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  1. Buy idea:

    LBRDP now at new lows at 27.16. Backed by large cap Liberty Broadband, yielding 6.44% and over 6% to call. Not callable until 2039 and goes ex this month.

    I bought today at 27.14-27.16.

      1. The ticker wasnt changed so long ago. It was GLIBP. I know that is not a 52 week low for it. They give false lows on ticker changes.

        1. Gridbird is correct. This preferred is from the old GCI Liberty now merged into Liberty Broadband. I can only surmise that the weakness is due to interest rates. Think this is a good buy here.

    1. Interesting idea. They issued convertible debt at 1.25% in November. That seems like an absurdly low rate from what I gather is an unrated company. What am I missing? If that’s reflective of their true cost of capital, then the preferreds are indeed a very good buy.

    1. And then there is this:

      “Telephone & Data Systems (NYSE:TDS) is jumping a bit, up 5.3%, as Citi says the smaller phone company could be an acquisition target for Dish Network (DISH +3.4%), which is working feverishly toward building a national 5G network to become a fourth U.S. wireless carrier.”

      Should have bought the common!

  2. GAINL down on high volume possibly pricing in a call. Anyone heard anything? GAIN just issued a bond at 5%, so I’d think the best they could do on a refi of a term preferred would be 5.75%, so don’t see how a call is economical.

    1. LL,
      With movement in rates and ex-divy coming up and large volume I think people that saw gains past couple months of more than they would get with the divided are trying to lock in the paper profit they have ( had ) and are rushing for the door. More sellers than buyers til it reaches equilibrium.
      Might overshoot . Just a guess.
      Could watch and make a quick flip ?

      1. I would think the movement in rates would decrease call risk, therefore increasing the appeal of GAINL.

        1. Heavy volume, wow a dumper. Screw it, give me cover, Landlord Im rushing in and bagged 700 at $25.13.

      1. Wonder what this will mean for ATH-D? QOL does not have any ” Change of Control ” clause, so it is possible that this issue will not be affected. Thoughts?

      1. .6 shares of MDLY. At current price of 6.65 that results in $3.99 for the $25 bonds if I under it correctly.

        1. Yes that is what is proposed for the conversion factor from MDLQ & MDLX to MDLY common if the holder votes to accept the Plan of Reorganization:

          “On the Effective Date, each holder of an Allowed Notes Claim shall receive: (i) if such holder votes to accept the Plan, 0.600 shares of newly-issued Class A Common Stock of MDLY for each $25 principal amount of 7.25% senior notes due 2024 (“2024 Notes”) and/or 6.875% senior notes due 2026 (“2026 Notes”) held by such holder”

          Less (0.45) if holder does not vote at all, and even less if holder votes NO on Plan *or* votes YES but opts out of 3rd Party Releases.

      1. 3rd !
        Saw the announcement for WTREP in my e-mail from Wed. Decided no reason to vote. Like Grid said they probably already have it done with behind the door agreements. Only thing left is government approval, France being one which might drag its feet so we get another qtr out of it. Kind of hoping it lives on though.

  3. A very strange end to the trading day for RCC which has only been trading for nine days. Before 3pm NYSE it was trading up to ~26.05. In the last one minute of trading a 407 thousand share block traded on the NYSE @ 26.59 in addition to many smaller lots. Pretty much had to be a large fund with that size, but the price action is NOT normal for large block trades. Normally large block trades are handled off market by professional traders and do NOT materially move the market. This one did. . .

    I have NO idea if the price will hold next week or not, but if you hold any shares you bought at IPO, you might consider flipping them for a few “tendies.” (Gotta keep up with the times. We no longer buy “steak dinners” with profits, we buy “chicken tenders” aka tendies, per the Wall Street Bets crowd.)

  4. Old faithful, stalwart and friend AFC finally called for 3/25. Will be very sorry to see it fact its buried so deep in the sock drawer that they might not actually be able to extract it

  5. For followers of HLM-

    Fitch Assigns Expected IDR of ‘BB-(EXP)’ to Hillman Solutions; Outlook Stable

    Wed 17 Feb, 2021 – 9:23 AM ET

    Fitch Ratings – Chicago – 17 Feb 2021: Fitch Ratings has assigned Hillman Solutions Corp. (HLMN) an Expected Long-Term Issuer Default Rating (IDR) of ‘BB-(EXP)’. The Rating Outlook is Stable. Fitch has also assigned an expected rating of ‘BB(EXP)’/’RR2(EXP)’ to The Hillman Group, Inc’s proposed $835 million senior secured term loan and $200 million senior secured delayed draw term loan.

    Fitch has assigned expected ratings in connection with the acquisition of HLMN by the special purpose acquisition company Landcadia III Holdings, Inc. HLMN plans to use proceeds from the transaction and a new credit facility to refinance its existing debt structure. The transaction is expected to be completed in 2Q2021.

    Fitch currently rates The Hillman Companies, Inc and The Hillman Group, Inc’s LT IDRs ‘CCC+’/Rating Watch Positive (RWP). Ratings for the existing first-lien secured term loan (B-/RR3) and senior unsecured bonds (CCC-/RR6) are also on RWP.

    1. 2WR, Here is another nickel stacker for you to monitor, STAG-C. Its down to the nitty gritty time as this thing will get redeemed. Pays March 31 and goes exD in couple weeks. So the divi is in the bag. I bought today at 25.34 to hide out for some small coin. They dragged the last redemption out almost an additional quarter, so its possible more blood could be squeezed out of the turnip. But its a goner…
      It’s something we’re evaluating. That piece of paper is callable in the next month or so. We’re looking at a variety of options as our prior preferreds were redeemed with equity. And both those redemptions were accretive with the equity redeemed, the preferred book. So, we’re looking at potentially redeeming it with common equity and also the other options. And, when we make a decision, certainly, that will be something that we announce publicly.
      John Massocca
      Do you feel like you have the ability to issue maybe fairly long duration debt or is that attractive?
      Ben Butcher
      Long duration debt today for us in private placement market is, call it, 275. So, that’s very accretive, if we were to redeem with that. If we redeemed, the preferred with our forward equity, that’s still outstanding that would still be accretive in deleveraging event in the eyes of a lot of our shareholders. So, again, there’s a lot of options here. And once we make a decision, we’ll make sure to let the market now.

      1. Thanks, Grid – This looks like it’s in a good range now for The Penny Picker Play. Nice buy…. STAG’s even got a BBB Fitch rating to boot with preferred = BB+, and a decent write-up last updated in May.. I’ve never looked into this one when STAG’s been mentioned here before, but I’ll probably give it a try on Monday if it stays here…. Remember your suggestion of BANC-D? That one never left enough pennies on the ground to pick up. just like most bank issues once they’re called.. I’ll be interested to see what happens to GAINM on Wednesday as I don’t think Mr. Market believes it’s getting called that early.

    1. QRTEP down to $98.50 on XD day.

      Debating if I should add a little more at this level. In 3 months, when the next div approaches, it should be back to $100 again.

    2. Yup, I sure know where that 7% increase in quarterly revenues came from…. On a positive note, I think our granddaughters know too as they’ve been beneficiaries of plenty plenty Mama Mancini’s (8)8-oz Beef or Turkey Meatloaf and Just Bagels NYC Kettle Boiled (24) 4oz. among other stuff….

      Inspy I was debating the same thing on adding at 98.5-ish… It’s one of those days where ThinkOrSwim hasn’t picked up the x-div pricing, so I’ve got QRTEP being down on the day when it’s actually up. Same thing with TCBIP. Sometimes they incorporate x-div sometimes they don’t.

      1. 2WR and Inspy, its a beautiful issue in terms of yield, protections, and term date. But…The company has got to perform or the above means squat.
        Come Q2 this summer the comps are gonna get tough. And Covid could be in retreat. And QVC was in retreat prior to Covid. Does the company have enough hooks in the arms from Covid to stay on firm footing going forward? That is the question. But they just gotta be good enough to pay me to 2031 hopefully.

        1. But even though COVID may be in retreat, would folks start to crowd the malls once again? Or would be convenience of Home Delivery continue to attract?

          In the circles that I associate with, the feeling is that even if Covid were to be a low or no concern, habits they have picked up over the last year can be quite ingrained. But the crowd I hang around with tend to be in the 60 year old fogies, so might not be representative of the general population..

          1. Malls were already out f style. Strip shopping centers with an anchor store are in. Will people go back to them? or did they never really leave?

          2. Inspy, I dont think its a mall issue, as malls were in decline with QVC at the same time. The key is their goal of moving sales on to the internet through Zillow and such and quit relying on the old lady in her leopard print outfit buying from the tv. And of course there are other online competitors out there, too.
            I dont even freakin know where the QVC channel is on my tv. So all I know is the aerial view.
            Rob, Sorry I just have never looked at it seriously. I lusted too much over the then purchased 9% QDI with a term date on QRTEP. And at this point I cant put a penny more into this outfit in any issue.

              1. 2WR, Ha, lol, ya wrong website, thanks for the correction.Thats the real estate web site …Way off base, no leopard prints for sale there! Needless to say I havent been on Zulily either. But I have been on Zillow. 🙂

        2. Grid:

          Do you ever look at the QVCD 6.375% baby bond? I have been trying to buy it well below $25, but no luck yet. Obviously higher in the capital stack.

          Thought I might get some today after the ex-div day sell-off, but I wasn’t aggressive enough.

        3. Try restaurant franchiser FAT Brands preferred shares (FATBP) to balance any pandemic related positions you’re holding. Monthly payer, 8.25% coupon, and currently trading at a 20% discount to par value. As the Covid pandemic eases more folks will be going out to eat, and the fast casual restaurant franchises FAT Brands controls should benefit.

          1. CW, piqued my curiosity, Quantum says it’s units are issued with 5 warrants – can you offer a primer on what that means?

            1. There’s no connection with the FAT preferred shares that I’m aware of D, other than a shared IPO date. The FAT warrants trade independently under ticker FATBW.

              1. CW, took a look too as its a play on the economy opening back up. Think I will pass. A company that reported losing money 3 yrs in a row even before Covid shut down ? besides this preferred they did 2 private placing of preferred that don’t show because it was a private placement. For a micro cap stock their debt to equity is too high. 59 million of debt to 141 million in stock value on top of which they pay a dividend on the common in stock, not cash which is increasing the float. On top of this they are merging with Fog Cutter capitol which owns 81% of the stock probably because this is the BDC loaning them the money to operate.
                Makes me concerned no one is going to be looking out for the preferred share holders interest.
                I think there might be better places to get 8 or 9% with less risk

                1. FAT has some work to do. Their interest payments are higher than their operating income. In a time frame that lenders are giving out free money or low interest rates, they are paying us over 8%?

