proceedings arise out of violations of the securities laws, including provisions intended to curb potential conflicts of interest at credit rating agencies, by Egan-Jones Ratings Company (“EJR”), a Nationally Recognized Statistical Rating Organization (“NRSRO”). Specifically, EJR violated Rule 17g-5(c)(8)(i) of the Exchange Act by issuing and maintaining a credit rating for a client where Sean Egan, EJR’s founder and sole owner, had participated in determining the credit rating at issue and engaged in sales and marketing activities with respect to that client. Because Egan had been influenced by sales or marketing considerations at the time that he participated in determining the credit rating, EJR also violated Rule 17g-5(c)(8)(ii) of the Exchange Act. Egan caused EJR’s violation of Rules 17g-5(c)(8)(i)and (ii).
2. EJR also violated Rule 17g-5(c)(1) of the Exchange Act, which is a conflict-of- interest rule that prohibits an NRSRO from issuing or maintaining a credit rating solicited by a person that, in the most recently ended fiscal year, provided the NRSRO with net revenue equaling or exceeding ten percent of the total net revenue of the NRSRO for the fiscal year.
3. EJR also failed to establish, maintain, and enforce policies and procedure reasonably designed to manage conflicts of interest, in violation of Section 15E(h)(1) of the Exchange Act.
https://www.sec.gov/litigation/admin/2022/34-95127.pdf
Egan Jones accused of being a softy.
Let’s see if the courts find fault.
This has been settled, its not a lawsuit.
Two Harbors Investment Corp (TWO/PA). , an Agency + MSR mortgage real estate investment trust, today announced that its Board of Directors has authorized the repurchase of up to five million shares of the company’s preferred stock, which includes its 8.125% Series A Cumulative Redeemable Preferred Stock, 7.625% Series B Cumulative Redeemable Preferred Stock and 7.25% Series
In way under par, redeem away!
Not a redemption they’re talking about buying on the open market. Would look like any other trade though high volume could boost the price and dilution probably helps in the long run.
GEGGL
https://www.sec.gov/Archives/edgar/data/1831096/000114036122022245/ny20003971x6_fwp.htm
Full redemption.
Global Ship Lease, Inc. 8.00% Senior Notes Due 12/31/2024
Ticker Symbol: GSLD CUSIP: Y27183147
Redemption date 7/18…So they’d be worth 25.50 plus interest accrued from 5/31 so roughly another .25 or a few cents more? Last trade 25.59.
July 18th
Will have to pay 25.50 + 47 day’s accumulated div thru the 17th
https://finance.yahoo.com/news/global-ship-lease-announces-full-204800042.html
Another goner.
Tim,
It looks to me like you are missing PACW 7.75 Pfd A on the database. Came earlier this month. Pretty high for a midcap bank.
I was interested until the price went back up on the latest rumors. Give me a bargain or I’ll shop elsewhere.
For any of us thinking older, lower liquidity, lower-coupon utes were a quiet hangout; some news….
ALPVN 4.60%, IPO circa 1950, and
APRCP 4.52%, IPO circa 1963
have been called for June 21.
All of the “legacy” Alabama Power Preferreds were called on June 21, six in all. Only ALP-Q remains (not a “legacy” issue) for Alabama Power. It’s puzzling that, with rates rising and the six called issues with coupons ranging from 4.2 to 4.92%, Southern Company elected to call these issues now. Most have been outstanding for over 60 years. Any opinions on what the future may hold for the Ameren and Connecticut Light and Power legacy preferreds? Opinions about why the Alabama issues are being redeemed would be appreciated!
Probably because of the headaches associated with the OTC Market listings.
FWIW: NRZ to become Rhitm : RITM on or about 8/1. Going to internal management- finally getting away from FIG
https://www.newresi.com/news/press-releases/detail/193/new-residential-investment-corp-announces-internalization
This Form 8-A is being filed in connection with the offering of Term Preferred Shares, 7.125% Series 2029, par value $0.01 per share (the “Preferred Stock”), by Oxford Lane Capital Corp., a Maryland corporation (the “Registrant”). The Preferred Stock is expected to be listed on the NASDAQ Global Select Market and to trade thereon within 30 days of June 16, 2022, under the trading symbol “OXLCN”.
OXLCN is already trading on nasdaq`
I thought Tim might change from the OTC symbol on the New List
LONDON, June 17, 2022 (GLOBE NEWSWIRE) — Global Ship Lease (GSL), Inc. (NYSE: GSL) (the “Company”) today announced that it has delivered a notice of redemption (the “Full Redemption”) to the registered holders of its 8.00% Senior Notes due 2024 (the “2024 Notes”) of $89,020,500 aggregate principal amount of 2024 Notes, representing the entire outstanding balance of 2024 Notes (the “Redeemed Notes”). Pursuant to the terms of the indenture governing the 2024 Notes, the Company has elected to effect the Full Redemption in advance of the maturity date, and the redemption price for the Redeemed Notes will be equal to 102% of the principal amount thereof (the “Redemption Price”) plus accrued and unpaid interest to, but not including, the redemption date of July 18, 2022 (the “Redemption Date”). Interest on the Redeemed Notes will cease to accrue on and after the Redemption Date. All Redeemed Notes must be surrendered to the trustee to collect the Redemption Price plus accrued interest.
Upon completion of the Full Redemption, there will be no 2024 Notes outstanding and the 2024 Notes will cease trading on the New York Stock Exchange.
How to lose $4,491 in one fell swoop. Last year we had a lot of discussions about SEC Rule 15C2-11 and how some number of issues were no longer tradeable by small investors. These issues “went dark” and are only buyable on the “expert market.” You can still sell them the same as regularly traded issues. I hear rumors that some brokerages allow small investors to buy these issues, but do not have solid facts.
Fast forward to today when expert market only GMLPF got the trophy for worst trade of the day. It closed yesterday (6/15) at 20.10. It opened today at 20.00 and was trading close to that until one 900 share order went through at 14.76. The next two trades were for 521 shares in the range of 19.75-19.90. You do not know what kind of order was used for the 900 share @ 14.76 trade. Maybe whatever brokerage the seller used only allows market orders for selling. In any event, the seller took a ~ $4,491 beating.
The message to us is clear. You absolutely, positively cannot plan to sell any expert market issue at close to fair market value. We talked about this exact scenario last year so it is not new. Today just offered a case study about what can go wrong.
ESW3 normally keeps us up to date on any 15C2-11 developments. I do not recall hearing of any recent news, so we have to assume status quo.
No real surprise, but some good news on a terrible day ->
FREEHOLD, N.J., June 16, 2022 (GLOBE NEWSWIRE) — UMH Properties, Inc. (NYSE:UMH) (the “Company”) today announced that it will redeem all 9,884,000 issued and outstanding shares of its 6.75% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) (CUSIP 903002400) on July 26, 2022 (the “Redemption Date”). The Series C Preferred Stock will be redeemed at a redemption price equal to the $25.00 per share liquidation preference of the Series C Preferred Stock plus accrued and unpaid dividends to, but not including, the Redemption Date in an amount of $0.2578 per share, for a total payment of $25.2578 per share (the “Redemption Price”).
Thanks! Hooray!!! I’ll take credit when it’s not due for them not waiting until the last day on 30 day limitation notice to call for announcing….. I emailed them Monday suggesting the benefits to UMH to take the uncertainty out of the equation in these uncertain time by announcing ASAP. I’m sure that’s what did it! Ha ha…
And I was hoping we might have a chance to buy more cheaply before they made it official . . .
I am ashamed to say I had way too much riding on this.
Now if you can just call BKEP and BRG for us…
Already did call BRG, Scott, and posted here but haven’t been involved in BKEP and won’t be….. BRG and NEWT notes are my two remaining biggies in this arena…. BRG’s mandatory upon closing where UMH never was, so less risk even in this environment, especially for C’s… And NEWTZ and L are both short maturity notes anyway so no large downside if they do not end up converting to a BHC and getting called… That being said, the stock is down 25% in the last 5 trading days, so I suppose anything’s possible…
Sorry, 730, you didn’t get your chance to add more. I was already 2 1/2 times over my normal max so I’ve been drooling only these last few days…
2WR, thanks for getting them to call UMH-C! We had gone “all in” on it being called and have been adding it to many accounts, including today. We have one account with a ~30% allocation to it, a little higher than normal! Traded down to 24.76 today, so somebody(s) either did not understand the likelihood of it being called or needed liquidity, like fast! Sure hope the Landy’s do not cancel the call. . .
Have not studied all of the preferred results for today, but definitively saw some March 2020 type selling pressure in other areas we are in. Looked like “sell whatever has not yet cratered.”
Yeah, that’s right, Tex… It was me………. haha…. they’ve been on record saying they were going to do this for probably 6 months or more now, never once implying market condition could possibly enter into the decision. So to quote Dylan, “it ain’t me, babe.” In fact, there was somebody on here, sorry don’t remember who, who reminded us that this was one of the most pre-unofficially announced/not announced implied calls on record when I began to be concerned about how rising rates were making 6 3/4% a marginal rate to want to redeem, despite them having already locked in their rate spread. So thank you, III and whomever that was… And yes, I did make the suggestion to them on Monday to announce the call early to gain some cred points, but I never even heard back. It’s my fantasy to believe I had any impact on their timing..
There was brief discussion here or on the Sandbox page about an anomaly in the ATLCP dividend paid in March. Atlanticus undercalculated the 15 mar dividend by $0.006528. I checked today and they remedied this: the dividend paid yesterday (15 jun) had that amount added to the normal dividend rate. In other words, the average of the 15 mar and 15 jun dividends equals the normal rate…
0.0065625 actually , got it too.
Although, in Dec ( first ‘normal’ pmt after the larger 1st pmt), they might have over paid by the same amt 0.4766 paid.
Gary,
The december looks correct to me. The correct rate is .4765625
Yes, it was indeed corrected.
Bur, thanks.
Yes, my div at E*Trade was corrected for the prior div understatement.
The two div total matches the total of two correct quarterly divs.
Can someone please post a link regarding the redemption or call of the Somers Re Preference shares, formerly known as Watford Re . with a former symbol of WTREP? Posters here seem to state it’s been called for 7/13, but the Somers and Arch websites say nothing about it. As well , Schwab tells me they can see nothing regarding this, so any link to the notice of redemption would be appreciated. Thanks…….
You don’t get a link because they aren’t SEC filers and you aren’t a holder of record. I can confirm that it is called for 7/13 with details filed at the depository.
It all sounds believable, but show us the baby somehow….any way of proving…..
Proof will show up in your account in 30 days. Not much you can do in the interim anyway
Fan, If you dont trust us, trust mcg as either he is in the biz, or illegally has his computer plugged into all the data bases, ha.
OK, I will sit back and believe! I did say it sounds believable, just would be nice to see any documentation. Don’t mean to rub anyone the wrong way.
I know, I was just teasing you . I cant pull it up on ipad, but it would look like I just created myself anyways. Just a simple sentence with cusip number and shares to be redeemed. No real formal press notice presentation like typically occurs. Didnt even mention dividend or stub div to be distributed either.
AFT is in $1M for WTREP of their $250M in assests per Q1 report, so Appolo Senior Floating rate would take a .4% bump up in NAV from WTREP being carried as worthless, to being called, causing a little bump in NAV? Or do institutions carry WTREP with a phantom value? I’m sure Appolo is relieved!
Fan – Never really looked much into NPORT-B filings on EDGAR but AFT’s most recent monthly filing (https://www.sec.gov/Archives/edgar/data/0001502573/000114554922033629/xslFormNPORT-P_X01/primary_doc.xml) shows a/o 3/31 AFT owned 37863 of WTREP and they had them valued 960773.63 or 25.375/, so I guess there goes that theory…. oh well…. good thought.
Fan59…this is a cut and paste of the notice I received from Vanguard…
WATFORD HOLDINGS LTD CUML REDEEM PFD, G94787119, in the brokerage account xxxxxxxx, is scheduled to be redeemed on 2022-07-13. A quantity of xxx will be redeemed at $25 for a total of $xx,xxx.
Posted on 06/15/2022 1:07 a.m.
Obviously I “x’ed out” my account number, number of shares, and total dollar amount, but otherwise is the exact wording from Vanguard…hope this helps.
Fan, over on the Sandbox page (https://innovativeincomeinvestor.com/sandbox-page/#comment-74818), Mark Gottlieb posted the message quoted below:
—–
From: Butler, Sioned
Sent: Wed, Jun 15, 2022 12:04 pm
Subject: RE: Watford Holdings Ltd, 8.50% Cumulative Redeemable Preference Shares
Hi Mark,
No, WTREP did not go ex dividend. We have given 30 days call noticed for the outstanding shares.
