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New Issue Capital One Financial Corporation (COF)
Size: $250mm
Expected Ratings: Baa3/BB/BB (Moody’s/S&P/Fitch)
5.00% Area
Sold COF/PRP at $25.40 (6% coupon – callable on 3/2). Held this issue for 3 months. Netted 0.7% or 2.8% annualized. Better than the money market rates which is why I brought it. Was hoping it would last a little longer but I am hardly surprised.
Thanks EarlyBird–just saw it.
EarlyBird….Any Grey Market or other exchange symbol on the new COF offering?
Appreciate your alert.
No grey market symbol yet. Will let you know when I hear it.
Thank you EarlyBird, look forward to your update!
BTW…WFCZL moved from Grey Market to NYSE symbol WFC-Z today, I assume everybody who’s interested knows that.
yes and TRTN will move tmrw
COF-P is reported by QOL as being more than 3x the amount of this offering – so perhaps this will be just a partial redemption if they are redeeming COF-P at all?
USE OF PROCEEDS
We estimate that the net proceeds from this offering, after deducting the underwriting discount and commission and offering expenses payable by us, will be approximately $ . We intend to use the net proceeds from the sale of the depositary shares for general corporate purposes in the ordinary course of our business. General corporate purposes may include repayment of debt, redemptions and repurchases of shares of our common stock and of our other securities, which may include outstanding shares of our preferred stock, acquisitions, additions to working capital, capital expenditures and investments in our subsidiaries.
I noticed that immediately but my profit margin (annualized at 2.8%) was thin anyway. It is worth $25.375 if called. So I just moved on. I had a paper plan in place if they called it, started moving ahead.
So yes, it could be partial.
I also have been waiting for the call for quite some time. Liquidated ASAP and made good money during its time in the stable. No need to sit and wait for the capital rot to happen.
The offering is going to be much larger than the headline 250M
Makes more sense. Why pay 6% when you can pay 5%. Might even be a tad lower, if recent trends hold where the actual coupon turns out to be less
NRZ-B trading higher than NRZ-A at the moment. So i bought A despite the high price. Hard to turn down spreads like that.
Now CIM-C higher than CIM-D. It’s crazy out there.
WEST CHESTER, Pa.–(BUSINESS WIRE)– QVC, Inc. (QVCD) (“QVC”) announced today its intention to offer $500 million aggregate principal amount of Senior Secured Notes due 2027 (the “Notes”), subject to market and other conditions. The Notes will be secured by a first-priority lien on the capital stock of QVC, which also secures QVC’s existing secured indebtedness and certain future indebtedness. The net proceeds from the offering are expected to be used to repay a portion of the borrowings outstanding under QVC’s senior secured credit facility. QVC’s senior secured credit facility is used for working capital purposes and, among other things, may be used for the repayment of other debt and the payment of dividends to Qurate Retail, Inc. (QRTEA) for general corporate purposes, including repurchases of its common stock. QVC is a wholly-owned subsidiary of Qurate Retail, Inc..
BofA Securities and J.P. Morgan are the lead book-running managers for this offering…
https://seekingalpha.com/pr/17761110-qvc-inc-announces-proposed-senior-secured-notes-offering
At some point, S%P needs to stop rating this as investment grade BBB-.
They sure are taking on lots of additional debt. The tracking stock on a 5-year basis is a falling knife. From $30 share to $8.
Hardly my idea of a growing thriving business or even a steady annuity type business.
Steve, when these notes were issued I did some reading on the company. It didnt fit my definition of quality either, so I never played. And stepping back and looking big picture at what their main business model of TV hawking doesnt appear as a cutting edge trend. Unless next generation of Gen X women become old ladies down the road purchasing cable again and ordering stuff from TV monitoring.
But it may be a nice safe purchase too, its not like I am an expert or anything.
On a short term basis, it looks okay. Moody’s analytics daily score is a 5 for the tracking stock which last year was owned by a few highly-rated value funds managers. However, I really don’t trust a tracking stock so that is just my personal bias. So, for a flip, this could be a reasonable trade. QVCC and QVCD have traded reasonably.
Not a great long term business and the repeated issuance of preferred issues is puzzling. Sure, looks like a house of cards to me but that’s long term
Steve, I agree. And I am a flipper on a lot of issues admittedly. But one of my personal investing quirks is to never buy anything short term, I wouldnt feel comfortable owning longer term. Unless its just one of those exploiting a buy/sell imbalance opportunities for a quick flip after liquidity dries up.
I wonder why this QVC announcement cannot be found in EDGAR? There doesn’t seem to be any equivalent filing of a 425 type filing that I see or even an 8k. I happen to own 10k of a QVC 5.125% due 7/2/2022. I wonder if they might end up calling it under its make whole provision with proceeds from this – I could live with that.. Thanks for posting.
2WR–it is a $1000 bond
https://www.sec.gov/Archives/edgar/data/1077068/000104746920000538/a2240259z424b5.htm
Thanks, Tim – I see where this SEC listing is under QVC, Inc. not Qurate where I was looking.. Originally, I bot the QVC 2022 bond under the Peter Lynch Theory of buy what you know given QVC would quickly go under were my wife to withdraw her activity. I do see where the 2022 bond is their most current debt outstanding, so maybe they’ll choose to call it in from proceeds so as to extend their debt maturities… One can only hope given the stock’s performance… issue sizes do match up..
BPOPP being called… Was at 26.90 and took a big hit since call will be for total proceeds of 25.1375. Now down 6.43% to 25.17 last
PUK-A and PUK- down sharply. Couldn’t find redemption notice
Is it my imagination or are preferreds in general reacting more downward today in sympathy with stocks rather than upward with the continuing slashing of Treas base rates?
PUK ones are coming down from nose bleed prices. They were almost 2 years in dividend payments. If I was up 15-20% up in gains with a past call issue and with being BBB+ rated, I would already have this sold. I think a couple of investors woke up and are capitalizing on the giant run up. Not sure at this price it is any where near what I would call “value.”
2WR, your imagination is in fine shape. I see most of my preferred holdings down, but not by a lot.
On a brighter POV, it looks like CBKLP is about finished with the basing action at $101-$102 over the past several months, and may be ready to break above $103. Perhaps the persistent seller has finished his stash. Let’s hope so.
CBKLP is back selling at $102.25. Inspy, I think you jinxed it. 😉
Yep, probably jinxed it, lol — seller may have been monitoring Tim’s website, as the big boys would likely know that this place attracts folks well versed in complexities of Preferred stock, especially sock drawer candidates like CBKLP.
I bought over 1/2 the shares today. I was down most of the day at .01%, in the last hour, I am up .01%. Still more out there.
I dont think anything is unusual for trading activity today. We cant expect the normal to have everything go up every day.
I cant clean him out. I’m out of cash now and own a few shares now.
I bought some too when it came back to $102.25. Now my largest position. Two items in my drawer now, this and IPWLK. Always shopping though!
Agree- only a third of my preferreds & notes are green.
Wondering about PEI & preferreds- really down big today- no news I can see.
Today, Gary, I am down .01%. But, that is probably because my portfolio looks like Grids. Lots of boring, low trading investments.
Nice- but was really wondering about the cause. Nothing turning-up so far, unless they were in an index and got booted- but not sure how the general buyer would know quickly.
I wonder if credit spreads are getting set to widen. If so, preferred stocks will take it on the chin just like in late ’18. Perhaps the surge in the 10-year is just a temporary rush to safety due to the medical/health issue in china. Who knows? I finally just bought some preferred issues to reduce my cash position. Having done so, I’ll just sit on the rest of my cash until things settle down.
It hit my pre-set order that captures flash crash. I entered a tiny position at $26.5X for PUK-R and it is now $27.12 apparently.
Could be related to the index rebalancing someone mentioned in another page?
Popular, Inc. (“Popular” or the “Company”) (NASDAQ: BPOP) today announced that it has elected to redeem all of the outstanding shares of the Company’s 8.25% Non-Cumulative Monthly Income Preferred Stock, Series B (“Series B Preferred Stock”). As of January 24, 2020, there are approximately 1,120,665 shares outstanding of the Series B Preferred Stock.
The redemption date for the Series B Preferred Stock is February 24, 2020 (the “Redemption Date”). The redemption price of the Series B Preferred Stock is $25.00 per share, plus $0.1375 (representing the amount of accrued and unpaid dividends for the current monthly dividend period to the Redemption Date), for a total payment per share in the amount of $25.1375.
The Series B Preferred Stock is held only in book-entry form through The Depository Trust Corporation (“DTC”). DTC will redeem the Series B Preferred Stock in accordance with its procedures and notify the holders. Holders of the Series B Preferred Stock need not take any action to receive payment of the redemption price.
BPOPP was close to 27 this month and callable. That 8.25% was tempting. Be cautious.
Ad still there are those out there that say that YTC doesn’t matter. Ever.
And there are still those out there that drone on and on that YTC always matter.
In this case, YTC was not relevant. What was relevant was BPOPP has been callable since 2015. So one arms themselves with that knowledge and decides what risk they want to take that a stock, long past its call date, will be called. Has nothing to do with YTC.
What you refuse to recognize is there are circumstance where YTC is not relevant. In other cases, it is. It is up to each individual investor to decide what is important to them
Looks like the BPOPP holders earned 8.25% for the last 5 years by betting that it wouldn’t be called
YTC matters. Except when it doesn’t.
I very rarely calculate YTC as I can eyeball it close it enough without the effort. As far as the past call issues go, I have been in (and just as importantly for me…out of) past call issues $1-$3 above $25 redemption price 7 years running and never been hit with a call loss. But I tend to be surgical and tactful from the standpoint of avoiding a call loss.
For example LANDP a couple weeks ago when it sagged to $25.60 before next divi cycle was declared. It was pretty much a layup next declaration would get announced and the price would go above $26 again. So I dumped about 1500 when it hit that point and have still kept a smaller amount for time being. For what I track these types are not currently a compelling value to own in such deep call loss potential issues. I own about 30 and only own LANDP, ALLY-A, and some AILLL that fit the higher call risk over par profile. I wont own those types just to own them.
Though I play these issues for specific flip goals, in no way does that mean I am maximizing the return owning it that way.
For example, I owned CNLPL and CNTHP and got out of both of them around $56-$57 a long time ago from exposure to being so far over par. But those held have seen even more capital appreciation and still no call notice. So I am clearly not the bravest past call above par person out there.
Grid,
I owned both CNLPL & CNTHP for a long time – and like you, finally got cold feet and sold CNLPL at $60.50 about a month ago.
Still holding onto CNTHP. Yes the call loss risk is huge, but I’m going to hang onto this one and take the gamble.
Inspy, remember our private conversations years ago about us getting our nerve up and buying these over par at $53? Funny looking back now huh? I forgot I own a 4th past call over par issue, but just barely so. Last week bought oft traded IPLDP at 25.47 as a money placeholder purchase.
Well done but probably you are agreed what these moves are much more about the speculation than investing. From the investor’s point of view YTC seems very important since we are buying more for hold not for flipping.
Yuriy, I wont disagree with you. And in fact I most certainly agree long term buy and hold purchasers need to hold your comments dear. But I do protest on the speculation vs investing. Entry points, yield vs. call risk and safety can all intertwine. Do you own preferreds that their profits cover the preferred dividends by 200 or more times? Most have preferreds that have covered by single digit coverage ratios. So one who likes issues that have proven themselves over and over through decades of payments may be willing to assume some call risk in issues that have been around 50-80 years. See some of these have mandatory interest coverage ratios imbedded also which keeps them from over borrowing.
And for me, I do try to find reasons why things are so. A perfect example with CNLPL/CNTHP. A couple years ago CLP wanted to increase their short term debt. But preferreds prevent that without preferred shareholder approval. They sent the votes out but stated they couldnt locate enough of the shareholders to get the 50% positive affirmation. The ones that did approved overwhelmingly they just couldnt locate enough. Why didnt they just call them? Problem solved. Yet they didnt.
To me buying GLOG-A at par is more speculating than investing. But I have a personal bias and aversion to much interest in shipping issues. I am just trying to show we use the same words but can use them differently for our own purposes. Just Sunday morning useless coffee talk. 🙂
That all being said at present time apples to apples, I would much rather own say IPLDP at 25.47 and 5% present yield (that I just bought last thus the reference) and small redemption loss of maybe 15 cents than buy CNLPL at nearly $61 for a 5.32% and risk ~$9 in capital loss…. But, on other side, even though its past call, I would much rather own IPLDP over ALP-Q that is call protected and actually has a small but measurable YTC. Its 4.5% yield and $27.59 price is to me a much riskier investment than IPLDP is in terms of capital protection and yield.
Yeah, Grid, but you left me back in the weeds again, scratching my head and wondering why you use callable IPLDP as a parking place and not something like BAC-L or WFC-L, both de facto uncallable, easily traded, and also yielding ~5%.
Is it because of your ongoing preference for utes over banks that you take the call risk? Or, like Ameren, have you found obscure rate-setting transcripts for Interstate that mitigate that risk? 😉
Or just stability…
Good point, Camroc…I use that term differently than most so I shouldnt have used that word. I think most use that term as purposely trying to walk into a call or a hard anchor to par. Im not with this issue. I may trade more than you, but I still, like you, stay fully invested. I was just getting a bit too light in my Ute stash, so this was “best available at time scenario for me” purchase. I can own long term or hold until a better ute opportunity comes up, but this purchased amount will have to stay in the ute sector in some form.
It should have a bit more anchoring effect being past call, and yield certainly a bit above what a new quality ute issue would come to market at today. But, nothing magical here in this issue prospectus.
So off we go together to fight over more SBNCM at 6% again. 🙂
There was a day I wouldnt own a bank preferred. But several years ago I let go of 2008-09, just like I eventually let go of getting 8% CDs again.
Presently I dont want anymore banks. Heck I got ALLY-A, IBNKL, SBNCM, and CBKLP. Then toss in some insurers and such I own, I have enough financials for my own good.
BTW, am I still in your will to receive those foreign tax loss carry overs?
Interesting. I never thought of it like that, where negative ytc does not apply to stocks in specific situations. I would think that it always matters unless it is a broken/busted and un-callable stock. Since i follow that rule where negative ytc matters in all situations except busted investments… I don’t get burned by that investment. The most I venture into negative ytc is 1 dividend above par.
Also, if any investor thinks they can outsmart and predict the actual call date of any investment in this environment where rates go up and down, and with all the unique characteristics of each individual company, and therefore downplay ytc….
How do you explain AGO preferreds. I have owned and traded AGO-E bought below par. Negative yield but they don’t call either.
Unfortunately you cant. But someone that owned Bpopp could have written that same comment last week. It works until it doesnt.
So true Mr. Lucky. Maybe the executives own a lot of preferreds and won’t sell it out of greed. Hard to tell. I probably jinxed myself for bringing up, lol.
Hot potato game, everyone hopes he will not be the last.
Brought some OSBCP after the last drop. The drop was caused by the management saying they were considering calling in this issue. The conference call transcript yesterday is as follows.
