READER INITIATED ALERTS

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526 thoughts on “READER INITIATED ALERTS”

    1. LONDON, Sept. 10, 2020 /PRNewswire/ – Seaspan Corporation (“Seaspan”), a wholly owned subsidiary of Atlas Corp. (“Atlas”) (NYSE: ATCO), today announced that it will not pursue the previously proposed voluntary redemption of its outstanding 7.125% senior unsecured notes due 2027 (the “Notes”). This decision aligns with Atlas and Seaspan’s prudent focus on maintaining a strong financial position during a period of uncertainty for the global capital markets. Seaspan may evaluate early redemption of the Notes at a later point in time.
      https://www.marketscreener.com/quote/stock/ATLAS-CORP-14483/news/Atlas-Seaspan-Updates-Proposed-Voluntary-Redemption-of-7-125-Senior-Notes-31267746/

        1. I expect it to pop up on OTC soon, with a new symbol.

          I doubt Seaspan, which is to say Atlas, will pay to relist on an exchange.

    2. CHICAGO–(BUSINESS WIRE)– OFS Capital Corporation (OFFSI) (the “Company”) (Nasdaq: OFS) announced today that it has commenced an underwritten offering of unsecured notes (the “Notes”), subject to market and other conditions. The Company has submitted an application for the Notes to be listed and trade on The Nasdaq Global Select Market under the trading symbol “OFSSG”. If approved for listing, the Company expects the Notes to begin trading within 30 days from the original issue date. The interest rate and other terms of the Notes will be determined at the time of pricing of the offering.
      The Company intends to use the net proceeds of the offering to fund investments in debt and equity securities in accordance with its investment objective and for other general corporate purposes. The Company also intends to use a portion of the net proceeds from the offering to repay outstanding indebtedness under its senior secured revolving credit facility with Pacific Western Bank, or PWB, as amended (the “PWB Credit Facility”). As of September 10, 2020, the Company had $15.0 million of indebtedness outstanding under the PWB Credit Facility.
      Ladenburg Thalmann & Co. Inc., Janney Montgomery Scott LLC, and National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ: NHLD), are acting as joint-booking running managers….
      https://www.businesswire.com/news/home/20200914005504/en/

      1. The spread between BBB- and BB+ preferred IPOs is huge. Looks to be about 7/8 if COF prices at 5%.

    1. Saw that Moodys yesterday has issued an IG rating on the apparently soon to be issued MET-G preferred. Article stated that the proceeds from the new issuance would be used to redeem MET-C, a 5.25% 1000 par issue. Not sure if the new issue will therefore be a 1000 par issue or 25 par issue.

      1. I’m not sure the “therefore” matters, the company can issue any type of security they like and use the proceeds to do anything they like 🙂 but yes the new met is going to be a 1000 par untraded issue

  1. if the QQQ index falls below 10% of the years high does that means the tech stock goes on bear market?

    1. 10% is considered a correction. 20% or more for a bear market. We just experienced one early this year and recovered in historical speed. Maybe another one is coming? How many we should have in a year?

  2. Kansas City Southern Railroad has takeover offers from Blackstone and Global Infrastructure Partners so far they have refused according to the Wall Street Journal. This is their second try making an offer from rumours.

    I remember when BNSF railroad was bought by Buffett the preferred was called.

    So be prepared if it gets called $29 to $25 will be a big plunge.

    1. Are you sure this is callable? If so, where are you seeing that?

      I haven’t researched this one before, but I looked for about 10 minutes or so and couldn’t find any proof that it was callable. It looked like the company previously repurchased shares for over $25 on the open market which would be strange to do if a call option was available.

      1. I have KSU- in my own data base as uncallable, but that’s not authoritative.

        I think gridbird will know this one.

        it sure isn’t acting like it’s callable.

          1. So if KSU is bought out and taken private off the exchange they have to keep these paying forever? The preferred is non cumulative. I will get back in after it’s bought out and keeps paying plus cheaper.

            BNI was delisted and you got paid in 2010. Quantum Online says delisted. I used to be very close friends with a KSU employee decades ago. KSU is a top notch railroad.

  3. Anybody look at this new pfd OTRKP? I have not looked at the prospectus yet but high coupon of 9.5% and common market cap is over $1bn although it is getting hit hard today it has more than tripled in 2020

    1. It looks like they are putting the first 8 quarters of dividend payments aside. It’s a new company in a hot sector

  4. RILY preferred priced at 7.375% https://finance.yahoo.com/news/b-riley-financial-prices-32-213500371.html

    Depositary Shares Represent an Interest in 7.375% Series B Cumulative Perpetual Preferred Stock

    LOS ANGELES, Sept. 1, 2020 /PRNewswire/ — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) today announced the pricing of its underwritten registered public offering of 1,300,000 depositary shares at an initial public offering price of $25.00 per depositary share, raising gross proceeds of $32.5 million before deducting underwriting discounts and other estimated offering expenses. Each depositary share represents a 1/1000th fractional interest in a share of the Company’s 7.375% Series B Cumulative Perpetual Preferred Stock. Dividends on the Series B Preferred Stock underlying the depositary shares will be paid when declared by the Board at a fixed rate of 7.375% with a liquidation preference equivalent to $25.00 per depositary share.
    B. Riley Financial logo (PRNewsFoto/B. Riley Financial, Inc.)

  5. Everyone should be looking at what “can” be redeemed in the next 12-18 ish months. If you haven’t, you should do so in the current environment. I own 90+ investments and KKR-A, and DLR-C are my list. I have already unloaded them in the last month. Why?

    The cow has already been milked and you might as well take the capital gains and invest somewhere else, as they will continue to go lower and lower and your gains will evaporate. This discussion has already been had numerous times here, and this is not a new idea/concept… simply a reminder. You can debate on what coupon, what rating, what sector, etc,… but my opinion for a minimum, is that anything 6% and above with a call date in 12-18 months you should review.

    1. Doing the same. Just sold GL-C over 27 which is more than you would get holding until call. I don’t see any way those are not called at the first chance.

        1. Good comment Mr. Conservative – great minds, etc. My list includes GMTA, EAI, EMP, BOKFL. I bought all substantially below par, so a call wouldn’t be a loss but half the MTM gain would be gone. All these examples could refinance more than 150 basis points cheaper.

          Any other examples folks are thinking will be called? Obviously securities trading below par aren’t of concern.

          1. I took Tim’s master list, filtered for 2021 on 1st call date, sorted on price, … I didn’t look too much at the list, but the ones below for sure should be looked at if you own them. If you don’t have the 1st call date, you could do a VLOOKUP or something like that to merge/add that col to your spreadsheet. 2 of mine were on the below list. There are others further down the list you could sell as well if you had your eyes on something else as the YTC is pretty low if you hang onto them. If your thought is pinned to par, then some that are within 1 divy payment is perfectly acceptable which is what I do to limit downside risk in a sell off.

            KKR-B
            GL-C
            ENO
            GMTA
            EMP
            KKR-A
            APO-A
            EAI
            GDV-G
            GAB-J
            DLR-C
            ARES-A
            BAC-A

    2. Mr. Conservative, I havent done much lately, but I did buy 300 shares of UEPEN Monday in low $87s from Vegas Wynn pool, lol.. It can be redeemed in next 12-18 months (and the preceding 60 years also). If you could convince Ameren to get Ameren MO to call these I would greatly appreciate it since they are redeemed at $110. 🙂

      1. @Gridbird
        I had to pay the full $88 for my shares of UEPEN 🙂
        But I decided getting these to replace my maturing bank CD is much better than the .45% the bank was offering for 3 years. I will take 3-4% in this environment any time.

        1. Hi Malka. I wish I had known, I could have shouted you out.. At beginning of day about 1500 shares dropped to an ask of $87.50. They got discovered and then sopped up pretty quickly after that. $88 is in 5 year mid range, so you arent getting beat up here. 4% is what it is as you know. But with these old issues the “anchoring of par” tends to protect them a lot more at this price point of your $88 than say a liquid 4.5-5% ones at or above par. I have UEPEN and some UEPEP. More of UEPEN because of the pricing below par.
          These will pay until the cows come home or Callaway blowing up, whichever comes first. 🙂

  6. ENGLEWOOD, Colo.–(BUSINESS WIRE)–Aug. 21, 2020– Qurate Retail, Inc. (“Qurate Retail”) (Nasdaq: QRTEA, QRTEB) today announced that an authorized committee of its Board of Directors declared a special dividend on each outstanding share of its common stock consisting of (i) a special cash dividend in the amount of $1.50 per common share, for an aggregate cash dividend of approximately $633 million, and (ii) a special dividend of 0.03 shares of newly issued 8.0% Series A Cumulative Redeemable Preferred Stock (the “Preferred Shares”), having an initial liquidation price of $100 per Preferred Share, with cash to be paid in lieu of fractional shares.

    hmmm 8.0%

    1. B. Riley Financial Announces Offering of Depositary Shares and Series B Cumulative Perpetual Preferred Stock
      LOS ANGELES, Sept. 1, 2020 /PRNewswire/ — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) today announced it has commenced an underwritten registered public offering of depositary shares, each representing 1/1000th fractional interest in a share of the Company’s Series B Cumulative Perpetual Preferred Stock, with a liquidation preference equivalent to $25.00 per depositary share, subject to market and certain other conditions. The Company expects to grant the underwriters a 30-day option to purchase additional depositary shares in connection with the offering solely to cover overallotments.
      The Company expects to use the net proceeds of this offering for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital.
      B. Riley FBR, Incapital, Ladenburg Thalmann and William Blair are acting as book-running managers for this offering. Boenning & Scattergood, Kingswood Capital Markets, Division of Benchmark Investments, Inc. and Wedbush Securities are acting as co-managers.
      The depositary shares will be offered under the Company’s shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”). The offering of these depositary shares will be made only by means of a prospectus supplement and accompanying base prospectus.
      Copies of the prospectus supplement and the accompanying base prospectus may be obtained on the SEC’s website at http://www.sec.gov, or from the offices of B. Riley FBR at 1300 17th Street, Suite 1300, Arlington, Virginia 22209, by telephone at (703) 312-9580, or by emailing prospectuses@brileyfbr.com.
      This press release does not constitute an offer to sell or the solicitation of an offer to buy the depositary shares, nor shall there be any sale of the depositary shares in any jurisdiction in which such offer, solicitation or sale would not be permitted…
      https://ir.brileyfin.com/2020-09-01-B-Riley-Financial-Announces-Offering-of-Depositary-Shares-and-Series-B-Cumulative-Perpetual-Preferred-Stock

        1. Why all these issues coming to market like the Sachem with rates priced so high? First it was the banks 4 months ago now its Capitol investment and BDC’s like dangling a big juicy worm on the hook to catch a fish.
          What does this feel like to others on here ?

          1. I don’t look at them, Charles. I stay in my lane way more than even Grid stays in his. 😉

            JMO

          2. There is a reason why Sachem has rates priced high. Just look at 2019 financials + their total revenue and net income. My CEO in 1 month makes more than their net income in 1 year. Everyone should have some spicy sauce in their investment portfolio and this is a good one for that.

    2. This is a sneaky way to issue 1.2 billion $ liquidation preference of preferred.

      Should be an OTC ticker out today.