The Q2 dividend will be paid by the end of the month and then on July 13th the principal and accrued interest (to Redemption date) will be settled.
Best,
Sioned
Saw, thanks
Update on BRG-C and D: IR rep tells me that there have been regulatory related delays on the closing of the single family spinoff… They are now projecting mid July for closing and they have penciled in July 14 as their hoped for target. I asked whether or not any of the delay has anything to do with market conditions and he said no. He told me both sides are fully committed to getting this done and market conditions should not be a factor. Both sides are also contractually locked in still, however, when I asked for how long were they contractually obligated, he did not have the answer at his finger tips.
That means the expectation is the declared divs will be paid out in full on July 5 with x-div. June 23 I believe. Focusing in on BRG-C, at its close today at @ $25.25 presently has 37 cents worth of accrued and is trading below $25 stripped. It will pay out .47656 on July 5 and then accrued from July 1 whenever it’s actually redeemed. The BRG rep confirmed that little wrinkle. D will be the same story. D is theoretically cheaper yet at its close of 25.16 and has approx 34.6 of accrued right now. D will pay .445313 on July 5 and then accrued from July 1 as well…
So both UMH-C and later on D and BRG -C and D are all just hanging around in limbo waiting for what’s supposed to happen happen…. Encouraging to see in this interest rate environment that SAR finally announced the call for SAK on July 14, 3 weeks after its initial call date even though they raised the money to do so with SAT in April.. I think UMH-C has to announce by June 27 to be able to call on their first call date of July 26 and no later than maybe July 1 to be able to call in the month of July as they said they would on June 10th.
Thanks for the update from IR on BRG. I assume they didn’t elaborate on the regulatory delays? Have to assume that Spinco reg stmt that hasn’t gone effective and no updates since April is the crux of it.
The outside date is Sept 20th, and Bluerock can exercise a 1 month extension if the only remaining delay is related to Spinco reg statement and separation.
Nice to keep earning the 7+% coupon on these while we wait
Thanks, 730…. No he did not elaborate on the regulatory delays nor did I ask him why they were happening… Probably should have but when you’re talking about regulatory bodies, they don’t need no good reason, do they… ha. Could be out somewhere participating in a hot dominoes tournament..
BTW, if you try to contact IR, you’ll get nowhere….. The guy I actually spoke to is actually a very helpful managing director….
2WR, thanks for the BRG update!
Well, I will miss SAK, pretty good rate for a term issue. But, after today I don’t think 7% issues will be too hard to find. Thanks for posting it.
SAK redemption notice for July 14th
https://ir.saratogainvestmentcorp.com/node/12506/html
FWIW, got a flash notice from Fido announcing a full call for WTFRD. Tracking per phone so can’t see details – can someone take a look and let us all know? thank
I have nothing from TD or VG yet. But this is certainly the time for a notice being we get paid in 2 weeks.
Could be it, thanks Grid.
That’s it – full call 7/13. Adios, Watford.
D, My notice on VG just came in overnight. I went 180 on this. I loaded up several thousand shares right around par, knowing filings said they would be looking to redeem it. So I figured an easy divi capture. Then got a bit nervous after it wasnt redeemed thinking I was trapped in it. But after a few months was actually hoping it would never be redeemed. The proceeds have 30 day to 2 yr TBill written all over it at first impulse for me.
Hmmmmmmmmm. now I’m gonna have a 100% increase in value in WTREP added to my IRA this year… Nuts to that, but I’m happy for my heirs. That’s one less complicator taken out of their lives…. Delete those instructions and make sure they understand what to do and not do with SLMNP. ha
Grid – You still interested in PLYM-A? RCA scaring you out or tempting you in for more? Price sure doesn’t make sense to be so low vs RCC and RCB…. looks way out of line cheap…. I don’t see RC not making it in 14 months so YTM over 9% seems nutsy.
2WR, For me, RCA is what it is now. I got a full position now in total a bit over par. Just will not violate full position rule for this. But I wish I could go back in time void my trades and buy them today though.
PLYM-A is one Im on sidelines for now. 7.5% is not anything great now for that credit ilk. And their “intent” to redeem from last year isnt the same as UMH having the cash sitting their to redeem. So I watch but am not doing anything presently. July could be a tough month as it is quite possible I may have a lot of money being redeemed back at me.
Yeah, I had the same feelings since I had quite a bit of it.
It was nice rolling it into a Roth IRA though when its value was zero!
Scott – For incomprehensible reasons, I’ve never established a ROTH, but do I understand correctly that once WTREP gets called, you will be 100% locked out of being able to withdraw the proceeds because profits are untouchable for a period of time?
I am not old enough to withdraw so I have not looked into it recently, but memory says you need to have been contributing for five years before withdrawal and be at least 59.5 yrs old for the withdrawal to be qualified.
Here is a link with more details.
https://www.investopedia.com/retirement/tax-treatment-roth-ira-distributions/
Scott-
My understanding is : If you put in cash or stock from an IRA ( that had tax paid on conversion), you can take the amount of the contribution without having to pay tax (again). Not age / time-in dependent.
But–You’d have to pay tax on any gains taken if you were past the time limits, and therefore eligible.
I’m not a financial advisor.
Yeh, the idea of an invisible annuity was intriguing, but I’ll be pleased to add the cash to the dry powder stash. I’m thinking shorter term bonds of solid concerns that have fallen pretty sharply, and may fall even more. Which would mean getting a little more edjimicated in that world – could take a while based on how long it took to learn anything about preferreds. 🙂
Grid- Or anyone else, Is there a link on this, or can you cut and paste the wtrep redemption notice? Schwab says they have nothing on this, thanks…
Fan, Im on my Ipad and VG app doesnt show messages. I own a bigger slug in TD and they have not mentioned it yet either. They will have it posted in a couple days.
From Fidelity:
“06/14/2022 7:30 PM
Warning Bond/CD Redemption Alert – CUSIP G94787119 – Full Call.”
That’s it.
For SOHO preferred holders. Hope for a dividend this year?
FOR IMMEDIATE RELEASE
TUESDAY, June 14, 2022
SOTHERLY HOTELS INC. COMPLETES SALE OF RALEIGH, NC HOTEL, PARTIALLY REPAYS CORPORATE DEBT
Williamsburg, Virginia – June 14, 2022 – Sotherly Hotels Inc. (NASDAQ: SOHO) (the “Company”) announced that the Company has closed on the sale of the DoubleTree by Hilton Raleigh Brownstone in Raleigh, North Carolina for $42.0 million. A portion of the proceeds from the sale were used to repay the first mortgage and repay a majority of the Kemmons Wilson secured note. Remaining proceeds will be used to make any required distribution on the Company’s preferred stock related to maintaining the Company’s REIT status and for general corporate purposes.
“We are extremely pleased to complete the sale of the Doubletree by Hilton Raleigh Brownstone,” noted Dave Folsom, Chief Executive Officer of Sotherly. “The $42.0M above-market price equaled approximately a 14.0x EBITDA multiple and a 6.2% cap rate on 2019 results. The sale represents a transformative event for the Company, as it significantly reduces mortgage debt, repays expensive corporate leverage, while simultaneously removing near term capex required for life cycle improvements at the hotel. These events are all major milestones in restructuring our balance sheet, as our portfolio continues its recovery from the pandemic. Further, in making these important balance sheet improvements, and by removing significant near-term capital outlays, the Company can focus on additional post-COVID efforts, including its accrued and unpaid preferred dividends. The completion of this transaction brings renewed optimism for Sotherly, and we look forward to the ongoing lodging recovery, its effect on our business, and improvements to the health of our balance sheet.”
About Sotherly Hotels Inc.
Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company’s portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit http://www.sotherlyhotels.com.
Contact at the Company:
Mack Sims
Sotherly Hotels Inc.
306 South Henry Street, Suite 100
Williamsburg, Virginia 23185
(757) 229-5648
Thanks for the info. The accrued divvy payment, however small, and the reduction of debt are both good news for SOHO.
Received this letter today about two baby bonds, OCCIN and OCCIO:
On December 7, 2021, the Board of Directors of OFS Credit Company (“OCCI”) authorized a program under which OCCI may repurchase up to $10.0 million of its outstanding shares of 6.125% Series C Term Preferred Stock due 2026 and 5.25% Series E Term Preferred Stock due 2026 (collectively, the “Preferred Stock”).
Under this program, OCCI may, but is not obligated to, repurchase shares of its outstanding Preferred Stock in the open market from time to time through December 7, 2023 or until the approved dollar amount has been used to repurchase shares of the Preferred Stock. The repurchase program does not obligate OCCI to acquire any specific number of shares of the Preferred Stock and may be extended, modified or discontinued at any time. To date, OCCI has
not yet repurchased any shares of its Preferred Stock.
Well this is interesting………. I don’t remember who asked the question about BRG preferreds coming up to a normal declaration of dividend date in front or the expected closings with the Blackstone deal but here you go:
Bluerock Residential Growth REIT (BRG) Announces Second Quarter Dividends on Common Stock, 7.625% Series C Cumulative Redeemable Preferred Stock, and 7.125% Series D Cumulative Preferred Stock, and June Dividends on Series B Preferred Stock and Series T Preferred Stock
Announced with no comment about the anticipated closing which will redeem both C and D…. I wonder what happens if it closes before July 5 as expected or if this is a backdoor updated commentary on the closing?
https://seekingalpha.com/pr/18829416-bluerock-residential-growth-reit-brg-announces-second-quarter-dividends-on-common-stock-7_625
2WR, I used to assume if a dividend was declared it was money in the bag. But a few years ago a company (I cant remember which off top of my head) declared the dividend then redeemed it before divi date. Lesson learned for me. Of course if all your money was in CUBI-E this wouldnt be a problem would it, ha.
Ha, but with CUBI stock acting like it’s never going to be profitable again, maybe we have other problems with E.. ha! that’s a joke.. Gosh, the stock sure is being priced as if mgmt hasn’t a clue what their future earnings will be…
just wait and see time on BRG preferreds I suppose right now…
I remember Enron declared a preferred dividend, then when the brown stuff hit the rotating blade rescinded the dividend. Until then I thought a declared dividend was in the bag.
I can’t believe they would put out this PR without any mention of expected timing of the deal closing, when the last mention stated it was expected to close in Q2, smh
I presume if the deal closes before the June 24 record date, the dividend declaration become moot. But I am guessing they do not expect it to get done by then.
The terms of the preferreds actually address what happens if the deal closes between June 24 and July 5:
If a redemption date falls after a dividend record date and on or prior to the corresponding dividend payment date, each holder of shares of the Series C Preferred Stock at the close of business on such dividend record date will be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares on or prior to such dividend payment date and each holder of shares of Series C Preferred Stock that surrenders such shares on such redemption date will be entitled to an amount equal to the dividends accruing after the end of the applicable dividend period, up to, but not including, the redemption date.
730 – I had seen that and was left with a “say what?” moment after reading…. Does this say to you that if these are called after June 24 but before July 5 that the shareholder will receive the full quarter’s dividend?
A head scratcher for sure. The first part appears to say that. But the part after “and each holder of shares” seems to say that the dividend will be what’s accrued since April 5. Not talking huge bucks here. The D has the same language.
The intent of the first phrase was so clear I didn’t really parse the second part that carefully lol. But I think what is going on is the dividend period is actually the calendar quarter, and the payment date is 5 days after the end of the quarter. I had not noticed this before, but this means there are 5 more days of accrued dividend than I had been calculating 🙂
So the first phrase is saying if they are redeemed between June 24 and July 5, we get the full quarter dividend (which is actually accrued from April 1)
And the second phrase is saying if they are redeemed between July 1-5, we get a stub period divvy too.
Reading between the lines, I don’t think the deal is likely to close before the end of June. Have not seen any updates on the Spinco reg statement since 4/22.
Ahah! It all comes together once you also read, “A dividend period is the respective period commencing on and including each January 1st, April 1st, July 1st and October 1st of each year and ending on and including the day preceding the first day of the next succeeding dividend period (other than the initial dividend period and the dividend period during which any shares of Series C Preferred Stock shall be redeemed or otherwise reacquired by us).” So this is potentially similar to the UMH preferreds dependent upon whenever the Effective Time ends up being, only this one’s 5 extra days potentially instead of their 15. Nice catch…
Thank you 2WR, Gridbird, 730Cap, and nhcoast. I really appreciate all of your comments to my initial post.
