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i added to SPNT/PRB 8 preferred callable 2/26/26 FTF 5y + 7.7% at 25.25
7.44 ytc I expect issues to be called
BEPJ opened – actually under par here!
24.95
I couldn’t get any….
Eagle Point preferred offering: EICC
Got it Rand–thank you.
When do we get concerned that they have too many issues? Though they aren’t very big.
Looks like the site certificate for Quantum Online expired today. The site now shows as ‘Unsafe’ in my browser.
Was just going to ask the same question – if others couldn’t reach QOL…. Funny how much you rely on it, just like here……
Quantam has been slow lately in updating their
site
ie; GLPpA call notice issued on March 15, and it took them until today to
show the issue has been called.
Keep in mind that QOL is receptive to users letting them know of such things as call notices they have not picked up yet….. If you know of a call that they’re not showing, email them of the announcement. And they’ll thank you to boot.
I have been sending updates to this email for years.
quantumonline61 AT gmail.com
Yes – I just risked it and used whatever “advanced” features are invoked by the Advanced button. It still works fine from what I can tell.
They fixed last night
I’m hearing 7.875%, what do you think?
https://ir.trinitycap.com/static-files/dcc2c343-cca9-4b1d-b7e1-3695ac6f3ebf
“We expect to use the net proceeds from this offering to pay down a portion of our existing indebtedness outstanding under the KeyBank Credit Agreement and, depending on the remaining amount of net proceeds after such use, to redeem a portion of our outstanding 2025 Notes.”
TRINL
TRIN is paying more for financing now, but the good is they’re acting ahead and reducing the amount of the TRINL they will have to call in 2025
The bad, is I own the TRINL
Barings news very interesting articles in Bloomberg. 20 key managers have departed suddenly. Consequences are numerous.
Wanda, any chance you can link the article?
Charles, they are getting poached by a new private equity firm, not leaving for fraud reasons, ha. Be some upheavel, and possibly force Barings to sell a division, but Im not worried about my bond. Barings is suing the private equity entity after Barings rejected their shot gun marriage partnership offer.
https://www.ifre.com/story/4470161/barings-sues-corinthia-and-former-staff-after-exodus-dfs7vyw4xt
Private credit lawyers said one of the potential outcomes for Barings would be to sell the existing portfolio to others, as the portfolio is well regarded by the market.
“We were hearing a whole lot of chatter in the market of other credit funds delighted to see Barings was out of the picture for a bunch of months – but also very excited about that portfolio and looking to try and acquire it,” said a London-based private credit lawyer.
Thanks Grid, You were reading my mind. I was never into bonds at a younger age. Now, I have slowly been buying with the idea of hold to call.
I was reading that over the weekend as well.
https://www.bloomberg.com/news/articles/2024-03-18/barings-pauses-investment-across-private-credit-amid-transition
This could be a shoot first and ask questions later situation under the cockroach theory of investing???
Barings, a financial services firm, recently faced a significant departure of key personnel. More than 20 employees from its private credit division, including co-heads Ian Fowler and Adam Wheeler, as well as the head of operations Kelsey Tucker, left the company. This mass exodus was notable for being one of the largest “team-lifts” seen in the industry to date1.
These departing employees have taken up offers of employment at Corinthia Global Management, a newly-founded credit manager backed by Nomura. However, Barings swiftly sought legal action to protect its interests. The firm applied for a temporary injunction to prevent former employees from using confidential information to solicit clients for Corinthia. The court in North Carolina granted this injunction, which aims to safeguard Barings’ proprietary client and employee data1.
The order requires the ex-employees and Corinthia to hand over any confidential information related to Barings’ business, clients, or employees before March 31, 2024. While the defendants agreed to the preliminary injunction, they did not admit liability or wrongdoing1.
MCI and MPC are best in class close end high yield bond funds which I presume are managed in whole or part by these individuals
Well, here is a bit confusing reading for the weekend.
EAGLE POINT CREDIT COMPANY INC.
7.00% Series AA Convertible and Perpetual Preferred Stock (the “Series AA Preferred Stock”)
7.00% Series AB Convertible and Perpetual Preferred Stock (the “Series AB Preferred Stock”)
https://www.sec.gov/ix?doc=/Archives/edgar/data/1604174/000110465924037947/tm249407d1_424b3.htm
Quite complex – it looks like the only difference between the AA and the AB is the early termination fee for the AA and the early clawback for the AB.