  7. CSWCL – Exhibit99.1 NOTICE OF PARTIAL REDEMPTION TO THE HOLDERS OF THE 5.95% Notes due 2022of Capital Southwest Corporation (CUSIP No. 140501206)*Redemption Date: September 29, 2020 NOTICE IS HEREBY GIVEN, pursuant to Section 11.04 of the Indenture dated as of October 23, 2017 (the “Base Indenture”), betweenCapital Southwest Corporation, a Texas corporation (the “Company”), and U.S. Bank National Association (the “Trustee), and Section1.01(h) of the First Supplemental Indenture dated as of December 15, 2017 (the “First Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), that the Company is electing to exercise its option to redeem, in part, the 5.95% Notes due 2022 (the “Notes”). The Company will redeem $20,000,000 in aggregate principal amount of the Notes of the $77,136,175 in aggregate principal amount of issued and outstanding Notes on September 29, 2020 (the “Redemption Date”). The redemption price for the Notes equals 100% of the$20,000,000 aggregate principal amount of the Notes being redeemed (or $25 in principal amount per Note), plus the accrued and unpaid interest thereon, through, but excluding, the Redemption Date (the “Redemption Payment”). The aggregate accrued interest on the Notes being redeemed that is payable on the Redemption Date will be approximately $46,278 (or approximately $0.0578 on each $25 principal amount of the Notes being redeemed).

    http://ir.capitalsouthwest.com/static-files/6bd03696-8214-4d49-ba1f-5fdf6652c00b

    1. Ptrader, This is a knock me over with a feather release. Not only were these all old and under par, but were generally below common divi yield also. Additionally EIX/SCE was really the ONLY utility that had a planned capitalization plan that meaningfully included preferreds which was close to 10%. With some of the trust preferreds also being yanked also this looks like a change in capitalization strategy going forward.

          1. i had 800 shares too. funny thing was i has a them up for sale at 24.50. i was a bit worried but they were redeemed at 28.60

        1. Ptrader – help me understand your comment about buying SCE-D months ago in anticipation of a call. What gave you a hint that these might be getting called?

          1. they talked about streamlining their capital structure on one of their earnings calls + I liked the significantly higher redemption price. It was a Hail Mary, I am giving you that.

      1. Grid, what are your thoughts on SCE-L here? Will they call this one too when callable or was this a one-time shift in strategy and they called whatever was available rather than wait for higher coupons to become callable?

        1. Landlord, Judging from what Razorback said in his comment company is reducing preferred capital plan to 5%. Basically shaved it in half. Just by that info, I wouldnt buy on anticipation of just a future call alone.

          1. That makes sense. More like a one time shift in capitalization strategy. Nonetheless, the calls improve the coverage on the remaining preferreds significantly. I notch utility preferreds one step higher to compare them to all other preferreds, so to me a BB+ utility preferred is equivalent to a BBB- financial preferred. 5.3% ain’t bad.

          2. Out of curiosity, any thoughts on why they would redeem low coupon issues at a premium (or at par in case of the partial SCE-G call) rather than just reacquiring below par on the open market? I know little of these matters.

            1. Nh, I just isnt worth their time. They couldnt get them all, it would take forever. I have an old preferred that company tripled the offer off par and only 70% accepted. They gave up…
              Since its a regulatory issue they probably incurred no “real cost” as the accounting is baked into all that at original issuance anyways.

              1. That’s probably it. Somehow I have the feeling that a company without regulated cost-based rates would have found the time.

    1. BALA CYNWYD, Pa., Aug. 28, 2020 (GLOBE NEWSWIRE) — Global Indemnity Group, LLC (NASDAQ:GBLI) (the “Company”) announced today the completion of the redomestication of Global Indemnity Limited (GBLI) and its Bermuda subsidiary, Global Indemnity Reinsurance Company, Ltd. (“GI Bermuda”), to the United States. The Company, a Delaware limited liability company classified as a partnership for federal income tax purposes, replaced Global Indemnity Limited, a Cayman Islands corporation, as the publicly listed parent company of Global Indemnity, effective as of today. The former shareholders of Global Indemnity Limited are now the shareholders of the Company, and the Class A Common Shares of the Company will continue to trade under the stock ticker symbol “GBLI”.
      Additionally, on August 26, 2020, GI Bermuda merged with and into Penn-Patriot Insurance Company (“Penn-Patriot”), a Virginia-domiciled subsidiary of the Company, with Penn-Patriot surviving. This merger resulted in the assumption of GI Bermuda’s business by Global Indemnity’s existing U.S. insurance company subsidiaries…
      https://seekingalpha.com/pr/17987133-global-indemnity-completes-redomestication-to-united-states

      1. Ok, not something you see every day. US entity for Global Indemnity is taxed as a partnership, so it likely gets a K-1. That is going to surprise some people next year.

    2. Dang, I own this one. Also have a lot of MVCD that I read would likely be called in the 4th quarter of this year. Where to invest these called securities is becoming an issue. Had STT.T and ARR.B called earlier this year. Sold back LTS.A, had two bonds called I held for years and another one called for 12/1/2020.

    1. Here is the use of proceeds verbiage for this new issue from Sachem. I’ll defer to the experts, but it doesn’t sound like an early redemption of one of their other baby bonds is being planned.

      ” We intend to use the net proceeds from the sale of the Notes offered under this Prospectus Supplement for working capital and general corporate purposes, i.e., to fund new real estate loans secured by first mortgage liens. In addition, we may use the net proceeds from the sale of the Notes to acquire other real estate finance companies or existing mortgage loan portfolios, although at this time, no such acquisitive transactions are pending. Pending such use, the net proceeds from the sale of the Notes will be temporarily invested in short-term government securities.”

  8. RE: SACH Baby Bond Forthcoming

    Sachem Capital readies registered public offering of notes
    Aug. 26, 2020 4:33 PM ETSachem Capital Corp.

    Sachem Capital (NYSEMKT:SACH) commenced registered public offering of unsecured, unsubordinated notes due five years from the issuance date.

    Notes will be listed on the NYSE American under trading symbol ‘SCCC’; trade thereon within 30 days of the original issue date.

    Pricing and terms have not yet been disclosed.

      1. The redemption is not good for the preferred holders, but it is a plus for those who own GDV common. The 5.875% preferred was very expensive leverage and a load on its back. if you add the management fee to 5.875, the fund was paying around 7% for this leverage.

  9. The Hanover Insurance Baby Bond THGA will be called on 9/19. I will miss the 6.35% coupon. Vanguard just messaged this.

    1. Thanks for the sad news. I have had a substantial position in THGA since it IPOd in 2013. Will definitely miss the income.
      The Hanover website states that the funds for this redemption are coming from a new issue of 2030 maturity senior notes with a 2.50% coupon.

    2. RE: THGA – where do you see an official notice of call stating the actual date of 9/19? Their new issue to refund THGA was 8/19, but it will not close until 9/24 and it specifically says the issuance does not constitute a notice of call. I think most frequently an announcement of call will be no early than the closing date of the refunding issue plus notification period. I have no doubt THGA is going to be called, but I just don’t see actual date as having been set yet.

      1. Biggest Vendor for the securities industry posted a call notice in their feed for this security on Friday 8/21, showing a call date of 9/19 and an actual call of 9/21 because of the weekend.
        they also have an interest payment of .39 payable on September 30 with a record date of 9/15.
        While it is rare to split them like this, it isn’t unheard of, but this vendor also makes mistakes from time to time, so this call announcement could be the misreading of the press release as well.
        We will find out in the next week or so.

      2. 2Whiteroses:I received a message from Vanguard about it on 8/22. I have not seen any other information. I would prefer it was not true…

          1. There you go….. That’s official enough for me….. Apologies for missing it. Thanks. Razor

            1. Justin – THGA normally pays quarterly on 9/30 from 6/30, right? This says you’ll get accrued up to but not including 9/19, so I’m guesstimating you get 80 days of accrued or about 25.352 instead of a full 90 days worth of .396875. What’s not clear is whether they’re just going to keep to their normal date of record schedule and have it be around 9/11 or if they’ll set an earlier than normal x-div date because of the call or if they’re be no x-div date at all.

    1. Very useful link Razorback…there are other videos dealing with preferred issues there also. Bookmarked, and thanks for sharing it.

  10. I have a suggestion for those who use TDA as a broker. I attempted to phone them yesterday and was advised the ‘wait time’ was 40 minutes. I hung up and used the ‘internet chat line ” to ask my question. The wait was about 10 SECONDS and the representative answered my two questions perfectly. ( Just go to ‘support’ and ask Ted to connect to the ‘chat line’ ). Thanks

    1. Mikeo
      I have accessed the site periodically all day with no problem.
      Maybe clear your memory/cache for your browser or try
      another browser . I used Firefox.
      howard

      1. Thanks h. It seems to be loading just fine now. Temporary maintenance early today most likely. I’m using Firefox as well.

  11. VEREIT to Redeem Six Million Preferred Shares; Collects 93% of August Rent
    BY MT Newswires
    — 4:08 AM ET 08/21/2020
    04:08 AM EDT, 08/21/2020 (MT Newswires) — VEREIT ( VER ) plans to redeem six million shares of its 6.70% series F cumulative redeemable preferred stock on Sep. 20 using proceeds from expected dispositions and cash on hand, according to a Thursday press release.

    The shares represent 24.12% of the company’s 24.9 million shares of outstanding series F preferred stock. They will be redeemed at $25.00 per share, plus accrued and unpaid dividends, for total proceeds of $25.0232639 per share. Payment of the redemption price will be made on Sept. 21.

    As of Aug. 18, VEREIT

    said it had received about 93% of August rent, which includes around 2% to be paid in arrears by a government agency tenant. The company is in ongoing discussions with tenants regarding unpaid rent.

  12. WASHINGTON, Aug. 20, 2020 /PRNewswire/ — The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.A) announced that it intends to provide notice to the holders of its 5.875% Non-Cumulative Preferred Stock, Series A (the “Series A Preferred Stock”) of the redemption of all of its outstanding 2,400,000 shares of Series A Preferred Stock. Farmer Mac will redeem the Series A Preferred Stock for a redemption price of $25.00 per share, plus any declared and unpaid dividends through and including the redemption date. The redemption date will be September 19, 2020. On and after the redemption date, dividends on the Series A Preferred Stock will cease to accrue. The September 19, 2020 redemption date is not a business day, so the redemption price will be paid on the next business day – September 21, 2020.

  13. UMH obtains a mortgage at the rock bottom rate of 2.62%. Intends to use proceeds to call UMH-B. They plan to also call the C and D series when callable in 2022 and 2023. I’ve been hesistant on this one because I couldn’t understand how their rental tenants who don’t own their mobile homes would be able to pay rent if they were out of job. But apparently this hasn’t been an issue and if C and D were callable today, they would get called.

    https://seekingalpha.com/news/3607660-umh-properties-gets-106m-proceeds-through-new-credit-facility

    1. The value of buying below par in this environment. Some of these operators ahave been doing this for a very long time. These guys are the kind of tough managers you want to employ.
      We’ve had discussions here regarding callability and rationalizing the buy.

    2. Be careful on UMH-B if looking to buy it for the call…. It’s already gone x-div for the 9/15 coupon so anyone buying now will only get $25 plus about .194 in div max for holding for 2 months until 10/20. It’s too high as a place to park some short term money now….

    3. UMH-D is my largest preferred stock position. I love this kind of business. Reliable, predictable and profitable. I will be sorry to see these shares called in 2023.

    1. Interesting…. haven’t seen something like this in a long time – OTRK is essentially escrowing sufficient proceeds from this issue to fund the first 2 years of quarterly payments due for the issue itself…… don’t know anything about this company but this seems unusual to me in this day and age.