Interesting that the dividend declaration was published 5 days before it normally would have been. There is a reason.
730,
Thanks for tying this together. It all makes sense now.
I-Bond rates up to 9.62%
treasurydirect.gov/indiv/products/prod_ibonds_glance.htm
Sotherly Hotels announced at NAREIT that they would be closing on the sale of their Raleigh NC hotel today. Proceeds would be applied to pay the mortgage, the emergency loan that they took during covid and there will be a small payment to the preferreds in order to remain compliant witn REIT regulations. A step in the right direction for the holders of SOHON and SOHOO.
UZE question: Why is the market pricing this so high given it can be called at any time and the current yield is a lot lower than other baby bonds from the same company? Thanks for your reply.
GB – what comparisons are you making? First off, a quick looksee says that UZE is not currently callable but callable in 2026. Beside UZE, there’s UZF with both having 5.50% coupons and due in 2070 and they are trading within pennies of each other at 20.45 and 20.30, both callable in ’26. Which issues are you looking at that tell you it’s trading out of line high?
WEST CHESTER, Pa.–(BUSINESS WIRE)– QVC, Inc. (QVCD) (“QVC”) announced today that it has commenced a cash tender offer to purchase any and all of the $750 million outstanding aggregate principal amount of its 4.375% Senior Secured Notes due 2023 (the “2023 Notes”) using cash on hand and, to the extent necessary, borrowings under QVC’s senior secured credit facility. The tender offer is being made pursuant to an offer to purchase, related letter of transmittal and notice of guaranteed delivery, each dated as of June 9, 2022. The tender offer will expire at 5:00 p.m., New York City time, on June 15, 2022 (as such time and date may be extended, the “expiration time”). Tendered 2023 Notes may be withdrawn at any time before the expiration time…
https://seekingalpha.com/pr/18827055-qvc-inc-announces-cash-tender-offer-for-and-all-of-outstanding-4_375-percent-senior-secured
They’re paying a premium to par to do this? I wonder what their motivation is?
Horizon Technology Finance Corporation Announces Public Offering of Notes Due 2027
https://www.sec.gov/Archives/edgar/data/1487428/000110465922069186/tm2217941d1_497ad.htm
New Issue
Horizon Technology Finance Corp (NASDAQ: HRZN)
Senior Unsecured Notes due 2027
BBB (Egan Jones)
$50.0mm
Price Talk: 6.25% area
Maturity: June 15, 2027 (5-year)
The Company may redeem the Notes in whole or in part at any time or from time to time on or after June 15, 2024 (NC-2)
Use of Proceeds: The Company intends to use the net proceeds of this offering to repay indebtedness (which may include the Key Facility) and for general corporate purposes
QDI/DRD Eligible: No
Thanks EB
Thanks J
New Issue
Oxford Lane Capital Corp
Term Preferred due 2029
$40 Million (subject to upsize)
Dividend Talk: 7.125% area
Maturity: 7 years, due 6/30/2029
No Call Provision: 3 years
Got it EB. Thanks
OXLC priced the new pfd offering:
https://www.sec.gov/Archives/edgar/data/1495222/000121390022031828/s137810_fwp.htm
7.125% coupon.
Latest Somers RE Quarterly Report (re: former WTREP preferreds)
“Because the redemption features are not solely within the control of the
Company, the preference shares have been recorded as mezzanine equity on the Company’s consolidated
balance sheets in accordance with applicable accounting guidance. “”
-Sounds like they are saying they cannot call?
the “Because the redemption features are not solely within the control” I would think refers to the shareholder ability to put the shares back in 2034. Whether shareholders decide to or not is not solely within their control…. I don’t think it means they think they cannot call at all.
Report looks decent enough overall, don’t you think?
That is precisely why they clasify at the mezzanine level. This is standard for any issue where the company doesnt completely control the outcome. Because in theory they can keep it outstanding in perpetuity and only select owners choose to tender redeem back to company. But its definitely callable. In fact prior to just going private they stated holding company was looking at finance options to redeem it. And it still hasnt happened for whatever reason they chose. It appears it will live on for near term anyways.
2WR –
The quarterly report from Somers is good from an operational level, though understandably, loss on investments for the quarter, which are paper, caused a marginal loss overall for the quarter.
That was my take as well…… Nice combined ratio improvements as well…
Another thing about Somers’ quarterly report – The investment paper losses were figured in last, after net income available to common shareholders was figured. Net Income before preference dividends was $1,000, 000, minus preference dividends of 1,015,000, caused a $15,000 net loss BEFORE the paper investment losses of another $36,000,000…..so it would certainly behoove the consortium of owners to call the preferreds, especially in light of rising LIBOR.
The interesting part it would have always been financially beneficial for this preferred to have been redeemed since the remnant was left outstanding. And yet it only redeemed an odd lot 76.34% amount just prior to going public in 2019. What is presently outstanding is just the private placed float that was not redeemed. About $52 million I believe. I know Arch personally owns 6.6% of the preferred float. I dont know about the other 2 entities.
HI could you indicate the last date WTREP paid Dividend and Possibly the next date forward. Im having a difficult time keeping track of this. Thanks Rob
Pays quarterly. Since delistment Vanguard has paid timely for me… Paid 9/30, 12/30, and 3/31. Slated for coming 6/30 payment.
Big mover today was AGM-C which is a $25 fixed to float issue. It does not float until 7/24, so it is fixed @ 6.0% until then. It closed today @ 28.70 up 2.27 on the day. And it was not just one small trade that moved the price. All 7K shares traded today were up at least 1.46. Not sure why the big move all of a sudden, but if you own it, you might take a look and see if you want continue holding at these prices.
We do not hold it in any account and did not have any trades in it today.
New Issue – Senior Notes – Great Elm Group Due 2027
Notes due 2027
$30,000,000 (base-deal)
Proposed ticker: GEGGL
Interest Rate Talk: 7.25-7.50% area
Use of Proceeds:
The net proceeds of this offering (i) to make investments in Monomoy REIT and/or (ii) for general corporate purposes, including making opportunistic investments, refinancing subsidiary preferred stock or other indebtedness
My note: This is not the Great Elm BDC itself, so does not appear to have same coverage protections as the BDC. But have not reviewed much at all so please do your homework.
https://www.sec.gov/Archives/edgar/data/0001831096/000114036122021901/ny20003971x3_s1a.htm
“We are a publicly traded holding company seeking to acquire assets and businesses, where our people and other assets provide a competitive advantage. We currently have two business operating segments: investment management and durable medical equipment, with general corporate representing unallocated costs and activity to arrive at consolidated operations.
Within investment management, GECM, our wholly-owned registered investment adviser subsidiary, is an investment adviser providing investment management services to GECC, as well as private funds and separate accounts for an institutional investor. The combined assets under management for these entities as of March 31, 2022 was approximately $224.3 million. GECM recently completed the acquisition of Monomoy REIT (as defined herein). See “—Recent Developments—Monomoy Transaction” below.
We launched our durable medical equipment segment in September 2018 by acquiring two durable medical equipment businesses that specialize in the distribution of respiratory care equipment, including positive air pressure equipment and supplies, ventilators and oxygen equipment, and provide sleep study services. Since then, we have grown the business organically through investments in scalability as well as inorganically through tuck-in acquisitions.
GECC was established in 2016 and it elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended. As of the date of this prospectus, without giving effect to our participation in the GECC Rights Offering (as defined below), we own approximately 19.3% of GECC’s shares that we may hold to generate dividends or sell to redeploy our capital in higher yielding opportunities.
GECM earns revenue through investment management agreements with each investment vehicle which provide for management fees, incentive fees and/or administrative fees. These fees are generally based on assets under management, investment performance and allocable expenses incurred in the administration of these investment vehicles.
As of June 30, 2021, we had net operating loss (“NOL”) carryforwards for federal and state income tax purposes of approximately $952 million and $198 million, respectively. The federal NOL carryforwards generated prior to fiscal year 2018 will expire from 2022 through 2037. The federal NOL carryforwards generated in fiscal year 2018 or later may be carried forward indefinitely. The California NOL carryforwards of $185 million will expire from 2029 through 2037. The Massachusetts NOL carryforwards of $13 million will expire from 2031 to 2038.”
With GECC’s performance to date, this sort of brings the Medley companies to mind and that didn’t end well
Thoughts on PCW and it’s new 7.75% issue (now tracing as PACWL at Schwab)?
I’m no accounting expert, but their latest 10-K looks pretty good to me (recovered from a hefty loss last year, NII up, allowances down, deposits and loans up). Wondering why they’re going out with a 7.75% coupon (and the reset of 4.82%+5yrTreas works for me too).
It popped as high as 27 (I’ll take that as market-order mistake by someone), but it’s been trading above 25.5 most of the day, which I guess means others see value.
I like the company and the terms on this preferred, but I’ve been trying to buy almost all day at $25.50 with no luck 🤐
The full, correct amounts for my CPTAG and CPTAL redemptions arrived in my eTrade account this morning. Previously, I had only received $1 per share for the redemption.
Not in my TDA or ML accounts yet…good sign you got yours though!!
I just checked my account at TDA and the correct redemption proceeds for CPTAL were credited at 10:47 am. this morning.
Thanks Bill, I am still looking but it sounds like there shouldn’t be a problem.
Paid in full today. On to the next one!
I recall recent posts about the unavailability of announcements for the dividend dates on PRIF preferreds. Here’s their Q2 divs:
Ex-Dividend Date Record Date Payable Date Distribution per Share
Series D June 14, 2022 June 15, 2022 June 30, 2022 $0.43750
Series F June 14, 2022 June 15, 2022 June 30, 2022 $0.41406
Series G June 14, 2022 June 15, 2022 June 30, 2022 $0.39063
Series H June 14, 2022 June 15, 2022 June 30, 2022 $0.37500
Series I June 14, 2022 June 15, 2022 June 30, 2022 $0.38281
Series J June 14, 2022 June 15, 2022 June 30, 2022 $0.37500
Series K June 14, 2022 June 15, 2022 June 30, 2022 $0.43750
Series L June 14, 2022 June 15, 2022 June 30, 2022 $0.53125
Here’s the link to the announcement:
https://www.marketwatch.com/press-release/priority-income-fund-announces-99-annualized-cash-distribution-rate-on-class-r-offering-price-through-board-declarations-of-increased-quarterly-cash-bonus-common-shareholder-distribution-in-addition-to-steady-monthly-cash-base-common-shareholder-distributions-for-june-2022-through-august-2022-and-preferred-stock-distributions-for-june-2022-2022-06-01?siteid=nbkh
Two new preferred’s from RAYMOND JAMES FINANCIAL starting trading today on NYSE.
6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual
6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual
Thoughts?
Raymond James acquired Tristate Capital Holdings. I believe TSCAP and TSCBP symbols are changing to RJF PRA (Cusip: 754730307) and RJF PRB (Cusip: 754730406)
Thanks EB
Thanks player4
From Raymond James Website:
Further, each share of TriState Capital’s 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock and each share of TriState Capital’s 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock was converted, respectively, into the right to receive one share of a newly created series A and series B preferred stock of Raymond James. Each outstanding TriState Capital depositary share representing a 1/40th interest in a share of the applicable series of TriState Capital preferred stock was converted into a Raymond James depositary share representing a 1/40th interest in a share of the applicable newly created series of Raymond James preferred stock (NYSE: RJF PrA and RJF PrB).
CPTAG- redeemed at $1 a share today. Am I missing something?
You are missing $24.00.
Thank you!
My CPTAL also got redeemed at $1 a share. This was in both in my Merrill and TD Ameritrade accounts. Clearly this is a mistake that should be fixed soon.
Did you contact anyone about this?
Chris
I’ve left messages at IR and nobody is responding. TD is trying to figure it out, but trying to find anyone there that even knows what a baby bond is,is proving to be difficult. One response was you have to be careful to read the prospectus on a convertible bond. This is what happens. Ok.
These are not convertible bonds…they are notes with a maturity date. Clearly they don’t know what they are talking about.
The intial post here, by the author you are replying to, was about CPTAG.
which are: 5.75% Convertible Notes due 2022
mcg – I see the difference now. Regardless, both the convertible and non-convertible were redeemed at $1.00/share. I got a hold of someone at corporate who will be responding to me soon about when the remaining $24 will be paid. It will happen, though.
I have been in touch with TD twice. They are no help. I own/owned CPTAL and I have the same problem. I was paid $1.00 per share. I tried calling Capitala but all I get is an automated answering machine that sends me to someones voicemail. I have scoured the net and so far I am not finding any bad news. I will post any news that I find.