“Jim Eccher (he is the CEO)
Yes, obviously we’re focused internally on organic loan growth first, but we certainly are taking a very hard look at TruPS redemption and reducing some of this high cost debt. That is probably right of the top of the list”
This is trading at $10.60 with a Par of $10. To me, not worth the risk, since it’s at the top of the list
PEI and it’s preferreds are getting slammed today. I don’t see any news. Probably a leak on their upcoming earnings. Dividend cut?
CORR-A with a current yield of 7.24% trading at $25.44 – $25.45. Goes ex-div on 2-14 at $0.4609375. The company has announced the ex-div date of 2-14 and payment date of 2-28 for that dividend amount.
https://investors.corenergy.reit/investors/press-releases/press-release-details/2020/CorEnergy-Declares-Fourth-Quarter-2019-Common-and-Preferred-Stock-Dividends/default.aspx
This becomes callable on 1-27 (next Monday). But you have $0 call risk with the dividend announcement. No call date has been announced.
Good capture the dividend play. I bought some earlier today at $25.43. May flip it if it gets overpriced going into ex-date.
This is from CorEngery 4th quarter 2019 earnings presentation which is on their website. Page 12
2019-2020 Initiatives
CorEnergy anticipates:
• Completing one to two acquisitions
• Continued strengthening of the balance sheet through scheduled debt
repayments and opportunistic repurchases of preferred equity
So, they have told their shareholders, they are opportunistically looking to do repurchase(s) of their preferred. Since they used the term “opportunistic repurchase(s)” perhaps partial calls. But, people may run it up after the call date, so yes it could also be a flip.
Cincinnati Bell’s bid from an ‘infrastructure fund’ is 14% above buyout deal with Brookfield Infrastructure
Cincinnati Bell discloses receipt of unsolicited buyout bid for $12 a share in cash
Marketwatch
The much discussed CBB-B is now $49.50. Had climbed back to around 48-49.
AATRL – Seller in mrkt right now with offering @ 47.65 [-1.95%]… YTM = 5.50% for this BBB rated trust preferred due in 2037. YTM actually is even higher than this as I calculated yield @ 48.03 originally this morning
I bought 200 shares of AATRL, a little too early as it turns out, at $48.06.
Volume is unusually high – figure its an institutional fund dumping big time.
But since redemption value is $50, this is “below par”.
This will likely be a mid to long term hold, unless it shoots above par in the future.
I bot at 48.06 too, Inspy, but then washed and repeated at 47.65 as well… It’s my assumption that AFG could be in for an S&P downgrade should there be an inordinate amount of outflows this reporting period, but if there are, it most likely will still leave this at IG rated…. Even were it not, with BB rated new issue preferreds being sucked up at rates lower than 5% these look cheap to me……. Yeah, “below par” is an inconceivable concept in this market, isn’t it?
Geeez, 5 minutes editing time is just to short for me!!! I meant AMG not AFG.
Why is this a pink sheet issue?
it was privately placed back in the day
thanks
I have never checked out this security before. Being a long maturity low credit risk issue I expected to be closely following TLT. Instead after the underlying stock dropped hard the embedded option became worthless and lots of holders bailed out. Now it seems very interesting for bond investors since as a plain vanilla bond (even if junior) looks quite undervalued vs similar notes issued by AMG. I think I will get some switching out of MGR.
A Breed Apart –
Would you ever expect to see an HDO article being written with a title like, “Preferred Stocks: Why ‘Yield-To-Call’ Matters?” How un-Rida like…. There’s only one explanation – PST wrote it.
2whiteroses – BINGO
Understanding YTC may help some investors figure out why their preferred investments only make 2-3% returns. That, and call risk.
NEW GS Coming
4.625 – 4.75%
The GS is going to be 1k par non traded
New GS issue will be a 5-year Treasury reset, no listing, and outstanding preferred all BB rated.
No minimum rate; no conversion option.
The truck will stay parked in the garage.
NEW ISSUE
ARMOUR Residential REIT, Inc. Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share and liquidation preference of $25 per share
NYSE: ARR
Series C Cumulative Redeemable Preferred Stock
Size:
$25 million (1.0 million shares at $25 per share)
7.25% area
ARR-B partial call
Thanks PTrader
Thanks EarlyBird
RILY raises guidance again. This is getting to be every quarter now. Wish I had bought the common stock instead of the baby bonds!
These guys are smart operators. Hopefully their investment in GSLD is one of the ones they got right as I followed them in on that one.
I lucked out on RILY common by buying in via arbing when they bot FBR so got a great entry price, but what fascinates me right now is RILYZ. Here we are in a market where people in general are playing the will it or will it be not called game on so many other issuers and being willing to buy right up to and through a 0% YTC risk in their bets and here we have RILYZ trading at better than a 4.25% YTC on its last trade price of 25.24 for 5/31/2020 call AND 7.30% YTM (both figured conservatively using 04/30/27 as maturity instead of actual 5/31/2027 to simplify the bond math) when RILY’s firing on all cylinders and you have the recent past history of RILYL 7.50% having been called on 12/30/19. So not only do you get a great YTC if you’re willing to accept it as a real possibility and might want to consider the purchase as a short term play for a cash alternative, but you also get the RILY baby bond with the highest YTM. To me, it seems very cheap no matter how you slice it and it’s hard to find practically ANYTHING right now anywhere that can be considered cheap. Am I missing something? Throw in RILYP’s current yield at 6.80% for the perpetual preferred by comparison and you still have RILYZ as cheap in comparison.
2WR, you make some good points and I may just buy some RILYZ. However, you can’t compare RILYP, a QDI preferred, to RILYZ a baby bond. apples and oranges.
Zwei – Sure you can. I get what you’re saying but just as long as you take all things into consideration there is a comparison to be made …. I used RILYP was a throw in comparison to what I was saying but for comparative purposes, I’d counter balance the qdi aspect vs the higher positioning in the capital stack for RILYZ and also give weight to the short term 2027 maturity vs the perpetual nature of RILYP. As long as there’s a positive interest rate curve, there’s value to a 2027 baby bond vs a perpetual preferred but then again, in today’s environment many would NOT consider a relatively short maturity such as RILYZ a plus nor would they be the least bit impressed with a great YTC when 2020’s the call year. I’ll accept it and look at RILYZ as a short term play that only gets better if I’m wrong in considering it to be.
RILYG has a similar YTC but with the call date at the end of 2020. RILYZ serves as a call buffer for RILYG, so I like knowing that in all likelihood, RILYG won’t get called until at least a few months after the RILYZ call. RILYH is an interesting play as well. Given the early redemption penalties, it’s not likely to get called and it has the shortest maturity date of 2023 which adds to safety. I think it’ a 5-something % YTM.
Good points on both RILYG and RILYH, LI. I had not remembered there were premium call prices on RILYH so that makes it even more interesting. Also the YTC for the 12/31/2020 call on RILYG is actually north of 5% so both of those points explain why RILYZ seems locked into this 25.25 price for now… I guess I’ll take the RILY bb’s one call possibility at a time and stick with RILYZ for now…
If anyone wants to buy Gridbird favorite SBNCM, it is trading today for 15.02 (= 5.99% yield). (Anyone want to fess up to being the seller?)
Looks like the seller is all finished – 4907 shares traded.
Ha, funny you mentioned that, David…..I bought a bit over 1000 today and Camroc said he got 1500. I bought early and waited to see if he wanted any but he was already on it. I went to buy more and got the last scraps to get me a bit over 1000. Camroc is a good guy, but I kind of regretted selling mine to him early last year. At 6% non callable, its good to have in the fold. No action or ask pricing out for sister SBNCN today.
??SBNCM Cant find this symbol is it traded on a U.S. exchange?
Its an old 1980s issued non callable preferred, as it actually was a convertible back in the day, but that period has long since expired. The parent largely went “dark” being insiders pretty much own the bank. I had to go into EDGAR in 1990s filings to get the history of it before I first bought. I originally found it on the OTC Markets website. You can see the common stock SBNC trades at $3875 a share and had zero shares traded today and an average 30 day volume of 11 shares. The preferred only sporadically becomes available a couple times a year. Its sister issue SBNCN is a twin, but smaller float and trades even less.
Its a Carolina bank and trades on OTC
I was busy today, and did not see these messages until just now, pity. I would have grabbed a few shares.
Thanks for the detailed explanation, didn’t come come up on Fidelity but did on my Schwab acct. under OTC pink sheets.
Out of curiosity, at what price and rate was SBNCM issued at, thanks.
$10
One can search here in III. Enter symbol in search box on top right (in this webpage). Search Results for SBNCM will include one entry entitled: “Sock and Underwear Drawers.” Scroll down to a post by Grid on 1 May 2019 that includes a link to an EDGAR doc and explicitly conveys the information.
Aarod, is not only a good guy, but a good record keeper. He kept the link I found and gave to him. I lost it long ago, but he keeps good records and sent me back the link, ha. I think I need to make him my record keeper! You can read through it all. SBNCM is the series B.
https://www.sec.gov/Archives/edgar/data/703904/0000703904-96-000004.txt
Aarod told me he got in the action today also. Between Aarod, Camroc, and myself, we bought all but a few hundred shares of went out for sale today. Who knew getting a 6% QDI non callable would be so exciting! 🙂
Good for you guys, thanks for the reply. ATB.
If I read it correctly. It has a $10 liquidation value and not callable by the bank.
That is correct, Tim. Unfortunately the 38 preferred shares for 1 common share exchange has long ago expired as that would be a most profitable conversion today, ha.
Yudaman – Grid. Thanks to you and Aarod.
MER-K unusual volume spike and sell-off, any idea if this is being called?
There is this filed today for BAC – https://www.sec.gov/Archives/edgar/data/70858/000119312520010653/d870970d424b2.htm#psupptx870970_7 Use of Proceeds “We intend to use the net proceeds from the sale of the depositary shares representing interests in the Preferred Stock for general corporate purposes, including, but not limited to, the repurchase or redemption of outstanding preferred securities.”
i did see that but mer-k isnt a preferred right ? also, cant seem to find what the market cap of mer-k is
No they’re notes. They used to be some kind of trust preferred issue that got swapped out for the underlying a few years ago
True – MER-K is a note as described on quantum…. I’m not familiar with it actually, but I suppose you might find mkt cap somewhere in notes in a 10k if you want to go on safari……. and with BAC-Y 6.50% already having been called for Jan 27, I suspect a new issue would have the potential to trip off a selloff on MER-K 6.45% due to fear factor be it not a preferred or not – how’s that for great English?
42m @ 25
Just remember MER-K is viewed by BAC as a trust “preferred” security. That may or may not mean anything. A list of them is below. BAC if memory serves may have some private placed of $1000k QDI preferreds also, so who knows.
https://newsroom.bankofamerica.com/press-releases/bank-america-announces-redemption-35-billion-trust-preferred-securities
BTW, at Rivera Maya and weather is great!
I don’t think that is accurate anymore. They redeemed the trust and the underlying note is held outright now.
MCG, The link isnt in reference to the redeemed security, but to show the list that they viewed them as trust preferred securities. As far as MER-K I never heard of the trust being redeemed with underlying debt outstanding, but its possible. It defeats the purpose of the tax benefit and tier capital status.
But maybe it lost its grandfathered Tier status. I used to own this thing and trade it a lot. But the risk/reward of its price redemption wise in addition to it being the last trust preferred outstanding moved me on.
Grid- I’m referring to MER-K specifically. here is the filing on it: https://www.sec.gov/Archives/edgar/data/70858/000119312518275247/d624367d8k.htm
MCG, thanks for correction and clarification. I suspect then they did it as it Basel 3 requirements may have voided the tier 1 status of issue. Im no bank expert, but this sure would seem the issue has less protection especially at the premium to par it is at, even now. I got enough excitement with ALLY-A and hanging on there. Just bought a non callable QDI preferred big premium, hope there is no loophole, lol.
For whatever it’s worth, p 64,65 of 2018 Annual Report says, “During 2018, we redeemed trust preferred securities of 11 trusts with a carrying value of $3.1 billion and recorded a charge of $729 million in other income. We also collapsed two trusts, with no financial statement impact, that held fixed-rate junior subordinated notes with a carrying value of $741 million that were outstanding at December 31, 2018. At December 31, 2018, we had one remaining floating-rate junior subordinated note held in trust.”
If any of you are owners in Amtrust issues and are flying a bit blind (understandably since its private), you may take comfort in this as one can see
indirectly through Enstar which is an equity owner in Amtrust. Notice they are receiving dividends from their investment. This was last post quarter from November. Looking at page 62 of Enstar financials on link below, one can see Enstar received 1.9 million in quarterly dividends and 5.5 million in first 9 months of fiscal year.
https://investor.enstargroup.com/static-files/cc018e40-2276-4244-9297-d104cce3a937
Amtrust has one 6.125% 2023 public senior unsecured bond that is trading over par at $103.18 or a 5.135% YTM.
https://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C616097&symbol=AFSI4155691
If you look at the chart of AFFS or AFFT it has been a thing of upward crawling beauty since the delistment uproar a year ago.
The baby bonds are now in the $21 range and around an 8.5% yield. I am not a big dumpster diver, but have been very pleased with this ongoing investment. And of course I keep the position modest here. But one may put on radar to WATCH if they are looking at an addition to their high yield bucket (not a conversion from a CD, lol). This may not be suitable for anyone to invest in as it depends on your goals and strategies. Since I own it I try to track it down every now and then as getting info is tough on this.
Several high yield REIT preferreds callable now have jumped to 3-4% above par. Are we fixing for another round of calls and re-issues?
DX-A $26.22
MFA-B $25.97
MITT-A $25.90 MITT-B $25.78
TWO-D $25.73 TWO-E $25.70
CMO-E $25.67
I own MFA-B, but there is a MFO baby bond with a higher coupion rate and also callable. Hoping this provides for a buffer against a MFA-B call.
If the baby bond gets called, I would start thinking about selling MFA-B, but not now.
I also own MFA-B and what you said about their calling the higher yielding baby bond MFO first makes good financial sense. It would make their balance sheet look better also.
Yes, that is another useful point to note.
MFO sits above MFA-B on the capital stack.
And the last time I looked, MFO is trading at a slightly higher price, which implies that investors do not regard call risk as exceptionally high.
Likewise, higher coupons on MITT-A vs -B, and TWO-D vs. -E may offer some protection for the latter, unless they called both at once (like CLNY-B and -E a few weeks ago).
Would also think ABR-C is pretty high call risk.
Martin,
I don’t know, but I think they’d call MITT-A and/or -B only when they can fund the call by issuing another new preferred/baby bond at ~1% lower coupon (i.e., ~7% to 7.25%). They may be unable to do this, since in September they issued MITT-C at 8%. Just surmising.
mbg
I bought MITT-B in several accounts last month when the price was right. Gradually selling off as the price goes up. Trying to pace call risk vs high return. here’s also some side action on the dips.
Also have CMO-E which isn’t quite in the sell zone yet.