                  So my money won’t be going here. I would say they need to exercise some more and lose some FAT. I am surprised this is not an investment idea for Rida Moron on SA.

  6. Bluerock Residential, BRG-A, called 2/26/2021 at $25.00 plus dividend.

    Hersha Hospitality states that they plan to pay suspended dividends by the end of the first quarter.

  7. Full Call on GEO Group bonds:

    CUSIP: 36159RAK9
    Description: GEO GROUP INC NOTE 5.87500% 01/15/2022
    Rate: 5.875%

    Call date is March 26.

    1. I hold some of those on the dodgier side of my portfolio town.

      Good week for me if they are paying them off!

  8. IPLDP is trading ex-div today and is on sale. At last look a 4000+ share block being aggressively unloaded. Picked up 400 at 25.13. Past call, QDI, current yield 5%+, BBB

  9. UZD trading Exdiv today around 25.11 -25.30 United States Cellular Corporation Senior Notes

    1. UZD at 25.10 v TDI at 24.93

      According to my math:
      1. Stripped yield –> TDI = 7.02% v. UZD = 6.22%
      TDI goes -ex around March 11
      3. Ratings –> TDI = Ba2/BB v. UZD = Ba1/BB.
      Ba1 slightly better than Ba2.

      1. UZA (7% par) was available at 25.37 this morning which effectively was below par since it goes exD in two weeks. I couldnt do anything because I bought up a bunch earlier this month at $25.41-42.

    2. Qx, My mentality is for now, call protection doesnt mean much. I rolled out of my TDE for pennies profit on a recent trade and rolled it into TDJ that goes exD in 2 weeks. Squeeze more yield to protect the capital. So basically you are buying a 7% BB paper under par. That has more backside price support if rates continue to rise. In rising rate era one needs to consider counter intuitive plays. Disregard call protection and seek backside price support issues in ones that have above market yield to serve as a buffer for rising rates.

      1. Thanks Grid. I greatly appreciate your input, I’ll check out TDJ looks like a good swap. I like that it goes exD in a couple weeks. I’m assuming I should stay in that 25.30-40 range with TDJ? I purchased UZD when it IPO’d in August and I’m still in the money as of today not including distributions. I really don’t need call protection either. I have been rolling out of some of these under %5.5 I.G. call protected issues since mid December.

        1. QX, Its pretty much just laying there for the taking at $25.30 as volume has been big at that price. You get a 43.75 cent interest payment at exD in a couple weeks. I dont know if you can birddog lower some or not. I didnt try being I wanted a quick direct rollover from TDE to TDJ.

          1. Grid thanks again, don’t now what I would do without you and everybody contributing to III. Maybe someday I will have something to post that may help somebody on this site?

            1. QX, If rates start bouncing upwards it may prove beneficial to have a list of similar issues of same type quality, yield etc. and watch for quick price discrepancies. This has happened several times in recent history. But they really need to be very similar to know if you are getting deals or not. 10 yr actually spiked above 1.61% earlier in day.
              Some of those SA PSA buyers who swear all the PSA issues are 5 year term dated issues, are gonna get an “edgukation” if 10 year goes to 2% and their 3.9% perpetuals sink to $20 or less, only to find out they are perpetual.

              1. Agree, Grid. I love those PSA issues but always have to be aware that you can be stuck with them for a long time if rates rise (maybe keep some dry powder and buy it when the price settles lower, so you just use it as a sock drawer yield issue). but your larger point is really crucial now about taking decent quality issues with a higher coupon because they will hold up better in a rising or high yield environment.

                1. Franklin, I need to get over my hatred for the preferred owner assassin mentality they have on owners. Their last 6% coupon was issued in a 2.6% environment 7 years ago. That would be my ideal mark to hit, but that may be too aggressive this year. But I will at least add the low yielding ones on my track list to follow the “pain trade” and see if anyone breaks down the road and capitulates a dump.

              2. If our crazy price increases in our window business are any indication.I’m not at all shocked by the increase in rates. After some of Powell’s comments not sure if he is crazy or?? Again thanks if it wasn’t for you and this site I would still be fully invested in way to many I.G. issues

                1. QX, Its an exchange of ideas here, but none of us are Nostradamus here. If we were we would be working for HDO making big money, ha. The key is you having a plan and one that you are comfortable with. Every strategy will have its plusses and minuses.

  10. RCP baby bond being called for March 26 – they are not waiting until the maturity date of April 30:

    NEW YORK , Feb. 24, 2021 /PRNewswire/ — Ready Capital Corporation (NYSE: RC) (” Ready Capital ” or the “Company”) today announced its intention to redeem all of its outstanding 6.50% Senior Notes due 2021 (CUSIP No. 75574U 309) (the “Notes”), pursuant to its option under the Indenture, dated as of August 9, 2017 (as amended from time to time, the “Base Indenture”), by and between the Company and U.S. Bank National Association , as trustee (the “Trustee”), as amended and supplemented by Supplemental Indenture No. 2, dated as of April 27, 2018 , by and between the Company and the Trustee. As of the date hereof, there was $50,000,000 aggregate principal amount of the Notes outstanding.
    The redemption date is March 26, 2021 (the “Redemption Date”), and the redemption price is equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon, to, but excluding, the Redemption Date, in accordance with the terms of the Notes.

    1. The current RCP price is 25.22 I’m not sure how much but probably smaller dividend if redeemed 1 month early and a loss on price.

        1. Thanks for the calculation. So if anyone can pickup 500 shares at today’s closing price the can eat at Wendeys.

          1. But they could order a few extra burgers than they might have been able to if the money was left just sitting in a money market fund.. 25.22 is still too high though – not enough pennies to pick up imho.

  11. LMICL – Just a general musing: I wonder why there’s been no call announcement made on this one? It was part of the plan right from the beginning of BEN acquiring LM for these and LMIBL to be called in upon first available call dates. They raised the money to do so on 10/16/20 [] and to call them on 3/15, they needed 30 days notice. Yet here they are still uncalled…

      1. mcg – I don’t doubt you for a second and am glad to find out all is as planned, but wonder where you see it? I can’t find anything on EDGAR nor on BEN IR news releases….

        1. I see it at DTC. I’m not entirely sure they’re required to make a public notice of redemption for this. They *may* have delivered it to the shareholders of record (ie your broker)

          1. Interesting…….. Can’t say I’ve ever come across this before… I sold out my LMICL in January at above what could be had on 3/15 so I don’ know if shareholders at Fidelity were notified, but thanks for the info….. will have to check out how to research stuff like this at DTC – I’ve never thought of that as an avenue for good info. Thanks mcg

            1. I’ve definitely seen it happen but can’t recall what symbol. DTC is usually only accessible if you’re a broker dealer fwiw

  12. Golar LNG Partners LP announces that at a special meeting held today, the holders of common units representing limited partner interests of Golar LNG Partners LP (Nasdaq: GMLP) (“GMLP”) voted on and approved the Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 13, 2021, by and among GMLP, Golar GP LLC, New Fortress Energy Inc. (“NFE”), Lobos Acquisition LLC and NFE International Holdings Limited, and the merger contemplated thereby (the “Merger”). Pursuant to the Merger Agreement NFE has agreed to acquire all of the outstanding common units and general partner units of GMLP for $3.55 per unit in cash.

    1. Quite a discussion on SA about this one. I have a small amount in GLOP-b that’ still under water, so have an interest will follow it.

  13. There’s been quite a bit of weakness in the REXR preferreds lately and I’m not sure why. Their earnings call on February 12 seemed like a good call with them increasing their dividend. Seems like a good buy, especially REXR-A, if it does get called on 8/16/21

    1. good call. i’ll likely buy some tomorrow

      there are a few of these preferreds with higher yields you’d think get paid off this spring/summer. if they do you earn 2-3%. if they don’t you own something yielding high 5’s going fwd.

    2. I held one of their issues for a long time and it always traded weaker than I thought it should.

      Bot sure why.

  14. New Issue Texas Capital Preferred (TCBI)
    Size: $150mm (6mm $25 par securities)
    Expected Ratings: Ba2 (Stable) / B+ (Stable) (*)
    Price Guidance: 5.625-5.75% (fixed for life)
    DRD/QDI Eligible: Yes

      1. Texas Capital Bancshares, Inc. intends to use the net proceeds of the offering for general corporate purposes. Texas Capital Bancshares, Inc. intends to also use a portion of the net proceeds from the offering, together with cash on hand, to redeem, in whole or in part and subject to receipt of all applicable regulatory approvals, its 6.50% non-cumulative perpetual preferred stock, series A (“Series A Preferred Stock”).

        1. Quantum Online has the new series B details here.

          according to QOL:
          This security was rated as Ba2 by Moody’s and B+ by S&P at the date of its IPO.

          They started trading OTC under the ticker TCBLL on 3/5/21.
          Will move to Nasdaq and be listed as TCBIO within 30 days.
          5.75%, not callable until 6/15/2026 and QDI.
          (trades on 3/5 are listed here):

          I’m actively considering this for my first ever preferred share purchase – would greatly appreciate any inputs from the experts in this group. Thank you all in advance!

    1. J – Many thanks for your post. I managed to unload much of what I own at 25.27 at the opening…. Yay to the III crowd!

  15. If you are asleep at the wheel, and not looking at anything with potential call dates within 1 year… you will probably lose all the cap gains done this past year. Some investors are getting slapped this week with more calls. I am glad my GAINM hit my sell limit. I was greedy and my limit was kind of high, but glad that it hit.

  16. AFC – gone

    The undersigned here notifies the Securities and Exchange Commission (the “Commission”) that it intends to redeem securities of which it is the issuer (as successor by merger of Allied Capital Corporation), as set forth below in accordance with the requirements of Rule 23c-2 under the Investment Company Act of 1940, as amended.

    (1) Title of the class of securities of Ares Capital Corporation (the “Company”) to be redeemed:

    6.875% Notes due April 15, 2047 (CUSIP: 01903Q207) (the “Notes”).

    (2) Date on which the securities are to be redeemed:

    The Notes will be redeemed on March 25, 2021 (the “Redemption Date”).

      1. If I understand the prospectus correctly, G and H can only be called on dividend payment dates – so not until June 1. Also not more than 60 days notice, so no official call announcement before April 1. So if that Is correct, you get at least one dividend.