I got a hold of Jason Roos, the CFO mentioned at the bottom of LRFC’s last earnings report. He said that there was a mixup between the funds allocated and the DTC and that they are working on getting the full amounts credited to investors in the next day or two.
Just give them a couple days to straighten this out.
What is going on with FATBP? I can’t find any news other than litigation date expirations. The preferreds have been on fire recently. A lot of big block buying. Kind of wonder if someone knows something.
I know FAT’s past regarding issuing preferred shares at a discount has been really frowned upon and looked at as being extremely foolish, but this action is crazy and unexplainable. It was over $22/share just before the close.
Some big buying in preferreds and baby bonds right at the close today. Affected nearly all of my holdings spiking them up by 1-2%. Will there be follow through tomorrow? It wouldn’t surprise me if there is. Where else can you get investment grade products returning 5-6% and high yield perpetuals in the 7-9% range? Yes, you can get 9% in IBonds, but you can only purchase 10k worth every year. Maybe some people are waking up and realizing these bargains.
I think everyone’s view of a big move is different. I didn’t see anything jump out at me but yeah my portfolio in general (which includes at least 50% non preferreds) did add some value near the close.
But I doubt it is truly attributable to individual retail investors and more likely due to month end rebalancing from larger players if what you saw was across a multitude of issues. Just my guess
Chris: I guess it depends on what you own. My total portfolio was only up .45% today, however I did have 3 issues that were up over 1%, the highest was my TANNL up 2.38% or .60 a share and TANNI up 1.47% or .38 a share and that was indeed right before the close. Those are relatively thinly traded issues so it doesn’t take much for a big move up or down. I do look at it daily, but 90% of what I own has maturity dates within 6 years so no intention of selling unless we are getting close to maturity and there is a capital gain close to what I might collect in dividends, then I will bail early.
I sold FATBP around 19. Didnt get all of the gain but with their reputation for cheap secondaries I’m glad to be out at that price.
NEW ISSUE: PacWest Bancorp (NASDAQ: PACW)
SECURITY: Depositary Shares Each Representing a 1/40th ownership interest in a share of Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A
EXPECTED RATINGS: BB- (Fitch) / BBB- (Kroll) / BBB (Egan-Jones)
SIZE: $300.0 million (12mm $25 par depositary shares)
MATURITY: Perpetual
TENOR: PerpNC5
INITIAL PRICE TALK: 7.75% – 8.00%
OFFERING PRICE: $25 per depositary share
DIVIDEND PAYMENT DATES: March 1, June 1, September 1 and December 1
DIVIDENDS: (1) from and including the date of original issuance to, but excluding 9/1/2027 at a rate of [ ]% per annum and (2) from and including, 9/1/2027, during each reset period, at a rate per annum equal to the five-year treasury rate as of the most recent dividend determination date plus [ ]%.
FIRST PAYMENT DATE: 9/1/2022
FIRST RESET DATE: 9/1/2027
OPTIONAL REDEMPTION: (1) Callable in whole or in part on 9/1/2027, or any dividend payment date thereafter, (2) or in whole, but not in part, at any time within 90 days of a Regulatory Capital Event
USE OF PROCEEDS: General corporate purposes
DRD/QDI ELIGIBLE: Yes
LISTING: NASDAQ: PACWP
So one is looking at an adjustment of about 5% plus 5 year at reset it appears.
Seems interesting to me. I am just not sure what the catch is to get that rate for the next 5 years. They seem to have been a bank that handled the GFC better then some cutting their div to a penny and covid div cut.. but preferred if any were paid. They then proceeded to buy other banks after. I may take a swing if the yield is truly that high. I just have a feeling it will come down. A lot.
This is trading as OTC as PACWL on Schwab at about $25.50. The fixed rate is 7.75% and the 5 yr reset margin is 4.82%.
Can’t buy on Fidelity…blocked buying on OTC is too risky! I will have to wait.
Lately waiting has worked out well. RIV-A is a good example.
PACWL is fine to buy at Merrill Edge, but is blocked at Vanguard
PACWL was issues 6/22/22 PacWest Bancorp 7.75% Dep Shares Rate Reset Non-Cumul Preferred Stock, Series A
Ticker Symbol: PACWL CUSIP: 695263202
The Annual Fixed Dividend Rate will be 09/01/2027 until the first redemption date, then it will be equal to the sum of the five-year treasury rate on the applicable fixed rate calculation date plus 4.82%, resetting every 5 years thereafter on applicable fixed rate calculation date (see prospectus for more details).The dividends are non-cumulative and if the board of directors does not declare a dividend or the company fails to pay a dividend declared by the board for any quarterly dividend period, the holder will not be entitled to receive any dividend for that quarterly period and the undeclared or unpaid dividend will not accumulate.
KTN – does anyone know if there was a cut to KTN’s dividend? Fidelity is showing a current dividend of only $.547 and an annual yield of 3.68%. There is no change on Quantum which continues to show the annual dividend at $2.05. I assume FIDO has made a mistake. KTN was down this afternoon on moderately high volume. Perhaps FIDO’s mistake contributed to this. I put in a bid below $29 but it didn’t fill.
GR, its contractual debt held inside a trust wrapper. The interest payment cannot be cut. Whoever disseminates the info has got it confused with quarterly and semiannual payouts. It is screwed up on other sites I see. Parent AON is paying a dividend on the common stock. For whatever reason the info being posted is wrong.
Thanks Grid – I figured as such and put in a bid @ $28.86 as some selling pressure started, but it didn’t fill. Let’s see if these misstatements create a buying opportunity next week. I can imagine a few looking up KTN on FIDO and thinking they cut the divvy in half – sell, sell, sell.
I added to my GJH position today at 10.01. It hasn’t participated in the recovery this week and goes ex in two weeks (twice a year only) for .32, so if it should stay at this price and does’t recover after the ex it would be yielding 6.6%, which I consider ok for this 2033 maturity.
Added to position also today, sold DDT on spike again to 27, thanks Grid again
The arb Grid mentioned earlier in the week to be able to sell GJH and buy the underlying bond for a 50 basis point improvement was closed pretty quickly primarily by the underlying bond’s offered side yield moving down from 7.05% approx to 6.56%. Good one!
I pretty much bought that small 10k purchase just to hold. Because if I tried to sell, the bond desk would skim all my profits away. Very unusual yesterday, did you notice the big wall volume ask of GJH at $10.01 and bid of $10? I dont know if the entire block sold but almost 10k did. Maybe RK and Ret bought them all. I did buy a small amount at 10 after Rk mentioned.
Grid – I’ve not been around much during the day recently since weeds in our garden areas are not transitory and other work on the house like refinishing a teakwood front door has kept me busy, so no, I didn’t see GJH @ 10-10.01 during the day nor did I get to execute on the arb. Oh well, just another opportunity missed… You get used to it eventually.
You keep dissing bond desks for skimming away profits which I don’t really understand… Some, like Fidelity, make buying bonds similar to buying listed stocks prior to stocks going commission free as they charge a set fee of $1 per bond (with an upper limit I believe) and they show you the bid and asked so you can place whatever you want to bid just like you’d do on GJH. In the case of US Cell 6.70 due 12/15/33. $1/bond = only about 3 basis points, so that doesn’t seem all that bad imho…. Granted $1 becomes more intrusive the shorter the bond maturity is, and just like with stocks, the more inactive the bond the wider the spread normally, but all in all, if you use the right broker, the bond market today is far and away nowhere near the old wild west gunslinger’s domain it used to be… Then again, I go back to the days when you had to use an actual book and then do interpolations by hand in order to figure out an approximately accurate bond yield on a specific bond and there were no reported last sales. In those days there were real spreads to be made making markets….
In an otherwise great day for preferreds, one issue stands out on the downside: COMSP. It is a $25 9.25% issue that closed yesterday @ 11.38 which was bad. Then today it fell 4.50 to close @ 6.88.
The company suspended the COMSP dividend today, which probably should not come as a surprise to anyone, but apparently did. . .
DALLAS, May 25, 2022 /PRNewswire/ — COMSovereign Holding Corp. (NASDAQ: COMS and COMSP) (“COMSovereign” or the “Company”), a U.S.-based developer of 4G LTE Advanced and 5G communication systems and solutions, today announced that its Board of Directors has suspended the payment of dividends on the Company’s 9.25% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) until further notice.
Fortunately we do not own COMSP in any account.
I remember this one from last October. I checked them out and offered the opinion they would either be rolling in money or bankrupt in a little while. Looks like it’s BK for them.
my general rule is if the common is trading for a buck or 2 i want nothing to do with the preferred at any price.
Have continued to nibble on some hopefully bargains as they present themselves. Thanks to whoever mentioned COF-I (which has rebounded a lot since then) and NI-B when it was under par on here recently
I also picked up some ESGRO, a BB+ investment grade 7% yield preferred at an average of $24.76. This is from a good property/casualty insurance company.
You might look at ESGRP as it has a longer call date.
Thanks – I did but I preferred ESGRO because it is fixed rate while ESGRP is fixed to floating and the floating rate is 3 month Libor +4.015%
I know 2028 is a long ways out before it floats but I just wanted some more certainty with the lower kicker
COF-I was me, over on the Sandbox page, with due credit to Tex the 2d for leading the way with his analysis of variable pricing for same-rated issues (https://innovativeincomeinvestor.com/sandbox-page/#comment-74171).
yeah
I missed NI-B, I was expecting it to go lower.
You may also like SR-A
I have a full position in both. Fingers crossed they stay outstanding for a long while. However, I do expect NI-B to drop at the first reset as the reset rate is on the skimpy side.
Grid noted a sempra energy reset of 5 year plus 4.5% I think.
That guy can really find a deal.
The cusp and discussion in in the RIA section.
Thanks – Yeah I have more than a full position in SR-A
I looked at Grid’s Sempra but I try to stay away from California utes. Crazy state, fire liability risk, etc. I am likely being overly cautious as I take on risk in other areas – but with utes I want SWANs
The biggest farce I have ever seen in all my investing years is what the SEC has done with the botched implementation of the expert market. SLMNP traded at $785 today, below the put price. No doubt many would buy all we could get our hands on at this price.
So we as a group here on III know more about SLMNP than any of the “experts” I suppose… It’s time that we collectively come up with an opinion as to what SLMNP should be worth in the marketplace.. Why? Because we sure can’t rely on the SEC or the “experts” to set a fair, accurate and visible price… What do we as a group think should be a market price and what are the right comparisons? Is it still worth more than the put price of $848 approx? $848 would be a 7% current yield. With Lyondell senior unsecured being Baa2 I would think this would be considered just below investment grade or possibly mid-Ba range rating credit wise potentially… Right now, I’m not sure what the best comparison should be but I think a case can be made to believe SLMNP should be worth more than the put price right now had it not been 15c-2-11’d.. Anyone want to venture an opinion? I sure know I’ll value an opinion on fair market value emanating from here much more than de facto from the “experts.”
I would give SLMNP a slight bump up in price just for diversity’s sake. Never cared for the fact that insurance, banks, mreit, and financial can get so heavy if one is not careful while pursuing yield. So many of the “others” are junk. They seem to run a very profitable long term business with a steadily increasing dividend for the common which often means more to me then the rating.
I would add at 900 if allowed to buy
Since there any true comps available (perpetual with a put, illiquid before experts, chemical industry, QDI, etc.) one could make a case for a wider range. Some “fair quality” reits are in 6.75% range and typically market seems to give a slight premium to the total QDI, so a case could be made for 6.5% ish range. But during nadir of interest rates last year it never really appreciated to a desiring level either. So conservatively speaking $875-$900 doesnt seem outlandish fair value to me.
2WR, your first line makes no sense. Experts are the buyers and they want to buy as cheaply as possible. It’s the seller in this case that is not the expert and doesn’t realize they can get a better price through the company.
How is it that you know the seller is not an “expert”? I have had a GTC order to sell AATRL at $54. It traded through that price on at least a couple different days, yet was not executed, evidently because I am not an “expert.” This so-called expert market is just an abomination, and it’s not clear (at least to me) just what’s going on.
Because I assume buyers in the expert market are knowledgeable and would realize they can exchange it for more cash to the company.
I honestly don’t know why so many people here spend time watching the trading prices of things they can’t trade. Do you track Exxon CDS prices tick by tick even though you’ll never trade them? Why not spend time looking at things you can actually buy?
Karma, I own SLMNP. So naturally I am curious what it is trading at… While I cannot buy it I can surely sell it thus it matters to me. I know quite a few others here also own these types of securities.