You can add the STAR preferreds to this list D,G & I – all trading around between $25.60-$25.80. I believe they go ex-dividend around the end of FEB
For you high yield chasers, an update on CEQP-. They are raising the common unit payment and are projecting long term leverage down into 3.5-4 area by end of this year. Thus their confidence to raise the distribution. I bought a few hundred more today at 9.25. Goes exD next month too. It pays over 9% and is essentially uncallable unless a change of control occurs if memory serves me.
This is an UBTI issue so I am keeping light still here to avoid the tax issue in Roth.
Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood” or “CEQP”) announced today that the board of directors of its general partner has declared the partnership’s quarterly cash distribution of $0.625 per limited partner unit ($2.50 annually) for the quarter ended December 31, 2019. This represents a 4.2% increase over the distribution for the quarter ended September 30, 2019. Crestwood expects to maintain the quarterly distribution of $0.625 per limited partner unit, subject to the board of directors’ quarterly approval, through 2020.
“As Crestwood nears the completion of our three-year organic capital investment program around our core assets in the Bakken Shale, Powder River Basin and Delaware Basin, we have clear visibility to generating substantial free cash flow which will drive our leverage ratio in-line with our long-term target of 3.5x to 4.0x by year-end 2020. Additionally, with our current outlook for 2020 and our targeted distribution of $2.50 per unit, we expect our coverage ratio for the year to be approximately 2.0x, providing Crestwood the financial flexibility and confidence to begin returning capital to our unitholders today,” Robert G. Phillips, Chairman, President, and Chief Executive Officer of Crestwood’s general partner commented. Mr. Phillips continued, “Crestwoo
Rida’s article bumped it up almost 20 cents… it has been falling back a bit. So it might be volatile in short term if you are wanting to flip. Some of their suggestions are volatile in the first 3 months because they have members that pump and dump as well. If the perceive the stock is stagnating/falling, then they dump the stock to capture the small gain from the recommendation from being a member.
Rida might be an investment moron… but this particular article caused over 10 million + trades at article publish time. He can move trades. This is why SA will protect him no matter what his background is, or what he says.
I agree Mr. Lucky with everything. But this was issued about a month ago. And some concentrated owner wanted out as the liquidity has been there for weeks on end. When one looks at the 9% plus landscape pickings are thin. Heck Amtrust baby bonds are well under 9% now also. But the key to me is the upgraded financial position. And at that projection Moodys already stated they would be in line for a credit upgrade if they got below 4X.Still as we both know, it aint no CD…Rida cant be trusted to tell the truth but he has a good gig going. Preferred Stock Trader reco’d this one and wrote it. Rida couldnt spell Crestwood. PST is an honorable dude out of that outfit.
Yah, I am just exercising caution or throw spec money at it. Rida’s group essentially traded 20% of the shares. Also making assumption that the people that wanted out were the ones taking advantage of the premium that Rida’s folks were paying in the price to take it off the lows. Probably with the discussion of some of Crestwood’s customers seen in financial trouble has caused some angst. Then on top of that… how many of these new buyers are long term holders? So just mentioning the idea that it might be volatile up or down because it trades 5,000-50,000 per day, and not millions/day as when the article came out.
If investors stay in Midstream long term, and they get burned again for the 2nd time, I will be among the ones to say, “i told you so.” But.. for high yield chasers, this is an idea. 🙂
I have never been burned there so maybe its my turn. Its a small play being the credit profile and UBTI. But still allowing for approaching 21 cent divi and backing it out, that is essentially a purchase price near 52 week low that was in March. So it definitely hasnt moved a lot yet.
I did throw some chicken feed money at Corr-A a few days ago. So I dipped in this space too. It fits more of my style. It has gone through some rocky road for some history. It is at its call date (a few days), one month to another divy. I am hoping it is pinned to par for a bit. I will keep a short leash on it, but hoping i wont have to worry about it for the next few quarters.
I do have to find something when my 7,000 shares of KYN-F is sold back to me. 🙂
Well I feel for you Mr. Lucky its hard enough finding anything of good relative value. But to find a comparable replacement to fit the exact void that KYN-F created is next to impossible.
I have flipped a few things and then resorted to buying them back. The self flip of PLYM-A was a good one for quick buck flip and repurchased 53 cents lower a few days later. But my PRIF-A reached a bottom barrel low. Sold them at $25 this week and bought back today at $24.90… Pretty weak…
Hey Grid, or anyone in this forum. If we hold CEQP- for years and then go to sell it are we going to get a nasty UBTI surprise at tax time? I only have 800 shares so I’m not worried on a yearly basis. I wonder if you sell it early in the year that might keep you under $1000. Thanks for your response.
Tim, I am no expert here, and try to play safe. But I have never been burned with amount you are stating. You are referring to a tax free account correct? 800 shares is a bit less than mine (850) and the income generated is straight forward UBTI. So yearly your income received will be under $1000 so you should be fine as a hold.
Now if it ever materially appreciates a cap gain trade and distributions could put you over. That is the part I am not clear on. So if close I always sell after January to make sure a cap gain doesnt trigger anything. It may not, but I assume the worst. I had 3 different tax free acct spread out over 2 brokerages in years past. So I could buy quite a bit. But now I only have 2 from same brokerage. Technically the UBTI is per account. I havent had them combine into one yet, so I am hopeful that stays as is and I dont screw up. 5 years of playing the game of this and so far so good. I do try to be cautious though.
Thanks Grid for the helpful info. I was speaking about IRA. ATB.
$DUK-A. Via an SA subscription, I’m being told to sell this 5.75% Duke Energy preferred, which I bought at par. Not callable until 06/24. Current price is $28.03. Yield to call is 2.38%. The sell advice is based entirely on valuation as reflected in the YTC. Do you agree? I’ve never been down this road before. Thanks.
At $28.03 that would equal 25 months of interest. I would have sold it yesterday………
Agree with Gary, however you didn’t say if DUK-A is held in a taxable account or not. If it is you may want to hold for a year + 1 day to capture long-term capital gain benefit depending on your circumstances.
HONG KONG, Jan. 17, 2020 /PRNewswire/ – Seaspan Corporation (NYSE:SSW) announced today, in connection with its previously announced holding company reorganization (the “Proposed Reorganization”), that it intends to delist its outstanding 7.125% senior unsecured notes due 2027 (the “Notes”) from the New York Stock Exchange (the “NYSE”) and to deregister the Notes under the Exchange Act of 1934, as amended. Delisting and deregistration of the Notes is expected to occur on or about the effective date of the Proposed Reorganization. Seaspan has not, and does not intend to, arrange for listing and/or registration of the Notes on another national securities exchange or for quotation on another quotation medium. Seaspan intends to exercise its option to redeem the Notes on October 10, 2020, the first date for early redemption, at par plus accrued and unpaid interest to, but not including, such redemption date.
https://finance.yahoo.com/news/seaspan-announces-intention-delist-7-134500556.html
Fabrib,
What does this mean? I hold ssw-d; will I be able to sell ssw-d? Should I?
Daniel–the same press release mentions they will be calling it on 10/10/2020. Prior to that it will quit trading on a public exchange (although there is a chance it could trade on the OTC pink sheets). Looks like there would be 3 interest payments of 44.53 cents and it is now trading around 25.87 so selling now would forgo around 40 cents.
It all depends on how comfortable you are holding something that you can’t see the latest price. Also what is your confidence level that they will actually call it.
https://innovativeincomeinvestor.com/security/seaspan-corporation-7-125-notes-due-2027/
I’m seeing 4 total interest payment if one includes the one coming up this month on 1/30/20.
GLV, remember its already exD on this one for anyone looking to buy. As Tim said it could fall into Pink sheets such as the Amtrust issues. Or it could be jettisoned to the bond market ala, PFX or IEH when they delisted.
Good point, thanks Gridbird.
And SSW preferred shares will become Atlas shares:
SSW will also create a new holding company, Atlas Corp., which will become the parent of the containerships operator. The reorganization is aimed at providing operational transparency and advancing capital allocation initiatives.
Under the holding company reorganization, Seaspan common and preferred shares will become holders of Atlas shares.
SSW will also buy mobile power services company APR Energy Ltd. in a stock deal valued at $750 million, including debt. The deal is expected to close in the first quarter of 2020.
Thx Tim and GLV,
Assuming they will call it on Oct, I will get $25 plus $1.99 in interest = $26.99. So, if I understand correctly: if I dont mind leaving it, there seems to be no reason to sell now at a significant lower price than $26.99. Am I missing something here?
Thx
Daniel–I think you will get 3 payments of 45 (1.35) including the one this month–plus a partial–so maybe around 1.60 (off the top of my head calculations)–but yes if you are comfortable holding and you believe the economy will hold up probably is ok. Final maturity is 2027.
Tim,
1. If one wants to hold it and assumes it will be called on Oct, then not only is better not to sell now, but it seems this is an “easy money” buy: you can make around $1.00 in 9 months buying it now at ~$26, isn’t it? That’s around a 3.8% return (~5% annual return)!
2. As we know, there are no free lunches, so I am suspicious: why would they delist it now? What could be the reason not to leave it listed until Oct?
One obvious risk is that the company goes down before Oct, but otherwise?
Thx!
D
The company is reorganizing under a new holding company and just bought a mobile power services company (so I doubt they are going out of business), and SSWA is the only senior note on their books–the rest are preferreds, which are not being delisted, though they will be renamed under Atlas, the new holding company. They say the note will be called in October, which is the first available call date. I speculate that it must simply be case of financials.
Yes GLV–just went ex–so you are correct 3 full payments and a partial.
What is the partial you refer to, Tim?
“Seaspan has not, and does not intend to, arrange for listing and/or registration of the Notes on another national securities exchange or for quotation on another quotation medium. Seaspan intends to exercise its option to redeem the Notes on October 10, 2020, the first date for early redemption, at par plus accrued and unpaid interest to, but not including, such redemption date.”
“ What does this mean? I hold ssw-d; will I be able to sell ssw-d? Should I?”
If you hold the preferred SSW-D then this should not effect you. The PR is for the 7.125% baby bond SSWA. However, I believe SSW-D is ripe for a call once they get this reorganization behind them.
Thx landlord, so a lot of misleading previous emails about ssw-d .
1. So to clarify: the PR is NOT about ssw-d. ssw-d is callable, and probably will be called soon. Thus: one should consider to sell ssw-d at some time/price.
2. Now, the PR is about SSWA, which is trading ~$25.3. If you buy now, you will receive $1.33 in interest until Oct. So here again: you will make ~$1.00 in 9 months. Isnt then SSWA a strong buy?
Why is SSWA not trading higher? (while writing this the ask went up to $25.59).
Thx!
D
Sorry Daniel–I thought you were referring to the SSWA issue. No wonder we were coming up with different answers–that and my old age.
You and I, or rather, my old age as I was the one starting the confusion by not reading the PR carefully.
Confusion apart (if now I read the numbers carefully), SSWA seems like a nice 9 month trade, this may be why it seems to be climbing; but still @$25.6x It produces >$0.70 in 9 months.
SSW-E, with higher coupon, would be even riper, no? But, again, I seem to have sold prematurely (along with ABR-C, DX-A)?
CR–SSW-E is a perpetual preferred, while SSWA is a debt issue (with a maturity date in 2027) so company motivations are different.
Yes, thanks. (Comment was referring to Landlord’s comment that SSW-D was ripe.)
And sorry for excess postings; earlier ones were somewhat delayed (at least for me).
CR–no problem. Actually for some reason you had 2 hit the spam filters–I pulled them out. We have lots of digital space so post all you want.
Hope someone doesn’t like the news. It’s some time I am waiting for a low entry-point to get some.
Wonder why they haven’t called pref-E with 8.25% coupon.
(Tried to post earlier, sorry if this is duplicate).
Wonder why they haven’t called pref-E, coupon 8.25%?
I have the same Duke Energy preferred plus NI Source (NI-B) and Alabama Power (ALP-Q), all of which have appreciated quite a bit since I bought them around par. I haven’t sold yet, mainly because I don’t know what I would replace them with and think there still may be more upside.
By the way, does anyone know of a site that posts current YTC?
New TRTN-D incoming
TRTN – Hearing 7% area
EarlyBird- thats what I’m hearing too, but haven’t gotten any color on size yet. You?
Scratch hearing a touch lower 6- 7/8ths
TRTN-D 2mm shares
Curious where you guys hear all this stuff…are you sitting with a CB Radio in your basement listening to the police channel?
I do this for a living 🙂
Ahhhhh!
I see that EarlyBird–thanks.
Thanks mcg–I see that.
For the record C just priced a 1k par pref at 4.7 as well (non-traded)
Just repurchased T-A at 25.88. I sold this at 26.40 on 1/02.
new WFC incoming. 4.875 price talk fixed
Thanks mcg–so few coming in so glad you caught it–I get lulled to sleep.
I suspect goodbye to my WFC-T that goes ex-div on 2-27 at a 6% coupon.
Yes seems likely WFC-T will be called on 3/15 dividend pay date. The blip down yesterday was kinda suspicious lol. I’m a little surprised still at 25.45 now.
We intend to use the net proceeds from the sale of the depositary shares representing interests in the Series Z Preferred Stock for general corporate purposes, including, but not limited to, the redemption of some or all of one or more series of our outstanding preferred stock and related depositary shares, as applicable. See “Use of Proceeds” herein.
It should be worth $25.375 because you will get the next dividend payment. But I sold at $25.46 anyway.
Yet quantum shows a couple of esoteric WFC high coupon other preferreds outstanding as well – WFC-L and WFCNO 7.98% – both 1k “par” issues, not baby bonds. WFC-L may be noncallable though.
Hello 2 whiteroses; I have wanted to buy “WFC+L” for many years now. I can remember studying it and wanting to buy it when it was around$1,300 or so. Today it was quoted at $1,500. You can read all the nitty gritty details over on Quantumonline.com. Its quite complicated and a little lenghty but worth reading. The chances of it ever getting called are extremely remote and next to zero. But since its been bid up into the stratosphere I doubt I will ever get to buy it. On a side note there are a few preferreds out there with decent coupons that have gone well past their call dates and have not been called.
T isn’t callable until 9/15/2019
Was callable on 9/15/2019 ?
Looks like first trades coming out around par
As expected, KYN-F being called Feb 13 following the initial funding of their new preferreds:
https://www.sec.gov/Archives/edgar/data/1293613/000119312520007167/d134838dn23c2.htm
Bought SOJD at $25.25 today on Fidelity. Not a super bargain but ok.
SOJD is now trading on Fidelity. Bid $25.25 Ask $25.27
lol – we made the same trade.
DHCNI trades slightly below the par.
ex-div today
CTV with big sell imbalance currently indicating to open @ $25.25; possible call? couldn’t find any info as of yet
Thanks Ptrader–possible call or possibly just ‘fear of call’.
AIRTP reverse split
https://finance.yahoo.com/news/air-t-inc-announces-reverse-200000761.html
is this a good or bad issue
Intriguing company this AIRT. Been around for long but tiny and not profitable. How did you find it? Any chance to see it cashflow positive? I read the management owns a large share of the company, do they have a target to reduce leverage?
SLMNP went exD today. Just making sure those who follow this dont see a drop without knowing why. LYB used to dutifully announce the declaration a head of time. But it appears going forward its just going to happen without a public mention anymore as this is the 3rd straight time without mention. Not unusual for a bastardized preferred. It will be payable Feb. 1, so probably several days after that since the date falls on the weekend.