I like the Term Preferred structure of the ECCC or the F. Not really interested in the perpetual convertible or not.
August, The switch from term preferred and notes to perpetual is interesting. The ECCC has a first call of 6/16/2024 . I like it does state that the 28, 29, &31 notes are senior in line for payment. The 28 note is already past first call in 2021 and the first call for the 29 note is Jan. 2025 and the 31 note is this month.
Still doing my research, but I am leaning more towards BDC preferred.
Charles:
Not really a “switch” to perpetual preferreds for ECC, as they already have one outstanding with 6.75% ECC+D that they issued back during the last days of ZIRP in November 2021 (right before the Fed started increasing short term rates to the eventual 23-year high we sit at today). ECC+D has been a horrible performer for anyone that bought at the IPO.
Perhaps ECC is calling the top in preferred prices again with these silly issues?
I haven’t read the offering documents, but who in their right mind would buy a convertible from a closed end fund that pays a 17% yield? That fund has done nothing but predictably gone down in price since its inception at $19.93 back in October 2014. Likely paying out ROC, issued many more common shares, etc.
With that kind of payout for ECC (similar to OXLC), the CEF’s price only can really go one way over time.
Kid, I really have no interest in convertibles. Unless it’s at the choice of the holder. Over the weekend I had people point out that too many investors buy BDC’s for the yield on income without looking at how their principal keeps getting less as the stock price goes lower. Some investors with a longer memory pointed out some of these had done reverse stock splits in the last 10 years making it look like they hadn’t been losing value. One of the things I like about Quantum is they highlight these reverse splits.
More to the point, holding the BB seems to be the safest place to be
Also the fees charged to the common are quite high.
I like the term preferred and own it in both ECC and OXLC.
regarding this statement
“I haven’t read the offering documents, but who in their right mind would buy a convertible from a closed end fund that pays a 17% yield? That fund has done nothing but predictably gone down in price since its inception at $19.93 back in October 2014. Likely paying out ROC, issued many more common shares, etc.”
amen.. you pick the CEF that a double digit distribution yield and you will find same dynamic
Hey Charles – the convrt option is noteworthy as these can converted at the holders option into common. Probably a gimmick to pay a lower coupon?
Anyway – I am not falling for it. I like the term preferred.
Back in Q4 I was looking for a BDC baby bond, but then RILY happened and I focused on that instead. I have made some decent money selling RILY option spreads and will be back in the maket for a BDC bond probably in mid April.
BEP is issuing a new preferred that apparently just priced at 7.25%. Anyone have the term sheet with the temp and permanent tickers?
LI, here ya go, sir:
https://www.sec.gov/Archives/edgar/data/1533232/000119312524073966/d809535dfwp.htm
Thanks! I had checked their filings yesterday when it priced but I guess it takes a day to post.
Thanks. I was able to get shares from the Schwab bond desk at $25.04
I just wanted to add that you can still get BNJ (perpetual sub notes) that are backed by BN and rated Baa2/BBB for only $2 above the fall 2023 lows with current yield of 6.88%
BN is trading 52 week highs > $63B cap in contrast to BEP which is trading closer to 52 week lows with $15B cap and rated BBB-
I had been wondering about this. Recently yields were about the same for BNJ/OAK-B which are both BBB rated, and the various BBB- rated stuff from BIP and BRP–all at around 7%. I figured no reason to own the lower rated stuff at the same yield as its all Brookfield stuff so not really diversification anyways.
The sudden price increases in most of these issues dont seem to make to much sense as evidenced by the new 7.25 BEP issue. I did unload some of the BBB- stuff this week before the new issue was announced.
It feels like this craziness has to reverse a little soon.
Thanks. Any US tax peculiarities like UK withholding taxes imposed on US residents?
good comment..bnj/lqd pair went from 2.5 sigma rich in october to near 2 sigma cheap in december 2023.. currently trading about .5 sigma cheap
For those interested in this issue. BEPJ is the symbol. Schwab is accepting trades this morning without calling the bond desk.
Thanks SteveA
Another one bites the dust! (Queen circa 1980)
AES/Ipalco electric utility bond originally recommended by Grid, CUSIP 462613AM2, 3.7% matures 9/1/24, make whole called for 4/13/24.
The music continues. . .
Brookfield new issue
7 and a quay
Thanks for the heads up. I bought this issue during the puking of Oct 2022 at a very nice YTM.