A) By not selling when it moved to the Expert Market, you chose to hold SLMNP indefinitely.
B) The price that someone else sold it for doesn’t actually tell you what you might be able to sell it for. Expert Market is not NBBO.
C) Many of the complaints (perhaps not from you, I don’t keep track of everyone) are something like, “It’s not fair that someone else gets to buy at those prices, but not me!” But, of course, if not for the Expert Market, those prices wouldn’t exist. They are mostly meaningless except to give people who like to complain about everything another reason to complain.
The issue you post about is representative of the OTC market not expert market. There is no centralized order book nor nbbo, you can’t have the expectation that your limit orders will get filled because you see a trade above your price. caveat emptor
By “experts” I was referring specifically to those designated as such by the SEC or whomever who are allowed to buy in their own little corner of the world where we can’t enter and compete…. IMHO they are fully aware of their license to rip out lungs when not burdened with competition and this is why SLMNP traded at 785. Granted here’s a case where either the seller was not an expert and/or was desperate to unload. Were SLMNP not relagated to the “expert” market, this trade would never have been recorded – witness the prices we collectively would be willing to pay if given the opportunity to bid against the “experts.”
I tend to agree with the idea SLMNP is probably worth in the 6.50-6.75 current yield range today, but the more I think about it, the more it also should be considered a preferred with limited downside no matter what happens to interest rates, so why not just consider it an annuity and keep on collecting… I don’t think LYB is going anywhere, although they did have BK in its history at one time..
BTW, this also made me think why in the world is LANDO still worth a premium?
Lol, I agree lando should be about $22 where it would give back about 6.8%. Not sure what’s keeping it up.
Höegh LNG Partners (NYSE:HMLP) +32.1% pre-market after Höegh LNG Holdings Ltd. said Wednesday that it agreed to acquire all outstanding publicly held common units at $9.25/unit in cash, for a total purchase price of $167.6M.
The revised price is a $5/unit increase from the $4.25 offer made by Höegh LNG on December 3, and a 35% premium to the May 24 closing price.
Höegh LNG already owned 45.7% of the common units and said it entered into a support agreement with HMLP committing to vote its common units in favor of the merger.
In connection with the transaction, the partnership’s incentive distribution rights will be canceled.
“The Series A preferred units of the Partnership will remain outstanding.”
HMlP-A
How times have changed! Just a few months ago one of our focuses here on III was “which issues will be called.” We had to judge each issue to decide how much principal to risk if an issue was called. If it was trading way above its call price, there was a risk of capital loss that had to be judged against the risk of receiving more payouts. Along the way, I published lists of which issues had the most dollars to lose if they were called. Several of them were called and suffered significant capital losses. Others were not called and there was usually some theory about why they were still trading.
You would have thought that the downdraft this year would have brought the number of issues at risk to zero, but alas that is NOT the case. Here is the latest list of non-convertible issues, regardless of call price that risks losing ~ >=4.0%, which is roughly $1.00 for a $25 callable issue. Once again, I offer no divine wisdom as to when this issues will be called. Just an FYI for III’ers to understand the risk for each issue.
Ticker, call price, % at risk, comment
BANFP, 25, 15.4%, Immediately callable
CHSCP, 25, 14.2%, Callable 7/23 but farmers don’t want it called
CNTHP, 51.44, 10.2%, Immediately callable
CNLPL, 51.84, 8.4%, Immediately callable
WVVIP, 4.15, 8.0%, Company says they will NOT call it, also wine privileges
MTBCP, 25, 6.3%, Immediately callable
C-N, 25, 4.9%, Immediately callable
DDT, 25, 4.8%, Immediately callable
BPOPM, 25, 4.3%, Immediately callable
We do own a microscopic number of WVVIP shares just to see if/how the “wine privileges” work. Otherwise, we do NOT hold any of these in any account.
Thanks for reminding me about WVVIP, Tex. I’m not a wine drinker but took the time to go look up the benefits. Geez, 25% discount on direct wine purchases and optional 115% conversion of dividends to a wine credit: what’s not to like? Of course you do have to like the wine itself, about which (see above) I obviously have no opinion…
I would appreciate any insight on Ciitigroup Preferred N “”C-N””…….long past 2015 call , floating at LIBOR plus 6.37%….seems attractive……what are the caveats or catches, why not called?
They stated a few years back they were not redeeming it anytime soon. But that was long ago. They kept it because it was grandfathered Tier 1 capital debt which isnt allowed anymore (they get a tax deduction on it since it isnt a QDI preferred). Libor is rising fast and may smoke them out on it. I play it a lot but I am out now. The higher Libor goes the more likely it gets redeemed as it is a massive issue.
The safest and quickest investment was Tiger making the cut today. Cashed me a quick $500 profit on a 2 day investment. I need 2WR to annualize my return for me.
Grid-
Tiger??
thx
C-N is trading $26.3x, so if called in the next 6 quarters you would be a looser.
Instead, you may want to consider their C-J or C-K which are lower coupons and lower adjusted rates, but you get 5-7 quarters of protection before they become callable. Both are trading in low $25s and I think C-J which goes ex-divd June 15th is trading almost at Par $25.41 where I bought some today is a decent buy.
Thank you Tim for the F2F List – where I found C-J & C-K
Thanks to both of you, Grid and mSquare…will look at other C issues.
mSquare, assuming for the moment that 3m Libor doesn’t change, I believe it will take 3 quarters to recoup the $1.37 premium, not six.
– The current div payment is 6.37% + 3M Libor = 6.37% + 1.45% = 7.82%.
– That’s a quarterly payment of $0.48875 ($1.955/4).
– $26.37 represents a premium of $1.37 over $25 liq pref.
– $1.37 / $0.48875 = 2.8
What am I missing?
NI-B under pressure if anyone is interested.
Split IG, Qualified, > 6%
May reach par by the next fed meeting.
I got it on my watch list to add to position.
Reset to 5 Yr. Tres.
cheers,
Thanks, PickleNick.
Remember, Monday (May 23rd) is the div ex-date.
The reset margin is pretty skinny at 3.632%. I’ve also been following it, but looking for some price around $24-$24.5
Ya, it needs to go lower to perk my interest for same reason. Im eyeing that Sempra BBB- $1000 preferred that resets with a 4.5% adjustment come 2025. And it has drifted to $930 area. Eyeing $900 area to buy.
What’s the symbol? Thanks
Randy you have to call the bond desk and give them the cusip number like a bond. These have to be called in since they are largely institutional preferreds.
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=FSRE5000276&symbol=SRE5000276
Here is the prospectus.
https://www.sec.gov/Archives/edgar/data/0001032208/000119312520166651/d941596d424b5.htm
BRG-D traded heavily yesterday below $25.10. Bought some yesterday and today at $25.05.
Do you know what is going to happen to the BRG preferreds after Blackstone buys the company?
The Company will deliver a notice of redemption (the “Preferred Stock Redemption Notice”) to the holders of our Series B Redeemable Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), 7.625% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series C Preferred Stock”), 7.125% Series D Cumulative Preferred Stock, par value $0.01 per share (“Series D Preferred Stock”), and Series T Redeemable Preferred Stock, par value $0.01 per share (“Series T Preferred Stock”), in accordance with their respective Articles Supplementary, which will provide that such preferred stock will be redeemed effective as of the Effective Time. Each share of Series C Preferred Stock, Series D Preferred Stock and Series T Preferred Stock will be redeemed for an amount equal to $25.00 plus an amount equal to all accrued and unpaid dividends to and including the redemption date set forth in the Preferred Stock Redemption Notice, without interest. Each share of Series B Preferred Stock will be redeemed for an amount equal to $1,000.00 plus an amount equal to all accrued and unpaid dividends to and including the redemption date set forth in the Preferred Stock Redemption Notice, without interest.
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001442626/000141057822001258/brg-20220331x10q.htm
Was told by IR a few weeks ago that expected timing for final closing of this deal was to be at the end of May or early June… I have not heard of any updates to this timing.
https://bluerockresidential.com/bluerock-residential-growth-reit-stockholders-approve-acquisition-by-affiliates-of-blackstone-real-estate/
Thank you for the information. I assume their is one payment left before the call.
If my calculations are correct BRG-D has and will accrue 0.00495 per day from 4/5. Similar set up for BRG-C. Like 2whiteroses indicated there’s no date set at this point for redemption so the longer the deal takes to complete the better.
As I understand it, the piece of the puzzle holding up the closing is the normal procedures for completing a spinoff to shareholders of BRG’s single family rental business into what will become Bluerock Homes Trust Inc to trade under symbol BHOM.. Once all the hoops are jumped thru for that to happen, then they will have an “Effective Time” as defined for the closing of the entire BRG deal. That implies that probably the “Effective Time” for closing of BRG deal will be determinable quickly once the redtape (hopefully not impacted by market conditions) is completed. And yet, the language in the both the C and D prospectuses regarding Change of Control call procedures says “We will mail to you, if you are a record holder of the Series C [or D] Preferred Stock, a notice of redemption no fewer than 30 days nor more than 60 days before the redemption date.” So is it possible that a call date for C and D might possibly have to be a date not coinciding with and longer out than the Effective Date to comply with the 30 day notice language? My assumption is that the call will actually take place on the “Effective Date.” Overall, I’d normally agree with you the longer the better but in this market environment, I’m kind of rooting for an announcement this upcoming week.
They are still waiting for the Bluerock Homes reg statement to be declared effective by the SEC. An amended version was submitted on April 22:
https://www.sec.gov/edgar/browse/?CIK=0001903382
Once the SEC signs off, I presume the deal will close in a matter of days.
The preferreds will be redeemed at the closing:
After the date this proxy statement is mailed to our stockholders, we will deliver to the stockholders of record of our Preferred Stock a notice of redemption for each applicable series of Preferred Stock that complies in all material respects with the specifications and timing requirements of our organizational documents. The notice of redemption will state that the redemption of our Preferred Stock will be effective as of, and conditioned upon the occurrence of, the merger effective time.
Thanks for the link, 730. That’s been my assumption all along – that C and D will be redeemed on the Effective Date. It’s interesting though, to see how the language used successfully bypasses the 30 day notification requirement… It’s not unusual, though, as Change of Control imho, when requiring a call, usually seems to be done outside a 30 day requirement…
BTW, your link leads to a description of the terms and conditions of the spinoff at https://www.sec.gov/Archives/edgar/data/0001903382/000110465922049088/tm221667d6_ex99-1.htm. Given the mkt as measured by the S&P is down about 12% from April 12, I keep wondering whether or not there’s wiggle room due to market conditions that could make this unravel… I’m sure my questioning is more based on my oversized position in an iffy market than rational concerns.
BTW, my position is concentrated on C because of the added backup of a put available next year. Put could be paid in shares, though, not necessarily common.
I wanted to add my two cents to the concern about sjij and it being delisted and deregistered and how long the brokers will hold it. I don’t know if there is a rule but I have an issue that even Gridbird hasn’t brought up (as far as I know) which is the old Delphi pfd ( 2037 maturity) that got bought by a Japanese insurance company a decade ago and I religiously get paid and never heard from TD Ameritrade that they were not going to hold it. It even gets a price although it probably is very stale.
That is encouraging, Rvert. I can only go by memory on what was posted here by Justin last year. But it seemed like it was totally a brokerage option and was not suggested to be something absolute. Possibly your inference of continually getting paid is the key. Maybe as long as payment process from DTC and such flow through in an ongoing seamless manner maybe they wont care. If something becomes a hassle or problem to them, they allow themselves the option to remove it from the account.
Conifer Insurance – S-1 filed – not much info yet https://www.sec.gov/Archives/edgar/data/1502292/000114036122019616/ny20004217x1_s1.htm
Proceeds to redeem CNFRL
Good news about CNFRL…its traded below 25 all year despite being callable and a year from maturity. The Rodney Dangerfield of baby bonds…
Thanks 2wr
Tellurian Baby Bonds (TELZ) on sale today with a >11% yield to maturity. This natural gas company is a $2.5 Billion company with a good outlook in a growing industry and has a BBB+ EG rating (just threw that in there for a laugh).
Anyway, I added to my position at these levels.
Yield to call is north of 30% BTW…
I own some at 23.50 and I just cannot add to it. It was a high risk purchase and had to put a cap on it. For now they have the cash to pay for it but if they do not get funding for their large project I have no idea what will happen. Matures in 2028 and is approx 50 million worth of notes issued.
“Tellurian ended its first quarter of 2022 with approximately $296 million of cash and cash equivalents and approximately $732 million in total assets.”