  17. Any other lucky Medley note owner have their MDLX most recent interest payment clawed back yesterday?

    1. This will be interesting to see what transpires. TDS has a lot of cap ex this year, and yet relative high yield debt also. Very possible this is just a capital raise. Child US Cellular issued a low 5.5% baby bond, but apparently it will not replace any older baby bond debt. Management said the 5.5% debt raise was just sitting in their balance sheet waiting to be spent on cap ex this year.

    1. McLEAN, VA / ACCESSWIRE / February 23, 2021 / Gladstone Investment Corporation (GAINM) (NASDAQ:GAIN) (the “Company”) today announced that it plans to make a public offering of Notes due 2026 (the “Notes”). The Company expects to list the Notes on the Nasdaq Global Select Market under the trading symbol “GAINN” within 30 days of issuance. Janney Montgomery Scott LLC, BTIG, LLC, B. Riley Securities, Inc., Ladenburg Thalmann & Co. Inc., and Oppenheimer & Co. Inc. are acting as joint book-running managers for this offering. Wedbush Securities Inc. is acting as co-manager for this offering.
      The Company intends to use the net proceeds from this offering to redeem all of its outstanding 6.25% Series D Cumulative Term Preferred Stock due 2023, to repay a portion of the amount outstanding under its revolving credit facility, to fund new investment opportunities, and for other general corporate purposes.

  18. Anyone playing with ABR preferreds especially the A and C series need to know management is totally asleep on these. The A and C have been a lot better alpha traders than B, but the call risk sting is higher. When they publicly yack about looking at them, especially when they say 6 handle (Im not convinced of that, but whatever) that is when I move on. B at right price is not really exposed being under next divi.

    …..Sure. So let me handle the preferred side. You’re a 100%, right, Matt. It is callable. The preferred, it was – it had a core protection. That core protection has expired. It’s only $90 million, but it is callable, is trading at a coupon above eight. I’ve been looking at the market it’s possible to introduce a new instrument like that and maybe in the sixes, maybe even better as things starting to tighten.
    And there’s another area as well, right. There’s an orb here. Right now our dividend yield is still higher than we want it to be. And we think we’re undervalued. And if we were able to get a premium value at some point, there’s also an orb on taking that out with equity, if the dividend yield is inside of that. But right now we’re just – we’re looking at that it’s very small. We’ll continue to manage that. It won’t have a massive impact on our cost of funds, but it is something we are watching.

    1. I do play them, but the volume is very low, so not as much as I would like. One needs the patience of Grid to play with these!

    2. Grid,

      – What does he mean by ‘core protection’?
      – Also, what does he mean by ‘orb’?

    3. Bur, I suspect management isnt too versed with preferred terminology, ha. What he means is all of the preferreds are past call now and have no owner “protection” from a redemption notice. The orb I suspect means he doesnt want to redeem the preferreds by issuing common stock to pay for them as he feels the common stock is still undervalued. So he doesnt want to dilute shareholders at this price.
      Reading between the lines it sounds like he would just rather redeem with equity if price of common would rise more instead of reissuing a small new series to replace all of the preferreds. It sure looks if and when they get redeemed they all could get served a notice at the same time.

      1. Grid,
        You do have the patience to accumulate these with the low volume, but I see what you mean.
        They have a repeating pattern of popping up on price just before the ex-divy date then dropping. Since they just went ex- I suppose you could hold for the next 3 months or try for a low entry point 30 days out.

        1. Charles many a time I wait until about half way through the divi cycle then buy then flip pre exD for generally an easy 75 cent to dollar flip as they always over cook going into exD.
          Being more desperate for higher past call yield, I actually bought ABR-C this time in 25.70s a week or so ago when it was below ABR-A even. But after reading CC Friday sold out for 20 cents. I may play the B later in cycle, but no hurry. When they start saying they are “thinking about” and know a range number it can be reissued at, I dont play there anymore, even if they arent definitively serious.

            1. Bur, I always play in past call above market yield issues, but I have never lost a penny from a call, and I wont end the streak on one that has actually researched redemption and is thinking about it. Like I mentioned, I may revisit B if price is under par plus next divi, but am not in any hurry on this one as B has always been more of a flat tire compared to A and C.

          1. Grid, there is a whole range of preferred’s going x-divy over the next 3 weeks.
            As you say, you can make more in the run up than holding to collect the dividend. I have played in this sandbox also, but once in a while you get caught with a small loss. I like stocks with larger volumes which shows people have more interest in following. I admit I am also looking for safety in some long term holds for the sock drawer but as Tim pointed out if those get ridiculous overly priced take the profit and come back later to pick them up. I like your IPLDP but should of sold over 26 and in past 5yrs been several entry points below 25

            1. Charles, sometimes there is a spike then drop before going exD. I try to go either before the run up or after the drop if it occurs pre exD. Sometimes its better to sell right before exD and others right after exD. But its always good to buy issues one is comfortable holding if things dont go your way. Not all issues are suitable for an exD play either, or market conditions can negate it also.
              I personally have always sold IPlDP whenever it goes over $26 if I owned it during that cycle. I recently just reentered a small position, not under any illusion of gains, just a counter balance best relative value option play, as I am leaning a lot on the other side of the yield ship. I try to at least feign interest in some safer ones to keep some credit balance in order now.

      2. I haven’t listened to the audio, but am pretty sure “core protection” = “call protection” and “orb” = “arb” (arbitrage)

  19. NEE down today more than 4% and NEE-Q down almost 3% to below $50, where it started the year. It got to >$56 in Jan (when I sold some) , and now back to around $49.7.

    What happened? Is it a good oportunity to buy NEE-Q, or a falling knife?

    1. Why not just go for NEE-K the regular preferred trading 25.4x with 2 dividends left till callable?

      Much simpler than having to deal with complex conversion for the NEE-Q?

    1. Sad/Not sad to see the PBCT news. I had it as a yield stock but it turned into a growth stock. With the bump today I exited so nice capital gains and the hunt for yield continues.

      1. Franklin, I have a similar take. Only have a small 250 share position in a taxable account for qualified dividend. Has basically flat lined before this bump since purchase. Now we can pick and choose when to “take a gain” not necessarily my original intent but can handle that scenario. M&T looks like a decent alternative for a conservative growth stock never considered in the past, USB preferred’s are much larger holdings in the banking area, also got a small position of BNS around 5% yield has tracked MTB real close over last 5 years. Up north so its best in a retirement accounts.

    2. How are people dealing with rising interest rate concerns? i.e. if we buy more preferred issues and bonds, then these are very likely to loose value in a rising interest rate environment. Yet that I’ve seen, not much comment on this site about this. Rather continued picking and buying of this class of assets. Interest in why you continue to buy? I understand that the range of choices is not great but still a major concern for me at least. TIA

      1. Interesting question, sc… I see your point on how assumptions change in a rising interest rate environment, but it’s an awfully broad brush view to lump all preferreds and bonds together into a single category and say they all will lose value in a rising interest rate environment…. There are ways to minimize risk of principal value within the field and even more ways if you’re willing to play with options or ETFs designed for rising interest rates instead of declining ones (which I should do but don’t)…. For example, it’s this environment now when buying high coupon issues that are “pinned to par” where callability enters the pricing becomes a good way to limit your downside risk… And of course, you can focus on bonds with shorter maturities or term perferreds as opposed to long maturities or perpetuals. That minimizes price deterioration and also allows for a mentality of knowing that if you hold your positions to maturity, you will have not lost anything and at the very least you’ll have achieved the ytm you set out to achieve in the first place.. if you bot at a good price, you may see your paper profit disappear, but you’re not subject to permanent loss should interest rates be starting a new direction toward higher permanently. That of course, can’t be said for any perpetual preferred you might have. Assuming no credit phenomenon, you’ll still receive your normal periodic income on perpetuals as opposed to issues with maturities, but your principal could be permanently impaired… So those are some thoughts… Why stay in the space??? Well, if it’s what you know, it’s what you know and you tend to stick with it while dabbling in other areas as well.

        1. I have been targeting securities with with fixed rates and shorter maturities (i.e., 5 years or less).

        2. Well said 2WR. Picking ones that “should” be called within a year or 2, illiquids, and junkier ones with higher coupons, etc, is where I am hanging out.

          1. Mr. C, not only should be called issues in a year or two but also “why the hell havent they been called” right now issues. I fight for every nickel. Heck I was actually up yesterday a trivial amount and am up nicely for the week (Thank you, illiquids).

  20. i see glop got a take private offer. I would think that might make their pref stocks trade up today. Not callable so it will be interesting to see
    what happens to these
    GLOP-a,b and c preffered

  21. New post detailing how the IRS is backed up. My suggestion is that you send any snail mail as registered with a return receipt. Hope your IRS dealings go smoothly.

    From the Propublica post:

    As of Jan. 29, the agency still hadn’t processed 6.7 million individual returns for the 2019 tax year.

    . . .

    The most common situation, according to tax preparers and attorneys, occurs when either a check is cashed but doesn’t get applied to the taxpayer’s account, or a return is processed while the check sits unopened in a separate pile of mail.

    1. Tex, I will do my best to help the IRS in their hour of need. I will delay and wait until April 13 to send my cap gains tax payment owed to them. Hopefully that will help them some. Its the least I can do in repayment for them not sending me a penny of helicopter money.

      1. The helicopter seems to have missed me, too. The wife and I were thinking of dropping in on Joe later today, to ask him about it, but I think he’s in DC this weekend.

    2. Tex the 2nd, Thanks for the {IRS cashed her check link:} I’ve experienced a similar type problem unable to resolve. Finally got a live IRS person on the phone, asked me to send a signed duplicate copy of my 2019 return which was filled early last year, even though my check was cashed last Feb. My wife & I received the first stimulus via direct deposit. Since then it is obvious all hell broke lose. She got a debit card on second stimulus I got nothing, we file a joint return both on SS? no rhyme or reason checked “get my payment” for weeks not enough information etc. etc. then finally tried the call. Filed my own taxes for 50 years on “paper returns” never had an audit or other problem. Been debating filing for an extension? even though i’m ready to go, til some of these backlog issues are resolved. If there is a “third stimulus” I’m positive it will only complicate my issue further. At least this article indicates I’m not the Lone Ranger. This whole helicopter money scheme’s got the world screwed up.

      1. I guess my 2019 tax return is still in the stack of 6.7 million returns waiting to be processed. I have talked to two live bodies over the past few months and have been told to sit tight and not send in another return. I am due a refund for 2019 which I wanted carried over into 2020.