      1. 2WR, The mysterious MTBCP did this at underwriting, so I played in it first couple years on shameless yield chasing. It has continued to do very well since, but I have been long gone.

      2. 2wr – it’s in essence an admission that the company doesn’t generate sufficient cash to pay the dividends. Strikes me as a requirement imposed by the underwriters. They didn’t want it defaulting until the ink was dry.

        Equity risks for fixed income returns! No equity kicker at all.

        1. Bob – I certainly don’t disagree. In my old muni bond days, you used to see this escrowing of debt service from original proceeds quite frequently on building projects, however when they did it, it was because of exactly that – a building project that would take that projected period of time before it would be finished and capable of generating revenues to sustain its debt service. That’s not the case here as use of proceeds listed beyond the 2 year escrow include not much more than the standard platitudes of “general corporate purposes,” etc.. certainly no incentive here to read the prospectus in full as I was going to.

  14. RE: MPLXP Question

    saw this on Finra today: MPLX LP PFD CL A Preferred Stock MPLXP

    didn’t see that MPLX was issuing a preferred and can’t find anything on its website or Seeking Alpha. any thots?

    searching, I did find it listed in NAIC’s “List of Schedule BA Non-Registered PrivateFunds With Underlying Assets Having Characteristics of Bonds or Preferred Stock”,[https://www.naic.org/documents/svo_schedule_ba_list.pdf] but I don’t know the significance of this.

          1. some add’l info:

            RATING ACTION COMMENTARY

            Fitch Rates MPLX’s Series A and Series B Preferreds ‘BB+’
            Tue 17 Sep, 2019 – 10:01 AM ET

            Fitch Ratings – New York – 17 Sep 2019: Fitch Ratings has assigned a ‘BB+’ rating to MPLX’s existing $1 billion 6.50% convertible Series A and $600 million 6.875% Series B preferred stock. The ‘BB+’ rating for the preferreds is two notches below the Long-Term Issuer Default Rating (IDR) of ‘BBB’.

            MPLX issued the Series A in 2016. The Series B preferreds were previously the ANDX Series A preferred stock, which were converted into MPLX Series B preferred units on July 30, 2019 in the MPLX/ANDX merger. The Series A and Series B preferred stock rank pari passu with respect to distributions and rights upon liquidation. The preferred units are junior to all of MPLX’s existing and future indebtedness.

  15. ESGR out with jr. bonds that should be rated BBB- . Pretty good yield for IG bonds. Anyone know if these will be $25 or $1000 bonds? If $1000, anyone know the CUSIP and when it will be available to buy?

    Enstar Group Limited Announces Pricing of $350 Million of 5.750% Fixed-Rate Reset Junior Subordinated Notes Due 2040 $ESGR
    https://www.globenewswire.com/news-release/2020/08/20/2081001/0/en/Enstar-Group-Limited-Announces-Pricing-of-350-Million-of-5-750-Fixed-Rate-Reset-Junior-Subordinated-Notes-Due-2040.html

      1. That’s weird that they are rating the jr bonds the same as the preferreds which are also BB+. Or was ESGR downgraded recently?

        Given their 7% coupon preferreds trade at $27 with a 6.5% CY, this still seems like a good deal in comparison. I’d happily trade in my ESGRO for these bonds.

      1. I wonder why the press release says “The aggregate redemption amount to be paid to all holders of the depositary shares is $500,000,000 for the Series W and $225,000,000 for the Series X for a total of $725,000,000,” but says nothing about paying the accrued dividends due. That seems to be different language from what they put out in June when they called PSA-V… They haven;t already passed x-div date, have they?

        1. 2WR,

          the announcement says the shares will be redeemed on Sept 30, which is the date of payment for the dividend to be declared Sept 14.

          so I guess the implication is that the shares are redeemed at par; the dividend payment on 9/30 is the usual event which will not be changed.

          hope that’s the case.

            1. No. the language is standard since they are calling it on a regular cycle dividend, so no accrued but unpaid.
              But this is unusual, where did the cash come from to redeem the other, way larger issue?
              They dig it out of the couches in their offices?
              Were they just sitting on all that cash?

    1. Oh Crapola!!
      Was hoping that PSA-W would have been spared.

      Oh well, that’s how things turned out.

      Now I have to find a good candidate for replacement.

      1. Eeeh. I have 6% of my portfolio invested in PSA shares. 16,000 shares i need to re-invest. I am going to need to spend a lot of time searching/analyzing. I don’t like sitting in a lot of cash as that is thousands of dividends I would be missing each month. Any and all ideas are welcome.

        1. Check grid’s posts and on ngh
          There’s the O and the P
          Might be a good place to park some funds for six months (or so?).

          1. nhcoast. Yeah that was a great idea. I purchased 10,000 shares of NGHCO when Grid called it out. PPX, RCP, AEFC, NLY-D are also my recent purchases as well. AEFC, and NLY-D are already up a divy payment (seller and then upcoming divy probably helps here).

    1. THGA – New THG note issue announced today – We estimate that the net proceeds to us from the sale of the notes will be approximately $ after deducting underwriting discounts and estimated offering expenses payable by us. We intend to use the net proceeds from this offering to redeem the full $175 million principal amount of our 6.35% subordinated debentures due 2053 and for general corporate purposes. This prospectus supplement does not constitute a notice of redemption with respect to, or an offer to purchase, our outstanding 6.35% subordinated debentures due 2053.

    1. It is more like if you haven’t had a stock up .50-$1 over the last week, there is something wrong with it.

  16. Just announced HASI is going to offer 125mm of convertable notes due 2023
    This company does financing of green energy projects but once they are built it flips them and moves on to the next project.

    1. I’m a big fan of HASI stock and have a large position. The stock moves with the mortgage REIT segment.

      I’m retired now, but when I worked for Verizon I was a happy customer of theirs.

  17. PSAGL making history by being first high duration preferred stock to yield under 4%. I think we are going to see lots of IG preferreds ( not including regional/retail banks) to follow PSAGL in the coming days as investors rotate out of LQD and treasury ETFs into higher yield fixed incomes. For what it’s worth PFF and PGX have been significantly outperforming other major fixed income ETFs (LQD, TLT, JNK, HYG, AGG etc.) in the past few days after lagging them for quite some times.

    1. VJ, Its actually history repeating itself. A slew of sub 4% par preferreds were issued in the 1940s. A few of these perpetuals still actually exist today such as UEPEN $3.5% (Ameren) NMPWP 3.6% (NGG) and WELPP 3.6% (WEC Energy). And they are all investment grade and still under par. So I guess if history is relevant, it may have shown these might not make great long duration investments, lol.

  18. Thank Or Swim Users – Is yours down today???? TDA support is telling me it’s a 40 minute wait to get to them so I thought maybe I could find out if others here cannot get into TOS right now.

    1. Mine is down too… wont even install updates. Regular TDAM site is fine though. I’m located in CA.

      1. As of 3:30 EST, TOS still erratically having connection issues – regular website been fully functional all day.

    2. 2wr-
      There are at least three outage reporting sites – all .com:
      downdetetector
      isitdowbrightnow
      outage.report
      They even have histories .
      In google, you can just type– is thinkorswim site down? or site of choice.

  19. This has been mentioned before but things are hard to refer too if one missed the initial discussion. But if one is wanting some relative safe short term income all while stalling out and praying for a better entry point besides 4.15% Park Storage issues should consider NGHCO and NGHCP. These are tracking exactly as they should. One is going to snag the 47 cent divi, and the final December one know matter what, and possibly the first quarter divi too, while AllState is waiting regulatory clearance expected in early 2021.
    Nat Gen is not and basically cannot do anything until the merger. And AllState has already declared them to be redeemed right at closing.
    At $25.33 you get 14 cents holding 6 weeks plus the future divi or two. And these will be anchored right around par now. Typically these type of “limbo” issues will creep up to around $25.50-60 right before exD, then will drop in the 25.10-20 range afterwards, rinse and repeat…For me presently its no accident my biggest 2 issues are LXP-C and the NGHCN (P) issues. And they are completely the opposite. One hedges out indefinite yield protection from being basically busted, and the other one on a precise short term rope.

  20. Chicken Soup for the Soul reported marginally good earnings on Thursday, and their common shares jumped almost 25% on the week. They reported paying off their Patriot Bank loan which gives them more financial flexibility going forward, and demand for their content is strong…but ad revenue in Q2 was lower due to pandemic spending cutbacks by existing advertisers. Two trends that should work in their favor in the second half are new political advertising (especially for local races) and indications that boycotting Facebook advertisers are spending more on video on demand (VOD) platforms.

    While the Chicken Soup Q2 report was marginal, there was enough good news in it to keep me interested in holding their unsecured 9.5% Notes due in 2025 (CSSEN). Those new notes which currently trade under par at $24.33 are going ex-div in mid-September. (Full disclosure: I also enjoy watching Barney Miller reruns on Crackle).

      1. Hey Irish…I like the monthly coupon that the Chicken Soup preferred offers, but the notes have a maturity as well as a call date so there is some certainty about when my investment dollars will be returned. There is also less likelihood that the quarterly interest payments will be suspended, although that could happen if the company were to go bankrupt. The preferred shares have a slightly higher coupon and a higher current yield, but I’m more comfortable holding debt than equity with this one.

    1. Camroc, Now these aint sock drawers! But, I can honestly say the SCE and PCG preferreds have been money making trading machines for me…I just a few weeks ago bought a slug of SCE-L in $22.90 range and just flipped them Thursday at $23.84…They have already started sagging again..Got my scope on them again! PCG anymore with nosebleed pricing and B rated preferreds just arent worth the hassle for me anymore. I got my bounty and left.

  21. For anyone interested, AHH has re-opened their 6.75% Series A preferred stock this week and it appears they will be issuing an additional 3.6 million shares. Leverage for this REIT is on the higher end, but they have been around since 1979. I’ve owned these in the past, but sold when the price got up to $27. This morning I started a position again at about $24.60 per share and am trying to lock in some income for the next several years as the issue is not callable until June 2024.

    1. Kap – Thank you for the alert. I’m seriously considering doing this. I’m a big
      chicken for a bigbear … I’ve watched this one drop over the past few days … but I just might give this a try.

    2. kaptain lou, the drop this far under par seems odd (currently 24.34); any guesses on the the over reaction?

      1. furcal – Actually AHH-A was trading in the $23.00 – $23.50 range in the past month, but really moved up when the company reinstated the full dividend on their common stock on about July 30th. At this point the preferred moved up much above par value, but I’m not sure why there was a drop today unless the underwriter was trying to move the shares quickly. The issue was actually priced at $24.75 and right now the ask on the shares is $24.55. The one-month chart on the preferred is actually very interesting.

        1. Doesn’t this generally happen when there is what is pretty much a secondary offering? More supply, demand the same. Don’t really know, but that’s my impression. If that’s the case, it might be a reasonable opportunity.

          1. nhcoast – those were my exact thoughts as well. It was not able to trade on the grey sheets for a couple of days so it just went to market. This weekend I’ll need to take a look at their quarterly supplement report, as it provides a lot of good information on the company. Happy investing!

  22. Apologies if this was already reported.

    American Electric Power to Raise $750 Million from Sale of Equity Units
    BY MT Newswires
    — 10:45 AM ET 08/12/2020
    10:45 AM EDT, 08/12/2020 (MT Newswires) — American Electric Power Company AEP
    , an electric utility, said late Tuesday it has priced an offering of 15 million equity units at a price of $50 per unit or about $750 million in aggregate.