I’d purged most all positions in them. No stomach for revisiting them. They seemed to have recovered ok. Current yields on 3 I checked today around 6.4. So 7.25 would be a big pick up.
Cant remember who recommended GBRK-A a few months ago. Was some gambling money i had laying around for 500 shares. Let that one go too. That one alone will allow me to buy ribeyes at $26/lb for a year. Buying boring mmm funds with the cash. I think throwing darts at anything the last few month have hit paydirt regardless of the companies standings. Lots of exuberant cash flowing in.
May have been Bea or myself. I didn’t get that many shares, bought around 17.50 range and left it go a week or so ago.
ET-E redemption 5/15
https://finance.yahoo.com/news/energy-transfer-lp-announces-full-200500900.html
CHSCN and CHSCL now trading higher than they were prior to exDiv just a week ago. Strange, but looks like time to take the offer.
I sold ‘N’ this morning, maybe get back in later but moving on for now.
pig pile : I did the same thing. The gain was well over 1 year of dividends and it is callable at the end of the month. I doubt it would be called as they have two issues with higher rates that are already callable, but who knows. I am still holding CHSCL, but that one is not callable until Jan next year.
Bill, yes doesn’t make any sense to hang on to it now. I always like to have CHS preferred’s in my portfolio as they are very shareholder friendly. Hoping to get back into something on a dip soon. Took some of the proceeds and added to my GJT holdings. Float risk but paper upgrade (in theory). Can see holding GJT to bitter end in 2036 if I’m lucky enough to still be kicking.
CHSCM up also. They may or may not be called this year. Sold my N.
I trimmed CHSCM at $25.80 and above (yield to first call of around 0.5%). I used the proceeds to buy PNMXO at $75.
If CHSCM goes to $26, I’ll be out completely.
I trimmed around half of my position in CHSCM at an average price of $25.85 on 3/20 and 3/21. I started to buy back today at $25.15 (2.7% lower). Seems to be somewhat heavier volume today.
With the bid on CHSCL at $25.96 and the ask on CHSCM at $25.11, you would need to have both be outstanding for the next 4.5 years for CHSCL to be a better buy at these prices.
Annual dividends: 1.88 for CHSCL, 1.69 for CHSCM (0.19 annual difference)
Current price difference: 25.96-25.11 (0.85 difference)
0.85/0.19 = 4.5
When comparing CHSCN at $25.99 vs. CHSCM at $25.11, you’d need 9.7 years
I sold my CHSCN and CHSCM at the higher prices. I have been buying CHSCM to replace what I sold now that it is close to par.
L div is 7.50% and buy price is 25.96
M div is 6.75% and buy price is 25.11
Buy $10,000 worth of each. It is impossible to know their selling prices after 4.5 yrs so I’ll assume they are still the same as now.
Total dividend paid on L = $3375 so you have $13375
Total dividend paid on M = $3037.50 so you have $13037.50
So for a $10,000 investment $337.50 more for L.
Of course if they are both called the 25.96 price has a larger loss then the 25.11 price. In that case, of them being called, the total gain would be almost equal.
Impossible to know the selling prices down the road but I know the prices today. You’re making a bet that they won’t be called within the next 4.5 years by holding L and not switching to M. If L is called anytime in the next 4.5 years, you’re better off with M.
Yes we should all consider the risk. I did sell the CHSCL I had when it was 26.30. That was too high. I did think the risk was low and I did want the higher dividend but I took the bet that the price would drop. If it drops enough I’ll buy it.
Looking at this from a different angle. Has CHS EVER called a preferred?
if they called one now, would it be the first time?
Issuers tend to be predictable, like Public storage would call preferreds literally the first day it was eligible like clockwork and you could make money by shorting them on the 31st day before their first call date.
At $26.60 just a “gut feeling” people in high places must know that the mgmt. will not call CHSCL in Jan. of 2025. If they did there is no money to be made so even though if you call them they will tell you nothing there has to be more to the story.
Chuck, When I hear you’re selling I might consider it. Honestly I know the market is forward looking and all this run up is people trying or thinking they are locking in current yield before rates drop after the feds drop rates later this year. People here are correct in saying the herd isn’t looking YTM.