    3. GasLog Ltd. (NYSE:GLOG) +25.1% pre-market after BlackRock’s (NYSE:BLK) Global Energy & Power Infrastructure team agrees to acquire the company for $5.80/share.
      The price represents a 17% premium to GasLog’s Feb. 19 closing price and a 22% premium to GasLog’s volume weighted average share price over the last 30 days.
      GasLog’s preference shares as well as GasLog Partners’ (NYSE:GLOP) common and preference units are not affected.
      GasLog also reports better than forecast Q4 earnings and revenues.

    4. I’ve been doing my return on paper for 50 years. This year, IRS has an online fill in forms for free no matter how much income. Doesn’t do all the calculations, but covers all but the most complicated forms. When finished, you can file it online as part of the process. Get return email within minutes verifying they received your return and if a refund, you can track it there.

      1. bogie free round, i’m looking as soon as i ‘m done typing if I can’t find would really appreciate the the link to the site if you can supply. thanks a bunch!
        I’m all done just waiting on forms but this could make life much easier Thanks again.

        1. Mike, go to, click on box, file your taxes for free, click the link for over 75,000 income file for free and then your ready to go. Really good deal.

          1. I looked at it, but you better have everything correct first try- no do-overs. You can use the IRS one, rather than the sponsored ones.
            Besides, the gov’t seems to get hacked frequently- I did mine on Sat, and sent by USPS with a return receipt.
            Still no $600 ck from Dec even though all my info is in their files, plus SS bank deposit- so had to claim it. Probably faster. Now the wait for the $1400. Last year’s payments were stopped a couple weeks ago- in case you haven’t gotten any due.
            Not sure everyone knows about this IRS site, but might not be any help:

    5. Mailed the IRS a check on Dec 1st – they have yet to cash it. Called today as 90 days is coming up on last correspondence. After a 75 minute phone hold, I was told to call back at end of March. Oy vey!

      1. talk dollars, IRS has a pay taxes by bank debit on their website. You get documentation that they received it, so no wondering if they got it or posted it wrong.

  22. Hi all

    Feb 18 2021
    American Century launched two funds covering preferred and convertible securities spaces – QPFF and QCON respectively. Each fund has an ER of 0.32%

    Not being anywhere as knowledgeable about individual preferred securities as all of you , I’d like to ask for your advice on buying QPFF. I’ll read the prospectus of course, but would appreciate this group’s inputs. Are there other preferred funds with a good track record (and a lower ER) ?

    Thank you all in advance.

    1. katnrica …….

      On any preferred fund you consider (any fund actually) the prospectus is fine to read but go to the sponsor’s website and look at the holdings and ask yourself if those are issues you’d be happy to own? No need to go through them all, just the top ten and perhaps not all of those.

      This is what I see, and it speaks to the inherent problems of funds, especially in an over valued market. Among the top ten you have:

      USB-M – the 6.50% coupon looks great until you consider that this resets to 3mL+446 or 4.464% in less than a year and the YTC is 1.8%.

      C-J – 7.125% coupon but resets to 4.22% and YTC 3.8%

      C-K – 6.75% coupon resetting to 4.31% and YTC of 4.0%.

      Each issue is, in my opinion, overpriced given the reset rate and YTC. Individually, I would not be a buyer of any of these issues at present prices.

      6 of the 7 remaining top 10 are converts and 1 is a money market fund. Most converts are effectively equity bets, so you’re buying common pretending to be preferred.

      And this is the problem with most preferred funds today: they are loaded up with overpriced issues that are going to reset lower (often much lower) and have low YTC. There is great downward price biased built in. It’s a tough time to be buying a fund.

      Buying individual issues is a better way to go but requires that you have the time, the inclination, and the math skills. Buying fixed income is very much an exercise in math.

      If you want to stick with funds I would urge waiting for a better buying point. They do come along. You may need to wait with “idle” cash between now and then but if you wait a couple years to buy funds at much lower prices you more than make up for the lost income.

      My favorite way to do fund preferred is with CEFs. FPF and FFC are my favorites JUST NOT NOW. Last March was perfect but that horse has left the gate. But it will come back.

      1. Thank you *so* very much, Bob!
        That is an excellent analysis and I”m sure glad I asked for advice here.
        I’ll take your recommendation and continue to lurk here looking for better opportunities in individual preferreds.
        A fair amount of dry powder looking for higher yields, which makes the wait more painful.
        Thank you again for your detailed reply; it is very much appreciated!

    2. Most preferred funds dont do much analysis they are essentially index preferred funds with a higher fee than index funds. And some are forced to trade at the worst possible times. The ones you mention may be more discriminating but you’re probably better off just buying their holdings if that’s what you want. Or better yet, invest a little time and eliminate the holdings you don’t want. Since there’s no commission any more we can build our own mutual funds.

      1. QCON is convertible securities, very different than preferred stocks. They tend to go up or down with the tide.

  23. T.PC trading under par
    Maybe one to watch as rates climb
    Sock drawer issue?

    Low rating (but the company is not going anywhere)
    Qualified dividend
    Long call protection (irrelevant if interest rates climb)
    Low chance of payments suspension as the common yields >7%, that would get cut first.

    Full Disclosure: I have a Full position in T and T.PC
    (but not too proud of it)

    1. Riley is basking in the glow of his BW deal and looking to repeat. I have always been uneasy with Rily but may take a 2nd look.

        1. WRB-H is available on the investor TDA site now, as are the two new American Century ETFs, QCON and QPFF ( the E>R> is .32% for each of these ETF’s ).

      1. Sure no problem MBG. Mark, I bought it at Wellstrade (Wells Fargo bank’s brokerage service).

    1. This was the day I was waiting for, 56% yield on D at 2.9 and not even a year out from my purchase date. Still below par for those looking to pick up div in arrears. This is why I have a cumulative bias. Just hope I don’t lose it all on the Ashford pfd

      1. Dufus: Never owned an issue with suspended dividends, but always wondered how it works. So the accumulated unpaid dividends all go to the current holder, not the person who owned the issue when the first dividend was suspended ?

        1. Whoever is the owner of record when the back divis are declared gets ALL of them.

          PCG-A is an example. Baked into the price are the 13(?) accrued divis that hopefully will come before the next PVG bankruptcy.

            1. Bill That only applies to issues that are CUMULATIVE where they add up, if the issue is non-cumulative there are no back dividends once they re-instate them.

              1. Dufus; Yes, I was looking through some issues and noticed none of the banks are cumulative, but seems there are a fair number of non-banks that are cumulative, so one could probably only buy better quality issues that are cumulative for a bit more safety whenever possible.

                1. Nearly all bank, insurance and most non-bank financials are non-cumulative. But there are exceptions so check the prospectus if in doubt. Don;t depend on secondary sources to always be right.

                  In your original question you speak of “accumulated unpaid dividends”. That term, by definition, means a cumulative dividend. Non-cumulative issues will use terms lie “will not accumulate” or “does not accumulate” in the prospectus.

          1. THAT is why you may NOT want to rest with some form of security on the concept of ‘cumulative’. It may become translated as “speculative”.
            Got Guts?

            1. Joel – if one only buys cumulative stocks that rules out the entire universe of common stocks (units, etc.). Sticking only to cumulative stocks and “safe” bonds isn’t going to get you much return.

              1. Bob, That’s exactly what I am saying. Not many people have the guts to hang thru some workout for an eventual release of cumulative divs, so it is kind of a meaningless weight on the scale of consideration at purchase time. I suppose it does have some pressure on management decisions and rating agencies though if there is going to be a catch-up provision out of available capital someday. It certainly has no effect on a bankruptcy/reorg judge’s or banking regulator’s decisions.
                If there is a spec available AFTER a washout, then the cumulative has meaning; as someone mentioned here: 16 divs accumulated at a MUCH lower entry. BLAM. Still gotta have guts. That’s a spec.
                I am sure there is an art to following these.
                PS: Canuckialand has got my mind torqued! Watching ZPR as a proxy-index for almost a year, I don’t think there has even been one or two skinny percentage drawdowns on prices. I am running with no stops in place right now.

                1. ZPR has been straight up since March. Has more than doubled in CAD and added another 12% or so due to exchange.

                  There are options on ZPR so I might look into those.

      2. The Hersha presentation states they “have the flexibility” to pay accumulated preferred dividends. It does not say if / when they will make payment. How can you be confident the past due preferred dividends will be paid near term?

        1. You’re correct that it doesn’t state a specific date, but from listening to past conference calls they also stated that they would this year. I’ve followed for a while and purposely purchased some of their lower stated yield preferred to try and assure that it’s not he first called. That was a lesson learned from the last big dive in I think 08 when looking at it from solely an income perspective

        2. Hersha has been responsible throughout COVID. Suspending the dividend was prudent. The risk of bankruptcy is gone to my thinking, the dividend will be reinstated, and it is cumulative. I own HT preferred, bought after the suspension, and I’m fine to wait. I expect to be paid the back divis from HT before I see anything from PCG.

          Now, if we were talking AHT I would be saying different things.

    2. “Finally we meet again”

      (Reuters) – A blank-check firm, backed by AmTrust Financial Services Chief Executive Officer Barry Zyskind, is looking to raise $300 million through an initial public offering, a regulatory filing showed on Friday.
      Pine Technology Acquisition Corp said it plans to sell 30 million units, made up of shares and warrants, priced at $10 per share on the Nasdaq Capital Market.

      1. Investing in a blank check company is hitching yourself to the sponsor. The AmTrust bunch, which certainly includes Zyskind, isn’t worth my trust. They will screw over shareholders in a New York minute. Do your homework on this one.

    3. In this release they stated the capital restructuring enables them to restart the preferred dividends, just a tease.

      However, Hersha released earnings after the market closed today. In the press release they did not state they are reinstating the cumulative, preferred dividends. However, in the presentation they posted they were explicit. Look at page 9. Proceeds “will be used . . pay the accrued”

      I have been buying and might add some more. Curious what it will do once they make it official?

      1. Prompted by the comments on this site, I did some research over the weekend and bought a slug of HT-D and -E yesterday. More important than the comment on page 9 was the Pro Forma application of proceeds on page 10. Doesn’t get any more clear than that.

        My guess is that they are staying slightly cautious in not mentioning it in the earnings report as they would typically not declare dividends until early March. So maybe they are still calling this a “wait and see” decision. There will be an earnings call tomorrow morning and I would guess it gets discussed.

        What happens after dividends are re-started? I think all the series’s prices will quickly move up close to par + accrued.