“At-the-Market Debt Offering Program
On December 17, 2021, we entered into an at-the-market debt offering program under which the Company may offer and sell from time to time on the NYSE American up to an aggregate principal amount of $200.0 million of additional Senior Notes. For the three months ended March 31, 2022, we sold approximately $1.2 million aggregate principal amount of additional Senior Notes for total proceeds of approximately $1.1 million after fees and commissions under our at-the-market debt offering program. See Note 16, Subsequent Events, for further information.”
Cash on hand has been stable and current assets have actually increased quarter over quarter due to the revenue currently being generated by their natural gas sales. Driftwood is on target and higher natural gas prices this quarter will likely generate $50-75 million in revenue. Not without risk, but pretty solid results.
Thanks.
I have a full position at par.
Those yields are tempting, however, I put this in my high risk bucket.
My ground zero is to compare TELL to AR and LNG which are more established. AR and LNG had their struggles at the start but the debt to get them on the up swing took years to recover.
Disclosure: Long TELZ, AR, LNG
Cheers,
Stay safe
Annally Capital Management is offering 100 million new shares of common stock. https://www.annaly.com/investors/news/press-releases/2022/05-16-2022-210535836 Presumably this should be good for investors in NLY-F, NLY-G, and NLY-I.
AT&T Inc. Commences Tender Offers for 63 Series of Notes
https://stockhouse.com/news/press-releases/2022/05/16/at-t-inc-commences-tender-offers-for-63-series-of-notes
NILEP
https://www.sec.gov/Archives/edgar/data/896493/000121465922006823/j512226424b5.htm
If BitNile Holdings would have just paid for an Egan Jones rating I’m certain they could get an investment grade rating for this new “quality” issue… 🙃 The equity has a market cap of a whopping $82 million, stock trades at $0.30 cents, 52 week change on their equity is NEGATIVE -87.29%, their profit margin a NEGATIVE -46.15% (we will make money on volume), EBITDA is a NEGATIVE -$15.48 million, diluted EPS is a NEGATIVE -$0.437 cents per share (higher then their share price!), leveraged cash flow is a NEGATIVE -$170.46 million. Runnnnnn; run away and never look back 🤬
And the 13% is the amount the price of the preferreds will fall once they start trading…
Gee, and just think, had they gotten an IG rating from Egan Jones maybe they could have priced at a more respectable 12% coupon….. haha BTW, did you happen to notice this headline from a certain SA article today: “Super Safe Investment With +9% Yield, For Turbulent Times?” It’s on IBonds……
DCUE converts to D on 6/1/22 and it’s last dividend is ex-div today.
https://www.quantumonline.com/search.cfm
ameritrade shows x div date of 5/27
i was planning on holding through that date
but will have to look at the numbers again
Bob
I think you are correct and Quantum online is wrong.
I looked at quantum as Ameritrade’s Think or Swim has N/A for the ex-div dates.
When I look at the dividend history on TD Ameritrade’s platform it seems like the last week of the month is the typical ex-div date. Looks like we get paid, the same day as the conversion to D.
Thanks for replying to my note.
I don’t recall ever seeing much discussion of these preferreds, but if you own them, they are getting redeemed.
BIRMINGHAM, Ala., May 13, 2022 /PRNewswire/ — Alabama Power Company (APRDM) today announced that it issued a notice of redemption for the following series of preferred stock:
4.20% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392207
4.60% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392405
4.92% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392702
4.52% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392306
4.64% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392504
4.72% Preferred Stock, Par Value $100 Per Share CUSIP No. 010392603
The redemption date for each of the above series of preferred stock will be June 21, 2022. The redemption price per share for each series of preferred stock to be redeemed shall be equal to $105.00 per share plus accrued and unpaid dividends to the redemption date for the 4.20% Preferred Stock; $104.20 per share plus accrued and unpaid dividends to the redemption date for the 4.60% Preferred Stock; $103.23 per share plus accrued and unpaid dividends to the redemption date for the 4.92% Preferred Stock; $102.93 per share plus accrued and unpaid dividends to the redemption date for the 4.52% Preferred Stock; $103.14 per share plus accrued and unpaid dividends to the redemption date for the 4.64% Preferred Stock and $102.18 per share plus accrued and unpaid dividends to the redemption date for the 4.72% Preferred Stock. No dividends on the preferred stock being redeemed will accrue on or after the redemption date, nor will any interest accrue on amounts held to pay the redemption price.
Anyone have thoughts on the likelihood of ALP-Q being called in October in light of the above redemptions
Commenting on something I know very little about, for the last 10k, it looks as though ALP-Q is considered a different class of preferreds from those that are being called now. “Alabama Power has preferred stock, Class A preferred stock, and common stock outstanding. Alabama Power also has authorized preference stock, none of which is outstanding. Alabama Power’s preferred stock and Class A preferred stock, without preference between classes, rank senior to Alabama Power’s common stock with respect to payment of dividends and voluntary and involuntary dissolution. The preferred stock and Class A preferred stock of Alabama Power contain a feature that allows the holders to elect a majority of Alabama Power’s board of directors if preferred dividends are not paid for four consecutive quarters. Because such a potential redemption-triggering event is not solely within the control of Alabama Power, the preferred stock and Class A preferred stock is presented as “Redeemable Preferred Stock” on Alabama Power’s balance sheets in a manner consistent with temporary equity under applicable accounting standards.”
p II-192
I didn’t really find out much about the preferreds being called other than there’s probably only $12 mil in aggregate outstanding. (from same p II-192).. Just guessing, but because ALP-Q is the Class A preferred referenced while what’s being called are the “preferred stock” referenced, maybe these are being called for non-economic purposes, such as covenants they might wish to get out from under. These are all very old preferreds issued at a time when there were restrictive covenants. ALP-Q was issued in 2017, and there’s $250mil outstanding, so there’s a good chance there’s very little correlation as to why these are being called now vs the possibility of Class A being called on its first call date. That being said, this is Grid fodder, not mine, but I looked anyway to see what I could find.this is all I could come up with on first (and only) attempt….
2whiteroses
Thank you. Appreciate your insights.
Hmm. ALP-Q is trading at a 52 week low. If they call it on 10/1, that will make a pretty nice yield for the next 4 1/2 months.
NewToThis…Surprised APRDM is not on the list, highest coupon of the lot (the old ones )
whoops, APRDM was in the middle of the list
Phoenix 7.45% QUIBs Due 2032 tender offer: https://www.galvnews.com/news_ap/business/article_8d153db5-6bd6-528e-834e-c8e481026090.html
https://assets.nfg.com/documents/bondholders/Nassau-Offer-to-Purchase-5.12.22.pdf
Screw them, maybe $22 might have perked my interest. I take this as a good sign they will be just fine financially to keep paying my 11% annual interest. I will take the full cap gain instead at maturity.
Definitely a disappointing low-ball offer, will continue to hold and collect those fat interest payments too.
At least I confirmed they shaved 100 million outstanding off the issue over the years. They got a notch credit upgrade a few months back, and consider it a prudent use of capital to tender notes with a 7.45% cost to them. So they have funds somewhere. I will be more than content to ride this out to 2032. Have had it for 4-5 years already. Its almost a dog whistle call to buy more.
They get to book a $5.75/bond profit approx in the current fiscal year (subject to treatment of amortized costs of issuance) for every bond tendered, don’t they? So they lose the interest expense and make a profit as well. Is that how the accounting would work? Usually when something is called, a company seems to have to take a loss on the books so tenders at a discount can goose the bottom line I would think.
Yes, it gooses the book one time, but that is pocket pen protector nerd fest accounting stuff. Im worried about their cash and their ability to have and manage it. And the fact they are expending cash to reduce a modest 7.45% note (B rated range) with a 2032 maturity in this present environment is a very positive sign for me to continue holding.
And even if they arranged financing to do this, that is just as encouraging being its terms would have to be even better which they didnt attempt to do when 10 year was well below 1%. Im getting the 11% but as you know they arent paying that. Let them eat cake! 🙂
and in case anyone is curious. They have been fully callable since 2007.
prospectus is here.
https://www.sec.gov/Archives/edgar/data/1129633/0000950123-01-509495.txt
so doing this tender isn’t really voluntary, it is a gun to the head of the bondholders.
What on Earth are you talking about? They are offering a premium to the market price – that’s hardly a bad option for bondholders who might want to sell.
You’re gonna have to elaborate on that. How is it a gun? That makes no sense
This trades through the bond desk with some hefty commissions, and they have a VERY short window to get the 20.00, if your broker doesn’t process by next Wednesday, the price drops to 19.25.
(granted, I missed the part where they said that they will eat the tender fee, which for some brokers can be sizeable.
I sti dont understand why you’re claiming this is a gun to bondholders head.
Where it trades is immaterial since this mostly applies to people who already own it. You call your broker and submit tender instructions, its free at IBKR. Do it before the early deadline for full consideration or if you like the name, hold till maturity
Tenders happen all the time. Best to ignore unless you need to hit the ejector handle.
No force as issue is non callable.
why would you think it is non-callable? i linked the prospectus. .
(Caps in original)
THE BONDS WILL MATURE ON JANUARY 15, 2032. THE PHOENIX COMPANIES, INC. WILL PAY INTEREST ON THE BONDS ON JANUARY 15, APRIL 15, JULY 15 AND OCTOBER 15 OF EACH YEAR. THE FIRST SUCH PAYMENT WILL BE ON APRIL 15, 2002. WE MAY REDEEM ANY OR ALL OF THE BONDS ON OR AFTER JANUARY 15, 2007 AT A REDEMPTION PRICE EQUAL TO 100% OF THE PRINCIPAL AMOUNT OF BONDS REDEEMED PLUS ACCRUED AND UNPAID INTEREST TO THE REDEMPTION DATE.
If they really want the shares, they will call them at par.
Chris, par is $25 and there is a zero percent chance Nassau Reinsurance Group Holdings, L.P. will offer par to buy back these bonds in the near future. Nassau’s financial management team should be buying both their 7.45% quarterly pay bonds due 2032 and the 7.15% notes due 2034 on the open market. From this private corporations information releases, their balance sheet is strong and they have excess cash flow to do the buy backs. I am very long the 2032 bonds and smile each time I get this quartly payment. “When the people fear their government, there is tyranny; when the government fears the people, there is liberty”, Azure
Hi Azure,
Would you care to share the CUSIP numbers on the Nassau Bonds??…having a hard time locating them. I’ve been an owner of the Phoenix issue last 3-4 years and will be holding till maturity. IMHO, tender offer is derisory.
they are listed in the PDF. 1 is a 144A
https://assets.nfg.com/documents/bondholders/Nassau-Offer-to-Purchase-5.12.22.pdf
They are listed on FINRA as the original Phoenix issued baby bond title. This was prior to Golden Gates company bought them out and then later changed the name. The cusip is here and last traded price.
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C134867&symbol=PNX3814338
Adrian, remember the bonds trade flat and have a EX date each quarter for their distribution. The bonds were delisted in 2016, but IMHO Nassau Reinsurance Group has quality revenue and a strong asset base. Please do your own deep due diligence before investing as the bonds are pretty illiquid and there are not SEC required earnings releases.
“Many of life’s failures are people who did not realize how close they were to success when they gave up.” Azure
Thanks guys.
Bought some more at Vanguard today. Thru Bond desk so a little bit pricier at 19, but given I could turn around and redeem them b4 next Weds at 20, maybe not too bad.
Not going to…v much a holder until 2032, or at least a better tender offer..
NOT tendering my shares. Though basically untradable due to going on the OTC, they have been reliable income producers for years. I will hold off for the next 10 years and collect my interest.
Chris, they didnt go to OTC, they went to the bond desk. They are very tradeable minus the bond desk ripoff spread. You just have to call bond desk give them the cusip and tell them to do their job and give you a quote.
Another interesting day. The median preferred and median baby/term were basically unchanged (-.04%,-.09%) That said, there were 15 preferreds and 3 babys/terms that were >$10, non-converts, $25 face, and lost more than 4% on the day. I don’t have a theory for all of these, but it is pretty unusual to have that many large losers, given that the median issue was unchanged. . .
Also of note to me is that SI-A is on the list with a loss of -6.36%. This is an issue that many III’ers have been positive on and IIRC have been recent buyers.