    Each unit consists of a contract to purchase common shares in 2023 and a 1/20 undivided beneficial ownership interest in AEP junior subordinated debenture due 2025. The units bear an annual distribution rate of 6.125%, the company said.

    Further, the company said the units carry a threshold appreciation price of $99.95 per share, which represents a 20% premium from the reference price.

    The underwriters have been granted a 13-day option to buy up to 2 million additional equity units or about $100 million.

    The company intends to use the net proceeds, which are expected to be approximately $732 million excluding the underwriters over-allotment option, to fund capital expenditures, debt repayments, and for other general corporate purposes.

    The deal is expected to close on Aug. 14, subject to conditions.

    1. AG Mortgage Investment Trust (NYSE:MITT) offers to exchange newly issued shares of its common stock for up to 1.36M shares of 8.25% series A cumulative redeemable preferred stock, 8.00% series B cumulative redeemable preferred stock, and 8.000% series C fixed-to-floating rate cumulative redeemable preferred stock, all par value $0.01 per share.
      Consideration will be limited to 6,818,350 newly issued shares of common stock, representing ~19.9% of MITT’s common stock outstanding immediately prior to the offer’s expiration date.
      Tender expires at 11:59 PM ET on Sept. 11, 2020.
      https://seekingalpha.com/news/3605652-ag-mortgage-to-exchange-up-to-6_8m-new-shares-for-preferred-stock

        1. Cumulative. They slow down the bleeding. (this is why banks can’t issue cumulative preferreds anymore)

  23. Hard to find opportunities. Purchased NLY-D. Many analyst upgrades. Lots of cheap money being printed. Upcoming dividend. High yielding for NLY. Not very conservative for me, but given the environment and new issues being 4+%…

    1. I hear you Mr Conservative (aka, the former Mr. Lucky). I had a helluva six week flip run again, but have petered out mostly and reaching and digging in at same time. Reaching my buying a bunch of NYCB-U in $43 and a last batch very low $44 a couple days ago. Bolstered up my RILYZ some more when good earnings came out. Probably wont even look at market tomm and just focus on my round of golf being things are at a standing, slow trickle up. Will just be content let everything bleed north as they are doing.

      1. i still have about 90+ preferreds and bonds. Sold about 5,000 shares of VER-F earlier this week. I put a sell at 25.76 and someone took it all. At 5 1/2 months of dividends… i figured VER might call another batch. This is one that I like to keep, but if someone wants the negative call risk, I’ll let them have it. I have over 15,000 shares of PSA preferreds, so i sure hope they dont call them. Also sold some IPWLK at 106.50 .

        Already was deploying the cash from the sales and bought: LMHB which is now almost .50 higher in a few days, NGHCO, NLY-D, and AEFC. Still need to deploy another 100,000 and it is tough.

        1. With same problems you have I had to bolster my MNR-C stash too. They had a great last quarter. And just announced property expansion? The three tenants for the properties are Home Depot, Amazon, and Fed Ex. All signed to 10-20 year leases. Despite their goofiness of an ill advised portfolio of reits, their tenants are almost all A+ quality signed to long leases.

  24. THL Credit Inc. has had its name changed to First Eagle Alternative Capital BDC Inc. Their old ticker TCRD is now FCRD and the exchange traded notes TCRX and TCRW are FCRX and FCRW respectively.

  25. Armada Hoffler readies preferred stock offering (reopen AHHPRA)

    Aug. 13, 2020 10:17 AM ET|

    Armada Hoffler Properties (AHH) initiates underwritten public offering of its 6.75% Series A cumulative redeemable preferred stock. Price, volume and terms not yet determined.

    The company intends to use the net proceeds from the offering to repay outstanding indebtedness to fund potential acquisitions and/or for general corporate purposes and working capital.

    This offering is a re-opening of the Company’s previous issuances of Series A Preferred Stock. The additional shares of Series A Preferred Stock sold in this offering will form a single series, and be fully fungible, with the outstanding shares of Series A Preferred Stock. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol “AHHPrA.”

    1. It is interesting. I own their A issue and love their diversified portfolio with a good share of residential properties in it.
      Most likely I will be the buyer of this one (below par of course).

      1. Yuriy, This is the A issue. And its already under par. They just reopened the spigot here. Its done quite often…MNR-C is serially tossing out new shares. Its close to a half billion now if memory serves.

        1. Gridbird, thanks for the clarification. So it’s looks like there is a high probability that the price will go down and I will have the chance to add them for the full position. There was a pretty good jump in the price, where I sold my stock and recently bought half back at $ 24.9.
          I think I will be buyer at or below $23.

  26. New Issue

    ANNOUNCED: Farmer Mac Preferred

    Issuer: Federal Agricultural Mortgage Corporation
    (common ticker: AGM )
    Security: Non-Cumulative Preferred Stock, Series F
    Size: $50mm (2mm $25 par securities)
    Expected Ratings: non-rated
    Maturity: Perpetual
    Price Guidance:: 5.375-5.50% (fixed-for-life)
    Offering Price: $25.00 per share
    Dividends: When, as and if declared, dividends will
    be payable quarterly, on the 17th of
    January, April, July and October
    beginning 10/17/2020. Non-Cumulative.
    Redemption: At the issuer’s option, in whole or in
    Part, beginning 10/17/2025 at the redemption
    price of $25.00 per share, plus a…

        1. Kind of weird looking at their last issue in May, AGM-E, there’s no link to a prospectus on QOL and also I don’s seem to see one on EDGAR around its issue date of what QOL says was 5/14/20 either….

          1. They are regulated by the FCA so filing requirements are different. The cert of designation for the prior prefs are on EDGAR

                1. Tim, Most of my best trades a prospectus has never been located let alone a solid summary like your link, lol.

                    1. Justin, probably so. One of our online friends owns one also and called their IR for info. They told him they dont know where to look for it at either, ha. For some of these one can get a thumbnail sketch through their incorporation links at bottom of annual SEC filings.

            1. Tim – I’m reading it now with my (male) eyes shut to hide my shame…. Thanks for guiding me to the light….. lol

  27. For fans of PPX, PPL announced (on Aug 10) that it plans to sell it’s UK segment:
    https://finance.yahoo.com/news/ppl-corporation-reports-second-quarter-122000460.html

    Moody’s said it will increase it’s business risk, but could improve the balance sheet.

    Here is the relevant text:
    As announced separately today, PPL is initiating a formal process to sell its U.K. utility business in order to unlock shareowner value and position PPL as a purely U.S.-focused utility holding company. The decision to proceed with a sale process follows a comprehensive strategic review by PPL’s Board of Directors that assessed the company’s business mix and future growth opportunities.

    The company said its use of proceeds from a sale would be focused on strengthening PPL’s balance sheet and enhancing the company’s long-term earnings growth, which could include supporting strategic growth opportunities in the U.S. and returning capital to shareowners.

    While there can be no assurance of any specific outcome, including whether it will result in the completion of any transaction, the company expects to announce a transaction in the first half of 2021. As a result, PPL is withdrawing its financial guidance for 2021.

    1. The rumor is that the buyer for PPL’s UK business is Berkshire Hathaway, but nothing official has been announced.

  28. Tim-
    I think the latest Truist TFC-R is missing in your lists & search.
    Not interested, but for those who might be, there’s a new SA article
    by Ilia Iliev today.

  29. Could someone explain to me what will happen to JE-A if the recapitalization goes through ? Will JE-A be tied to the new equity in some way ?

    1. You had my hopes up Earlybird, but its not meant to be. Another one of those damned old equity units offering instead of a real preferred.

      1. So, how do these work? Do you trade your shares in like convertibles and can end up with the short end of the stick by the stock price being too low when that happens, or do you keep the underlying and have to buy the stock as an addition to your holding when the first date rolls around? I guess in the latter case you could still end up on the short end of the conversion stick.

    2. Thank you EarlyBird. I was looking for the Otc symbol. Here is the news item about it for those interested.
      https://www.aep.com/news/releases/read/5707

      I own some of their very similar note AEP-B with same 6.125% coupon and an earlier call date 3/15/2022 and maturing 3/22/2024. I had bought it almost at par of $50…It’s conversion rate is also similar at 0.5021@$99.5818+
      0.6026@$82.98-

    1. We may get, what, 4.5% out of a PSA-M?
      PSA-L was only 4.625%.
      But it’s “safe”:
      S&P: BBB+
      Moody: A3
      III Rating: A

          1. I bought KKRPP at TD. My limit orders went unfilled until 10 am and the ask was below my order. They are terrible at OTC issues.

  30. Definition of insanity. PLDGP just traded 432 shares @ 89.99. This is for an issue that matures on 11/13/26 @ 50.00. A guaranteed loss of ~ 3%/yr. I understand the greater fool theory of investing, but would be a little surprised if the buyer could flip those shares for a profit. . .

    Searching for a greater fool . . .

  31. HLM/P has reinstated the dividend AND is paying the cumulative amount from where they had suspended it. Closed @28.94 up 3.59/14.2% today.

    (GLOBE NEWSWIRE) –The Hillman Companies, Inc. (“Hillman” or the “Company”), Doug Cahill, President and CEO of The Hillman Companies, Inc., announced today that a cash distribution has been declared by Hillman Group Capital Trust for the month of August in the amount of $0.241667 for each Trust Preferred Security (NYSE Amex: HLM_P). Additionally, the Company announced a cash distribution for the months of April 2020 through July 2020, with cumulative interest thereon, in the amount of $0.990255 for each Trust Preferred Security. Both distributions will be payable August 31, 2020 to holders of record August 24, 2020.

    On April 3, 2020 the Company announced its decision to temporarily defer the payment of distributions to holders of Trust Preferred Securities to preserve liquidity due to the uncertainty of the financial impact of the COVID-19 pandemic. The Company was fully compliant with all financial covenants as of the end of the second quarter and remains compliant with the terms of its debt agreements. The Indenture that governs the Trust Preferred Securities provided for the ability to temporarily defer distributions but required that the Company accrue the amount of the deferred distributions during the deferral period.

          1. Win some lose some…Im personally not. I bought it in upper $25 range in early spring on volume, and then a week or two later saw a notice payment was to be suspended and got out in mid $26, oddly.
            Their finances have always been a GAAP nightmare. And the fact they had to panic suspend early shows the fragile ness. I made a blind luck quick buck and wont go back. Its just not in my profile and I stretched there and got away with it.

  32. The RichUncles.com (now BRIX REIT) pseudo-scam finally blew up and they are now liquidating. This turned out to be about as legit and successful as the lendingclub.com pseudo-scam still being perpetrated.

    1. They invested in a lot of properties linked to universities, both apartments and businesses like campus serving Starbucks, and then COVID shut all of those places down.

      Unless there is something more (and there may be, I just haven’t seen it) I don’t think that qualifies them as a scam. Lots of legitimate businesses are going down now. When I looked at them I did think they may have overpaid for some of their properties. But everything is an overpayment given there is no prospect of getting new tenants now.