        1. Hersha said on the call this morning that preferred dividends will be resumed by end of this quarter. I would expect the dividend declaration within the next 2 weeks.

          I see no reason these won’t trade near par after dividend resumption, which means all series are worth close to $27. They are up a bit higher this morning, but still a lot of upside for anyone who also thinks they will trade at par soon.

          1. KC:

            Why would the HT preferreds trade at $25+ (after dividend resumption) when hotel REITs with much better balance sheets (like PEB, SHO) that never stopped paying preferred dividends aren’t there yet? The PEB preferreds are in the $23 range.

            HT has one of the worst balance sheets in hotel REITland. $1.1 Billion in debt, $370 million in preferreds, and $450 million in equity based on $11 price. EBITDA is negative today, but assuming it gets back to $100 million annually (questionable with all their recent asset sales which aren’t being used to buy any additional hotel assets), the stock is trading for 20X EBITDA.

            They are borrowing from Goldman at 9.5% to pay the $30 million in accrued preferred dividends. I expect the HT preferreds to trade back down to the $21 range once the dividends are resumed.

            Be careful on that one.

  24. AATRL roaring last few days (not huge volume today).
    Not seeing any news, but I note AMG common has popped recently. Maybe “busted” convertible isn’t so busted anymore with AMG ~$145 and adjusted conversion price ~$195 ( .2558 conversion ratio per last 10-Q)?

    1. qx, I did also at $25.19. If I liked it at $25.30, I guess I should at $25.19, lol…Is it a random dump, or prep to rid for an anticipated redemption notice soon?
      We will know in due time, but a good place to hide none the less.

      1. I agree, and if they don’t call till after merger in the 1st half of 2021 per there 2-8 SEC filing this definitely is a good place for short term money.

        1. qx, who knows even if it just lasts until next payment, there may be issues we like at a lower entry point. So in effect get paid a little to wait. I have been buying a bunch of these types of issues past month or so.
          Some stretch my comfort zone a bit, but those very low yielding IG issues are not going to run away in price near term as the downward dribble continues. Even my long loved but long ago sold SR-A slid under $27 for the first time since about last summer. Slide under $26, and the investing loins start to perk up on it a bit again.

          1. Gridbird;
            Yeah, I have been doing the same with MNR-C . They turned down the first offer of a buyout with Blackwells Capital in December, but I suspect a higher offer could be coming and they might take it in light of some challenges to their board members by Land & Buildings Investment Management LLC. At any rate CEO Michael Landy said the preferred issue will be called when it is first eligible on 9/15/21. I suppose it could be even sooner if there is a change of control, bought it last April at $24.00, so a decent 6% hiding place until then.

            1. Bill, Who knows, but I think its possible he is being a bit too aggressive with his statements. This isnt an IG preferred (but its a good issue dont get me wrong) and I see no definitive proof he can pull off a 5.5% reissue. Maybe some redemptions with cash, but a call and reissue with any meaningful savings after underwriting fees is going to be a closer call than he is stating apparently. Things have tightened up a bit since he has spoke too. So I dont think its a layup you will lose this, baring no immediate change of control.

              1. Gridbird, You’re right, that is something to consider. Almost forgot, interest rates can actually go up as well as down 🙂

              2. Grid – Part of your assumption, though, expects a refi could only be done via another baby bond preferred (excuse the oxymoron)…. Though I don’t remember the details how, don’t forget the Landys managed to call UMH-B using 2 3/4% money somehow… I have no clue whether that same type of avenue might be open to MNR but you have to think the Landys are not dummies and they could have in mind a cheaper alternative along with a balance sheet restructuring of sorts that could keep the call comment onstream by Sept should rates rise modestly even if they’re not bot out before… Your point is well taken though imho… To me, MNR-C does not have as much of a cushion as I would normally like in my penny pinching approach, but it’s there. To me, there’s only about a 50 basis coupon cushion…. I prefer 100 minimum so normally I’d look for a higher coupon than MNR-C carries.

                1. Assumptions? How about bald ass guesses you mean,lol. I doubt no baby bond as UMH didnt go that way either. Some other debt and cash proceeds I believe. My 5.5% thought was a perpetual reissue, but that is a big reach in my mind.
                  So yes that means doing something else from the balance sheet. Cash if any to pay down, equity dilution, debt of some kind, or a combo… Of course an acquirer with deep pockets could do whatever they wanted.
                  But who knows with them. An odd lot of people.. Sign up quality tenants, work to pay down debt, good operating company and yet have essentially been issuing 10% one year preferreds recently (6% plus ATM underwriting) if intent is to redeem. Lets just say that isnt normal… And I am not even mentioning the HDO disaster type investment portfolio that has dogged them in recent times…Oops I just said it anyways.
                  Personally in this potential interest rate environment, I could care less about duration protection at this time. Who needs call protection on a 4.125% bank preferred, ha. I am back beast mode into the “Why hell havent these issues been called?” The relative high yields ones of near 6%-8% and under a divi above redemption price.

                  1. Grid – You ever look at ARGD? That’s in the “Why hell havent these issues been called?” category… I’m still holding it but really figure I’m gonna get burned doing so some day.. Then again, I’ve owned it since 2017 awaiting a call, so all’s good……

                    1. 2WR, Its just a bit out of my price point past call, though its close since it goes exD real soon..BTW, it figures its an insurer, as they seem to have some options, and I dont pom pom insurer issues.. But hey I did buy a little bit of your RCA a couple days ago thanks to your borderline harassment of the company; oh and I dont like these outfits either. I was afraid they might slap a restraining order on you, ha.
                      Im asking for trouble as I bought a little more WTREP today at $25.19. Did I mention I dont like insurers.
                      Though my portfolio of preferreds doesnt actually show it by looking at it, I like utes and farmland (and a little man crush on ABR preferreds buying and selling them a bit) Since things arent doing much but largely flat lining and small sagging, I have been reduced to flipping 400-500 shares of FPI-B a day and buying back usually in the same day for 20-25 cents a day. Keeps me arms distance from the Walmart door greeting job anyways….

                    2. Grid – And I bet you’ve already flipped in and out of WTREP a time or two already for 10 to 20¢, right? I didn’t buy any today and started a little bit higher on buying yesterday, so I averaged in an add into my existing shares at 25.23 including 101 bot at 25.17. I had a little I don’t care bid kind of bid in at 25.15 today but we never got there… Volume was 13 times average today and price hung in so I’m thinking that pretty well validates the premise… I own more than I expected to put into this one, but it seems to me that practically any scenario is a positive one, if the merger goes thru or doesn’t. RC guys were quite nice actually, went almost so far as to thank me, but it did take a bit of machine gunning calling before getting them to respond.. Now I just can’t wait for the next 10q to see whether or not they were just blowing smoke or are actually going to change the description that’s been in the 10q and 10ks since Day 1 of the issue.

                    3. 2WR, Actually I have just kept buying. Very surprised it is being dumped under $25.20 this late in accruel cycle, so I have helped all I can to accomodate at that price the past couple days. It may be my biggest holding, now. There seems to be a random regular dumping going on. Even if they redeem on payment day there is a reasonable chance others may have dropped more by then to roll into.

            2. “At any rate CEO Michael Landy said the preferred issue will be called when it is first eligible on 9/15/21. ”

              Was that in an earnings call transcript or somewhere else? I was assuming no call as they were issuing it at 24.90 ATM last quarter.

              1. LI – I don’t think there’s a definitive statement that’s been made that they will call – that’d be verboten but Landy’ made a few pretty serious hints as to expectations in the last quarterly CC from 2/4…

                Quotes: “Our Series C preferred stock becomes redeemable on September 15 of this year. We believe a significant opportunity exists to generate additional earnings growth by replacing some of our Series C preferred equity with lower cost of capital.” And in Q & A:

                Rob Stevenson:
                Okay. And you’re talking about the Series preferred, is the thought there to replace that with another series of preferred at a lower rate. You guys thinking about just taking out the preferred altogether with and just use debt? How are you in the board thinking about that these days?

                Michael Landy:
                Yes, there’s tremendous opportunity to replace that low hanging fruit. If you remember, Rob, we had a Series A preferred and a Series B preferred, they were under 8%. But rounding up there is 8% cost of capital, and we issued the Series C to replace the Series A and B, and we generate tremendous dividends, savings and earnings growth.

                And that was a smaller tranche A and B equal to about $111 million preferred combined. And now we have $550 million outstanding in the Series C, every 100 basis point reduction will be $5.5 million in preferred dividend savings flowing right to the bottom line, it would get achieve a 200 basis point savings like we did, when we issued the C and places A and B, that would be $11 million in savings, we also have the ability to use debt and generate even more savings, or even common equity would generate more savings. So there’s no silver bullet, but refinancing that low hanging fruit at 6.125% is available as soon as it becomes redeemable, which is on or after September 15 of this year, in whole or in part.

                Rob Stevenson:
                Okay, and how soon do you start that process [of redeeming] given where rates are today and your comments about not knowing where rates are going to go in the future? I mean, if it’s attractive today, do you guys start that process over the next couple of months and have either another series of preferred overlapping or some debt overlapping with that in order to lock in advantageous rates? Do you wait until you’re within 30 or 60 days of that redemption?

                Michael Landy:
                It’s a little early now, but you certainly don’t have to wait till the redemption date. As we get closer, we’ll evaluate the landscape.

    1. J.
      I hold a small position in MDLX in my account with TD. The interest due was credited to the account yesterday 2/16. There could be a broker caused delay but you should get it fairly soon.

        1. The company put out a filing saying that MDLX did not make the payment. It will be pulled back out of your account if it was already credited.

          1. KC,
            Can they really pull the payment back from the account? And do you have a link to the company filing? Many thanks.

            1. Yes, I have seen payments pulled back. And the filing from J is what you first commented on, so you have already seen it.

            2. The payment systems are automated, so they work on a negative verification, since it isn’t feasible to monitor 100% of payments for the .01% that don’t get paid, like this one.

            3. In my Fido acct, MDLQ payment credited 2/1, removed 2/12. MDLX credited 2/16, I expect it will be removed soon. As I read it, prospectus says they have 30 d to make payment without being in default, so I guess we’ll soon know the outcome, as MDLQ payment was officially 1/31 (1/30 was a Sunday). Common is way down from pre-pandemic, and was heading down in prior years, but not trading as if imminent BK?

            4. I wouldnt worry too much about MDLX. HDO says it is a mispriced baby bond and the market has it wrong, and they are pretty much spot on with all their recommendations and risk. If I could only read the counter arguments with their investment ideas, but they seem to get removed. I think I have about 400 + more comments but they seem to be written in magic disappearing ink?