Charles M. ; You are absolutely one of my most favorite people on this site bar none. I take a different philosophy than many. Yes, you and I could sell out now at the $26.50 BUT what if they don’t call it and we end up keeping a 7.5% coupon from a “solid company” for 5+ more years??? There are many preferreds in the universe that have gone many years past their call dates. I would rather just keep “Clipping the Coupon” as the old saying goes. At its “present price” my gut tells me they are not going to call it in Jan. of 25. I reserve the right to be wrong but even if they do I have not been harmed as I bought all my shares around the $25.15 area. I own 15,460 shares and sure do love that quarterly $$$$$. Sometimes companies don’t call something because of their “relationship” with their shareholders–in this case their farmers.
Chuck, FWIW, I find no fault in your decision to hold based on current call risk and price. My only differing opinion is at 26.50 you cant view it as a 7.5% coupon. Its a 7.06% coupon now, if one wants to disregard YTC with base assumption it stays outstanding. Even if you had bought it at a $1, its still 7.06% presently. Then when evaluating you compare that yield to “suitable replacements”, its dividend taxing method (QDI, interest, etc.) and tax selling implications. Just flying blindly based on what info you provided, you probably would find the above process I mentioned not providing you much motivation to sell. But, I find it good to review the process frequently just to stay abreast of options market may (or may not) provide.
Gridbird; Nice to hear from you & I agree with you 100%. I own all of my shares inside of an IRA & really don’t have motivation to sell as there are very “few bargains” out there these days. Most everything has had a huge “run-up” over the last couple of months in anticipation of just exactly what Powell said yesterday. For those of you that are not scared of a Long Term Bond (and I do mean long term) I did buy some Canadian Pacific KC Railroad Bond a couple of days ago. Its a 6.125% coupon and I was able to get it a smidgen over $103. I’ve been buying corp. bonds for a thousand years and rarely sell them once I buy unless some really big or bad news comes along. I would NOT buy CHSCL at its present price of $26.50 as I would deem that really foolish. Thank You for you input. I also did the other day buy some of that State Street Bank 6.7% bond as well. Got it right at a tiny smidgen over par. I don’t care for its reset rate in 5 years but I have learned over the years to check where rates are at say in 3 1/2 to 4 years and go from there. I don’t do any flipping but still enjoy very much Tims site.
As of this week, I let go rest of my CHSCL shares – 10k. Was too juicy, and what a climb. Everything is flying right now, and am excited to continue to pay Uncle Sam more gains. Dumping the cash right now into things like MINT, JPST, etc. spreading it around. The greed has been gettin greedy lately, so I am moving things around a bit.
Some say a decision to not sell/hold at a give price is the same as a decision to buy.
Dick, I am of the philosophical persuasion to believe, tax implications aside, if you havent sold, you are in effect repurchasing what you own at market open each day. However, I also agree with Chuck in that there are a few I own, I am not selling, but wouldnt be a buyer at present price either.
I am not going to even try to square off the inconsistency in the above comment, ha.
BTW, Dick, I just round tripped a small ball trade only you can appreciate. I had a couple hundred shares of PNMXO bought in $74 and change and sold off at $77. Bought 200 back today at $75 and still in line for the upcoming divi without missing it. Its a struggle to keep my minimum floor level of perps, but I gots ta do it so I do.
for me it’s mostly an after tax reinvestment decision in my taxable accounts, certainly taking risk into account, on if I am selling… yes MM is an alternative at >5% now.
easier to flip em in the iras
I did sell my cno-a today above $22 in my taxable account and moved into some ebgef at $21.58, with bids lower for more as this trades thin
GB, How do you avoid wash sales when doing this?
TIA
Peto, that isnt a wash sale. I made a profit, it got taxed, and now just buying it back with a new cost basis to be taxed on. A wash sale is when you sell at a loss, and then buy back too quickly.
https://www.investopedia.com/terms/w/washsale.asp
Everything in wash sales is just math, except “substantially identical”. Its pretty narrow. In general, if two issues are trading under different ticker symbols, they are not “substantially identical”. There are a few exceptions, but extremely rare.
said another way:
In my experience, brokers don’t report trades as wash sales to the IRS if they involve two issues trading under different symbols. For example, I sold AILLN at a loss and bought AILLO, – not reported as a wash sale.
Grid, when I buy a bond or preferred, I observe the coupon, the purchase price, and the purchase date. From that I calculate a) purchase yield and b) YTC/YTM/YTW (depending on the issue). I consider those values fixed for the life of that position. The price changes the next day, and with it the corresponding yield calculations. But those are irrelevant to me (admittedly I am speaking of buy-and-hold). Am I missing something?