Ticker, Closing Price, Percent Change
AAIC-C 21.68 -7.35%
ABR-E 21.10 -4.75%
AHT-D 20.38 -4.99%
AHT-H 18.42 -8.11%
AHT-I 19.35 -7.59%
BW-A 21.93 -7.59%
CDZIP 15.00 -8.26%
COMSP 13.40 -11.26%
CSSEP 22.15 -8.32%
DS-B 20.00 -4.81%
DS-C 17.30 -7.98%
FGFPP 19.05 -7.30%
IVR-C 19.49 -4.18%
MINDP 14.55 -5.46%
SI-A 15.45 -6.36%
CHRB 17.72 -7.95%
CSSEN 21.40 -7.56%
OCCIN 22.32 -7.41%
SI is that crypto bank isnt it? Maybe connected to crypto problems?
I think it’s on the microstrategy margin call rumors related to their crypto holdings since SI financed it
Nibbled on BWSN, company having issues with tariffs on solar panels restricting supply. Crazy government, doesn’t want fossil fuels and restricts green, energy shortages will be a real thing this year.
OCCIN is a outlier here because the issuer has related issues that barely moved.
28 shares of PPWLM off from 170 to 126.53
not long
Big drop in AAIC-C today.
Every day it is a different set of securities that are getting hammered. Looks like the panic selling is starting to set in.
Strange- espec since AAIC reports after the close today.
Getting late to be reporting- zilch so far- even on their site.
Hmm… good report- hit as high as up 17% today – now ~ 14.6%
Looks like it was taken down- maybe like Musk today- playing with Twitter value by being on/off/on again. The guy is a manipulator- it might catch up with him.
Over the past few days, some of the MReit preferreds have been dropping faster than the commons. Maybe some kind of preferred ETF that is dumping?
PFF has massive outflows which forces selling. Probably other funds too. If only we knew what a bottom looks like so we could buy it.
Anybody been monitoring PFF daily?
If they had to do mass selling, it should be sticking out like a sore thumb in the daily portfolio positions dropping like a rock in some of their holdings.
Mid January through February had considerably higher outflows, but its still consistently negative outflowing though. Some of these funds are real trips. I was looking at one last week. A floating rate fund. And then I read the top holdings. Most were the exchange traded bank preferreds of the 5-6% ilk that havent even went floating yet. And when they do its like Libor plus a 3 handle. Putrid…Oh and MER-K was a top 5 holding. Not a bad issue but they are totally misrepresenting it. The issue doesnt begin to float until 2066, and yet its a top 5 in a floating rate fund. This is why I have nothing to do with fee eating preferred funds and the fund managers only worried about cashing their checks and getting the prime 1 pm tee time on company time set.
https://www.etf.com/etfanalytics/etf-fund-flows-tool
SCCF has begun trading on the Amex today
BW-A was not the only troubled $25 issue today. It largely bounced back after being down $3.78 to closing down $1.26. Charah Solutions 8.5% notes maturing 2026 (CHRB) fell $3.69 and closed down $3.44 to close @ $19.25. They had their earnings call today and the only analyst covering them was B Riley, which tells you something about the strength of the issue when it IPO’ed last September. The quarter was UGLY with negative earnings and cash flow. The common CHRA is down 43% YTD @ $2.71. Yesterday CHRB was down 7% YTD, but now is down 21% YTD. Appears that investors are not convinced they will be able to pay off the notes in 2026.
Luckily we did not own the notes in any account nor have any open orders. And we are not tempted to buy it without doing a lot more due diligence to be convinced the notes will be paid on time.
Something going on with BW-A. Closed yesterday @ 24.99. Looks like somebody issued a sell alert and its low today was 21.20. It has rebounded back to 22.50, still down 2.49 from yesterday. Babcock and Wilcox is a weak company, but I have not seen anything indicating they might be pausing the 7.75% cumulative payouts on the -A. Don’t follow the company closely so cannot say for sure.
We do not have open orders in any account for BW-A, but did one roundtrip today.
This has the fingerprints of an advisory service sell signal, like one of the Seeking Alpha authors. This was NOT a typical “flash crash” type sell off. Those occur when someone places a larger size “market order”, typically a sell but sometimes a buy. When the order hits a thinly traded issue, the order “blows through the book” and substantially moves the price. These type flash crashes happen less often these days, but still occur.
OTOH, the BW-A selloff was in many smaller volume orders over about three hours. Hence my guess that many small investors were receiving the sell signal and acting at different times until they had all sold @ any price. By the end of regular trading @ 4:00PM Eastern, the price had rebounded to 23.73, which is still down 1.26 from yesterday’s close.
Interesting case study. . .
BWSN = Babcock & Wilcox Senior Note 8.125% due 2/28/26. With it ending up the day at below par, it’s tough not to think of BW-A perpetual preferred closing at a current yield of 8.16% overvalued. BWSN closed at 24.10 and I believe that’s a ytm over 9%.
Anyone know what’s going on with BWSN today?
Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE), one of the largest operators of advertising-supported video-on-demand (AVOD) streaming services, and Redbox Entertainment Inc. (Nasdaq: RDBX), a leading entertainment company, have entered into a definitive agreement under which Chicken Soup for the Soul Entertainment will acquire Redbox.
Transaction Details
Under the terms of the agreement, which has been approved by the Boards of Directors of both companies, Redbox stockholders will receive a fixed exchange ratio of 0.087 of a share of Class A common stock of Chicken Soup for the Soul Entertainment per Redbox share. Following the close of the transaction, Chicken Soup for the Soul Entertainment stockholders will own approximately 76.5% of the combined company, and Redbox stockholders will own approximately 23.5% of the combined company, on a fully diluted basis.
Is there a decimal shift in the conversion rate reported? CSSE is trading at $7.92, at 0.087 that would be 68 cents value for RDBX shares, but RDBX last traded at $5.60. Or is there something I’m missing?
Looks like a take under
https://finance.yahoo.com/news/chicken-soup-soul-entertainment-acquire-115100584.html
Hearing the deal is based on the Series A shares of $CSSE or $CSSEP which closed $24.75. With the deal at .087 this puts the price of $RDBX deal at $2.15.
In the news article it says:
“Redbox stockholders will receive a fixed exchange ratio of 0.087 of a share of class A common stock of Chicken Soup for the Soul Entertainment per Redbox share.”
I honestly dont think they mean CSSEP, but if they do mean the common stock that prices the transaction at around 70c ? which is bs on its own.
Apologies for the confusion regarding the CSSE/RDBX merger. It is in fact a takeunder as originally stated using CSSE common stock. Here’s a note from Wedbush…RDBX downgrading to Neutral from OP on the proposed acquisition by Chicken Soup for the Soul (CSSE) for roughly $0.65 per share plus the assumption of Redbox’s debt @ Wedbush – We expect the transaction to pass regulatory approval within the next six months. Redbox shareholders will get 0.087 shares of CSSE for each share of RDBX upon closing, which at CSSE’s share price is worth roughly $0.65 per share. This implies market capitalization of roughly $35 million, and adding net debt, an enterprise value of $335 million.
Redbox still trading at $3.04. Either those in the know know this won’t happen or just not aware, or just gave up on their holdings. Or is this just a play that pushes share price down so someone or group can buy on the cheap and then not go through with the acquisition. Certainly a strange bird. Stock moved up earlier this month, maybe insider whisper of being acquired, those not in the know got a major burn. Have to wonder why Redbox shareholders would approve.
RDBX price action is probably due to it being a meme stock.
Shareholders already approved the deal, they have the votes lined up per the filing. If they don’t do the deal they’re basically bk.
Why is this seen as so negative for the notes cssen? Down 7% today, due in 3 years.
Irish
I’m guessing it’s the debt on the transaction.
Page seven (7) on this link provides details.
https://ir.cssentertainment.com/static-files/13b1f310-cac7-4762-89a7-67c08b9137ce
I’m long CSSEN and added a little on today’s dip.
I think that’s a joining of two lousy, weak companies, whose products are way past their peak. Just my opinion.
ISTAR, STAR-D, STAR-G, and STAR-I Moody’s upgrades https://www.moodys.com/research/Moodys-upgrades-iStars-corporate-family-and-long-term-senior-unsecured–PR_465693
Moody’s upgrades iStar’s corporate family and long-term senior unsecured ratings to Ba2 from Ba3, concluding review; outlook is stable
06 May 2022
New York, May 06, 2022 — Moody’s Investors Service (“Moody’s”) has upgraded iStar Inc.’s (iStar) corporate family and senior unsecured ratings to Ba2. Moody’s has also upgraded iStar’s preferred stock rating to B1. Additionally, Moody’s has withdrawn iStar’s Speculative Grade Liquidity Rating of SGL-2. iStar’s outlook is stable.
This rating action concludes the review for upgrade initiated on 18 February 2022, following iStar’s announcement that it had entered into an agreement to sell its net lease asset portfolio for $3.07 billion. The sale was completed on 22 March, 2022.
Upgrades:
..Issuer: iStar Inc.
…. Corporate Family Rating, Upgraded to Ba2 from Ba3
….Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 from Ba3
….Senior Unsecured Shelf, Upgraded to (P)Ba2 from (P)Ba3
….Subordinate Shelf, Upgraded to (P)B1 from (P)B2
….Pref. Stock, Upgraded to B1 from B2
….Pref. Shelf, Upgraded to (P)B1 from (P)B2
….Pref. Shelf Non-Cumulative, Upgraded to (P)B1 from (P)B2
Many shares of AMH-G offered @ 24.95 in the afterhours market if anyone is interested. Several observers including me expect this to be called on the first call date of 7/17/22. We own this in many accounts.
According to the CEO today, it’s not a sure thing:
https://seekingalpha.com/article/4508294-american-homes-4-rent-amh-ceo-david-singelyn-on-q1-2022-results-earnings-call-transcript
Thanks 730 for pointing out that AMH discussed the -G preferred today on the conference call. The reply to a question was:
*************************************************************
And then on the preferreds, you have a great point. You know as I’m sure you saw, we’ve already announced and enclosed the call or closed the calling in redemption of the Series S; those are done at this point. On the G’s, you know look, as of right now guidance still contemplates that those are going to be redeemed, but you know small enough that they are not really needle moving either way, but I agree with you. It’s something that we’re watching very closely and we’re thinking about it relative to where the capital markets and cost of capital trend over the next couple of months.
But it underscores one of the great benefits of preferreds, and that they truly represent perpetual capital, so there’s no actual maturity or forced decision that we have to make. But we’ve got the luxury if you will of unilateral optionality, where if it makes sense we can call them in or if it doesn’t make sense relative to where the markets and cost of capital considerations are at the time, we can continue to let them sit out there and we’ll have that option available to us.
But anyways, if you think about the year at this point, I would say that the GE’s are small enough that we’re not really terribly needle moving either way from an earnings and/or guidance impact standpoint.
*********************************************************************
Tex’s comment: this points out that a call is not a sure thing until the check clears the bank so to speak. All of the issues that we assume will be called have some risk of NOT being called. Obviously as the cost of funds for each company increases, it LOWERS the likelihood an issue will be called. Even if they have previously said they are going to call an issue, the market forces might change their minds. This is how I interpret AMH’s comments today, a little less certain the -G will be called on 7/17.
BTW, there were only 50 shares traded after my original post, so if I was wrong for suggesting -G will be called on 7/17, it would not be a catastrophic less to others.
STRRP Proposed Change Of Terms
The Annual Meeting for Star Equity Holdings (STRR) includes one proposal to revise the terms of the company’s Class A Preferred Stock (STRRP) which, in my opinion, would weaken shareholders positions. Voting must be accomplished by 5/30/2022.
See the language:
PROPOSAL 6: APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS
General
Our Board of Directors has unanimously approved, and is seeking stockholder approval of, the Amended and Restated Certificate of Designations, which reflects amendments to the existing Certificate of Designations, Rights and Preferences of the Series A Preferred Stock (referred to herein as the “Certificate of Designations”). The Amended and Restated Certificate of Designations, a form of which is attached to this Proxy Statement as Appendix C, would amend the redemption provisions to provide that, among other things, the Series A Preferred Stock is redeemable by the Company (and not the holders of the Series A Preferred Stock). Our Board of Directors has unanimously determined that the amendment to the redemption provisions of the Certificate of Designations is in the best interests of the Company and our stockholders, and recommends that our stockholders approve the Amended and Restated Certificate of Designations. In accordance with the Delaware General Corporation Law, we are hereby seeking approval of the Amended and Restated Certificate of Designations by our stockholders. You are urged to read the actual text of the Amended and Restated Certificate of Designations, which is attached as Appendix C to this Proxy Statement and incorporated herein by reference.