              1. MR. C, Look what Bob just pulled out of Pendyfool…
                WPG HAD taxable income in 2020, likely they still do. And they CAN pay dividends even if they default on the bonds in order to retain REIT status.

                Dang I should have bought WPG common…Its a superstar common. Not only can it lose boatloads of capital buying off their reco, it can still pay common dividends while they suspend bond payments. Isnt that awesome?

                1. The WPG common shares have always been the best bet, albeit a speculative one…For example, if you followed HDO’s advice and bought WPG common shares at the end of August, you’d STILL be in the black today with ample opportunity to have cashed out at double or even triple your purchase price. Even if you didn’t buy the WPG common shares until HDO’s December article, you’d only have a small capital loss today…again, with lots of opportunity to have taken substantial profits.

                  The old adage ‘pigs get fat, hogs get slaughtered’ applies here.

                  1. But the ones who bought on HDOs WPG reco in Feb 27 of last year at $22 wouldnt think the same….or Feb. 5, 2020, or Dec. 19, 2019, or Sept. 19, 2019, etc…Buy the time Aug. 2020 came around they already were running jokes on this issue though.

                    1. Correction, ooops, it was another WPG stock reco at Dec. 12 not the 19th, and Sept. 13, not Sept. 19. I guess I love the number 19 for some reason…They recommended it a bunch prior also.

                  2. HDO has been recommending for a very long time, and not this past Fall. It paid a faaat divy and was “cheap” and that is all HDO cares about. They know very little about fundamentals, analyzing books, understanding trends, etc. This is despite other analysts saying don’t invest. They have been recommending WPG at $60+ /share

                    They also offer some great advice: “It is wise to throw good money after bad money…” well, until you can’t. Never admit mistakes. Blame it on the secretary of something, the wind, china, competition, viruses. Lol, just look at retarded Phil in OKC. OMg he is still pushing WPG, and the retarded statements he still keeps claiming, including that it is great that 17 executives gave themselves millions in bonuses. :-). The “Rida Moronians” keep eating this stuff like it is the latest candy from Charlies Chocolate Factory.

                    Feb 27 2020: Washington Prime: The Cut Is In And We Are More Bullish
                    Feb 5 2020: Washington Prime: Buy For Income, Stay For The Upside
                    Dec 12 2019: Washington Prime Is A Strong Buy: Analyzing The Debt Covenant
                    Dec 5 2019: REIT Preferreds At 8.5%-9% Yields Thanks To A ‘Sympathy Drop’ – From Washington Prime And Pennsylvania REIT
                    Set 13 2019: Washington Prime Group Up 40%: Enjoying A Short Squeeze
                    Aug 4 2019: Washington Prime Group: Rampant Fear Creates An Incredible Opportunity Yielding 28%
                    May 7 2019: Washington Prime Group Offers 100% Upside, Why The Shorts Are Wrong
                    Mar 30 2019: Deep Value And 18.5% Yield From Washington Prime
                    Jan 23 2019: Washington Prime Group: Top Preferred Stock Pick With 10% Yield, 40% Upside
                    July 24 2018: Washington Prime Group Remains A Strong Buy – 13% Yield And Sizable Upside

                    That is why this stie is popular…

                    1. Mr. C, Surely they are smarter than I give them credit and dont eat their own cooking. Their Sept. 13 ‘19 was my favorite. It was at $37 and they said it had 100% more upside to it. Gonna take a while to get to $74, is my best guess.

              2. Almost all my HDO comments are expunged. No profanity, no ad hominem attacks, and only occasional sarcasm. But most are removed.

                The real harm is scrubbing comments accrues to SA readers, especially those newer to investments or newer to SA. All they get is the sales pitch; they don’t hear the other side of the story or the argument.

                I have actually been expecting SA to allow contributors to remove posts in their entirety. HDO, among others, has a great many posts I’m certain they would like to be removed. It’s like revisionist history in the schools.

                1. Bob, they are scrubbing the wrong posts. What should be scrubbed is Pendy saying they can pay common dividends with a debt payment suspension.

            5. Its not all bad…provided MDLX doesn’t default, you should get a little interest on top of any delayed coupon payment.

        1. It’s not everyday you see preferreds drop in ~ half.

          WPG-H 15.99 to 8.41 for -47.4%
          WPG-I 14.99 to 8.05 for -46.3%

          Market is voting a bankruptcy filing is imminent. They probably have 30 days to cure their bond interest payment before it technically defaults. If they defaulting on bond payments, what does that mean for preferred payments? Nada, which means these should be selling for low single digits IMO.

          It also appears to have dragged down the PEI preferreds which were off ~ 12.5%. Bad day to be in the shopping mall business. . .

          1. In the case of WPG you would be better off in the senior debt. May not be anything left for the preferred.

            1. Speaking of speculative investments, is Entergy Texas something (ETIpr) that could be hit with liability after the widespread problems down there?

    1. WPG 2024 notes ….

      For the brave, this is 939648AE1. Scoop it up at your bond desk. Trading today at about 58 for a YTM of 25%+. Not much call risk.

          1. If someone told me 20 years ago (when I was 6, hahaha) that I’d be laughing out loud at a joke about deeply distressed debt, I would have asked them what they were smoking. Thanks guys.

      1. Indeed: now I see it:

        On 02/16/2021, the redemption date, the issuer is expected to redeem them at $25.00 [and $.14] per bond/share

  25. UK Insurance company Prudential’s PUKPR and PUKPRA preferreds will be redeemed on 3-23-21.

    Both great holdings for me but – oh well

    1. These 2 issues ARE NOT BEING REDEEMED.
      My post the other day was in error.
      Please accept my apologies.

    1. Bob – I’m sure this hasn’t escape your eagle eye but it wasn’t by chance that RILY ended up lead on this issue…. Typical of RILY’s corral of left for dead companies, they’ve been involved with BW for at least 3 years and as described on p 26 of RILY’s last 10q. “In connection with making the loan to B&W, in April 2019 the Company received warrants to purchase 1,666,667 shares of common stock of B&W with an exercise price of $0.01 per share. The option to exercise the warrants expires on April 5, 2022.” And they’re on the hook to buy a good chunk of this new issue as well, aren’t they? I follow this because, to loosely quote Chico Escuela, I’ve owned RILY since 2017 and RILY’s been berry berry good to me.

      1. 2wr – It surely did not escape my notice. I think it was a very savvy move by Riley. If BW does recover and make good Riley will be cashing in big time.

      2. 2WR:

        Is RILY ever going to call 7.5% RILYZ? 6% RILYT was specifically issued to do so, and yet they wait.

        The management of RILY is a tough nut to crack.

        1. Rob – One thing RILY’s made clear in the past is they will drag their feet when they’re using OPM and that seems to be the case yet again with RILYZ. The key wording in the language on RILYT’s Use Of Proceeds about calling RILYZ was “as soon as practicable” which I have to believe was included because they knew foot dragging was in the cards for them yet again… So as long as they keep coming up with other things to put their money in at higher rates such as their commitment to the BW issues they just managed, it looks like they’ll continue to hang on to the “as soon as practicable” caveat. Right now I’m not sure if I’m hoping they do or do not come thru with the call… They’re always bragging about their utilizing their strong balance sheet to their advantage…. No, seriously, they really do! Here’s hoping the carnival doesn’t stop to misquote Wouk….

    1. Tom:

      Did you receive your 2/15/21 quarterly dividend payment on JMPNL? It was due to be paid on a holiday, but I still have not received mine as of 2/18/21 (at Schwab).

      Tried calling Schwab but the current market environment is causing very long hold times. Thanks!

  26. CTAA – Full Call Alert

    CUSIP: 74913G808
    Description: QWEST CORP NT 2056 7.00000% 02/01/2056 PFD
    Redemption Price: 25.00
    Call Date: 2021-02-16

  27. There’s quite a bit of selling of ENO today. It looks like it’s callable on 4/1/21. It’s been trading under the $25 redemption price and potential last interest payment of $0.34.

    1. I think its very likely they will call this on 4/1, Quantum shows a long history of called preferreds and their long-term bonds have yields under 3%.

      1. Fair points but ENJ (5% coupon) has been callable since 12/1/17 and is still outstanding. I have some extra cash so I’m willing to wait until 4/1.

    2. Thanks for the heads up, Dick. I decided to jump in and bought 300 ENO at $25.29.
      The next dividend should cover the over par premium. All I need to do is hope they don’t call before March 1st.

    1. Hmm- no info on that sheet- FINRA says SREU is not a valid symbol. Not trading at Schwab.
      How can it be trading? Rate?

    2. Red herring said the new unit would trade and the FWP said it wouldn’t. But it is clearly trading as SRCU.

      Don’t recall this situation before.

  28. The bizarre trade of the day was AFSIN. It closed yesterday at 16.10. Today it was trading at 16.88 midday then traded 2,000 share at 22.00, up 36.6%. It closed the day at 16.88. Yesterday they declared dividends on all six preferreds that are outstanding, but that is unchanged since they had been paying all along IIRC. The six issues now trade as pink sheets, but AFSIN does not look that volatile over the last three months, until today.

    We have no positions or open orders, but if you own it, you might be able to sell for an attractive price. 22.00 is the highest trade since 2017!

    1. How many can remember the very first Saturday Night Live show in 1975? Remember the Triple-Trac Razor faux commercial I think with George Carlin? The tag phrase was “The Triple-Trac. Because you’ll believe anything.” This reminds me of that ad, probably because I remembered the phrase to be “Because you’ll buy anything..”

      1. Well at least TDS (owner of US Cellular) is honest about why they issue “retail debt”. Their management said this just last conference. I love the “lack of meaningful covenants” line!
        As highlighted on the slide, we have a number of potential funding sources. In this instance, given market conditions, we judged that the retail debt market was relatively favorable, taking into account all factors, including term, callability, ease of execution, lack of impact on the business operations, lack of meaningful covenants and, of course, the all-in cost of financing relative to our other potential alternatives.

    1. EQH and EQH-A have also moved up. I haven’t seen any news. I had been considering selling so I took advantage and sold my EQH-A for the equivalent of a years dividends.

  29. 2w and qx,: tx!

    I didn’t know that the conversion rate can change, as originally it was only 1.3158. However, at 1.8865 and SPE @ $14.89 you get >$28.

    So if one wants to hold SPE, it seems a good deal to convert, instead of selling SPE-B.
    If you like to hold SPE, it also has a juicy dividend of $1.13.
    However, would any III investor want to hold SPE? It was $8 last March….