Bur, that is fine if you consider it irrelevant and are a buy and holder. But one cant have “their cake and eat it too” math. Meaning lets take 1000 shares of preferred “A” bought at $25, 7% par issue. Its now say $26.50. You cant look at your portfolio on “A” and say Im collecting a 7.5% yield and my issue is up 6%, as its worth $26,500 now. That is not honest math. Call risk aside, what you have is $26,500 and a 6.6% yielding preferred. And conversely let’s say it later gets called at $25 unannounced when it was $26.50. Even though you bought at $25, you just lost $1.50. Many contend they didnt lose any money…They did. It just wasnt a taxable loss. One lost a $1.50 unrealized gain. Im basically talking about “mark to market”.
BTW, I dont hold a lot of bonds, but what I mostly own are illquid so I deal with the opposite problem. Buy with a YTM yield I can accept. And then immediately deal with the fact they will reduce the value of my bond price with “fake news pricing” sometimes 10% less than what it is trading at. Whatever….like you stated, I will get it back at maturity. But until then the pricing impact does have an effect on my investment amount and annual returns. I have learned to get over it and accept what value the liars are assigning it as day to day.
Grid, I’m unsure if you saw this Phoenix news from late last month https://news.nfg.com/nassau-financial-group-announces-close-of-250-million-in-credit-facilities/
I thought that Nassau might attempt another buy back of the Phoenix Cos., Inc., 7.45% Quarterly Interest Bonds QUIBS due 1/15/2032 CUSIP: 71902E208
Since the bonds trade flat and the next distribution is 4/1/24, but nothing has happened so far. I emailed Nassau to inquire last week, but as of today have not gotten any response. Thoughts?
Bur,
I am not much different then you are. To modify how we think more permanently requires trading more often. That is the key idea behind what Grid is saying. You have to reevaluate your positions constantly and take action when certain thresholds are hit or other opportunities are available. That requires being honest about a position and the math to calculate that.
So you sell that position he mentioned. You have $26,500.
Now find your self a preferred share that is just as good at 25 dollars a share, paying 1.65 per year (instead of 1.75 which is a 7% yield), and buy 1060 shares of it. You just replaced your income. But now you only need a yield of 6.6% at par 25 to cover it.
Perhaps you can also get a better rated security. Perhaps you get more
guaranteed duration. You eliminated the possible call risk loss. And so on.
Just be more active trading. Grid’s honest math helps you determine what to do. Frankly I think I typed this out for myself just as a mental exercise to, perhaps, adjust my own way of thinking. One of my big hang ups though is selling quality and somehow ending up in trashier securities to keep the same income. It is definitely easier just to sit on a high quality preferred without dwelling on it much.
good comment.. as a former trader when asked where I “own” a security the answer is yesterday’s closing price…
Energy ~ Brent up 18% since Dec 12 low; I can imagine consumers paying more for everything if this trend continues into the summer driving season regardless of JP’s yakking today.
A long time ago in a galaxy far away I used to publish a list of preferreds/babies that had the greatest risk of lost principal if they were called. This was back when ZIRP ruled the roost and issues were being called early and often. Then the world changed as interest rates increased and for a while, calls were few and far between. Recently there has been an uptick in issues called for various reasons, so I decided to publish the latest list of issues most at risk. This is a mechanical calculation without any divine knowledge whether an issue will be called or not. Some of these have been discussed here on III which I likely missed. If you also missed the collective wisdom, I would encourage you to make sure you understand why you think a particular issue will NOT be called causing a loss of principal. When I published the lists many years ago, we were able to help a few people avoid the losses. Hopefully this list will do the same.
All of these are $25 face issues with a $25 call price. All issues except for NGL-C have passed their first call date and are immediately callable, ignoring how long the company has to give notice of a call.