Wake me up when it’s trading at 1015.
I kinda think you could be sleeping for quite a long time, Bob.
I sure wouldn’t mind if SLMNP went back down to $1,015 but I am looking to add around $1,018-$1,019.
Inspy, I figured you already had a full allotment here. You and Bob both had months on end last fall to already got what you needed at 1015-1018. Change of heart and wanting more, Inspudget? I have my base hold here and really am not a player here anymore. It will do what it does for a long term hold for me.
I’m with Grid, got my fill 1015-1019. Going to hold until the end of the world.
Two interesting “annuity-type” issues to revisit: MET-A and BML-J.
I see that BML-J is an ADR and that there may be fees associated with it.
???? That doesn’t seem right–that is an old Merrill Lynch issue prior to BAC acquiring them.
Yes, float on LIBOR, 4%floor.
The edit let’s me reply to David below if it has to be explained:
Already at floor, collect IG div QDI.
If rates go down it should be sideways to up.
If rates go up floating with LIBOR.
May be ballast in an uncertain world?
As mentioned conservative, annuity-like. Grocery and utility payments.
Thanks for posting Joel.
Buying a pfd that has a “4% floor” at 25.00″ below 22.22 turns the “worse yield possible” to 4.5%. But nothing is low with current run.
BML-J becomes interesting if next year everyone here becomes excited about 3% and want to hedge that. I remember all the posts here a year plus ago when comments were, “6% is too low for me, and I’ll pass on that idea.” Now we are becoming complacent about buying something well under 5%. I am personally not there on buying anything under 5%, because I don’t want to be sitting on a potential $3 – 5$ drop in price if rates start an ascent.
Classic mistakes in investing: Or a Broker’s Sales Pitch:
Trends don’t change much and if they do I am smart enough and quick enough to determine them quickly and change course. There will be perfect alternatives available to me at that time as I liquify and re-enter the correct issues.
I really don’t have enough capital, so I will risk what I have or an overweighting trying to manufacture capital.
I can make a series of decisions, over years, in a row that are correct.
Seeking alpha returns is an easy pursuit.
The Fed will always catch me.
Libor and the ten year bond rate will not go up in my lifetime. Look at the last 40-50 years years, but I have a life expectancy of 20-30 more years.
There are no real decisions for me to make regarding easy hedging or risk reducing tactics if there are they are not for me.
Investing is easy.
You have to take out sized risk to get out sized gains.
Cash is trash.
Joel, If nothing else, not every issue purchased sits on its own island. I personally view it as pieces to a puzzle for me. Although I dont own an issue like BML-J, I certainly have ones that accomplish the same thing and are similar. I don’t like leaning on one side of the boat income wise. That is why I got varied issues like SOCGP, ALLY-A, CNIGO, AFFT. All my 30 or so issues generally fall into one of those 4 types. Im not proportionally segmented across those lines, but do stay cognizant enough to keep some segmented balance.
It is a floater.
Time will tell.
I remember, back in the day, my father looked at all his solid IG utility bonds and said, “I’m not loaning any more money at 8%.”
Rates have been more or less steadily going down ever since. How low can they go? I have no idea but I don’t have that much time left–certainly not 20 or 30 more years–so I keep reinvesting and stay pretty spare-cashless.
Can we pay the vig, if rates shoot up? Or do we just keep printing money?
“I pity the poor immigrant, who wishes he would’ve stayed home.” –B. Dylan
JMO
BML-J is a traditional preferred stock, not a ADR.
What is interesting about 4%?
SOJD is a permanent NYSE symbol for the new issue by Southern Co. (series 2020A 4.95% Junior Subordinated Notes)
Thanks Yuriy
CUTLF Canadian Utilities Ltd 2 Preferred Series EE
BROXF Brookfield Asset Management Inc Pref Shares Class A Series 37 4.9%
Excellent 2 more Investment grade fixed rate Candian preferred issues that are investment grade. Both of which were on my list for next week. I also have Co-op General insurance (CCS.PR.E) that I am looking at.
SteveA – Once you’re finished battling Schwab over their treatment of international tax treaties, if you’ve still got a raised sword how about taking on Fidelity and the Nanny state? Talk about losing competitively, their stance on not allowing online trading of anything fixed to floating rate without having to call in is ridiculous. On top of that, I came up against 2 new idiocies of their nanny state just this week…. First I decided to park some money in MERFX, The Merger Fund. It’s the purest of pure funds dealing in arbed deals trying merely to capture spreads between securities mostly having to do with mergers….It’s hard to come up with a more conservative approach but Fidelity forced me to click a button declaring my investment philosophy to be ‘MOST AGGRESSIVE” before they’d allow me to buy. One lie later and I had my order entered… Then, I also own a KLA-Tencor bond due in 2021 that I bought AT FIDELITY! Wanting to take a profit and move out on the curve, I was going to put an offer out on my KLA-Tencor 4.125% due 11/21. Fidelity told me all I could do was put them out for a bid. Why? Because the bond has a clause allowing for a change in coupon should KLA-Tencor’s ratings change, either up or down… They interpreted that as floating rate and, therefore, they believe any Fidelity client holding it is too stupid to know how to treat it, thus making the bond less liquid for Fidelity clients instead of more valuable because of the clause itself, even though they allowed me to buy it originally from a listing they had at the time. I’ve moved money out of Fidelity more than once in the past because of these policies but kept my account there primarily because of their overall bond handling capabilities… With bonds in general seemingly so expensive, maybe it’s time to consider just moving on.
Ehhh, every broker has their own quirks.
Fidelity is the call in with the fixed to floating.
Seems Schwab’s is with foreign tax withholding
Others have issues with early trading of new preferreds in the grey market.
Some have issues with paying crap on their cash sweep accounts
You weigh the tradeoffs and make the best decision. For me, I can deal with the occasional inconvenience of having to call Fidelity for a fixed to floating issue I may want to buy because it does everything else I want extremely well. For others, their decision may be different. Sure, in a perfect world, there would be no quirks at any broker – but we don’t live in a perfect world so . . .
No, I will pass on that one. Fidelity is a mutual organization. I have worked for government and mutual organizations in my career. They truly march to their own drummers. Public companies such as Schwab, Etrade or Merrill have accountability to shareholders. They think and react differently. My experiences with them are that Fidelity will change it only if they feel like it. It’s take it or leave it with them.
Fidelity is not a mutual company in the sense of having no shareholders. It has no public shareholders. It’s privately owned by the Johnson family and current and former employees.
The only true mutual investment firm I know of is Vanguard. It has no shareholders, which goes a long way toward explaining why it does what it does. More than any other firm, Vanguard is responsible for driving down the cost of investing over the last half century.
I would venture a guess that John Bogle put more money into more peoples pockets that anyone who ever lived. We should be putting his name on public buildings, instead of the politicians who have spent the country into oblivion.
Every time I drive past the train Joseph Biden, Jr. train station in Wilmington, Delaware I feel sick to my stomach.
Bob, you make a very good point about Vanguard’s John Bogle… although you I’ll bet you could also make a case for Sen William Roth of Delaware. The Roth IRA has been so effective at helping folks avoid taxes, they had to change the rules on inherited wealth. Sic Semper Socialists!
The Roth is the best deal in the tax code, sans doute.
Roth was a great guy. He was a good retail politician and would be frequently seen out and about. He wore a big button on his shirt that said “Yes I’m Bill Roth”.
You have all these pols out there “fighting for you” but Bill Roth was one of the few who actually did.
No firm puts its best and brightest in compliance, but those are the guys who call the shots.
Plenty stupid, all right. There is all kinds of garbage they will gladly sell you but heaven help you if you want to buy or sell an IG-rated bond with an “adjustment” feature. The adjustment feature in the KLAC notes actually REDUCES risk (interest rate changes if ratings change). I wish more fixed income issues had them. As well as default rates on interest.
Your welcome.! Haha
My call with Keith at Schwab lasted 9 minutes to get 2 symbols set up. I’m getting pretty efficient at this. I’m heading in to my busy season at work so I’m likely done for a while so others will need to take it from here.
heavy seller in CFG-D
CFG-D is dropping from insanely expensive to very expensive. A couple more $ and it will be in a buy range. I captured my $2 gain awhile ago and have not looked back.
CHS reporting all kinds of concerning information today (IMO), Tim…. and others that own the Ag co-op. Despite the bad news, it’s trading up.
Thanks 2WR–will check it out.
SAB redemption
Thanks Ptrader. You would think they could have gotten all of it done on 12/21 with the partial call executed.
Any thoughts on how the SAB redemption plays out with respect to call date and final dividend?
Thx
If the call date is not the pay date then the dividend is pro-rated. That’s a general answer, not specific to this issue.
Thank you
Earlybird – Call date = Feb 7. Accrued will be from 12/30 up to and including 2/6 but not 2/7. If I figured correctly call should be for no less than 25.178 or no more than possibly 25.1828.
Anyone still holding SAB – There’s a legit bid still in the market this am @ 25.35. Maximum proceeds from call announced for 2/07/20 should be 25.178.
Here you go Tim.
4.75% confirmed for Metlife
Here is pricing sheet
https://sec.report/Document/0001193125-20-003127/
Boo — Thanks Steve A
Tim, I am reading between the lines that you arent locked and loaded on this issue for a quick dollar flip! 🙂
Grid – the last one of these I tried with a low coupon on PS Business Parks 4.87% (psb-z) it didn’t work so well–I let it fall on issuance and bought on the fall–been holding it since and finally have 1% (counting a partial div)–about 2 months
https://innovativeincomeinvestor.com/security/ps-business-parks-4-875-cumulative-preferred-stock-series-z/
On the other hand as you have said before ‘names count’–so if it fell on open enough I could get a taste of it–just wouldn’t hold my breath for anything quick.
Energy Transfer Operating, L.P. (formerly, Energy Transfer Partners, L.P., and a subsidiary of Energy Transfer LP) (“ETO”) today announced that it has priced an underwritten public offering of $1.0 billion aggregate principal amount of its 2.900% senior notes due 2025, $1.5 billion aggregate principal amount of its 3.750% senior notes due 2030 and $2.0 billion aggregate principal amount of its 5.000% senior notes due 2050 (collectively, the “senior notes”) at a price to the public of 99.924%, 99.843% and 99.914%, respectively, of their face value.
ETO also announced that it has priced an underwritten public offering of 500,000 of its 6.750% Series F Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units (the “Series F Preferred Units”) at a price of $1,000 per unit, and 1,100,000 of its 7.125% Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units (the “Series G Preferred Units,” and together with the Series F Preferred Units, the “preferred units”) at a price of $1,000 per unit…
https://www.marketscreener.com/ENERGY-TRANSFER-LP-40511769/news/Energy-Transfer-LP-Operating-L-P-Announces-Pricing-of-Concurrent-Offerings-of-4-5-Billion-of-Se-29805228/
I just saw this, but don’t know what to think. Is this a positive for the company?
EPD to issue 3 senior notes, the 40-year (the highest yielding one) to yield < 4%:
https://www.businesswire.com/news/home/20200106005977/en/
New Issue MetLife Preferred
Issuer: MetLife, Inc. (Ticker: MET)
Size: $250mm (10mm $25 par shares)
Expected Ratings: Baa2 / BBB (Moody’s / S&P)
Maturity / Call: Perpetual NC5
Price Guidance: 4.875% area (Fixed)
Offering Price: $25.00 per depositary share
new MET-F coming
What’s up with MTL- ?
Just sold out of Ver-f $25.60 through $25.64.
Libero–am considering the same, but my cash is piled to the ceiling as filps and captures are sold off so am trying to hold off a bit more.
Yeah me too. I am up to 20% cash but we know this one will sink when the next call is announced and we can buy it back. I also expect there will be better times ahead to deploy the cash.
Sold all of mine too…
Issuer: The Southern Company
Security: Series 2020A [●]% Junior Subordinated Notes
Expected Security Ratings: Moody’s: Baa3 / S&P: BBB / Fitch: BBB-
Issuer Ratings: Moody’s: Baa2/ S&P: A- / Fitch: BBB+
Outlooks: Stable/Negative/Negative
Format: SEC Registered
Initial Size: $250 million (10 million $25 par securities)
Over-allotment Option: None
Price Guidance: 5.125% Area (fixed-for-life)
Denominations: $25 x $25
Maturity: 60nc5 (January 30, 2080)
Trade Date: January 6, 2020
Settlement Date: January 9, 2020 (T+3)
Listing: NYSE Expected
Joint Bookrunners: BofA (Physical), MS, Wells, JPM, RBC
Thanks EarlyBird
AFINP, with a 7.5% coupon, is now trading around par.
Just did a dividend capture. Bought 25.25 sold 24.98 for a net profit after div. I’ve been in and out of AFINP a couple times since the secondary offering. Hasn’t done much.
I grabbed more shares under par. I now have a full position in 3 accounts.
FYI – for anyone that has accounts at Vanguard, I just logged into my account this evening and they are now providing free trades as well. This was mentioned in Barron’s last week, but now appears to be the case.
Happy investing to everyone in 2020 and I wish you all continued success!
Some Middle East news is impactful. Futures have changed direction. The price of oil is spiking. Tomorrow we may see some unexpected market spikes
BREAKING: Israeli military on high alert amid killing of Qassem Suleimani
Yashar Ali 🐘
@yashar
1. There are unconfirmed reports that Qasem Soleimani commander of Qods Force (Iran’s external security agency) has been killed in drone strikes. If true, this will be a major moment in US-Iran relations & Supreme Leader will undoubtedly see this as a major provocation/act of war.
If some feel this is political, I do not. I classify this kind of news as world events that potentially can impact stock and commodity markets and therefore impact investing decisions.
Well, everybody who seemed to think prices were too high, this act of war might just do the trick…
DHCNL going crazy today. has bids @ $28.07 with offers not in sight. If anyone has this, please sell for gs. can’t short, broker cannot locate shares
Schwab tells me that that they have not received the new DHCNL shares that are replacing the old SNHNL shares, which are no longer trading. Bummer, my small position would have turned a fat profit had I been able to sell the new shares.
PTrader–thats absolutely crazy. While I do think that there are some goods things going on at the various RMR companies (which historically is a rarity) this jump is simply silliness.
ZION bancorp preferreds now listed on NASDAQ with new symbols
ZBK -> ZIONL
ZB-A -> ZIONP
ZB-H ->ZIONN
ZB-G -> ZIONO
Thank you, VJ
Anybody knows what’s going on with JMPD?
new symbols: JMPNL
JMPNZ
And down c 2.4% – don’t see any news, not callable till November 20. What am I missing? Also Zions Bank 5.75 QDI pref was ZB-H, now it’s ZIONN. It is callable, has dropped only a few pennies.
Any insight into what’s up?
And HAPPY NEW YEAR to everyone on III!
Seems to be something going on with Senior Housing Properties Trust and at least the 6.25% Senior Note Callable 2/18/2021 Due 2/1/2046, symbol SNHNL. Schwab tells me there has been a name change and the new symbol is DHCNL. The other note, SNHNI, has not changed symbol yet but is expected to shortly.