      1. They overpaid and admitted that they overpaid – stretching for a somewhat unrealistic returns to keep fresh deposits coming in, and as a result of that risk, management got fat pockets while investors will be lucky to get pennies on the dollar back. Sure, it’s the chance you take – but just like with the parade of scheisters like lendingclub and the rest of trashy peer-to-peer type pyramids – the little guy gets a great marketing department presentation and a gift wrapped bowl of s*** in the mailbox instead of dividend checks. The other portion of why I call this a scam is the entire ‘reason’ why the properties and their adjacent areas, remain largely shuttered. Of course, if management was smart enough to hold on or find a way to hold on until the election, I’d bet things would turn out quite differently. Too bad BRIX REIT didn’t buy liquor stores and lottery ticket kiosks…you know, those essential services/item providers that continued to operate and thrive.

    1. And more are coming. There are quite a few higher coupon issues coming to first call opp that will be gone soon. If lucky we will have an opportunity at a lower rate preferred issue or the company may go to debt. Many redeemed preferred are effectively going to the bond market.

    1. Thanks Justin! Is it correct that the dividends will not be taxable and will reduce your basis in the preferred so that when you sell, you’ll have a larger capital gain?

      Also, what are your thoughts on what this means about the financial health of the company?

      1. Correct. It is a basis reduction. There are usually 2 reasons this happens.
        1. the law changes. (we saw that in 2017 with Centurylink)
        2. Something out of the blue happens that wipes out their history of E&P, like a huge writedown due to a regulatory decision.
        But as Gridbird loves to point out, there have only been 2 utilities go bankrupt in the last 100 years.

        1. So assuming I hold for at least a year and this doesn’t mean the company is in trouble, is it correct to say that I should be indifferent between QDI or return of capital classification?

  33. Grid, Another REIT NR I have continued to hold is LMRKO, where there are three prefs, stable common div, good mngt. Just like their focus, no moving parts.

      1. Yep.
        Comment regarding K-1s: I have learned to build that whole element into our larger picture across eigth accounts. My advise is do not shun, but pick one you can live with and see it thru a cycle of reporting and filing. OK once fear is out of the way, then a rationale for you can develop.
        Good Luck!, as if there aren’t better things to do with Time!

        1. Bite your tongue, Joel. I can think of a 100 things to do, and none of them are as fun as doing this for me…Until of course, I head out to golf for an afternoon round with a friend later today.

      2. Hey Justin – Just remembering some of your old posts on AATRL, have you ever received the printed info AMG is supposed to provide upon request regarding how they treat tax remifications on AATRL? I’m talking about, “The CPDI regulations require that AMG provide to U.S. holders, solely for U.S. federal income tax purposes, a schedule of the projected amounts of payments (the “projected payments”) on the junior subordinated convertible debentures” which you are supposed to be able to get by submitting a written request for such information to: Affiliated Managers Group, Inc., 600 Hale Street, Prides Crossing, MA 01965. I’ve made my written request awhile ago as well as a couple of email requests and so far bupkis. I don’t own in a taxable account but still want to feel comfortable in understanding how dire or not dire it might be to do so.

          1. Thanks, Justin – However, I’m lost even trying to understand what this Projected Payment Schedule is trying to imply let alone what it means for tax implications….. What math do you use to come up with $207.03 (or 207.80) and what does that mean to tax considerations???? If this is too specific or detailed for here, you can PM me at SA if you would, but this doesn’t give my thick brain a clue what the tax implications would be for someone who would buy AATRL on 9/26/2019, for example (to collect the 10/15 coupon) @ 47 and sell it on 10/15/2020 at exactly the same 47 price, does it??? Would he have to pay taxes on 2.72 of dividends (.68 x 4) but only collect 2.575 (..64375 x 4) or are the consequences more dire than that?

            1. this is the math. 8% comparable yield was determined by them back in 2007
              starting at original issue date:
              original issue price * comparable yield /360 * number of days in period (I’ll assume 90, as it pays quarterly) this was issued at 96.65 (48.325) and then minus the projected payment to get the ending adjusted issue price.
              so for the first period. (50*.9665*.08/360*90) = .9665 cents of OID for the first period.
              48.325+.9665-.64(from the projected payment schedule) = ending adjusted issue price of 48.65
              then it repeats with the new adjusted issue price.
              48.65*.08/360*90= $.973 of OID in the next 90 day period for each unit, and an ending issue price of 48.983 (remember to subtract the .64)
              . So this is the math starting in 2007, and it has continued from there and will continue for 30 years. (this can be done easily in excel using 120 rows 30 years on a quarterly schedule))
              in 2020, the adjusted issue price is now at about $75 a unit, so for 2020, this would be a rough calculation of the OID per day.
              75*.08/360 or $0.016 per day. Dividends are ignored as far as income in this scenario, they just reduce the basis, as they are contained within the OID income and would be double counting the income.

              So to buy it on 9/26/19, we will assume an adjusted issue price of 74.50, which is in the ballpark, so buying it at 47 means you have market discount of $27 per unit. Then you accrue a year of OID to your basis (a rough calc is 5.75 for one unit for one year).
              So add the OID to your basis 47+5.75 and then reduce the basis by the 4 $.64 payments (check the schedule, the payments differ later in the schedule)
              so your ending basis is 50.19, so you have a $3.19 ordinary loss(it doesn’t qualify for capital loss, regardless how long it is held) per unit if you sold it at the same 47 you bought it for. if you sold it for more than 50.19 and below 80.25 or so (74.50+5.75), the amount over that would be market discount income.

              1. Whew! I’m almost sorry I asked as my eyes glass over quite quickly…. lol Thanks, Justin…. I bet TurboTax or little Timmy Geithner would never catch up with this when it comes to tax time, but then again, would the IRS either???? My other top of my head reaction, admittedly not believing I’ve really got a clue, is, based on the example we’re using the tax consequence turns out to be a good thing, not a penalty doesn’t it???? I mean you buy at 47, you sell at 47, you collect 4 coupons and you end up also having a 3.19 ordinary loss???? Where am I going wrong?

                1. You have phantom income of 5.75, which is almost 1.5X the cash income you receive, that is where you are going wrong….

                  1. Justin, 2WR
                    Having been part of this conversation before, I understand the 8%, which is disclosed in the prospectus, and how that compounds reach a “value” of $207+ in 2037, and how that results in OID in excess of actual payments, this year ~$3.50 (~$6 OID less payment of ~$2.5).
                    I’m not seeing how the table at the end of the referenced trust document gets you the OID. Is there any further explanation?

                    1. nhcoast – I almost feel the need to apologize for bringing this up again, but I remember Justin was de man, and wanted to see if I could figure it out with his guidance just as an academic exercise since thankfully I own AATRL in an IRA… I’m still trying to wrap my brain around the whole thing so really appreciate Justin’s efforts…. I just keep thinking that this seems to be so complex that how could the IRS ever challenge someone for reporting tax consequences wrongly ? I think even those who have high falutin’ accountants doing their taxes for them only have a 50-50 chance at best that their accountant will either pick up on it or report it right. Or am I totally off base… For the initiated, as opposed to we uninitiated, is really more boilerplate complex than I’m imagining? So bottom line, Nh, don’t be looking to me for answers… I still sit at the feet of Raja Justin… BTW, Justin, out of curiosity, is your background in this tax stuff??? Heck I don’t even want to have anything to do with anything that issues K-1’s ..

                    2. I took about 20 minutes to create a schedule in google docs that gives an idea how this works on a basic level. that one column should track the payments in the filing, and the rule for these is total OID+original issue=total payments and here it is…
                      https://docs.google.com/spreadsheets/d/1SWqjP4W7iTqnLSoeRiRrQfcnP684qLADTjeUU5XWIUY/edit?usp=sharing
                      The title shows what I left out.

                      The schedule for the security will get filed with the IRS in some instances. (security appears in Publication 1212 list of OID instruments)
                      Starting with purchases of these securities after 1/1/2016, your broker is supposed to track your gain and loss on these like I did while accounting for the other quirks I didn’t get into.
                      There are multiple vendors who provide software that the IRS or your broker could buy that would validate whether the broker’s math (or the accountant’s math (if bought before 1/1/2016) is correct, just based on the CUSIP, purchase date and price, and sale date and price reported on the investor’s tax return and on form 1099B.

                    3. Absolutely amazing work and effort, Justin… Thank you for donating your time to do this…. To be honest, I don’t think I’ll ever fully understand but I’ll cease with even more academic questioning… You’ve suffered enough..lol

                    4. To answer your question, yes, I am a lawyer who designs tax software for financial institutions.

                2. Justin, should have said…Save me the work and just keep the damn thing in a tax account! Anyways, did you the conversion and strike price points for conversion are all different now?

                  1. Justin,
                    Thanks much for this and for your efforts.
                    I had put together a more simplified version in Excel that shows the estimated OID and excess “phantom income” by year based on those parameters.
                    As an aside and of no real importance, my understanding (admittedly less than perfect) is that AMG takes a tax deduction on the 8% per year accretion, based on the theory that in 2037 they will have to surrender value equal to $207 per unit, that value being in the form of common stock. At this point, that seems highly unlikely, and they will actually extinguish the supposed liability of $207 per unit at the principal value of $50 per unit, so they will have a taxable gain of $157 per unit. With 10 million units, that comes to $1.57 billion. At the current income tax rate, that’s a tax payment of ~$330 million.
                    The income statement will not be affected at that time, because they are recording a deferred income tax liability, but they will have to come up with the cash. In effect, until that time, they are getting an interest free loan from the Treasury Department. Conversely, if you buy it in a taxable account, you are making an interest free loan to the Treasury Department.

                    I think we could have whole separate corner here just for AATRL.

                    1. That is a fairly close approximation of what occurs.
                      See CCZ for one that is really nuts.

                    2. You sure won’t find that kind of corner anywhere else… another example of the good guys frequenting the III…. Thanks again, J and nhcoast. nh is yours the shortest shoreline in the nation?

                  2. Hence “the basic level” part.
                    The law was enacted to prevent issuers from taking advantage of below market rate debt by taking on a convertible feature.
                    The attempt to make something unpredictable far into the future predictable with adjustments at regular intervals to account for differences in what was predicted and what ends up happening.
                    Note that this is starting to happen with the projected payments adjusting higher than .64.

                    1. 2WR
                      At 18 miles, so I’m told.

                      This has been an informative academic exchange but I think we digress from the stated purpose of the reader initiated alert page

                      And Justin, your responses have been above and beyond the call of duty

  34. From 8/4, FINRA- what is this – for an ETF and listed- other OTC
    Addition: IMPPF INVESCO MKTS II PLC INVESCO PREFERRED SHARES UCITS ETF ACC Exchange Traded Fund

    thx

      1. Fabrib–these are not traded –they may list them in 3-5 years, but now you can buy them but no exchange trading.

      1. UIT is the closest equivalent here. Biggest markets are Ireland and Luxembourg. These are Irish.
        Collective investment trusts.
        They own a fixed basket of ETF’s it seems.
        As a general matter only English common law countries have trust structures, hence Ireland. Luxembourg changed their law to allow their creation.

    1. Gary,
      since the description contains the word “UCITS” I assume that this is some kind of European ETF.

      1. Yes- I looked-up UCITS before posting, but thought it might be traded here- but not interested for myself.

    2. UCITS – its a unit trust, Brit speak and elsewhere for a fund. Probably Irish. These are not SEC registered and they can become problematic holdings. I would only consider a foreign unit trust if the holdings were something that could not be had in a US based fund.

      Foreign expenses are generally much higher than US.

  35. For those own MNR or preferred, things are steady… Bought two buildings and Fed Ex is long term leasing those (dont act surprised, ha) Expanding more properties and Fed Ex (of course), Home Depot, and Amazon signed on long term contracts to lease all of that…. They certainly dont lease to rag tag outfits even though concentration risk is there (which I disregard).