    1. dd – where any stock traded in March ’20 is essentially irrelevant, but that’s just me…. heck you could point to XAN-C having been in the low 2’s back in March vs. 23.50 today but what does that prove??? I’ve owned SPE since 2013 and have been dripping all along the way… it’s far from having been a barnburner but it’s been OK…. Personally, I like paying attention to Goldstein and his activism but find it ironic that he targets CEFs that trade at discounts to NAV that seem to be equivalent to where SPE tends to trade most of the time… They’ve had self tenders in the past to benefit shareholders but haven’t seen one of those recently… What also mystifies me currently about SPE is he’s been an early investor in SPACs yet somehow, his participation in the SPAC sector doesn’t seem to have goosed SPE all that much.

  30. spe-b will be mandatorily redeemed on August @ $25, yet
    it is trading today at >$27 !!!! Somebody knows why and how this can be? Who buys this at this price?

    Or, in other words: shall I rush to sell my spe-b at this price?

  31. GJH – Synthetic Fixed-Income Sec STRATS 2004-06, 6.375% US Cellular Corp.

    There’s been a seller sitting there offering 6700 with more behind at 10.40 for a few days…. Seems cheap to me with minimal call risk. I believe the underlying 6.70% Senior Notes, due 12/15/2033 is only callable via a make whole call so the real call risk would seem to be from the holders of the call warrants which I don’t fully understand those mechanics of, but it seems as though were that a real risk, they would have executed it a long time ago…. YTM I believe is a little bit better than 6%….12 year piece of paper… I bot 1000 Friday. Compare to the much longer maturity US Cellular UZD 6.25% 9/1/69 callable 9/1/25 @ 25 trading at 26.64 = 4.92%YTC/5.91% YTM… Also by comparison, the underlying US Cellular 6.70% ’33 is offered at 130 and YTM 3.72% . What am I missing??

    1. Call warrant risk is real. The logic is simple. The owner of the call warrants can pay par value to redeem all units of GJH for cash, in turn receiving the underlying bonds which are trading around 130% of par. So they sell those and pocket the 30% difference between sale price and the par price they paid to redeem GJH.

      Of course, you’ll ask, “Why hasn’t it happened already?” I don’t have an answer for you, but there have been many examples over the years where the economics seemed to support the call, but it didn’t happen right away. But it seems to always happen eventually if the pricing is right.

    2. 2WR, Karma is correct. Almost all of these old now irrelevant 3rd party trust “retail bonds” had same scenerios and got redeemed slowly, most years past when they should. Maybe the fact Wachovia (who most likely held the call warrants) was bought out by Wells and they are totally unaware of the provision. Or maybe its so small it isnt worth their time.
      But when I play this, I really dont give that a concern. Its not like you are buying something 10-20% above redemption price. Your not exposing yourself much here penny pincher so dont worry about it. Your dear Wifey told me she blows more money on a single QVC purchase than you would lose here on a call. 🤣

      1. Hah! Don’t remind me, Grid! lol I know what you’re saying and have studied these before and avoided them longterm and yet they still exist and it just seems worth the risk now comparably… what am I at risk now, maybe 25¢ or so vs weighing that this has not happened yet after 11 years? Heck I’ll even guess the premium spread available on selling the underlying has probably been higher at sometime in the past when there were more years left to maturity despite where everything trades today, so as the bond gets shorter, the incentive to exercise probably even goes down, not up – still, there’s such a huge amount to potentially lock in if they could that you would have thought at the very least some investment banker type would not have let Wachovia’s relatives forget … It’s because of these wrinkles that the only one of these I’ve held longterm is GJO. it’s as clean as a whistle I think but pays squat these days as a Wal-Mart floater…

        1. 2WR, Actually I have been in quite often over the years, especially around exD time…And played it during March drop too. Overall with all the terms, and relative yield, for a buy and holder such as yourself, I think its a great buy for the few pennies risk. I just dont stay in it much because the price is just too darn stable for me to trade around.
          That next 30 some cent interest payment is all but in the bag, so your risk is just pennies…If that even.

            1. 2wr. I own a couple thousand shares. I don’t even look at this one. They can call it and its no sweat. I think i got it in the Fall for 10.20 ish or so. I still need to divest more cash from the sale of my prior home. Maybe I’ll buy some more. I bought a lake house up north MN and with rates on the dirt cheap I’m keeping money invested and having a mortgage.

              I can’t wait to see the heating bill. 6,600 sq feet and 3 heating units running like 14 hrs a day in this -20 to -30 weather, at least that is what Nest is telling me.

              1. Sounds like just a tiny little shack in the woods by the lake from the description…. No wonder fear of heating bills! Yes, I thought I remembered you being in this one.. I had a small existing position so I happened to notice it was still sitting around the same level and the absolute ytm looked attractive with theoretical call risk relatively low, so I decided to add… I’ll probably do the same thing as you – not even look at it – unless some evil genius makes himself known to the warrant holders….. if that happens I probably buy more and assign it all to my picking up pennies drawer. That drawer, btw, is in my Cropper Hopper Home Storage Rolling Organizer -0 Drawer from QVC…

        2. 2WR, while the call warrants have been there all along, the underlying bond needs to trade high enough of above par to justify the transaction. I don’t know what that target price above par is, but the very earliest point at which the call would conceivably have occurred was near the end of 2019/start of 2020 when the price was approaching 110%. And, of course, GJH traded at or below par most of that time, so there was no principal risk if you bought it. But the idea that “it hasn’t happened in 11 years” is not the right way to look at it; it has only truly been an “in the money” trade for the call warrants for a little over a year. I wouldn’t be surprised if GJH is called tomorrow, but I wouldn’t be surprised if it doesn’t happen over the next year, either. My advice is the same as a few months ago – if you are paying over par, don’t take a big position all at once. Buy a little here, a little there, and build it up over time just in case the call comes out of nowhere.

          1. I made an ass load on several of these over the years. The best one was KCC a couple years ago. Its redemption price was several dollars above par. When it served call notice people dumped down to close to $25 not knowing its redemption price was much higher. Ah, the good old days! Not as many dumb people as there used to be. This happened quite frequently back then when older obscure issues that had unnoticed higher redemption prices were being redeemed.

          2. KC – well you forced me to go back further in history than I actually had to check out prices on the underlying and you’re certainly closer to right than I would have guessed. It’s just a reminder on just how vicious this rally has been this past year plus. Yet why do you assume the price target would have been 110% before considering exercizing the warrant???? By historical comparison, I would have thought that the arb profit would have been considered quite juicy at a level much below that… But you’re right, in theory the chances of an exercise I suppose are much more elevated than I would have assumed…. So if I turn out to be wrong, my wife’s just going to have to cut back on the next shipment from the Josie Maran Body Butter Collection on QVC…..

            1. 2WR, My 3rd running theory all along math wise, why its never been redeemed prior is this….Lets see if you can figure this working thesis out on your own. 🙂
              ……represent an undivided beneficial interest in the assets of the trust which
              consist of the following underlying securities: $12,500,000 of 6.70% Senior
              Notes due 2033 issued by United States Cellular Corporation.
              ……are entitled to semi-annual interest payments on each June 15 and December 15 at a rate of 6.375% per annum to the extent interest payments are received on the underlying securities.

              1. I have to admit I have no idea how these work.

                1. USCC sets up a Trust whose assets are $12.5M of 6.7% 2033 notes issued by USCC.
                2. The Trust then sells a) STRATS which pay 6.375% (GJH), and b) interest-only certificates ‘not offered by this Prospectus Supplement.’ So
                3. USCC is paying 6.7% interest to the Trust for the notes in the Trust, and the Trust turns around and pays GJH unitholders 6.375% interest, pocketing 325 bps? Or maybe the 325 bps goes to the holders of the interest-only certificates?

                My head hurts.

                1. Bur, US Cellular had nothing to with this. Wachovia brokerage bought the bonds and sliced them up into “retail baby bonds” (back then todays baby bonds basically didnt exist then, the brokerage had to create them for their customers). They placed the bonds in bank trust for safe keeping and reporting purposes.
                  Now from every placement I have been explained to (You dont seriously think I knew any of this stuff do you? A smarter man than me explained this all to me several years ago, 👍) There is no “broker skimming”. What logically occurred was Wachovia paid over par premium for the bonds. This is why GJH yield is lower than the par bond of the underlying issue. As GJH was issued several months after the bond was underwritten, so Wachovia most likely bought them around GJH IPO time, and paid above par to gain access to them to sell as GJH.
                  Thus probably why they hadnt been redeemed as the profit margin had not been historically wide enough to bother with. Brokerages would keep the call warrants and wait years patiently before redeeming, Typically they have a prearranged deal in place to sell to someone or entity before the call notice is served. If the deal collapses, the brokerage can cancel the redemption notice and carry on as before.

                  1. clink clink clink! [sound of several pennies dropping at once]

                    Thanks for the edification, Grid.

                    1. Bur, if you dig deep you find the brokerages arent dummies. They didnt just Willy Nilly any bond and prepackage it for retail. They picked out bonds that were either issued uncallable or “make whole”. This way the odds tilted into the hands of the call warrant holders which most of the time was the brokerage themselves. That way they could profit off of any appreciable increase in the underlying bond, by redeeming it and selling it to another entity.

                  2. No, Gridbird, there actually is skimming on this one. The warrant holder collects 0.325% per year. In fact, that is one reason to defer exercising the call warrant for some period of time. At what point the current price offsets that future income is up to the Wall Street math magicians.

                    You have to read the prospectus on every one of these individually as the structures vary. In general, the underlying bonds would have been bought by the issuer well below par, then reissued to the baby bond investors at par with the same coupon. So the profit is made up front, with possible call warrant value later on. Some however, were bought deeper below par, so the trust actually owned more in par value then was outstanding in the baby bonds, and the interest rate was adjusted higher to the baby bonds to reflect that, but the baby bonds did not benefit from the higher par value (e.g., SSRAP). Then you’ve got skimmers like GJH and XKE (where the warrant holder got 1% of the interest!) And then you’ve got the ones with interest rate swaps to change the underlying bond’s fixed coupon to a variable one – I’m not going into details, but you really need to understand what happens to the swap if the trust is terminated early!