Format is:
Ticker, 3/19 close price, div type, current % yield, Dollars at risk if called, notes
Ranked from greatest potential loss if called down to least
NGL-B, 28.99, FixFloat, NA%, NA, Special case due to reinstated payout
NGL-C, 28.03, FixFloat, NA%, NA, Special case due to reinstated payout
CHSCP, 31.98, 6.3%, 6.81, Callable 7/23 but farmers don’t want it called
C-N, 29.41, FixFloat, 10.3%, 4.15
IIPR-A, 28.34, Fixed, 7.9%, 3.15
GSL-B, 27.72, Fixed, 7.9%, 2.54
CHSCO, 27.3, Fixed, 7.2%, 2.13, Callable 9/23 but farmers don’t want it called
GLOG-A, 26.99, Fixed, 8.1%, 1.8
CHSCN, 26.66, FixFloat, 6.7%, 1.6
DSX-B, 26.64, Fixed, 8.3%, 1.45
CMRE-E, 26.54, Fixed, 8.4%, 1.35
ALL-B, 26.3, FixFloat, 4.9%, 1.19
DDT, 26.29, Fixed, 7.1%, 1.13
BANFP, 26.25, Fixed, 6.9%, 1.1
CMRE-D, 26.22, Fixed, 8.3%, 1.04
DLNG-B, 26.19, Fixed, 8.4%, 1
SB-C, 25.99, Fixed, 7.7%, 0.82
NSS, 25.98, FixFloat, 11.8%, 0.72
FITBI, 25.9, FixFloat, 9.1%, 0.7
SB-D, 25.86, Fixed, 7.7%, 0.69
SCE-H, 25.74, FixFloat, 5.6%, 0.62
AGNCN, 25.84, FixFloat, 10.5%, 0.61
AL-A, 25.7, FixFloat, 6%, 0.57
When it comes to ALL-B I can imagine a lot of us bought under or near par. We knew they would float. I feel ok just holding since selling only nets approx 6 months interest. They will have to get a bit richer for me to let them go. I dont mind holding. Now 27 per share is a different story. They can have them at that stage.
CHSCN became fixed rate at 7.1%. Its call date is 3/31/24 but I don’t believe its been called.
Thanks for posting Tex.
I own the following and intend to keep for the income until they are called and not book the capitol gains unless I can find similar stocks with similar quality. This hasn’t stopped me from looking but it’s been difficult to say the least. When I do find a replacement like I did recently, I find it hard to sell the stock I was going to replace it with.
ALL-B ave price 25.15
CHSCL ave price 25.50
CHSCM ave price 24.80
CHSCN ave price 24.85
thanks Tex 2d also:
DLNG-A CALL 8/12/20 9% COUPON FIXED 25.22
Hi Gary, DLNG-A was not listed because it has a lower amount of dollars at risk. With it trading at about 25.33 and its last payout of 56.25 cents, my formula assumes that if it was called, you would get the full 56.25 cents and thus suffer no loss of capital. This is why I added the disclaimer about how much notice has to be give for a call. There were many in this category and I only listed the most at risk 23. Also, I should have mentioned that I excluded ALL convertibles. Each convertible is a one-off calculation so you cannot assume just because it is trading way over par, you are at major risk of lost principal. In that case, the assumption should be that it is pricing in a conversion to the common stock, instead of being called at par.
Thanks, T2
I bot mfa/prc at 21.74 (current yield just under 7.5%) .. i expect it to roll up to near 25 when it floats at SOFR + 5.34 on 3/30/25
I bought a little of their debt last month. Paying well over 8%.
Happier to own something that has a mandatory redemption (even if it is in 2029) and to be higher in the capital stack.
am also close to buying MFAN as its stripped price is near par (25)
MFAN paying as much as the fixed perpetual MFA-B. That’s unusual. Only advantage of B is possible price upside.
mjtroll – shhhhhh.
P.s. the SOFR spread will be 5.61%
Maine-
Aren’t you are thinking of MFA-C.. ? MFAN is a BB.
mjtroll started talking about the C (as was MAINE’s reply), then about MFAN. I was talking about MFAN.
Like everyone else, I’ve been looking to lock in yield over 7% for the near future while improving credit quality.
Bought more PMTU at $25.16
PennyMac 8.5% Sr Notes 9/30/2028, Call 9/30/25
YTC 8.4%
I dump the PMT.PR.B at $23.95 gain 15% and then go to PMTU at $25.18, already bought a lot under $25 par!~
Also loading up ACP.PR.A $24.11 about 5.27 yield, A2 rating, will buy more investment grade products.
Another week, another bankruptcy ~ this time retailer Joann. Highest corporate bankruptcy rate for the Q1 since GFC.
I am not sure how a lot of these business types hung on as long as they did. Bed Bath and Beyond and all their ilk. I mean Joann might have been fine if Hobby Lobby did not ?out compete? them. Too much competition for such a niche area. Even stores like Walmart, Target, and Home Goods all want a piece of the pie in some aspect.