    Approximately 49% of our 1.5 million square foot pipeline is leased to FedEx Ground for 15 years, 43% is leased to Home Depot for 20 years, and the remaining 8% is leased to Amazon for 10 years. The 120,000 square foot Amazon acquisition is expected to close before the end of this fiscal year with the remaining 1.4 million square feet leased to FedEx and Home Depot expected to close during fiscal 2021. We are currently working on additional deals and anticipate further growing our acquisition pipeline in the ensuing quarters.

    Tenant Rent Collections for Monmouth during the COVID-19 pandemic has been excellent. Broken down monthly they are as follows; for March, 100%; for April, 99.6%; for May, 97.9%; for June, 99.4%; and for July, 99.6%. For the month of August, we expect total rent collections to be consistent with July at 99.6%.

    Our resilient occupancy and rent collection results during these challenging times highlights the mission-critical nature of our portfolio and underscores the essential need for our tenants’ operations. To-date we have agreed to a total of $438,000 in deferred rent, which represents just 31 basis points of our total annual base rent.

      1. Gary, I didnt realize it, but GNL is now almost 50% industrial reit. Their preferreds have pretty much recovered. As a side note industrial reit LXP’s common stock just hit a 7 year high today and they just had a 5% equity issuance dilution just a couple months ago.

      1. so then they will be loaded into the various preferred funds that do take non-public stuff, like Principals, Cohen and Steers Preferred fund etc…

  36. Either this company is a total scam or they are like Stacy’s mom and got it going on. I own two of their baby bonds and patiently waiting them to give me alpha as they are about the only thing in my stash spinning its wheels. But time is on my side here as long as solvency is not a concern…
    B. Riley Financial (NASDAQ:RILY) declares $0.30/share quarterly dividend, 20% increase from prior dividend of $0.25.
    Forward yield 4.66%
    In addition, declared a one-time, special dividend of $0.05/share for the quarter.

    1. Nice! I still hold a chunk of RILYG at basis $22.59. At the 8/7 close of $24.05, maybe it’s time to move on? Call date is 12/31/20.

      1. Yazzer, they dont mature though until 2027. But if things are going this well, a call could be well in order here. Its easy for me to flip and profit and move around the 4%-5% issues I have. Its not so easy with these as they dont trade that way. Taking a profit and running could be a sound idea. But for me, my intent near term is to keep the pedal to the metal as it has been paying off.
        And selling these relative high yielders to replace on that yield plane is problematic for me. So I suspect I will keep both issues. The recent trend has been upward after their quarterly report.

    1. Sidhu still adheres to his prior guidance and what he’s been saying all year long that CUBI will make $3/share in earnings for 2020 yet even now after being up 10% on the day, CUBI still trades at under 4 projected EPS.

      1. BTW, I’m surprised they went out of their way to even state the obvious but CUBI reiterated its interest in retiring the preferreds but also stated no preferreds will be called in ’20 or ’21.

        1. Why would this be obvious? With the CUBI preferreds entering the floating stage, the dividend payments will drop. Seems CUBI would want to keep the preferreds outstanding and pay the lower rates.

          1. Retired – obvious in the sense of exactly what you said – meaning stating the obvious that for now calling is off the table. Not only are they trading at substantial discounts now, making them unlikely call candidates, but CUBI will half accomplish the goals they want to achieve in calling once they float anyway…… From these levels of LIBOR, what would still be an incentive for them to call would be an ability/desire to swap them out for fixed rates at a rate less than their LIBOR + numbers… C, D, and E have pretty hefty + numbers @ 5.30%, 5.09% and 5.14% respectively, but they’d have to give up the perpetual aspect for a relatively short maturity to even come close to locking in at rates like that, so as you said, it’s pretty obvious calling has become a pretty obvious low priority idea.

        2. CUBI pref have never recovered from March, so it’s fair to say that the market is judging the credit risk to have gone up. CUBI-C is now paying a 6.50% floating yield and zero call risk.

          1. Bob – What do you mean by “floating yield?” With CUBI-C coupon for 9/15 to be approx 5.30 and it trading @ 22, I think CUBI-C’s current yield would be about 6.05% wouldn’t it? So is floating yield something different or did you invert numbers? I still don’t understand the knock on CUBI vs other banks given Sidhu maintaining his earnings guidance for the year to be $3.00, just as he guided in first quarter… That’s pretty impressive…..

  37. DCOMP is at 20.32 and currently yielding 6.75
    ex-div 8-5-20 .34375 payable 8-15.
    What’s noteworthy is the bank is merging with BNB Bridge Bancorp.
    BNB will exchange new pref matching the same as dcomp.
    Is this merger going to make the preferred higher ranked by S&P?
    If so, then can we extrapolate a 18% move higher to 24 ?
    Or am i off?

    1. Good question.

      I checked and this looks like a merger of equals. Very similar credit rankings. So I would expect the merger to have very little effect on the pricing or rating of the preferred. Indeed, the price has been rather flat since the merger was announced.

  38. FYI – The SNV preferreds have really jumped the last few days, they are floaters so I am taking the bump to dump them.

  39. For anyone interested in GFNCP, it popped more than 4% this morning on high vol, goes ex-div tomorrow I think. I opened a position back in April.

  40. BrightSphere Investment Group Inc. Announces Divestiture of Affiliates Barrow, Hanley, Mewhinney & Strauss and Copper Rock Capital Partners
    https://ir.bsig.com/investor-relations/news/news-details/2020/BrightSphere-Investment-Group-Inc.-Announces-Divestiture-of-Affiliates-Barrow-Hanley-Mewhinney–Strauss-and-Copper-Rock-Capital-Partners/default.aspx

    Announcement does say “Proceeds from these transactions will allow us to pay down debt and return capital to shareholders through repurchases, which could result in double digit accretion to 2021 ENI per share while also providing capital to support the continued growth of our remaining affiliates by seeding new strategies.”

    10k p 147 shows BSA is their highest cost debt @ 5.125% but also their longest maturity debt. I wonder if they are considering doing something with BSA? Another one going to bite the dust?

    1. Jul. 24, 2020 11:16 PM
      Ready Capital (NYSE:RC) has filed a prospectus for a $1B mixed shelf offering.

  41. Some of my preferreds/BBs are trading way above par these days (NTRSO, GAB, PSA, DLR, NGHCN, others). I understand things like KBTA which are not callable running up but what about these ones with 3-5 year time horizons? What is a good rule of thumb for when to sell these things? Or is this part of the “new normal” with quality issues in a zero interest rate environment? Just a question to those here who have been in the preferred world longer than me!

    1. Sell before a crash?
      Sell when YTC is near zero and you anticipate a call.
      Sell before a notable interest rate increase.
      For traders, sell on a price spike.

      too many factors to have one rule of thumb.

      1. I understand the individual nuances you state and not having a “general” rule of thumb but,I was trying to discuss the more general uptick of numerous issues as stated. It’s more than an individual analysis issue IMO. As these things begin to approach being 8-10% over par, there seems to be a bit of a disconnect. My thinking is that it is because of the ZIRP but was inviting discussion.

        1. My opinion FWIW, is preferreds with call features are income vehicles and/or trading vehicles. They are not, however, growth stocks. Eventually they will have to drift back towards redemption price as they approach the call feature. WGC-J was a perfect example. Anybody who bought 3 years out from call date made no money at all chasing the 8% yield, as it kept dropping and not rising with each dividend dispersed. The only people buying that issue for income the last 4 years of its life that made any money were the people who bought after call date as it mysteriously stayed outstanding for a year or so after call date.

          1. Thanks Grid – sorta my thinking as well. For me, I look at them as income BUT BUT BUT, now that some are getting stretched above par, it might be worth a trade or two to capture some extra premium. NTRSO is one example that has been bid up a lot in the last 2 weeks and now it is almost 6 quarterly divvy payments above par. Take that premo and either look to find another opp or rebuy when it pulls back a couple %.

            1. I sold a lot of my preferreds several years ago when the yields on value declined to the 4-5% area from the 6.5-7.5% yield on original cost. I made good money on the trades but then was stuck with where to park the cash. I settled on financial sector ETFs which worked fine but gave me little cash flow. I eventually made money holding them as well, until selling them in the fall and going back into preferreds. I have honestly looked back on these events and concluded that taking everything into consideration (taxes, lost/lower dividends, etc.) I probably overreacted to the lower yields and would have done nearly as well with a lot less work just holding them and clipping the coupons. If you’re a trader and you like to trade it’s one thing, but if you are in it for the cash flow you’ll be cutting that off in exchange for a taxable gain and a search for a replacement investment,
              which may be fun for you. Due to all the economic uncertainties, I’ve increased my income portfolio allocation and dumped individual common stocks (buying ETFs/MFs instead) and am hunkered down for a while. Welcoming my QDI in the meantime!

              1. Thx Tim! As an experiment, I sold a 400-share block of NTRSO at $27.70 today and will look over the next 2 weeks to either reallocate to it below $27 or look at some other preferred to get back in. I did it with NTRSO because we have about 7 weeks till ex-div and have some time leeway to decide. I have been accumulating KTBA but still not at a full lot – my avg is $26.70 on it and at 75% allocation. So, if it dips back into the mid-28s, I may apply the funds to it given the uncallable nature of that investment-grade 6%+ yield.

                  1. Over the years I have had no experience owning this in a taxable account, but according to prospectus the payment owed yearly is just normal interest expense……
                    your Certificates will represent beneficial interests in the Underlying
                    Debentures. For information reporting purposes, interest payments on theUnderlying Debentures will be reported to you (and the Internal Revenue Service)as interest and not original issue discount and will be included in your income as it is paid (or, if you are an accrual method taxpayer, as it is accrued) as interest (and not as original issue discount). See “Certain Federal Income Tax Considerations” in the Prospectus.

                  2. I own KTBA, in an IRA. So thankfully I have no experience if there are problems owning it in a taxable account.

                  3. I had KTBA in a taxable account for years…no issues other than the usual reporting of non qualified interest.

              2. Tim, like you a few years ago, I had an aversion to 4%-5% preferreds. Fought like hell to stay above and largely did with an increasingly narrow band of issues such as like AILLL. But even that damn broke as prices kept escalating and it wasnt worth the risk reward to continue in those. I never got out of preferred market just accepted fate in dropping down in yield and taking a stand in certain issues and digging deeper. Ironically I have found just as good opportunities in some flipping in 4% level as I did plus 6%.
                Trading for alpha has got harder. As everything keeps climbing and unwilling to part with non callables. These will avoid the eventual “pull towards par” just from nearing 1st call date. But, it all depends, as I also keep some call anchored issues on purpose in the fold, also.

                1. Yes, I know, I hear you. Good yields in Canada on good credits, so that’s where I’ve mostly gone, but time will tell if I cope intelligently with the reset mechanism. I reinvest 50% of the cash flow on a current basis to offset inflation, etc. and if I can stick with that into the future I think I’ll do alright.

    2. National General Holdings Corp (NGHCN) has agreed to be acquired by Allstate. Deal is expected to close in early 2021. It appears the preferred stock price now reflects this acquisition and rating of Allstate.