                    1. KC, You may be correct here as I havent researched this as thoroughly do to fact most of time it was right around par. I did scan prospectus and did not see the .325% skim but maybe its deeper somewhere. Keep in mind I was writing off the underwriting costs which I knew they recieved, plus any custodal agreement fees which may or may not be a part of that. But like most it appears the brokerage here is the call warrant holder.
                      Counter party swap agreements are very complicated, but they are for the synthetic floaters. And it all doesnt come out bad for unitholder though. JBK is case in point. Trustee voided counter party swap agreement with Lehman after it went bankrupt, thus turning the floater into a fixed off the 6.34% par yield. This was very benefical to shareholders as now its well over $28 instead of being a present 3.5% minimum floater. Lehman creditors sued but it appears they didnt get anywhere after a couple of challenges.
                      Not all are skimmed and offered at lower coupon yields and for some reason they dont issue themselves call warrants. KTH is an example of that situation.

                    2. Grid – What do you mean you didn’t see the .325% skim??? I thought that’s exactly what you were pointing out in your proposed theory – that the warrant holders have a built-in annual income for doing nothing on this one hence weigh giving that annuity up for a huge one time haul… Overall, this kind of structure reminds me of the old fun things we got to do back in the day… As an institutional muni bond trader back in the early 80’s I was around when bond insurance was first created and in fact worked with one of the creators.. As a trader, what I figured out early on was the insurers such as AMBAC and MBIA were willing to insure bonds in the secondary as well, not only new issues. So I made it a point to get a good handle on what parameters an issue needed for the insurers to insure the name, then go chasing the obscure non-rated or low rated issues out there that qualified in sufficient size to make paying for insurance worthwhile. These were names 95% of all traders just wouldn’t even bother to touch ever so they traded at very high discounts to AAA insured rates and thsu when you turned them into AAA bonds that retail loved by getting them insured, there was plenty of cushion to profit… That was fun… This whole idea of STRATs etc seems to be the same kind of genius kind of idea somebody came up with that made them easy money while providing a product easily saleable to John Q…. Buying the underlying bonds in the secondary and creating these STRATs was easy essentially risk free money for the bond desk creators.

                    3. GJN is the floater that went bad and almost no one figured it until it was too late. Due to changes in capital rules post-GFC JPMorgan was able to redeem what were supposed to be uncallable TRUPs. However, the swap was by that time deeply in the money to the receiver (i.e., a big negative for GJN trust, the payer). So the redemption value of GJN would be par for the underlying TRUPs, minus the value of the swap. So when JPM announced that the TRUPs would be redeemed, GJN went from a price in the high teens to about $25 and I said to myself, “That’s not right.” I didn’t have a margin account and there probably weren’t any shares to short anyway, so I didn’t make any money on it, but I mentioned it on a website or two that this thing would be redeemed well below par. It was redeemed at just $14.6857.

                      Investors were outraged and sued (don’t know what resulted of that). I had argued with a blogger a bit (Tennessee Bond Investor or something like that) who claimed that the fact that no one ever bothers to read the prospectus was not the investors’ fault, but by some twisted logic was evidence of wrongdoing, – and he was a retired lawyer! Here I thought that the prospectus outlining what you own is kind of the whole deal.

                    4. 2WR, You should be teaching me…Birds of a feather flock together, bond desk thieves, and brokerage issued products. Im surprised your handle aint “Edward Jones”, ha ha!
                      I will have to defer to Karma on this one. The bond yield era facts would also support his case. The underlying bond according to Finra was issued at around $98. So if they bought then and issued 4 months later there was a built in cap gain. Plus the 10 year bond went up about 25 bps which should have likely raised the issue yield of GJH instead of suppressing it. So likely money was made a few ways there. Karma said there is the .325% “skim fee” not me, I know Brokerages arent there for charity, but I had no info to show anything. He didnt state where he actually found it, but Im sure its there somewhere.
                      The GJO and GJP issues which I have flipped in past at lower prices, and you have played with also are synthetic adjustable also. But most counter party swap cancellations come from the hands of the underlying bond being able to be redeemed. Thus why GJO and GJP were issued do to their strong protections from this.
                      Material events can occur such as say a bond in trust being able to be redeemed because of a change event such as losing Tier 1 capital status. But that doesnt pertain to Walmart or Dominion debt. But crazy things can happen and once the fees and everything is collected on one going bad, it would be quite the haircut!

                    5. Karma, Those are very complicated issues. It took me a while to process the general understandings. And of course that doesnt equate to any probability of something onerous happening. To someone who bought they seem relatively benign. And of course its the devil in the details. The issuing company can look bad on one of those events and have absolutely nothing to do with the problem. But it only happened in a couple rare circumstances. In fact the one you referenced is the only one I know of that really went bad for consumer. But I only tracked certain ones.

                    6. Qniform, yeah that’s him. I haven’t looked at his website in many years.

                      The GJN discussion is still there, though! I was one of several “Anonymous” posters, so it’s hard to tell who is who, but here was my first comment where I did document on other websites (with now long-dead links, unfortunately) that if you do your homework, you don’t get surprised.

                  3. I wonder what the price was trading at, to build a yield of 6.375? From the offering doc.

                    The Underlying Securities will be purchased by Wachovia Securities in the secondary market (and not from the Underlying Issuer), and then Wachovia
                    Securities or the Depositor will sell such Underlying Securities to the Trust.
                    The Underlying Issuer is not participating…
                    Wachovia Securities participated as an underwriter in
                    the initial public offering of the Underlying Securities.

                    Well, we knew about one preferred that had a call price higher than the face, it was redeemed a few months ago. There can’t be many left, and I don’t remember any off the top of my head that are still outstanding.

            2. 2WR, as I said, I don’t know what the trigger price is, but the profits will be taxable, so that creates one hurdle to justify a reasonably high price. The other factor is that the call warrant has option value, just like any type of option. The owner has to weigh the potential profit of exercising now vs. at some later date. At 105, the potential for a higher price at a later date would have been worth waiting to see if a higher price could be achieved later. At 130, I would expect that time value to be insignificant vs. the intrinsic value. So I would not be surprised if a call was imminent.

              But it’s hard to predict. GJV remained outstanding for several years even though the underlying bond traded at 140+. However, the underlying bond was an orphan from a prior merger and it was thinly traded. But after Disney became the parent company of the underlying, the price moved up to $170 or so and despite the lack of liquidity, the call warrants were exercised on GJV.

              Interestingly, the GJV warrant owner exercised a very small amount at first, as if they were testing how it worked. Then a few months later, they called the whole thing. Many people (who probably weren’t tracking the SEC filings) probably weren’t aware of the first partial call and were in for a surprise when the full call came because I think it was still trading close to $26.

              1. So when you cut to the chase and consider all possibilities is the worst case even possible to receive less than par as per GJN?

                1. 2WR, GJN was redeemed long ago, so are you referring to GJH? Outside of theft of the bonds or the company financials distressed to insolvency there would not be. An example being if US Cellular defaulted or quit making SEC filings the trust would liquidate the holdings, presumably at a nice loss.
                  That is the one disadvantage of owning a debt in a typical trust issue like this, as you dont control your destiny as you would if you held the underlying bond yourself. They liquidate at first problem and proceeds are split. However if US Cellular redeemed the issue and caused a profit to occur from higher redemption price, you only get your $10 certificate value plus any accrued interest. Any additional premium goes to the call warrant holder (brokerage).

                  1. Grid – KC mentioned that because of special events that only a soothsayer could have discerned in advance from reading the prospectus, GJN was redeemed at 14.6857. What I was asking was can you or KC or anyone else who wishes to chime in foresee where redemption, not recovery amount from US Cellular insolvency, but from warrant holder induced action be for an amount below $10? I don’t so I’m good for the risk but i defer….

                    1. 2WR, There are none. GJH is a straight bond sent to trust paying fixed rate to certificate holder. This is not a synthetic floater so there is no counter party swap agreements to cause a fee busting nightmare.
                      The only reason GJN actions were triggered was because the underlying bond became redeemable because of a situation involving issuing company. If I remember right the bond was not allowed to be used as Tier Capital as its intended use. So JPM Morgan redeeming bond caused the chain reaction effecting the counter party swap agreements. The scenario I mentioned with JBK which made investors money was the call warrant holder issuer (Lehman) going bankrupt which cancelled the counter party agreements. But since they violated procedures (by going bankrupt) no loss occured. The underlying bond was never called.

                2. As Grid said, GJH can’t be redeemed below par. I just went into details of others to show that everyone really needs to know what they own and the only way to do that is read the prospectus.

                  1. Grid, as a reminder, the JBK trust considered the swap cancelled at no cost, but Lehman came back later claiming that it didn’t accept the cancellation and in fact wanted a huge payment for the swap value. Lehman hasn’t gotten anything, yet, but as far as I know the litigation is outstanding. I assume it the lawsuit is dead in the water and those who know more than I do are the ones paying $29 for it, but I took it off my watchlist just to be safe. I do still check the SEC filings to see if anything definitive will ever be said about it.

                    1. P.S. I was buying JBK the Monday right after Lehman filed bankruptcy because I re-read the prospectus that weekend and understood that the swap would be unwound at no cost and the coupon would go from floating to fixed. It took a loooooong time before the rest of the market knew or cared about it and it’s price separated itself from the similar issues PYT and GYB. In the short run, they all got crushed in the late stages of the GFC, but eventually JBK won the day once enough people realized the coupon had increased many months later.

    3. NEW YORK, February 8, 2021 – AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) today announced that its
      Board of Directors has approved a cash dividend per share on the following series of non-cumulative preferred stock:
      Series Rate Dividend
      A 6.750% $0.421875
      B 7.250% $0.453125
      C 7.625% $0.476563
      D 7.500% $0.468750
      E 7.750% $0.484375
      F 6.950% $0.434375
      The preferred dividends will be payable March 15, 2021 to stockholders of record on March 1, 2021.
      About AmTrust Financial Services, Inc.
      AmTrust Financial Services, Inc., a multinational insurance holding company headquartered in New York, offers specialty
      property and casualty insurance products, including workers’ compensation, business owner’s policy (BOP), general
      liability and extended service and warranty coverage.

      1. Fabrib, Thanks for the reminder. The Amtrust issues fell off my “dog with fleas list” and they always make me money on trades. Not a fan at these prices, but on relative basis my options are limited. I wont do the preferreds anymore since they went private, but always will play the sub notes. Reentered today the 7.50% note at $20.50 and will play it up and around exD date.
        Oddly enough these may have been my best flash trades. Several years ago I was in Mexico and they crashed to around $12 and $13 something like that. I was buying every series I could get my hands on with whatever cash I could free up. Then sold several dollars higher a few days later. I miss those kinds of trades.

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