They had a chance to develop a new strategy, concept, or what have you but failed to deliver. Also not like they are disappearing. Current investors just got hosed.
fc, just to bring some clarity to the Bed Bath & Beyond Chapter 7 liquidation. BBB would still be with us, but they misspent their “safety net”; they destroyed a whopping $11.8 BILLION on buying back their own equity since 2004. These precious dollars could have been better than spent buying back stock and/or not issuing the $5.2 billion of debt that they had on their books when they filed for bankruptcy protection. In 2014 I was part of a team that spoke directly with senior management and their board of directors about NOT taking on $2 billion of debt to finance their share buyback; BBB had little to no debt before that juncture. Even M&A would have been less risky (that was our presentation) than taking on this $2 billion to buyback their inflated shares. Last year Chevron announced they were going to buy back $75 BILLION of their equity, I sold my position immediately and bought more KRP and other energy companies equity.
In the USA 🇺🇸 our national motto is ‘In God we Trust,’ reminding us that faith in our Creator is the most important American value of all.
Peace, Azure
Bed Bath & Beyond didn’t need to spend a dime, simply clean up their stores and present their products in a attractive manner. Anybody who went to their store would most likely never return to such a disaster, I know my family didn’t.
Bed Bath Beyond is now Beyond ticker BYON this is new growth play if you will. It includes Overstock.com and they have just added Zulilly. I am not much for cool retail brands and online shopping “experiences” but I am told they are cool. There is some other crypto businesses in there as well which is a hangover from Overstock.com. I am not nuts about that part, but it has upside and no downside (they paid nothing for this portfolio of businesses as far as I can tell).
Marcus Lemonis (of CNBC fame) is now the executive chairman of BYON. I like this aspect of the story quite a bit.
It looks like the business plan is to roll-up defunct retail brands and build up a portfolio of value oriented brands sold online.
FWIW I have recently put on a leveraged long term long position in the name from a common equity standpoint using both common stock and options.
It is harder to find anything that sucked more than Zulily. Qurate paid $2.5 billion for it almost 10 years ago and basically paid some one to take it as it was financially killing them. Then the company they gave it to shuttered it months later.
Yup it sucked.
BYON purchased the IP post BK for about $5M. So they didn’t spend much for things like FB accounts, logos, customer lists etc. Seems reasonable to me. I generally like the idea of rollingup bankrupt brands. We will see if BYON can be successful with it.
I like the fact that Lemonis is part of this, too. His CNBC shows involving retailers seemed to focus heavily on improving merchandising the physical stores. That is something our local BBB (rip) couldn’t seem to figure out.
To me BYON is a back the jockey play.
He has options struck at $40 so one of my approaches has been to sell puts and use proceeds to buy calls at $40 while pocketing about 25% of the premium. Using 2025 options for this while also picking up some of the common.
Agree it was like being on an episode of Hoarders
Stuff everywhere,
well said.. excessive leverage dooms even the best laid plans
From the prospectus…
“which was previously an independent publicly traded corporation until its acquisition on March 18, 2011 by a subsidiary of Needle Holdings LLC (formerly known as Needle Holdings, Inc.), a company incorporated on December 16, 2010 by LGP for the purpose of the acquisition”
Little debt until 2011 and then bought by Private equity firm Leonard Green Partners by 100% borrowed money.
They would have survived if they had not been taken private. They were profitable other than the “I” part of EBITDA.
They went public again in 2020 for LGP could cash out, but none of the IPO proceeds paid off any debt and still left the company with a massive amount. It was only a matter of time.
Wolfstreet wrote a useful article on this: https://wolfstreet.com/2024/03/18/brick-and-mortar-meltdown-fells-another-retailer-joann-inc-files-for-bankruptcy-3-years-after-ipo/
Bur:
Wolf Street is mostly just another website that lives to post extreme headlines and daily Fear, Uncertainty, and Doubt.
A few quotes from this biased perma-bear in the article:
“It has been tough for years being a brick-and-mortar retailer”
“Ecommerce will continue to wipe out brick-and-mortar retail chains and retail properties, and thereby will continue to wreak havoc in commercial real estate as it has done for years.”
I guess this clown has never heard of Marshalls/TJ Maxx, Hobby Lobby, Five Below, Trader Joes, Lulu Lemon, Warby Parker, Starbucks, etc – all brick and mortar retailers that are thriving.