The amendments to the Certificate of Designations set forth in the Amended and Restated Certificate of Designations include the matters listed below:
a.The definition of a “Change of Control Triggering Event” shall be modified such that a Change of Control Triggering Event shall occur upon (i) the acquisition by any person (other than Mr. Eberwein, any member of his family, or person or group controlled by Mr. Eberwein) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of stock of the Company entitling that person to exercise more than 50% of the total voting power of all stock of the Company; and (ii) following the closing of any transaction referred to in clause (i), neither the Company nor the acquiring or surviving entity has a class of common securities listed on an exchange.
b.The redemption provisions of the Certificate of Designations shall be modified to include a “Special Optional Redemption Right” for the Company. Following the occurrence of a Change of Control Triggering Event, the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control Triggering Event occurred, for cash at a redemption price per share of Series A Preferred Stock equal to (x) the liquidation preference per share of Series A Preferred Stock plus (y) an amount equal to all unpaid dividends on such share of Series A Preferred Stock accumulated from (but excluding) the date fixed for redemption.
c.Holders of Series A Preferred Stock will no longer have the option to require the Company to redeem their shares upon the occurrence of a Change of Control Triggering Event.
Other than as described herein, the Amended and Restated Certificate of Designations is not intended to modify the rights of existing holders of Series A Preferred Stock in any material respect. As of April 5, 2022, there were 1,915,637 shares of Series A Preferred Stock outstanding. As of April 5, 2022, Mr. Eberwein beneficially owned 1,289,772 shares of Series A Preferred Stock.
Under the Delaware General Corporation Law, our stockholders are not entitled to appraisal rights with respect to the Amended and Restated Certificate of Designations, and we will not independently provide stockholders with any such rights.
Reasons for the Amended and Restated Certificate of Designations and the Potential Effects
The holders of Series A Preferred Stock currently have the right to request a redemption of the Series A Preferred Stock in the event of a change of control. The Amended and Restated Certificate of Designations will remove that redemption right and thereby remove a significant risk to the Company’s ongoing ability to meet its operating cash needs and continue as a going concern. We believe that the removal of such risk would also provide the Company with greater flexibility to act with respect to offerings of the Company’s securities in circumstances which our Board of Directors believes would advance the interests of the Company and its stockholders, including, without limitation, opportunities to engage in public offerings or private placements of the Company’s common stock.
Effectiveness of the Amended and Restated Certificate of Designations
If the Amended and Restated Certificate of Designations is approved by our stockholders, it will become effective upon its filing with the Secretary of State of the State of Delaware, which filing is expected to occur promptly after stockholder approval of this Proposal 6. The text of the Amended and Restated Certificate of Designations, as attached to this proxy statement on
39
Appendix C, remains subject to modification to include such changes as may be required by the Secretary of State of the State of Delaware and as our Board of Directors deems necessary or advisable.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS (PROPOSAL 6).
Qurate Retail, Inc. Reports First Quarter 2022 Financial Results
https://seekingalpha.com/pr/18782088-qurate-retail-inc-reports-first-quarter-2022-financial-results?source=content_type%3Aall%7Cfirst_level_url%3Aportfolio%7Csection%3Aportfolio_content_unit%7Csection_asset%3ApressReleases%7Cline%3A1
Common, bonds and preferred all getting whacked. I bought back into a small amount of QRTEP at 63. High risk high reward bucket.
Why is QRTEP down 18% or so and QVCC and -D not getting equally killed?
QVCC and QVCD are bonds…higher in the corporate stack than the preferred.
I obviously think the preferred is a reasonable buy, down more than the common.
Forgive my financial ignorance, but where are preferred dividends accounted for in this 10-Q (or the 10-K back in February for that matter)?
a few places.
like this paragraph on I-29.
During the three months ended March 31, 2022, Qurate Retail’s primary sources of cash were net debt borrowings of $265 million and cash proceeds from dispositions of investments of $12 million, partially offset by capital expenditures of $43 million and dividends paid to noncontrolling interests of $14 million.
So pfd divs are classed in this case as ‘dividends paid to noncontrolling interests’?
in this case, yes, because Qurate has a bunch of subsidiaries, so it is possible that there would be a dividend paid would be paid to the parent company.
AHT-J an AHT-K incoming
https://www.sec.gov/Archives/edgar/data/1232582/000110465922056200/tm2213690-3_424b3.htm
Holy crap, look at those selling commissions…
NEW ISSUE
Sachem Capital Corp
Fixed Rate Senior Notes due 6/30/2027
Proposed symbol SCCF
$25 Million (subject to upsize)
BBB+ (Egan-Jones)
6.875% to 7% area
Stated Maturity: 5 years
No Call Provision: 2 years
Use of Proceeds: To make investments consistent with investment
objectives and for general corporate purposes
Here is the press release from Sachem Capital https://ir.sachemcapitalcorp.com/press-releases/detail/99
Thanks blue
Got it E–thank you
Thanks, E, blue, and Tim.
Here is the FWP for SCCF: 7.125% coupon.
https://www.sec.gov/Archives/edgar/data/0001682220/000110465922056779/tm2214746d1_fwp.htm
Thanks mbg
The big winners of the day were the ALIN-A,B,E. These are the Altera Infrastructure shippers that have suspended dividends since about one year ago. They were up ~ 34% to 41% to ~ 4.XX, so they have a long way to go to make it back to 25ish. They announced earnings yesterday and made a profit, which IIRC is unusual. I don’t follow them so have no opinion if they will ever be able to reinstate their dividends or not.
I unfortunately own one of them so I’m hoping that the parent company will make some kind of a half ass offer to redeem them. Not one of my better investment decisions. ☹️😟
ALIN was acquired by a profitable company and preferreds were spun off to make the deal more attractive. very sleazy tactic becoming all too common.
They’ve been fluctuating between $3 and $6. At such small numbers it doesn’t take much to generate a large percentage movement. I have a few hundred trading between them on price movement. Gains are small and infrequent with the wide spreads it’s hardly worth the trouble of watching them. Just enough to keep me from dumping them cheap.
Tex:
Big winner today so far is EBGEF; up 7%. I sold all mine today on the big jump higher. Have no idea what caused this bounce.
Want to personally thank @2whiteroses for recently mentioning this idea, as these kinds of quick capital gains on preferreds are few and far between in the current environment.
Meats and cheeses for all my good people!
Oh yeah, like I knew this was going to happen…. ha! but thanks…. What seems to be hidden (because there’s been no trades in the US) is that the comparative ENB preferred, EBBNF, is up even more on TSX.com. EBBNF – ENB.PF.U on tsx and it’s currently at 24.90, up 12.4%. EBGEF on tsx.com = ENB.PF.V and it’s currently at 23.00 +10.8%. Why????????? I haven’t a clue but you have to suspect there’s something happening…
They called Series J ENBBF on June 1, which strongly suggests they will call Series L EBBNF on Sept 1
https://www.enbridge.com/media-center/news/details?id=123720&lang=en
The outlook for a call of EBGEF in 2024 is much less certain, but I guess the odds improved
Good catch, 730. That explains alot……
Ya, gee, I wondered what was going on. I just recently toed in 700 shares at 22.40 range last week and dumped them all at $24.50. Might have left some meat on the plate, but I had EBBNF so its not guaranteed I guess.
Thanks for sharing. I’m long EBBNF
EBBNF is in pretty rarefied air. Start with 909 preferreds/babys/terms. Remove ones that did not trade >=$10 on both 12/31/21 and today (5/4/22). Remove suspended payout issues and convertibles. YTD return rank:
HMLP-A +13.2%
EBBNF +12.6%
And this is the same time period where high quality/low coupon preferreds were down -26.2% and all preferreds were down -7.9%.
So EBBNF was a gift from the preferred GODS today. . .
We had no positions and/or orders in any account for either security.
BRANFORD, Conn., May 05, 2022 (GLOBE NEWSWIRE) — Sachem Capital Corp. (SACH) today 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 “SCCF” 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.
Got it Fabrib–will post shortly
TPTA diving today, I’d guess as parent (private BDC) being acquired by Terra REIT (also private, I think), and sellers worried the BB will go on pink sheets??
Per QOL, maturity 6/26, call 6/23.
Press release: https://www.sec.gov/Archives/edgar/data/1674356/000110465922054155/tm2214138d1_ex99-1.htm
But what about this press release says pink sheets to you?
I had found that (and should have posted link, sorry), and agree, I saw nothing about pink sheets, so pure speculation on my part (thus the “??”). But it’s a just a press release, and from what I’ve seen lately, these changes to pink seem to catch people like me asleep, so wondering if that’s the concern that drove price down.
P.S. Good catch. Fidelity and seeking alpha have nothing.
Two different bonds.
TFSA and TPTA.
TFSA was issued by the BDC.
https://www.sec.gov/Archives/edgar/data/0001577134/000110465921012259/tm212707-9_424b1.htm
TPTA was issued by the REIT.
https://www.sec.gov/Archives/edgar/data/0001674356/000110465921077040/tm2112955-11_424b1.htm
and based on the market prices, it appears everyone thinks that this is a bailout and that the survivor will be weakened severely
An alert on KIMCO prefs KIM-L and KIM-M.
for me these issues are highly mispriced in the current environment.
KIMCO bonds that aren’t maturing anytime soon are heading toward the 2020 lows while KIMpL and KIMpM are trading at 5.36% yield pricing a probable call which is very unlikely for BBB- issues currently trading at 6%+. Objectively these could fall $1-$2 or more to price in the current market but I can also be wrong.
I am not sure if anyone observed that WFC-L (IG, non-callable) is down to $1200 for a yield of 6.25%. Looks like a good value even with general interest rates going up. You lock this kind of yield for as long as you want to keep this issue with little risk.
MFZ – Not trying to be snarky but I don’t understand your reasoning on what you say. Granted in general I have a bias against perpetuals in general (I do own a few) so that may be clouding my view, but in WFC-L you have a preferred that’s down 20% in absolute price on the year primarily because of rising interest rates, a trend which seems like it will be a continuing for awhile. And yet you describe L as “good value even with general interest rates going up.” and an issue “with little risk.”
I will assume you mean there’s very little credit risk associated with Wells Fargo, but beyond that If this year’s reversal of the direction of interest rates is any indicator of a continuing trend, then based on this year’s performance alone, I think WFC-L has been proven to be pretty pretty darn risky as a result of its noncallability and associated long duration… Then again, if the Fed’s strategy of raising interest rates aggressively ends up causing recession, then the rate trend could theoretically reverse and that long duration will work for you not against you. Is that what you’re saying?
2wr—I bought some WFC-L @ $1200 yesterday. Definitely don’t know where the bottom is, but my strategy is to add IG issues gradually as yields increase. I think there’s a decent chance that the Fed causes a recession and also that it can’t raise rates too high because the national debt has to be serviced. Consequently, I’m just taking small bites from the apple as yields go higher.
Thank you Randy- I share your thinking process for holding this issue long term. In the short term, I could be wrong; time will tell.
Thank you 2WR. Yes, I meant little credit risk. Although you raise good points, I feel that getting qualified 6.25% from fairly safe bank is not a bad long term investment. Of course if interest rates shoot MUCH higher from here, that would change this.
It’s not a loss unless you sell it. Unless you consider missing out on a better price to be a loss. 6.25% is a comparatively good rate for Qualified dividends. There are plenty of nonqualifieds in the 7’s with more risk. I’m gradually shifting from REIT prefs to bank prefs in taxable accounts as the spread narrows.
Wow perpetuals really get killed in this rising rate market. I really like the ‘too big to fail bank’, Wells Fargo but will wait till rates flatten and the 20 day moving average crosses the 50 day moving average. Thanks for the tip!
ATLCL @ 23.3, down 2.14 on 450 shares in pre-market trading.
We have no positions.
Tex- I don’t see any quote that low- it went neg 95¢, now – 44¢
Maybe %, not $ ?
Gary, the reason you do not see the 23.30 trades is that your data does NOT include pre-market trades. This is pretty common amongst data you see both from brokerage houses and/or websites. The 23.30 trades really did occur. If your brokerage has tick by tick aka “time and sales” data, it will show the trades @ ~ 8:34 AM New York Time.
So- it didn’t turnout so bad. After hrs and pre-market can be deceptive. Real-time looks better. But- I’ve traded both of those time periods.
thanks for the reason
Yes, I see it actually hit $23.20 @8:33am ET
Any idea why DDT spiked so much Friday? I might just dump it if no one has a rationale reason for it. It’s in my HSA so I can always get back in with no tax consequence. Thanks!
No clue but I sold my BANFP which is also up there for no good reason. It is also a trust preferred. Yet C-N, a trust preferred, with a higher yield is no where near as pricey. Maybe am impatient buyer of these leftover oddballs that have a terrible call risk?