Could there be a price disruption with this change? No idea but may be worth keeping an eye on.
new symbols:
SNH –> DHC
SNHNI –> DHCNI
SNHNL –> DHCNL
https://www.dhcreit.com/news/press-release-details/2019/Senior-Housing-Properties-Trust-Announces-a-Name-Change-to-Diversified-Healthcare-Trust/default.aspx
Quantumonline down for everyone?
Looking at Quantum on holiday of New Years? Geez you blew your cover on your new years resolution. Its pretty obvious now you are getting a head start on jumping head first into the flipping game and are rounding up some prospects, ha. You can use Tim’s site instead as he has links to the prospectus of issues.
Grid- A quick review of the year tells me I have no choice…. Despite such a good year, I’m seeing outgoing to QVC/HSN et al consuming mass quantities which means I have to pick up the pace to generate more incoming… And speaking of flipping, I hear they’re making book on you in Vegas regarding EP-C and yesterday’s close. I’m taking the under that you’ll be in EP-C beyond 10:00 AM tomorrow if yesterday’s close is available at tomorrow’s open….that is of course assuming you weren’t the supply source for the afterhours trade yesterday. lol
I wish that was me, you darn right I would have been out the door at that price, but it wasnt me. I am almost now out already out of it anyways, lol. Selling in the 50.50-50.75 range in some small trades the previous couple days. Its been doing that goofy acting stuff. Would put an ask up at 50.40 and not a bite at all. But then throw out a 50 share market order bid and that hits at 50.69. Its very weird, a few months ago I did that with an ask at 50.75 Getting nothing and then sent market order and got $52 out of it. Its an odd one. I hit my goal so I am pleased. Used proceeds basically to buy that SL Green Preferred yesterday.
It works on my PC.
Down for me too (from Greece). Up when I use VPN.
If anyone else is having trouble with quantumonline, I discovered clearing the cache took care of the problem…. I had the problem on Chrome and Firefox but when I found out I did not have the problem on IE or my seldom used Brave browser, I cleared the cache as possible solution and that worked to solve the problem on both Chrome and FF
WRB-F, with a 5.10% coupon and BBB- rating, is now trading under par.
12/30 CGBD Note
https://seekingalpha.com/pr/17737115-tcg-bdc-inc-issues-115_0-million-of-4_75-notes-due-2024-par
Any opinions on TDA Telephone and Data Systems…can be called but trading at 25.11 so minimal risk…5.875%. Thanks. Steve
I owned TDA most of the year. I took my profits and brought UZA which is owned by Telephone Data Systems also. Eventually, they will start calling their issues but among all their callable preferreds, TDA would be pretty low on the list. If you look at all the TDS and USM preferreds, 5.875% is one of their lowest coupons and has a chance to not be called.
Yes I noticed that which made this a bit interesting to me since it was trading near par. Steve
GECCN, with a 6.5% coupon, is now under par.
GECCL moved under stripped par last week. I grabbed a bunch for the short term opportunity. Now I need to decide if it was a wise play, or is there a good reason they both fell. GECCM has been volatile but not the same bargain range (yet).
Now GECCM is down too. All I could find was GECC declared a special dividend on the common stock. Maybe it was an attemp to stifle the short sellers, because they don’t have the money for extra payments. I’m trying to exit this position now.
Zacks downgraded the common to sell from hold today. This too shall pass. Taking a page from SteveA, the Moody’s Risk Score for GECC is 5, which is considered moderate. I consider it a buying opportunity.
Though I don’t follow GECC closely, what I do know is one the biggest knocks against it is its high portfolio concentration in a satellite company called Avanti Communications that has been a very troubled issue for a long time… I think the only current listing is under symbol AVNLF and that shows as being worth 1 1/2 cents. I know from GECC last 10Q they still own a lot of common plus a couple of second lien loans… Maybe that’s turned even more bad?
Well, they are baby bonds with a set maturity. But everyone must do their own due diligence and determine their own risk tolerance.
This is what Arbitrage Trader on SA said about the GECC baby bonds in October:
“At this point, on a comparative basis, as decent issues without taking too much credit risk, I find GECC’s baby bonds – GECCM, GECCL, and GECCN. The company’s debt-to-equity and interest coverage ratios are good. Moreover, it’s a BDC that needs coverage of at least 150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. The three are yielding at an average of 5.00% Yield-to-Call, a return that is hard to find from issues trading at or above par value.”
The company is creating some uncertainty with investors because of a company that has the largest loan from them. They have not diversified, and the money they loan to is a small set of customers. Their market cap is like 70 mil. The company I work for matches their annual earnings in about 15 minutes of business. I would only trade or flip this and not be a long term holder. There is also too many shorts out there, which is where the action is. If you make your money on lending to risky businesses… well there is a risk to that. You are dealing with companies that can’t get a loan anywhere else, and you are squeezing them for high interest loans. There is way too many big fish in the BDC businesses that get the best loans and make the best deals. This is not one of those companies.
What is interesting is that they did a special dividend. I am not sure how they can even do this when looking at the books. My guess is they are trying to get the shorts out of the way, as they really can not afford this dividend.
New IRA rules coming:
You’ve got to hand it to these people– Congress really knows how to bring out the holiday cheer.
They have some sort of pathological need to pass the most absurd legislation at the VERY END OF THE YEAR giving people very little time to react.
Two years ago, for example, they passed comprehensive tax reform in late December 2017… and the new tax code went into effect only a few days later.
Taxpayers had no time to even understand the new law, let alone plan around it.
That’s the funny thing about taxes– people plan their entire lives around the tax code.
They set up special structures, invest in particular assets, and go through all sorts of legal and accounting work, to make sure they’re following the tax code while they take care of their families.
And then, poof, Congress changes the rules overnight.
Well they just did it again.
A few days ago they passed a 643-page spending bill. And, buried deep within that legislation are provisions that were originally part of the SECURE Act.
I told you about this a few months ago– the SECURE Act was intended to ‘help’ Americans save for retirement. And there are certain sections which are great.
For example, they removed the age limit for contributing to an IRA. It used to be that you could no longer contribute to your retirement after the age of 70 ½.
That limit has been lifted… which should prove useful for many people.
They also increased the age for Required Minimum Distributions to age 72, up from age 70 ½. So you have an additional 18-months before you’ll be required to start taking distributions from your retirement account.
On the other hand, they also passed new rules which are really bad for inherited IRAs.
Under the old laws, your IRA could be bequeathed to your heirs when you pass away. And while your heirs were required to take distributions from your IRA over time, they had the option of stretching out those distributions over the course of their entire lives.
This was a really great way to give your heirs a tax-efficient safety net.
If they suddenly needed a lump some of money, for example, to buy a new house, pay for university, or offset a major medical expense, they could tap into the IRA that they inherited from you.
But if they didn’t need the money, they only had to take a small distribution each year, and keep the tax consequences to a minimum.
Those rules have now been torn up.
Under the new rules, almost all inherited IRAs must be fully distributed within 10-years, whether your heirs need the money or not. And that’s going to trigger significant tax consequences for them.
Again, in fairness there are plenty of provisions in this law that many people will find helpful. And other provisions that people will find terrible.
But that’s not really the point. It’s not about whether the law is good or bad. The issue is that Congress doesn’t give people any time to react.
Responsible people plan around their taxes… especially when it comes to retirement and estate planning. People have to plan literally DECADES in advance and think through generational impacts.
So it’s a pretty nasty surprise when Congress tears up the rules at the very end of the year. They’re basically saying, “Unless you die by Tuesday at midnight, everything you’ve planned over the last several decades won’t work anymore. Merry Christmas.”
This highlights a very important reminder: these people can and will change the rules at any time, with no warning whatsoever. And they couldn’t care less how their changes impact you.
Now, all that said, I’m always an optimist– where there’s a will, there’s a way. And there are definitely ways to dull the negative consequences of this new law; transferring your IRA to a special type of trust called a charitable remainder unitrust could still ensure that your heirs receive lifelong favorable tax treatment on an inherited IRA.
Happy Holidays, Nomad
Thanks, Nomad – I have already received a very long summary of the impact of the SECURE act sent to me by a friend and written by one Martin Shenkman, an estate planning attorney, author of 42 books, and more than 1,200 articles who serves on the editorial boards of Trusts & Estates Magazine, CCH. It takes up 5 pages on a word doc but I’d be willing to copy and paste here if people would like to see…. It does mention the use charitable remainder trusts for example. I’ve yet to read it because my eyes rapidly gloss over when broached with this kind of stuff, but it seems pretty thorough… If not appropriate here, private message me via SA and I’ll share it individually. All I know is I’ll have to reacquaint myself with my attorney who wrote our wills 11 years ago. I haven’t even spoken to him once since then…. Tim, would posting here be appropriate or desired?
Thank you 2WR. So much for those of us who spend our middle class lives living below our means attempting to build generational wealth by following the rules. If you can suppress the obnoxious ads, I believe the Shenkman document is available through Forbes web site at:
https://www.forbes.com/sites/martinshenkman/2019/12/25/secure-act-new-ira-rules-change-your-estate-plan/#700d1e03710f
Doug B – Yep! That’s the same article I had received… Glad you found the source site….
Greetings Nomad…my understanding is the Secure Act also expands choices for employers who provide 401k plans to their employees. Have you had a chance to review those provisions and if so what do you think about them?
Citadel, I hope this message finds you doing well. I only keyed on the Secure Act that really effected me and since I have a large rollover/traditional IRA I am quite disturbed by the new controversial provisions. I retiring from managing money over 4 years ago and would have highly recommended transferring clients IRA’s to a charitable remainder unitrust. I urge everyone to speak with a Trust/Estate Attorney and the New Year is a great time to create a will and trust to protect your assets and loved ones.
If you know that this life is all that you have, wouldn’t you make the most of it?” Ayn Rand
Nomad
CBB – Standard & Poors just put CBB on credit watch NEGATIVE on acquisition by Brookfield
Table of Contents
Cincinnati-based telecommunications provider Cincinnati Bell Inc. announced that it has entered into an agreement to be acquired by Brookfield Infrastructure Partners in a transaction valued at $2.6 billion (including debt). The company has not disclosed the terms of its proposed capital structure.
We are placing all of our ratings on Cincinnati Bell, including our ‘B’ issuer credit rating, on CreditWatch with negative implications.
We intend to resolve the CreditWatch placement when the transaction closes, which we believe will most likely occur by the end of 2020.
NEW YORK (S&P Global Ratings) Dec. 26, 2019—S&P Global Ratings today took the rating actions above. The CreditWatch placement follows Cincinnati Bell’s announcement that it has entered into an agreement to sell itself to Brookfield Infrastructure Partners for approximately $2.6 billion including debt. The transaction will take Cincinnati Bell private. If the company’s shareholders and regulators approve the proposed agreement, it will exchange each share of its common stock for $10.50.
We will resolve the CreditWatch placement once the transaction closes, which we believe will most likely occur by the end of 2020, and we are able to assess the company’s capital structure, financial policy, and strategic direction.
IS CBB really going private as per the S & P summary? To me, they will be a subsidiary of a public company. I don’t understand how that makes them private
Steve, Im basically where you are at. A big portion of my preferreds have always been from bought out companies “taken private” by another company, usually from a holding company. So I dont know why they made that an issue if that was even their intent. Some of these “go dark” meaning there is no future financial reporting of the company, or its folded into other operations.
But clearly they are waiting to see if capital is being injected or if they dump more debt on it, etc. In and of itself the private thing isnt much of a concern yet for me. Speaking of dark, DMRRP hasnt had any reportable finances since the 1990s, and doesnt even have any reportable operations anymore. But CSX dutifully pays the preferred like it always has.
something iike DMRRP would work for me. To me, a private company logically meant that the preferred would not be accessible anymore.
In fact, if this became an illiquid issue, that’s fine also.
Steve, I certainly dont mind quality illiquids. I got to play DMRRP a few times for $7-$8 flips in recent times. But wont buy back in where it infrequently trades now though. Keep in mind CBB-B could be in line for delistment down the road. And this may or may not effect its pricing either. Probably depends on how dark it is and its financial set up. Delistment in and of itself usually isnt a long term problem. Its the intent behind a delistment that could be a problem though.
Ok thanks.
Steve, concerning CBB-B, this is just my own personal attitude and not any pontificating advise as I dont know anything. But I still feel this double down trade as a flip more than hold. This last 200 shares was bought in Roth, so I can yank anytime without tax issues. I peeled back a few of my MBNKP today to pay for the trade. So Im not increasing risk profile just spreading it out as I simply bought too much MBNKP last week and still own to much. But it keeps rising so its hard to pare down much just yet.
Apologies if this has already been posted – Moody’s on CBB/Brookfield
23 Dec 2019
New York, December 23, 2019 — Moody’s Investors Service stated today that Cincinnati Bell Inc. (CBB) announced that it had signed a definitive merger agreement to be acquired by Brookfield Infrastructure (Brookfield). Management and Brookfield have not disclosed material considerations such as sources of financing, the company’s post-merger capitalization and organizational structure. If the company’s bonds remain outstanding post-closing, any ratings impact will be dependent on the credit profile of the borrower post-closing considering the ranking of CBB’s debt in the post-merger capital structure.
Under the terms of the agreement, CBB’s shareholders will receive $10.50 in cash per share of CBB’s common stock in a transaction valued at $2.6 billion, including debt. As of 30 September 2019, CBB had $1.9 billion of net debt obligations. The transaction would result in CBB transitioning from a public company to a private company. The closing of the deal is subject to customary conditions, including CBB shareholder approval and regulatory approval. The transaction is expected to close by the end of 2020.
With headquarters in Cincinnati, Ohio, CBB is a full-service regional provider of broadband data, voice and video services, a provider of managed information technology services, and a reseller of IT and telephony equipment. For the twelve months ended 30 September 2019, Cincinnati Bell generated $1,545 million of revenue.
Not sure how to start a new thread so I attached this here. The new Ford 6% issue seems to be trading. Listed on QO at $26.00. Its Ba1/BBB and uncallable for almost 5 years. If I were in the market to add a new issue…..
Jersyvinny, Yes Ford pref C is trading.
I bought 1000 shs, half to hold and half to flip.
The two days prior trading shows it never went lower than 25.87.
I reckon it has more gas in the tank and will drive up the price to imo 26.50.
Assuming it has crash avoidance system of course.
2WR, I shot a great 75 today. You think this is going to bother me? Ha. Seriously all they said was we dont know a darn thing about what will happen. I mean the preferred is already CCC so it dont have much further to fall. This doesnt bother me. It just tells me they know as much as I do right now.
75, huh…. Was that on the front 9 or the back??? Good point on what they’re actually saying…. I read it the same way, that they’re saying “we don’t know no nothing but just to be safe we’re not going to allow ourselves to be caught with our pants down.”
“75, huh…. Was that on the front 9 or the back??? ”
Lol…I have a feeling Grid’s game gets better when there’s a steak dinner (or two) on the line. Don’t play him Nassau.