    3. I think these are consequences of passive ETF&CEF&MF actions. They buy the stocks on their list/index regardless of the price. Simply by the presence of incoming cash flows.
      Likewise, they sell them when the flows turn in the opposite direction. It doesn’t matter to them, the investor pays for all mistakes.
      These features can be exploited for profit, but we need to have good patience …

    4. Zarrew – I have no rule on selling some of these issues, but my general rule is to consider selling issues when they reach $26.50 per share. Generally speaking, I’ll sell at that level and then try to work and find other issues selling closer to $25, but that does not always work for all investors. I love PSA shares, but may likely sell some of them later this week if the price moves well above $26. Good luck with your investments.

      1. Hi Kaptain. I hope PSA stays where it is at, pinned relatively close to Par and/or within 2 div payments. Things would have to be insane to go above $26, especially with the company famous for re-cycling them like i do with my cardboard and plastics :-). PSA is one of my larger investments with over 10,000 shares, and I am hoping to keep as a sock drawer. In March, they were in the low $20’s and that simply was a gift from the financial gods as the company is in great financial shape.

        If psa-w, psa-x, go above $26, it will signal an alarm to financial leadership that says investors are willing to pay anything for 5%, so how about issuing 3.5 or 4.5% ? You are right, that if it goes above $26 and rounds the corner to 3 div payments, I will be selling as well.

        1. Mr. Conservative – check out the price action on PSA-I. This is one of their newer issues with a coupon rate of 4.875%. It is now trading at about $26.50, as it has call protection until 9/12/2024. I would not be surprised in the next year if they don’t issue a preferred with a coupon rate of 4.50%, as their most recent issue was at 4.625%.

      1. If an investment is trading below the par value… there could be some reasons to cause that for a few days. Year end, month end, quarterly rebalancing efforts if the investment is held by etf’s or cef’s. 2nd reason is that the investor fat fingered the trade and did an amazing market order, which we love to see from time to time. The 3rd reason is that the ex-div date hit, and frankly the investors want out and dont want to hold to the next ex-div date.

        If it trades below par for awhile (meaning beyond a few simple days) it is usually because of risk. Look at the books, look at the sec filings, look at its bonds, etc.

        1. A 4th reason is it may be an old 4% issue from 1940s that have never seen par since they were issued.
          Mr. Conservative, have ever bought KTBA, now or your Mr. Lucky days? That thing has been bouncing a buck range but I got 1000 in the 28.45-75 range past week. One of few noncallable BBB debt that is plus 6% still.

              1. 6% is still good yield in our times. To be honest, I’ve already tried to open a position on these shares several times, but there was always some incredible spread and very poor volumes so I quickly got tired waiting for my orders to be executed.

                1. Yuriy, Sometimes you set a bid and just wait, but other times liquidity comes out of the blue. That is how I scored as a found the volume and lack of bid action to snag them a few times. Yesterday I bought on the low and was trying to sell on the high as it went up to almost $29.90 before heading back to $28.68 on several thousand shares. I got screwed on trying to sell the spike getting front run, but I didnt on the buy end. Probably best I got screwed as its getting harder to find anything I can buy anyways.

            1. Yuriy, Here is the actual bond held in trust of KTBA.
              http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C32618&symbol=T3668086
              As you can see it presently trades at $134 ($100 is par, actually its $1340 and $1000 is par but they dont price them that way on screen) which is a 5.16% yield. This was originally a $500 million issuance, 7%, noncallable, 2095 Bell South bond. Since it was issued noncallable 25 years ago, T has offered several tenders to buy. So only about $75 million exist now with about $50 million of that trapped in KTBA trust. So only about a 25 million true trading bond float exists anymore, so it doesnt trade a lot.

              1. When KTBA dipped below $25/share in mid-march during the covid scare flash crash, my $25/share limit order did not execute even though KTBA remained at $25/share after the dip for a few hours. When I filed a complaint with FINRA, I was told by the brokerage that it was because it was an odd lot.
                LOL

        2. I mean the AHT prefferds..
          They have a tender offer for $9,75 for share or 2,66 common shares (now the common stock is trading ~$4,80) and the preffereds were a lot below that..

          1. Look at the contingencies, not a done deal. According to what Tim posted: “The company is offering $9.75/share cash for just a small portion of the preferred shares and is looking for consent from holders to convert the balance into common shares. 66 2/3% of holders must agree for this exchange to happen.

            Additionally it is conditioned upon the company’s ability to raise $30 million in new money to fund the cash portion of the exchange.”

            https://innovativeincomeinvestor.com/lodging-reit-ashford-hospitality-makes-exchange-offer/

            The cash payout is capped, so larger portion of redemption would be through the common shares. The common dropped about 20% yesterday, so who knows what those shares will actually be worth.

  42. From Bloomberg:

    CBL & Associates Properties Inc., the owner of more than 100 shopping malls across the U.S., is preparing to file for bankruptcy, according to people with knowledge of the plans.

    The company has been negotiating with its lenders in an effort to enter Chapter 11 with a consensual restructuring agreement in place, said the people, who asked not to be identified discussing confidential matters. The plans aren’t final, and elements could change, the people said. CBL declined to comment.

    CBL, which operates mostly so-called Class B malls, has been hurt in part by struggles of retailers including Dick’s Sporting Goods Inc. and Ascena Retail Group Inc., among the landlord’s top tenants based on revenue at the end of 2019. CBL’s own financial distress shows the impact of retail-sector failures, which have come fast and furious in recent years.

    Shares of CBL plunged 11% after Bloomberg reported the bankruptcy preparations, and dropped an additional 18% as of 4:40 p.m. in late New York trading.

    The mall owner said in June that the loss of income from stores withholding rent during the Covid-19 pandemic had forced it to skip an interest payment due on some of its more than $3 billion debt. It has a forbearance agreement with debt-holders that was extended until July 22, according to a regulatory filing this week.

    https://www.bnnbloomberg.ca/mall-owner-cbl-prepares-to-file-for-bankruptcy-protection-1.1467175

    1. Must not yet be trading? but $24? Can’t find it at brokerages or charting companies.
      “The company intends to contribute the net proceeds from this offering to NexPoint Real Estate Finance Operating Partnership LP in exchange for series A preferred units. The operating partnership intends to contribute the net proceeds to Subsidiary Partnership III for limited partnership interests in Subsidiary Partnership III. Subsidiary Partnership III intends to use the net proceeds from this offering to acquire commercial mortgage-backed securities B-piece investments.”
      Wow- Matrushka structure alive and well.

  43. SA article on this fantasy- looks new – FATBP : https://seekingalpha.com/article/4359072-fat-brands-new-tiny-issue-preferred-stock-ipo-is-now-trading-on-nasdaq?utm_medium=email&utm_source=seeking_alpha&mail_subject=ilia-iliev-fat-brands-a-new-tiny-issue-preferred-stock-ipo-is-now-trading-on-the-nasdaq&utm_campaign=rta-author-article&utm_content=link-1

    If it’s so new, I don’t see how there is a comment about FATBP on 10/5/19– maybe delayed, but now??
    Interesting scaled liquidation pref if called before 7/16/25- starts at 27.50 + accrued.
    Could it have been in a worse business at a worse time.

    1. Ah ha- this was commented on 2 days ago -Bob in De– not sure where the 10/5/19 came from. And, I guess Tim has not put it into the database- is not searchable so far.

  44. A potential bargain in LTSA (Ladenburg Thalmann Financial Services, 8.00%) . PFF (largest preferred ETF) had to sell 1.3M shares since it’s now listed on OTC. That caused it to go down from $16 to $6 while other issues of Ladenburg ( LTSH, LTSK , LTSL ,LTSF) didn’t move much. Now that selling is over it is bouncing back dramatically. All other issues are yielding %10-12 while LTSA yield 18% at $11. There is a potential for another $5-7 bounce back. They are solid on dividend and it’s paid monthly.

    1. Separate question, how did you discover PFF had to liquidate those shares, was there an announcement or just good old fashioned sleuth work?

      1. eoz3106 PFF by definition only holds exchange listed preferreds and LTSA de-listed back in feb. I monitor PFF holding everyday and noticed they have been selling it between 4/30 and 7/13.

        1. VJ, This is a good example of why PFF is an inefficient investing vehicle. These could have been tendered by PFF for $25 back at acquisition a few months ago. They got raped forced selling following a dumbbell meaningless index of no relevance. They cost their shareholders a lot of money. This stuff happens all the time but not to this severity.

          1. Gridbird, agreed. They dropped the ball big time. I know some PFF market makers got hosed because of this back in Feb.

        2. I didn’t see where they list the changes by day, so do you manually (or a script) compare the holdings each day? I downloaded the holdings and put it in google sheets but their tickers aren’t complete so you can’t simply use a formula to look up the prices/changes on each holding.

          1. I use ISINs to look up symbols. and yes there is no historical holding file. I have a script that downloads files for each day and aggregates them in a big sheet for comparison. I trade end of month ETF rebalance that’s why I have the whole thing setup.

              1. Justin – I’m not sure I’m seeing what you’re seeing but more to the point, what’s wrong with SEDOLs?

    2. There is a big difference in these issues, which explains the difference in price. LTS-A is a pref, and all the rest are notes. Non-payment of interest on notes means a default of the company and non-payment of dividends on prefs does not affect anything other than reputation. It is not as important for a private company as for a public one which means they may well suspend the divies.

      1. Yuriy, that’s true but I look this as a short term play and the financials of the parent company doesn’t suggest an imminent div suspension.

    3. Why did the LTS notes drop $5 when the buyout was announced in November? Was it based on expectations of de-listing or was Mr. Market concerned about the deal?

      1. Probably both but I think the de-listing had a bigger role…. most of mutual funds/etfs don’t want otc names in their portfolio

        1. yet they have a 73 million dollar unrealized loss on the CBL, Chesapeake and Nabors still sitting on their books.
          You would think the bankruptcy filing would cause them to sell them off.

    4. The LTS acquirer Advisor Group is paying these dividends now, right? Since they are private and do not issue financial reports to the public, how do you gauge their dividend paying ability?

      1. As long as their senior unsecured debt is sitting Caa2, one will always be a bit nervous holding these or should anyways. Its all on your risk profile. Some of these private outfits have a portal you can look at the finances with if you prove you are a shareholder. Of course one has to be able to understand it. And as many Seeking Alpha expert Wall Street rejects have found out that can be problematic at times.

      2. One interesting thing is if you look at The Advisor Group website, there is no mention of Ladenburg whatsoever. Makes me wonder if they’re in the process of rebranding the entire LTS operation.

      3. LTS used to confirm div payment of preferred stock for each quarter via press release on first day of quarter. But that didn’t happen this quarter and it’s part of the reason it sold hard in early July. But then they declared July div on 7/10 which helped the shares to recover. But agree it’s a high risk company given their investments in commercial REIT. I would keep an eye on it specially if it sells down to $7-8 there might be short term bounce if they declare Aug div

      4. LTS… i try not to invest in anything i dont understand, or has security by obscurity. This leans towards looking for trouble vs shying away from trouble to begin with… let alone all the antacid one has to take to sleep at night.

        1. Hate to say this but its time for a name change, Mr. Lucky with posts like that. LTSA is precisely what someone named Mr. Lucky should be buying all day long. If this doesnt change soon can I suggest a new name…Mr. Conservative Investor? 😂😂

          1. Haha. Grid. I suppose. I take my 5-6% and I don’t have to worry too much. It would wreak havoc if i have to check on about 90+ investments to confirm if they are paying or not. I just want the checks rolling in. I got 2 more years of paying kids college tuition, and after that, i guess I could start setting aside more gambling money.