Citadel, I cant putt. 15 pars, 3 bogeys, and missed birdie putts galore. I would choke under pressure on a big money Nassau, and you can take that to the bank unfortunately….
Im glad 2WR, posted the credit watch bulletin. As I studied this the best I could in SEC filings and couldnt really determine anything from reading. So it at least makes me feel like I am not a total dummy since they know nothing either. So its back to originally why I purchased it Monday and today. A shameless money flipping poke in the dark.
Getting on the green is the hardest part for duffers like me. Perhaps your short game can be improved thru technology…have you ever tried using a Seemore? https://www.seemore.com/putters.html
SPLP announces partial redemption of preferred shares
Steel Partners Holdings L.P. (NYSE: SPLP) (the “Company”), a diversified global holding company, today announced that it will redeem 1,600,000 units of its 6.0% Series A Preferred Units, no par value (the “Preferred Units”), currently representing approximately 20.2% of total outstanding Preferred Units, on February 6, 2020 (the “Redemption Date”). The Preferred Units are currently traded on the New York Stock Exchange under the symbol “SPLP-PRA” (CUSIP 85814R 206). The Company is redeeming the Preferred Units based on its previously-disclosed obligation to repurchase the Preferred Units by the third anniversary of their issuance, February 7, 2020.
Why are these units trading near $23? Isn’t the redemption price $25?
Its partial, only about 20% of the issue which they had to do anyway according to the prospectus (which no one seemed to have seen), so someone is taking the opportunity to sell at these relatively higher levels.
I hate to say it but Rida mentioned this back in November:
“This partial redemption will provide a $2.54/share gain with dividends included (49% annualized return) on 20% of your shares.”
Re: CBB-B
1) The deal is subject to regulatory risk- state PUC’s, FCC (?), and CIFUS. The state PUC’s have every right to require concessions and will decide when they decide. They are in no hurry.
2) In the meantime preferred stockholders accept the interest rate risk for a long term low quality busted convertible. Take December 2018 for example. There is no free lunch.
3) How much of “plant” is technically obsolete we do not know.
4) $2.7 Billion is a lot of debt compared to assets.
5) So far, I have not been able to find record that the preferred dividends are cumulative. Does anyone have any record of cumulative vs. non-cumulative dividends for CBB-B? CBB currently does not pay dividends on the common.
Update:
QOL lists CBB-B as cumulative.
Not to dampen anyone’s celebrations but it’s worth noting that the the CBB Brookfield deal is structured such that CBB becomes a wholly-owned sub of Brookfield. It’s not being merged into Brookfield.
Brookfield does not directly assume the obligations of the CBB preferred, which will remain outstanding. It’s all in the SEC filings.
While I don’t see Brookfield running from the CBB preferred, such things can and do happen. Preferred is almost always the easiest debt for an acquirer to defease.
What I prefer to see in such circumstances is what Pembina (PPL) did in its recent acquisition of Kinder Morgan Canada (KML). PPL completely took over the two KML preferreds and reissued them in PPL’s name with identical terms. They are now a PPL credit, which is much stronger than the KML credit was.
That is pretty standard, many confuse acquisition with merger, as they are not the same. Most people for example think of venerable Johnson and Johnson as well, Johnson and Johnson. Its actually a holding company for over 250 subsidiaries.
To me, if the merger is expected to close the end of 2020, it is a reasonable dividend capture play. Right now above 7%. The bankruptcy risk of CBB is removed. Can evaluate in a year or so.
Thanks. I has the same questions but hadn’t got around to researching it. Nevertheless, I thought it was worth the risk and grabbed a few shares at 45.37
Regarding CBB-B: In browsing through the prospectus, I come across this.
CONVERSION RIGHTS. Unless previously redeemed or repurchased, Cincinnati Bell 6 3/4% preferred stock is convertible at the option of the holders at any time into shares of Cincinnati Bell common stock at a rate, subject to adjustment in certain events, of 28.84 shares of Cincinnati Bell common stock for each share of Cincinnati Bell 6 3/4% preferred stock.
REDEMPTION PROVISIONS. Cincinnati Bell 6 3/4% preferred stock is redeemable after April 5, 2000, subject to certain conditions with respect to the closing price of Cincinnati Bell common stock in the case of redemptions prior to April 1, 2002.
ADJUSTMENT FOR CONSOLIDATION, MERGER OR CHANGE IN CONTROL. In order to protect the interests of holders of Cincinnati Bell 6 3/4% preferred stock, the Cincinnati Bell amended articles of incorporation provide for adjustment of the conversion rate and related terms in the case of certain consolidations, mergers or changes in control. — (I guess I need to find the original articles of incorporation to determine what might transpire with the acquisition by BIP…? Is this going to become one of those busted convertibles that can’t be redeemed? )
LIQUIDATION RIGHTS. In the event of the liquidation, dissolution or winding up of the business of Cincinnati Bell, holders of Cincinnati Bell 6 3/4% preferred stock are entitled to receive the liquidation preference of $1,000 per share plus all accrued and unpaid dividends.
DEPOSITARY SHARES. Cincinnati Bell 6 3/4% preferred stock is issued as and represented by depositary shares. These depositary shares represent a
one-twentieth of a share of Cincinnati Bell 6 3/4% preferred stock. A holder of depositary shares of Cincinnati Bell 6 3/4% preferred stock only has voting rights equal to the number of whole shares of Cincinnati Bell 6 3/4% preferred stock represented by such depositary shares of Cincinnati Bell 6 3/4% preferred stock.
ALSO, does anyone have any idea where these IXC shares ended up? “In the merger, shares of IXC 12 1/2% preferred stock will remain outstanding
as 12 1/2% preferred stock of the surviving corporation in the merger.”
Yes, this seems to be an optional convertible at the shareholders discretion. Could be that this option is negated or as you say a busted convertible that cannot be converted. Since, it’s optional, I would not think it impacts the ability of this to be called back at $50 per share. Do you have any concerns about that?
This POC company has had the ultimate long term busted convertible. They did it to themselves after the Broadwing fiasco early this century. They only thing they ever did right was create Cyrus One and they blew that divesting it, to pump the cash into their money losing operations and the Hawaiian over purchase. Brookfield probably wants it for NOL’s I would guess, ha.
You need to read like a lawyer to figure out deep in the weeds change of control provisions as there usually is more details deeper in their company records. There is no uniform playbook to follow…SLMNP has become uncallable after change of provision with an $802 floor. WFC-L became a busted convertible where the terms were adjusted to Wells then common stock price.
Unless, I can find something definitive I just assume the worst it remains busted. That $10 offer did nothing for the preferred in terms of converting. Remember this crap outfit already had a reverse split a few years ago already and it didnt help the preferred there.
POC is one way to describe it. The financials on this group is T E R R I B L E from what I just researched. Definitely not SWAN material but could be a great flip if it holds up. Not really sure I see this thing rocketing to par or higher. We need to know more about what BIP plans to do with it. I’m looking to get a taste but certainly not make a meal of it, so to speak.
Charles Barkley said it best…”Its Turrable”.
“We need to know more about what BIP plans to do with it.”
Yeah, Brookfield isn’t known for businesses with TERRIBLE financials so this transaction may not be as straightforward as it sounds. May not be a normal merger like if ATT bought CBB. Brookfield is not a telecom company and they have no existing operations with which to merge CBB.
reminder. For TAX purposes, BIP is a partnership.
Enjoyable Christmas Everyone!!
good point.
thanks
LI, well said. I couldn’t find much info on the deal. That could be so for a number of reasons – but I’m not real crazy about this one until I see some explanations. There has to be a lot more to the story than the cheesy BIP announcement that stated very little but that they now get “the leading data transmission and distribution network in Cincinnati, Ohio and Hawaii”…
I would levy a guess that the Bengals football team have more intrinsic value than CBB. Certainly have better financials…
I was rather surprised that BIP’s stock did well today. Agree CBB has a ton of debt
A4I, Im just trying to hang on until Jan. 2. My freaking tax bill this year is horrible enough with adding on $400 more, ugh.
I have mine in an IRA account. Since the merger is not expected to be completed until the end of 2020, the tax structure will not change as CBB payments. So I can avoid taxes for now.
I may exit before it pays out as part of BIP and take the years capture of 6.9%
It certainly removes the bankruptcy risk
Landlord
You are right about brookfield but you need to also consider that they have actively been entering the U.S. This is probably the third deal that they have done within the last six months.
The main point is that while they are big,normally their administrative structures are complex and they have not shown themselves to be unit holder friendly. I would not want to own their common. Brookfield has a good name but their payouts are small .I have avoided the whole family of funds. Just my view. A happy and productive New Year to you and all the members of this group. Best SC
$CBB: Any concern with BIP not doing a true merger and instead owning it like a subsidiary in which the debt is non-recourse to the parent holdco?
The sort of model I’m talking about is how Brookfield bought OAK. In that case, I believe OAK retained its own credit ratings as it is jointly owned by Brookfield and Howard Marks. However, since OAK’s ratings are very strong, retaining the rating was a good thing for the prefs.
Taking on CBB’s debt could impact BIP’s credit rating or at least put it on negative watch (just speculating). If that was the case, BIP would be incentivized to keep it as a non-recourse entity that just flows dividends up to the holdco. In that scenario, CBB-B probably stays as a HY rated preferred.
Maybe, But Im thinking about selling already, lol.
Anybody else having trouble getting access to Fidelity right now????
Fido shows no watch lists for me.
Almost trading blindly, but Fidelity mobile is 100% running and that’s what i’m using.
I did. They said use icognito mode or another browser. I was on Chrome, tried again and it worked.
Thanks, guys… Fidelity seems to be fixed now for me….
Ford’s 6% Note (F-C) started trading today. The underwriters certainly set this yield too high as it’s trading at around $26 a share. I grabbed a small position at TDA.
CBB being acquired by BIP. Seems there is speculation CBB-B will be called though wasn’t able to confirm that from the prospectus
The Company’s shares of 6 3/4% Cumulative Convertible Preferred Shares, without par value (the “6 3/4% Preferred Shares”), will remain issued and outstanding as 6 3/4% Preferred Shares of the Company, without par value, following the Effective Time.
Seems like CBB-B won’t be called but I’m seeing strong buy imbalance pre-market right now. will prob be trading around $50 today.
Plus the merger is expected to complete by the end of 2020.
“Cincinnati Bell’s board has approved the proposed transaction, though the buyout remains subject to customary closing conditions, including the approval of Cincinnati Bell shareholders. The companies expect to close the transaction by the end of 2020.”
It’s the trade of the day (so far!). CBB-B opened at $38+ , obviously terrible ratings. But with the announcement of the BIP purchase that 6 3/4 rate looks awfully good, the credit metrics get much stronger and getting in under the $50 par seems like a win. Couldn’t get any premarket but got a fair amount under par when market opened, and yet it’s shooting up to par now.
Franklin I tried at 42 but failed at market open. Not familiar with credit profile of acquiring company so couldnt stick my neck out far without any actionable info at moments notice.
I went in due to BIP being BBB- rated by S&P as of July 2019
Steve, I had 30 seconds to make a decision with a yelling GF wanting me to go eat breakfast at the Inn we were staying at. I needed more time at 8:29 when the quick decision had to be made, ha.
Still could be a good opportunity, selling now at about $46
Steve, Patience paid off, I just got in at $42 for 300 shares…Good enough for me. I owned CBB-B back in the day when it owned Cyrus One. Dumped it after that making a few bucks. It was a dump company without Cyrus. With a plus 8% yield its worth a go for a few hundo shares.
Your trading experience shows. I am at $48.50 but only a half position. I can buy more and for the second part of the trade, I will probably wait a few days to see where it settles. But I am happy for a 6.9% yield on a future BBB- Telecomm company.
Steve, It was luck. A bit of hesitancy and a nagging GF helped me the most.
Brookfield Infrastructure Partners is BBB- by S&P. So we have a real junk bond preferred (rating CCC) being acquired by an investment-grade company. CBB-B prospectus is very difficult to read through.
Here is what I found on BIP:
S&P Global Ratings affirmed its ‘BBB+’ long-term issuer credit rating on Brookfield Infrastructure Partners L.P. (BIP).
At the same time, S&P Global Ratings affirmed its ‘BBB+’ issue-level rating on the company’s senior unsecured debt and its ‘BBB-‘ global scale and ‘P-2(Low)’ Canada scale preferred stock ratings on the company.
The stable outlook reflects S&P Global Ratings’ expectation that BIP will continue to receive stable cash flows from its various subsidiaries.
TORONTO (S&P Global Ratings) June 27, 2019–S&P Global Ratings today took the rating actions listed above. The affirmation reflects the continued performance of BIP’s assets, which supports S&P Global Ratings’ assessment of the company’s business risk profile. The affirmation also reflects our view of BIP’s core credit metrics, which we believe are at the stronger end of the financial risk profile compared with peers’.
Thank You Steve A.
I looked into it late, paid avg 43 .
Great catch !
Does anyone know if this will create a K-1 issue with this buyout of cbb-b? Thanks
Can you explain what WITHOUT PAR VALUE means?
Steve, Par in itself is truly just a nerd fest accounting term. It doesnt mean what you think it means. Most people think its redemption value or liquidation value. It means neither.
Ok thanks. Just trying to catch up on any due diligence.
Thank you, Steve, for providing credit rating as I didnt have the time. Wouldnt have stayed with the trade if you hadnt gave me the info.
Any thoughts as to whether this will be a Canadian preferred subject to dividend withholding? Are you holding yours in a tax deferred account?
CUBB is selling on the NYSE today. Purchased through Fidelity. The coupon is 5.375%. The price is below par!
CUBB v CUBI-F – I can’t believe I’m saying this but imho there seems to be a disconnect between CUBB and CUBI-F in favor of the perpetual vs the 2034 note. Perhaps it’s the ’21 call on CUBI-F vs the unusually long (at least these days) ’29 call on CUBB, but with CUBB 5 3/8% essentially at $25 and CUBI-F at a current yield of 5.79%, it seems CUBI-F’s the better buy even if it is a perpetual… With CUBB a SUBORDINATED note and CUBI-F a preferred, there’s no big deal difference credit wise between them and CUBB’s 15 year maturity does seem to qualify it as a longterm note anyway in the yield curve, so it seems CUBI-F’s the better buy. At todays LIBOR, CUBI-F would float up from its present 6% if it began floating today.
2whiteroses: I think CUBB is the better buy because it’s ytc is 5.35% vs. 4.11% for CUBI-F. (That’s the first call only, not ytm.) I also prefer the subordinated note over the non-cum preferred. thoughts?
Franklin – Good point I suppose to mention the non-cum aspect of CUBI-F vs the note categorization of CUBB. What I was pointing out was the subordinated aspect of CUBB. Subordinated makes a difference when comparing the strength of a note vs a preferred and it sort of makes the note lose its place if the corporate capital structure. As far as comparing ytc yields, one has to take into account the maturities of the calls.. In other words, one would or should consider the YTC yield in comparison to yields of pieces of paper with actual maturities equivalent to the call dates. That makes a direct comparison of YTCs for CUBI-F with its ’21 call date and CUBB with its ’29 call date a bit more iffy. YTC on CUBI-F should be much less so it’s more a case of how important/valuable longer call protection is to you… good academic exercise……. It’s looking as though it’s really more of a jump ball than I was thinking originally.