            I only like gambling like Dec 2018. I just got done paying $51,000 in taxes with a good chunk of that from the fallout from that Dec. I wish I did more in March… but sold about 10% as I wasnt sure how low things were going to go. I was down almost a million, but closed my eyes and said I was invested in sound investments. Almost all of that has been erased, and I have the dividends and interest payments. Still keeping 95% invested.

            1. Ha, ha…Love the new name!!!! If I had your stash, I would be changing my name from Gridbird to “Mr. 30 Day Tbill”. 😁

              1. Grid, you are on the right path with the name change. When you get to some dollar amount it is no longer about how much you can accumulate. One of the accounts I manage is at that point and is constrained to only hold US treasuries or FDIC insured CD’s. It currently holds 280 CD’s. It makes your UTE holdings look like riverboat gambling! A good day is when we can buy a new CD that yields more than 1.0%, but the owner is fine with that return.

                1. 2WR, Im only brave because I am hiding behind a pension skirt. I would be a cat on a hot tin roof if I was in the real world of living off of investing draw downs.
                  Tex, I dont blame them at all. I got real lucky sliding my step mom into 5 year 4% CDs getting close to two years ago. And we were worried about locking in money long term on that “low yield”. Things change quickly dont they.

              2. Try as you might, Grid, you’re not fooling us…. lol…. You love the game too much to EVER be “Mr. 30 Day Tbill.” Do you think James Holzhauer is now playing with 30 Day TBills? I don’t think so… Fess up, Mr. Flip, neither will you, ha.

      5. Is anyone here holding or considering purchasing LTSA? Have there been any updates on the intention of the company to pay dividends going forward?

        1. I did buy some at 9.7-10 ish. They have already filed Aug and Sep divs. I also reached out the IR of the parent company (Advisor Group) and they confirmed there is no plan for suspending divs at least in the foreseeable future. But you never know. It may go under pressure again in Sep until they announce Q4 divs.

  45. Your ship has come in. FATBP trading at 18.50 to yield 11%+ on a qualified issue.

    Small company; closely held; “use” of proceeds includes a big slug to cash out insiders; trend-setting menu filled with calories and cholesterol. Company is FAT Brands and it is aptly named.

    Otherwise I see no issues.

  46. In regards to the filing of 990-T and K-1 potential liability.
    Yes it seems TD is just catching up with other brokerages on doing these filings via Price Waterhouse. I received an efficient email and correction which included this paragraph below. Apparently, the mistake in my account arose from ETP-C which is on this list of FOUR, so BEWARE if you own or have owned:

    This will not delay any tax filings or tax payments that have been scheduled with the IRS. Thus, no penalty or interest will be calculated for affected accounts.
    The Partnerships who chose not to include the sales schedule with their K-1 include:
    · 02364V107 – America First Multifamily Investors LP
    · 29336U107 – Enlink Midstream Partners LP
    · 89376V100 – TransMontaigne Partners LP
    · 29278N301/29278N509/29278N400 – Energy Transfer Operating LP Preferred Shares
    We are anticipating corrected 990-T forms to be generated by PwC within the next week, we will provide a copy of the corrected 990-T upon request. We are also planning on sending the corrected 990-T form through the mail, however; we anticipate mail outs of the corrected 990-T to take additional time.

    (Funny…Buy/Sell points are documented in each account in Gain/Loss with the brokerage, but NOT on the reports sent by these four companies themselves! )
    JA

    1. Yeah, equally funny is the PWC partner who signed as paid preparer yet didn’t notice anything amiss on the returns he signed. And these are the same “experts” who run tax package support.

      SMH

    1. Hi Whitney–yes you are correct. Those are $1,000 bonds which I don’t specifically follow on the website–but others may well have an interest,. Thanks

  47. Allstate Expands Personal Lines Market Position with Acquisition of National General

    The Allstate Corporation (NYSE: ALL) has agreed to acquire National General Holdings Corporation for approximately $4 billion in cash, or $34.50 per share. The transaction is expected to close in early 2021, subject to regulatory approvals and other customary closing conditions.

    “Acquiring National General accelerates Allstate’s strategy to increase market share in personal property-liability and significantly expands our independent agent distribution,” said Tom Wilson, Chair, President and CEO. “The acquisition increases personal lines premiums by $4.0 billion and market share by over 1 percentage point to 10%. National General’s business and technology platforms will be utilized to further strengthen Allstate’s existing independent agent businesses. The transaction will be accretive to adjusted net income earnings per share and return on equity beginning in the first year.”

    https://www.businesswire.com/news/home/20200707005943/en/Allstate-Expands-Personal-Lines-Market-Position-Acquisition

    Tex comment: NGHCN, NGHCO and NGHCP probably became “money good” with this buyout. Am guessing that Allstate calls O and P right after the merger since they are past the first call date.

      1. Yes this quickly became a “Punt on 3rd down play”. I tried premarket but TD wouldnt allow trading premarket. I did buy 500 of NGHCP at 25.25. The one with call protection is largely trading in line so no value there…These will all be “goners” ASAP. However 2 past call ones per terms they will not be until everything is dotted and signed which is projected early 2021 sometime..

        (a) At Parent’s sole expense and subject to Parent’s reasonable cooperation therewith, the Company shall, as reasonably requested by Parent in writing, take all actions necessary to effect the redemption of any or all series of the Company Preferred Stock as of or immediately prior to the Effective Time to the extent redeemable by the Company on its terms at such time, including preparing and delivering all notices of conditional optional redemption in form and substance reasonably acceptable to Parent to effect the redemption pursuant to the requisite provisions of the applicable Certificate of Designations; provided, however, any notice of redemption shall be irrevocably conditional on the Closing occurring immediately following such redemption and the date of redemption shall be no earlier than the Closing Date; provided, further, that Parent shall provide, or cause to be provided, all funds required to effect such redemption or shall confirm the use of cash on hand at the Company to effect such redemption.

        1. Grid, NGHCP had a recall date of 2019 so it may get called immediately (or very soon) based on your post. Wondering why you bought it and not NGHCN which has a recall date of 2021?

          1. Jay, it got away from me as I started after it first and failed. Now as to why I am not worried, I am putting faith in the SEC filing from Nat Gen. Their filing states all issues will stay outstanding…Then later in filings it states issues will be redeemed at closing. All State said closing wouldnt occur until 2021 so that gives preferreds runway. NGHCN has been pricing consistently with that gap in mind. So in theory its 6 or half dozen from here, basically.
            I have done some recent profit taking and had cash burning a hole in my pocket. I also bought 450 more of NGHCO at $25.15 when it dropped a bit. This will keep that money out of trouble for a little while.
            Read top of page 4 and bottom of page 56 on link below.
            https://www.sec.gov/Archives/edgar/data/1578735/000119312520189151/d934937ddefa14a.htm

    1. Appreciate this. Bought some of NGHCN and NGHCP early AM. May exit if they appreciate as much as yield to call for a few Pizzas worth of profits

      1. Pickle, I noticed that the debt issue was conspicuously missing in terms of it staying outstanding near term. It is reaching its first call date in September. The preferreds undoubtably are some type of tier capital. Companies that are in the middle of an acquisition tend to keep this stuff frozen until everything is signed and sealed. I dont know if this also would apply to this debt issue though.

        1. Well played Sir,
          good observation, that totally flew over my head
          if it gets called this fall I will be ok with that as I hold only a small position in a Roth and have some other stuff I want to add to
          The irony is I bought this security just before the CA wild fires after reading a Rida morron article on SA
          this is one of his only picks that have turned up roses

    2. Sold the “O” and “N” today for nice gains. Had sold the “Z” baby bond last week.

      1. I bought some NGHCO at $25.20 this morning. I have a decent amount of cash due to recent bond calls, so this seems like a nice holding place to pick up some yield until it is redeemed or I can sell it for something longer-term. Anyone know why NGHCN is trading for $25.60, while O & P are around $25.20?

        1. Karma, its basically math…Filings show O and P will be redeemed at merging which is projected early 2021 which could be March dividend, N is redeemable in July. So basically you are possibly buying that last dividend for little gain at that price.

          1. But NGHCP, NGHCO, and NCGHZ (callable baby bond) would still be better than stashing cash in a money market for the same period with little risk.

            1. I agree Mikeo.. That is why I bought a relative bunch of O and P yesterday myself. I tried to fleece N at market open around par and wasted time as it proved fruitless.

              1. Yep, I saw you were quicker on the draw than I was with NGHCN and it got away from me also. So I took small starter positions in all three others including the baby bond this morning after open.

                1. Useless trivia Mikeo…All State is buying Nat Gen for $4 billion dollars… All States annual profits are guess what? About $4 billion. It basically just took a years worth of earnings to swallow this company up.

            2. I like how you think mikeo, picked up some O and looking to buy more. Now if you have anymore sure things, let me know lol……..

              1. Well, nothing in the markets is a sure thing in my experience but that 7.5% until sometime next year seems more than worth the risk involved.

                1. YTC of ~6.2% for O by my calculations, depending on what you assume as call date in early 2021.
                  Their financials look pretty solid to me for a 7.5% coupon. You guys who bought it back when done good.

        2. Karma NGHCN is not callable until 7/15/21, so the expectation is they will remain outstanding longer then the other 2 that are callable now…. Projected closing for ALL deal is before 4/7 but can be extended until 7/7 with call of O and P to be done upon closing essentially. They’re unable to call N on that same schedule.

    3. NGHCP pays on 1/15, 4/15, 7/15 & 10/15. It traded today for around $25.25. Are there any thoughts on the probability that the 1/15/21 dividend gets paid (i.e. the redemption occurs after the payment date)? Assuming the 1/15/21 dividend gets paid and it gets called before the 4/15/21 dividend, you get an annualized yield of roughly 5.4% if you buy at $25.25. Please let me know if this is the right way to thing about this one. If I have it right, it seems to be a decent value.

  48. CHS out with earnings. NI of $97.6 million on rev of $7.2 billion.

    Surprised it was that good this quarter.

    1. New Issue: Argo Group International Holdings Ltd. (“Argo”) Securities:
      Fixed-Rate Reset Perpetual Non-Cumulative Preference Shares, Series A Maturity: Perpetual Non-call period: 5-years Size: $75mm (3mm $25 Par Depositary Shares) Expected Ratings: S&P: BB (negative) Price Guidance: 7.00-7.125% Offering Price: $25 par depositary share First Reset Date: September 15,2025

  49. ETP-D. Energy Transfer (ET) has this preferred from absorbing Energy Transfer Partners. It’s down today on Dakota pipeline news, as is ET. Trading at $18.00 with yield of 10.62% and call in 2023. BB. What’s wrong with this? Seems like a solid buy to me. Help/advice? Thanks.

    1. Wilson, I’m not saying don’t you buy it, I’m saying it is too risky for my present goals. I don’t like . . .
      1. Price is showing market weakness after it recovered somewhat from the March shock, so the market is not optimistic about the company and/or the industry.
      2. Rated junk by Moody’s/S&P, Ba2/BB
      3. It’s a perpetual. Those three negatives (for me) would preclude even spending the time needed to deep dive the company financials (I’m not very good at it anyway).

      3 strikes you’re out for me.

    2. wilson-
      for me the main issue is the ceo who is also the founder. He is less than investor friendly and if there is ever an issue, he can be counted on to do what is best for him not the investors. There are many other opportunities and many better run compnaies. Look back into the history of the comapny.Good luck SC

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