CNTHP, one of my sock drawer residents, had a huge spike up to an all-time high of $63.50. Someone wanted shares pretty badly.
Saw the changes on my screen, but too late to take full advantage; was able to sell 147 shares @ $60.72.
Bid is back down to $58.50. Will try and buy back the shares I sold around that price, if possible. I kinda think I can achieve it.
Way to keep them eyes open, Inspy….Good job… I know you were fighting it as it is getting close to nap time out west. 🙂
Kinda sad to see longtime residents leave. I bought those CNTHP shares in early 2016, at around $53+.
But almost 2 years dividends above par – phew! very difficult to not take the gain. And I have time & opportunity to buy back cheaper, almost certainly.
AATRL has a wide B/A spread but there’s been a bit of selling at the bid the last few days and I’ve increased my position at under 47.25.
It’s a de-facto busted convertible, BBB, 5.15% coupon, trading past call – but under redemption value, with a 5.375% current yield and 5.65% YTC at 10.15.2037 maturity.
duh – that should read …and 6.51% YTC at 10.15.2037 maturity.
The 5.65% was my own discounted YTC without the cap gains – which I’ll use for potential perpetuals – which this is not.
Alpha – I was going to ask you why you thought YTC was all that relevlant on an issue legitimately under par, but doing the math I see where 47.25 is 5.65% YTM, not YTC. Pretty attractive for BBB rated 17 year maturity but on the downside, S&P put AMG on negative credit watch in October while confirming the rating..
Affiliated Managers Group Inc. (AMG) had almost $20 billion in net outflows during the third quarter of 2019 and a total of approximately $58 billion in net outflows during the last 12 months.
We predict that AMG’s adjusted EBITDA will experience a high-single- or low-double-digit percent decline in 2019 relative to 2018, which in turn was about 10% lower than the adjusted EBITDA exhibited at the end of 2017.
We are revising our outlook on AMG to negative and affirming our ‘A-‘ rating on the company and its senior unsecured notes, as well as the ‘BBB’ rating on AMG’s junior subordinated notes.
The negative outlook reflects our expectation that the company could continue to experience earnings pressure as a result of further net outflows, S&P Global economists’ forecast of flatter equity markets, and uncertainty regarding future performance fees. We anticipate that AMG will continue to operate with leverage between 1.5x and 2.0x during the next 18 to 24 months.
Another partial call for ver-f today?
?? What are you seeing Dan? The previous call is for 12/21–don’t see anything else out there.
I dont see anything. They did take the redeemed shares out of my account yesterday, so maybe that is what you saw Dan?
Mr Lucky–yes mine have been segregated for a couple weeks.
My VER-F called shares have been segregated for past few weeks. Interestingly, overnight they were added back to my un-called shares. This is with Vanguard. Did Vereit have a change of heart? I know call dates is not till 12/21 but…
Adrian–Fido did screw up as well–first they segregated – then they put them back together – then they segregated again which is where they are now as well.
Yes, thats it: td segregated mine only this morning
Tim or anyone else,
So where do you think you were wronged? I also had mine segregated a while ago @ Merrill but last night, they were dumped back from the temp symbol, back into VER-F, and then they have taken MORE than they segregated the first go around and have now segregated them into a different CUSIP#.
Fido notified me yesterday and segregated them as well.
They take the 20% of my shares tomorrow.
Unfortunately some were bought as late as 12-02 after ex-div.
Oh well,
For those that have an account at Fidelity…
They have messed up…they are “calling” VER-F for lots bought AFTER the call announcement back in November. They are supposedly working on this for me…I called them yesterday morning, but no change. My position has been segregated as if I had VER-F before the call.
No problems at Schwab that I can see.
Fidelity says there was a call then some sort of reiteration of the call.
Check your accounts if you own this!
RB–Fido did screw up as well on mine–first they segregated – then they put them back together – then they segregated again which is where they are now as well.
Just got off the phone with Fido.
VERPRF call notice on 11-21 did not mention a date when your shares are safe from the 26% segregation.
I bought 200 shs on 12-10 and they took 52 back.
Maybe i missed some comments here regarding the safe date, as i can’t read all the comments.
What me worry… A. E. Neuman
Not sure what you are looking at but the date has always been Dec21st
Vereit (NYSE:VER) plans to redeem 8M shares of its 6.70% series F cumulative redeemable preferred stock, representing approximately 20.58% of its ~38.9M shares of series F preferred stock, on Dec. 21, 2019.
The shares of series F preferred stock will be redeemed at a redemption price of $25.00 per share, plus accrued and unpaid dividends from Dec. 15, 2019 to, but not including, the redemption date in an amount equal to $0.0279167 per share, for total proceeds of $25.0279167 per share.
Curious… Where does the fractional portion of the redemption end up? Does VER get to keep it? Does it end up in the broker’s coffer?
Where is it mentinoed that only 26% of your shares are to be redeemed?
Merrill is taking 66.6% of mine and can’t explain why.
Here is the press release from the company, it plainly says 20.58%
http://ir.vereit.com/File/Index?KeyFile=401169570
Yeah, I read that a month ago. But it doesn’t stipulate the percentage that each shareholder is going to get hit for. They are redeeming 20.58%, but how? This wasn’t clear the last time they did a partial call. Some of my accounts got hit, others didn’t, and the percentages amongst accounts was different. It’s even more bizarre with this redemption. So the one commenter says there was a 26% segregation. Do others concur with this?
I don’t use Fido so I’m simply trying to determine if this is a wider spread issue and if there is/isn’t uniformity in the percentages each shareholder is losing.
Fidelity is currently holding 26.25% on me
According to Merrill, here is the situation: There was an initial “lottery” to determine how many shares each person would have redeemed. That’s why many saw the segmented shares. The “results” of that lottery were then canceled. A new lottery was invoked and that is why you see a bunch more shares being moved around and quantities modified. Nowhere was it specified that any or all shareholders would lose a certain %’age of their shares.
You guys are lucky I guess for only losing ~26%. I’m losing a solid 66.6% of mine, but then again, I’ve been a holder of shares since back when VER was ARCP, so I “guess” that may have something to do with being screwed over more – who knows. I’m going to reach out to IR but with the redemption upon us, it seems to be a moot point now.
Just got off the phone with Fido, and they said the same thing as Affinity said above.
I do not know how VER can call holdings that were bought after the call announcement. The Fido rep was baffled as well.
I’m losing 26% if any cares to keep score.
Just for context, I bought 50 shares on 11/20 and 25 more on 11/29 through TD. So far none of mine have been touched.
UPDATE: Just looked at my account and 20% (15) of my whopping 75 got redeemed. Interestingly, there is an additional $15 “internal transfer between location codes (VERpF)” that got credited to my account as well. Can’t quite figure that out, but basically got $26 per share, assuming that extra $15 doesn’t disappear.
I guess I need to let the dust settle a little more, but some were purchased before EX date and some after. Unable to determine which lot(s) the shares were taken from. And right now, all 75 are showing up in my realized gain/loss page with a “corp action G/L” next to the purchase info.
I have 26% of my VER-F shares quarantined.
Guess by Monday we should see what happened – but sure is confusing with the initial quarantine, then putting shares back into my account, then quarantining again ( with a larger amount ).
I am losing 26% of my shares. They were quarantined late Friday night.
There was a recent discussion about auto-populating price data to Excel. For those that are interested:
1) Excel itself has a built-in tool. On the excel page header (not the toolbar), go to Data/Stocks. Some learning curve here but is fairly intuitive. My biggest objection is in the clunky formatting – but you can always pull data from one sheet to another.
2) For a better experience: On the excel page header go to Insert/Get Add-Ins/Stock Connector. Your refresh rate can be as frequent as 60 seconds, but from a practical standpoint once every 30 minutes or 60 minutes does the trick. I’ve been using this for about 18 months and now track 60-70 favorite issues, running YT(C and M) tables, tracking ex-dates etc. Has challenges with some OTC issue pricing but otherwise it’s fabulous.
Alpha,
Can you verify which version of Excel you’re using? I don’t see those features in Excel 2013 and to my knowledge, the only auto populating stock features that are amazing are available thru the paid subscription of Office 365 that gives you access to the Office suite of products.
I even looked at the new Office 2019 on another one of my machines and it doesn’t have the stocks features either.
A4I,
You did not indicate Windows or Mac – so will address both.
The “Stocks” app is available for all Windows and Mac Office 365 users, though should also be readily accessible in your referenced desktop version of Office 2019 if Windows-based. (https://learning.linkedin.com/blog/productivity-tips/3-new-features-in-excel-2019-that-you-ll-actually-use)
If Mac and not Office 365:
Option 1: Go to OneDrive.com (no fee), create sheets and run the “Stocks” app. Again, it’s under “Data” on the spreadsheet. I find the OneDrive version a bit clunky.
Option 2: Use the Stock Connector add-in. On the page (not the toolbar), go to the “Insert” tab, then Get Add-Ins and find “Stock Connector”. It’s intuitive, easy to install and use and incredibly useful; auto-updating as frequently as every minute.
Hope this helps and let me know when you’re up and running.
For those of you who stash money in ICSH, it’s fallen to $50.29 today.
Went ex-dividend so it really didn’t fall… Actually it is up +0.005 as we speak
🙂
One of my largest holdings..
Well, an opportunity to buy nonetheless! 🙂
Unusual volume in the PRIF preferreds leading to a small spike lower in prices. I wonder if they’re about to issue that new series of preferred. End of Dec when no one is around seems like an odd time for an IPO, though. That said, they probably see some opportunities in the depressed equity CLO space.
WRB-F now available for trading on NYSE.
Thanks VJ! Been waiting for that.
Bank of America Corporation announced today that it will redeem all outstanding shares of its 6.500% Non-Cumulative Preferred Stock, Series Y on January 27, 2020.
https://finance.yahoo.com/news/bank-america-announces-full-redemption-211500926.html
Eagle Point Credit Company Inc. Announces Redemption of the 7.75% Series A Term Preferred Stock Due 2022
Business Wire December 18, 2019 04:30:00 PM ET
GREENWICH, Conn.–(BUSINESS WIRE)– Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC, ECCA, ECCB, ECCX, ECCY) announced today that it will redeem all of the outstanding shares of its 7.75% Series A Term Preferred Stock (NYSE: ECCA) (“Series A Term Preferred Stock”) on January 31, 2020 (the “Redemption Date”), following which the Series A Term Preferred Stock will be delisted from the New York Stock Exchange. The redemption price per share of the Series A Term Preferred Stock will be $25 per share, plus an amount equal to all accrued and unpaid dividends and distributions on each share accumulated to (but excluding) the Redemption Date (the “Redemption Price”). The redemption of all of the outstanding shares of the Series A Term Preferred Stock is expected to result in interest savings through the original maturity date of the Series A Term Preferred Stock, but will also accelerate into net realized loss the remaining deferred issuance costs related to the issuance of the Series A Term Preferred Stock in the period such shares are redeemed.
All of the Series A Term Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”) and the Series A Term Preferred Stock will be redeemed in accordance with the procedures of DTC. Payment to DTC for the shares of Series A Term Preferred Stock will be made by American Stock Transfer & Trust Company, LLC (the “Redemption and Paying Agent”). From and after the Redemption Date, the Series A Term Preferred Stock will no longer be deemed outstanding, dividends will cease to accumulate and all the rights of the shareholders of such shares will cease, except the right to receive the Redemption Price, without interest. The Redemption and Paying Agent can be reached by mail at American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219, Attn: Corporate Actions or telephonically at (718) 921-8317.
ABOUT EAGLE POINT CREDIT COMPANY
The Company is a non-diversified, closed-end management investment company. The Company’s investment objectives are to generate high current income and capital appreciation primarily through investment in equity and junior debt tranches of collateralized loan obligations. The Company is externally managed and advised by Eagle Point Credit Management LLC.
The Company makes certain unaudited portfolio information available each month on its website in addition to making certain other unaudited financial information available on its website ( http://www.eaglepointcreditcompany.com ). This information includes (1) an estimated range of the Company’s net investment income (“NII”) and realized capital gains or losses per weighted average share of common stock for each calendar quarter end, generally made available within the first fifteen days after the applicable calendar month end, (2) an estimated range of the Company’s NAV per share of common stock for the prior month end and certain additional portfolio-level information, generally made available within the first fifteen days after the applicable calendar month end, and (3) during the latter part of each month, an updated estimate of NAV, if applicable, and, with respect to each calendar quarter end, an updated estimate of the Company’s NII and realized capital gains or losses for the applicable quarter, if available.
FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”). The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
View source version on businesswire.com : https://www.businesswire.com/news/home/20191218005751/en/
Investor and Media Relations:
ICR
203-340-8510
IR@EaglePointCredit.com
http://www.eaglepointcreditcompany.com
Source: Eagle Point Credit Company Inc.
Thanks A4I
AXS-D Called for Jan 17th. Though I didn’t see the announcement, it shows on Fidelity and quantumonline…
12/17/2019 — AXIS Capital Holdings Limited today announced that it will redeem 9,000,000 of its 5.50% Series D Preferred Shares, par value $0.0125 per share and liquidation preference $25.00 per share, constituting all of its outstanding Preferred Shares, representing $225,000,000 in aggregate liquidation preference of Preferred Shares, on January 17, 2020 at a redemption price equal to $25.00 per Preferred Share, plus all declared and unpaid dividends, if any, to, but excluding, the Redemption Date, without accumulation of any undeclared dividends. The Board also declared a dividend of $0.17569 per Series D 5.50% Preferred Share payable on January 17, 2020 to shareholders of record at the close of business on January 2, 2020. Accordingly, the total redemption price payable on January 17, 2020 will be $25.17569 per Preferred Share. The Preferred Shares are currently traded on the New York Stock Exchange under the symbol AXSprD (CUSIP G0692U117). Payment of the redemption price will be made upon presentation and surrender of Preferred Shares to be redeemed to Computershare Trust Company, N.A., Redemption Agent, by overnight delivery at 462 South Fourth Street, Suite 1600, Louisville, KY 40202 or by mail at P.O. Box 505004, Louisville, KY 40233-5004.
YGYIP priced dilution at $22.75; trading as low as $22.25 pre-market right now.
https://finance.yahoo.com/news/youngevity-international-inc-announces-pricing-130000706.html
Sorry Ptrader–this got caught in the spam filter for some reason.
AXS-D call
https://www.businesswire.com/news/home/20191217005795/en/
Finally–I have been waiting for this since it was pre announced.
MBNKP start trading today on Nasdaq Capital Market.
Thanks Eugene
what is the rate on that one
Dividends will accrue on the liquidation amount of $25 per share of the Series F Preferred Stock at a rate per annum equal to (i) 8.00% from the original issue date of the Series F Preferred Stock to, but excluding, April 1, 2025, and (ii) a floating rate equal to a benchmark rate, which is expected to be three-month Term SOFR, plus 6.46% from, and including, April 1, 2025. Dividends will be payable in arrears on January 1, April 1, July 1 and October 1 of each year, commencing April 1, 2020. In each case, dividends will be paid only when, as and if declared by the board of directors of Medallion Bank (or a duly authorized committee of the board) and to the extent Medallion Bank has legally available funds to pay dividends.
Thomson Reuters cumulative preferred floating rate stock should now be available to trade OTC. The symbol is TMSOF. It yields 5.6% and it is trading around half of redemption price. TR’s common stock has a dividend streak over 25 years. Among other things, TR is the leader in legal and tax research subscriptions and software.
I bought this through Schwab’s global trading desk on Friday and FINRA posted the OTC symbol today.
https://web.tmxmoney.com/quote.php?qm_symbol=TRI.PR.B
I have no personal interest in this issue but here is more information for those who do. BB+
http://prefblog.com/?p=37350
Thanks, SteveA.
For those interested in CBKLP, there was a seller who dumped 11,000 shares on Friday, bringing the price down to par; closed the day at $100.38. It went XD on Thursday, Dec 12.
CBKLP is listed as one of the strongest banks in the US. CBKLP is a 6% preferred, callable at $100 plus accrued dividends, Investment Grade, and QDI.
If one were to buy on Monday at $100.38, even if a call was announced, the 30 days accrued dividend is $0.51, giving a guaranteed gain of $0.13 for the worst possible outcome. And there is no indication of any imminent call.
I intend to buy at opening Monday, if the price remains around $100.38. This will be an addition to what I already have in my sock drawer.
Alright, Inspy – You’re pushing me over the edge… I’ve been meaning to look into CoBank for awhile now but sloth pervades… CBKPP was theoretically more interesting to me because of its high F/F premium and ’22 call, but it sure is hard to justify the price differential between the two or even three if you include CKNQP. You’ve got me motivated…
2WR & BigBear,
Thinking over it this morning, it occurred to me that perhaps CoBank accrues the next divy from Payment Date, and not XD date.
If this is so, then accrued divy assuming a call on Monday is only $0.25. XD date was 12/13/2019, Payment date 1/1/2020. If a call came on Monday, the 30 day notice brings it to Jan 15. Daily accrual is $0.017 for CBKLP, so 15 days of accrual is 25 cents.
So buying on Monday at $100.38 could be a worst-case loss of 13 cents/share if called Monday.
I gotta chew this over a little more, before pulling the trigger. What do you guys think ? I really do not see signs of any imminent call, other than the dump on Friday – which could be a normal dumping after XD activity.
Only once have I’ve seen a dividend accrue from ex-div date. Convention is dividends accrue from payment date to payment date and ex-div date or date of record is nothing more than a date to allow the issuer to determine who’s entitled to payment on payment date.. And regarding call, I’ve not looked yet, have you been able to locate a prospectus? There’s not a link on quantum as they normally have…. A lot of banks can only call on payment dates, not on the normal 30 day notice minimum…. It’s worth discovering obviously…
inspbudget and 2whiteroses, this is what I could find for the Series G (I have not been able to locate a prospectus):
Issuer:
Par Amount:
Shares Outstanding: Cusip#:
Description:
Original Rate: Current Rate:
Rate Basis: Maturity:
Redemption Option:
Record Date:
Dividend Payment Date: Dividend Period:
Total Dividend: Calculation:
Dividend Per Share:
CoBank, ACB
$200,000,000
2,000,000
19075Q870
PFD NON-CUM PERP SER F 6.125%
6.125%
30/360
Perpetual Issue
07/01/2018 and any dividend date thereafter
09/13/2013
10/01/2013
07/01/2013 through 09/30/2013 $3,062,500
$200,000,000* .06125 / 360* 90 days
Dividend 1.531
Hope that helps, Nomad
Thanks, Nomad but something’s amiss somewhere – you say Series G which quantum shows as the 6 1/4’s CBKPP, while the fine print you pasted speaks of the F series 6.125%, CBKLP…. may be a moot point though as not much new info there, is there……….
That actually says series F in the description.
What is rate basis: Maturity: 30 / 360
2WR, did you mean to say “dividends accrue from payment date to ex-date ” and not “dividends accrue from payment date to payment date”? If it were payment to payment then it sounds like that would be 24/7/365.
A4I Dividends DO accrue 24/7 but normally based on a 360 day year, not 365… That means they DO accrue from dividend date to dividend date.. EX div date does nothing to the accrual from the point of view of the issuer… EX=Div date is nothing more than an accounting date for the company to know who’s going to be eligible to own the dividend.. Having said that, from the point of view of a buyer who’s buying in between the ex div date and payment date, there IS a period of time where you get squat for having bought it, and that’s probably the point you are making… technically speaking, if you’re trying to accurately determine your yield to maturity or to call, you do have to take that into account, however, if it’s a long maturity or call date, the differential becomes minor…. On a shorter maturity or call, it’s important…. I’m not entirely certain on how best to calculate that but what I do when using a bond calculator would be the opposite of taking into account “stripped yield.” In other words, if I’m buying something at 25.15 in between the ex date and payment date, I’ll calculate the number of days I am NOT receiving accruals when the calculator assumes I am and then recalculate at a price above 25.15 to give me my true yield. That will account for what I’m not receiving… You’ll get a lesser yield, obviously, but it’s more accurate, if not 100% accurate, than what your typical yield calculator would provide.. Yeah, I know, pretty boring stuff…..
Inspy – Thank you for sharing this opportunity regarding CBKLP.
I’ll try to pick up a few shares on Monday.
Inspy, or others, I’m looking for the prospectus. I’ve tried this site, EDGAR (which I don’t know how to use very well, yet) and CoBanks website. all turning up nothing for me.
I was trying to figure out the 30 day call you referred to. I’m assuming they have to give 30 days and call is not tied to ExD date. TD is still charging $6.95 for this one, so the math gets a little out of whack on smaller purchases. If it goes a full dividend cycle, I’d be in the clear on a 13 share purchase, assuming I get in at or below $101.
Thanks in advance. Mark
I know that others have tried to find the Prospectus for CBKLP; I did try to search for it previously but found nothing.
QuantumOnline states that they did not find any as well. So, no way of knowing for sure if they are only allowed to call on a Payment date.
For the worst case option, I would have to multiply $0.017 ( the daily accrual ) by the # of days after Jan 1, 2020 – then add to the Par price. If that result is equal or less than ask price on that day, I can pull the trigger.
Otherwise, the risk off loss is 13 cents/share beginning this Monday, and reduces by 1.7 cents for each day that passes.
Heck, I might just take the gamble. My other shares were bought at $102.90, so I’m deep underwater on those ( but did receive 2 dividends )
What I can add, Inspy, is that quantum also shows they had one issue, CBKAL, that was called in 2014 and it WAS called on a coupon payment date of 10/1… That might increase odds of guessing payment date calls only are allowed.. That announcement of the 10/1/14 call was made in press release dated 8/22/2014, which also makes you think it’s 30 days notice minimum…
2WR, look at the info in Nomad’s Post.
There is a section I’ve cut & pasted below:
Perpetual Issue
07/01/2018 and any dividend date thereafter
As it so happens, 7/01/2018 was the first possible Call Date of the issue. So the phrase “any dividend date thereafter” would imply that a call must occur on a dividend payment date.
If this is so, then the next call opportunity would be 4/1/2020. If they had wanted to call on 1/1/2020, they would have had to issue the announcement on November 30, which did NOT happen.
Good catch! I had not noticed the “any dividend date” language… So that’s got to get you charged up. I think it’s also a reasonable bet that if it’s the language for one of the preferreds it’s the same for all…. I’ve still got to look into CoBank more, but I don’t think I’ll be your competition on CBKLP…. CBKPP also fell afterhours Friday and on the surface, that one’s more up my alley…… What’s also interesting to discover is that S&P rates CoBank senior unsecured AA-. That’s a surprisingly big gap down to BBB+ for the preferreds.
Thanks to 2WR, who sent me a copy of the IPO prospectus of CBKLP.
I was able to establish that the only times the issue can be called is 1st day of Jan, Apr, July & September ( which are dividend payment dates ).
Of course, in the event of a ” Regulatory Event “, they can call at any time. That is the usual boilerplate.
So, we can be assured that the earliest CoBank can call CBKLP is on April 1, 2020, the next dividend payment date.
Today’s share price of $101.27 means a very small gain on the bottom line, if bought at that price and held through the worst case scenario of a call on 4/1/2020. But if they do not call, then one can enjoy a 6% annualized income stream until they call, barring unpleasant events like a dividend suspension or a ” Regulatory Event “.
Inspy, I wouldnt get my hopes up here for a $100.30 trade. Those low trades were block trades, all the normal sized trades were higher.
DATE TIMESTAMP PRICE VOLUME TICK DIRECTION CHANGE
12/13/2019 15:50:34 100.38 4,500 -0.82
12/13/2019 15:32:02 101.20 100 -0.05
12/13/2019 15:22:29 101.25 500 0.29
12/13/2019 15:21:43 100.96 100 -0.30
12/13/2019 15:21:39 101.26 100 1.26
12/13/2019 15:21:24 100.00 5,800 -2.50
12/12/2019 14:59:41 102.50 100 0.00
It’s fun to dream, though. Maybe someone, somewhere, gets unglued by the price drop on Friday, and dumps his/her shares at Market tomorrow morning?
“Hope springs eternal in the human breast”
Inspy- I’m following you in.
Grid, Where does that information come from? Is it available to the general public?
I’m also trying to figure out how bid / ask works. The consensus ask is $102.50. Someone says I’ll buy 5800 if you drop the price to $100. and then someone wants 100, but no one to sell at that price, so, finally they enter a bid at 101.26 and someone says OK and sells 100 of their shares at that price?
So, my measly 13 shares that I’m willing to pay $100.80 is possibly not enough to move the needle, nor enough to entice someone into selling? Is that why I get orders unfilled even though my bid is higher than the current price? I’m pretty sure I’ve seen trades go through at or below my bid and yet my order never gets executed. Do I get shoved to the back burner because I’m dealing in such small amounts? Do these brokerage accounts “play favorites” where someone’s order is more likely to get filled over another just because a larger amount of money is on the table? Or, it is purely unbiased function of supply and demand?
Bid / Ask size is 100×200. Bid is $100.40 / Ask is $102.50
Does that translate to “I’ll buy 100 if you’ll sell at $100.40” And the other side says “I have 200 if you’re willing to pay $102.50”
What if I say “OK, I’ll give you $102.50, but I only want 13.”
Im a nobody, so its definitely available to public. For OTC issues like this CoBank issue that trades in slow mo, you can follow trades on this link. It also has the bid ask spreads when market is open also.
https://www.otcmarkets.com/stock/CBKLP/quote#trade-data
Sometimes trades do go around you on smaller lot trades. Usually the quotes are in 100 share blocks, but not with every issue though.
You have the basics down on the transactions. But…There are front running computer intercept trades coming either direction at times. Plus they hide a lot of shares available also. It can be a rigged game. I remember a few weeks ago with INBKL I had the same problem. Ask was about 20 cents higher than my bid was. My bid was lead bid but was left unmolested. So I started sending “market order” bids of 50 shares out there. I wound up getting 300 shares in 6 trades all at same price and all a dime lower than my ask price was. I do not recommend doing this, though. I am able sniff this out and can tell when something fishy is going on so I do it every now and then. But I never go blind market on illiquids in big orders, all small to test things out.
Mark in CO,
this issue is often when you trying to trade odd lots of illiquid papers.
It’s due to the way the broker route orders of these types.
Mark – There are all kinds of little wrinkles involved in bid/asked that are not really worth worrying too much about because there’s not much we can do about them. For example, trades are routed to different platforms and a trade could happen one platform while your bid or asked is on another. MMs also have an ability to execute at a price of xx.xx1 for example where we can only enter prices at xx.xx. And as Grid has become expert on, an ability for them to have a price hidden between the bid and the asked which we will only be able to find (if not sniffed out) by changing our bid or asked either to an extreme or somewhere in between what’s shown… HOWEVER, i do have a suggestion for you.: Have you ever attempted to access what’s known as “Level II” quotes at your broker? Ask yours if you have access to them as they give you a bigger picture of the depth of bids and asked behind what is shown. Your broker may also give you an ability to see all individual trades that have happened during the day which can also be helpful to understand what’s happening… you’d be surprised at how many odd lot trades actually happen during the day and you can see that if you can review all trades that have occurred…. I know I can do that at Fidelity, but I’ve not found how to do that with TDAmeritrade… Then finally, if you have not tried to use your broker’s trading platforms such as TDA’s ThinkOrSwim or Fidelity’s Active Trader Pro, you could probably benefit from becoming more familiar with what you can see on these platforms… I think all the online brokers have their own and nowadays, as opposed to in the past when these were only available for either more active traders or more well healed ones, I think they’re available to all nowadays… It’d be well worthwhile to check with your broker if you’ve never used a trading platform before….
2WR, I find these level 2 platforms are almost as problematic as anything. They hide a lot also. Funny, On level 2 TD, sometimes they will show the standard 100 shares available at ask, while Vanguard which doesnt show Level 2 will actually at times show the true ask available. Say 500 instead of 100. So then sometimes I know there is liquidity to make bids. From what I understand you really need Level 3 to see the true book. But its still interesting for me to watch and track at times.
Many times Level 2 will try to fake you out and chase, only to see it fall quickly after a fake short rise.
when I get price improvement I assumed it was the frontrunners bidding for my order. Or a delayed fill could be an institution placing a larger order. Didn’t think about hidden bids. That explains some of the weird action I get on low volume stocks.
One time I called Fidelity to inquire why my limit sell was bypassed. They looked until it and said “You’re entitled to a fill” And they filled my order at that price. Don’t know who the counterparty was. And this only happened once.
I tried installing think or swim, but I think my computer may be too old, or maybe I’m too old and just doing something wrong. I’ll call and ask about level II access. I’ll also plan to check out the otcmarket link.
It’s interesting to find out about how much goes on behind the scenes. I figured there was a lot more than meets the eye. My first 10 years playing in the common stock arena (exclusively buy and hold), things seemed pretty straightforward. Over here on the BB / preferred aisle (pretty much still buy and hold for me), there seems to be so much more to think about. Or, maybe like I posted on the other thread – “the more I know, the more I realize I don’t know” I’m also trying to make the transition from “winging it” to actually having a plan and making more informed choices.
Bottom line Mark above all is simple though. Know your price you are comfortable buying at and dont chase. If you dont get it there are other fish to fry.
Inspy – Surprisingly, I received a nearly instantaneous response from CoBank IR providing my with the original prospectuses on CBKLP, CBKPP, and CKNQP….. connect@cobank.com is the address, or pm me thru SA and I’ll share…
Great!! I sent you a PM on SA.
Looks like the CBKLP bid is $101.20, ask 101.50, so there was no panic from Friday’s trading, pity.
Well, there will very likely be another opportunity, I’ll keep my bid open at $100.50, GTC
PPL up over 5.5% this morning on what is presumably a favorable reaction to the elections in Great Britain.