Brick and mortar retailers have come and gone since the dawn of time and will continue to do so. A company like Aldi has just announced it is opening 800 stores in the US. Spanish fast-fashion retailer Mango is also opening many US stores, etc.
And industrial/warehouse real estate has tremendously benefitted from E-commerce.
And of course this curmudgeon failed to mention that original shareholders in JOAN back in 2010 did extremely well when the company was taken private for $61/share by Leonard Green.
If one enjoys reading Wolf Street articles please remember to first remove all sharp objects from your desk or office.
MMFs today…
VUSXX…5.28%
VMRXX…5.28%
GABXX…5.27%
VMFXX…5.27%
SWVXX…5.19%
PRTXX…5.07%
PRRXX…5.05%
SNSXX…5.04%
SNOXX…5.03%
SPRXX…5.03%
SPAXX…4.96%
I’ve dipped into this Global X CLIP- 30 day is 5.28% (Plus SGOV)
https://www.globalxetfs.com/funds/clip/?utm_source=Google+Ads&utm_medium=Search&utm_content=CLIP&gad_source=1&gclid=CjwKCAjwzN-vBhAkEiwAYiO7oF-O_JWmg0_b9NWvgkbEpA2ickJJUl1Bj9n_ZhZsnRqwaB8gmAC5ORoCilMQAvD_BwE
I parked some cash into it also. Do not want to deal with early call and roll into another CD kind of things.
Will 10yr T test 4.4% this month?
10yr T ~ now at 4.33%, up 55bp since Dec 26, let’s see JP’s impact this week.
SF CRE issues continue… Obviously not just rates as there are multipe factors including a development project and the general SF tourist economy. Rates are, however, a factor. Somebody is going to get a deal.
Evidently there are 17 more CMBS loans in San Francisco maturing in the next 2 years which are at risk.
https://www.sfgate.com/travel/article/sf-hotel-westbrook-four-seasons-default-19083077.php
Folks anybody on here track agency mREIT ARR? It looks like there are some things going on there in terms of exiting CFO and co-CEO also internal investigation into reporting non GAAP metrics and also finanical controls.
They NTed 10K on 3/1 but filed 10K on deadline which was 3/15.
This is an externally managed agency focused mREIT which I don’t pay much attention to, but this news could be interesting.
I previously owned one of ARR’s preferreds. I got out of the entire mREIT sector once I realized that they tend to be pretty good money furnaces (the ARR share price is down 80% since covid, for example). They’re probably just not going to be good businesses until the yield curve un-inverts.
I look forward to reading the 8-Ks about those departures. They will indicate if there were disagreements with company policy that happened.
Yes… in this case the CFO seems to have been fired (it would seem). I have never seen that end well.
Thanks for the heads up, August.
this one might be fun to watch
(CUSIP 21871NAB7)
CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today that it is delivering an irrevocable notice to the holders of all of CoreCivic’s previously issued $675,000,000 original aggregate principal amount of 8.250% senior unsecured notes due 2026 (the “2026 Notes”) that CoreCivic has elected to redeem in full the 2026 Notes that remain outstanding on April 15, 2024 (the “Redemption Date”). The 2026 Notes were otherwise scheduled to mature on April 15, 2026. The 2026 Notes will be redeemed at a redemption price equal to 104.125% of the principal amount of the then outstanding 2026 Notes, plus accrued and unpaid interest on such 2026 Notes to, but not including, the Redemption Date (the “Redemption Price”). As of March 15, 2024, the principal amount of the outstanding 2024 Notes was $98,774,000. CoreCivic intends to use a combination of cash on hand and available capacity under its revolving credit facility to fund the Redemption . .
My apologies if someone has already posted this. I did not see it.
Tex, does this seem to be a trend? companies seem to be issuing new debt and the market seems to be buying it. Even with rates seeming high right now, companies like ATH and AMG are coming to market and the offerings are being quickly bought out and the yields driven lower as buyers are paying more than par to own them.
Charles,
Yesterday, Reuters wrote about this:
https://www.reuters.com/markets/us/peak-rates-boost-us-demand-riskier-form-corporate-debt-2024-03-15/
The article I notice, states what I have been presuming to happen…”It is more cost-efficient for companies to issue junior subordinated debt whose interest payments were tax-deductible to refinance taxable preferred stock that is becoming callable,” Botoff said.
Of course this is all on a relative basis though. Financials constitute 70-80% of all preferred stock anyways because of capital regs. And also because of those regs, they cant issue sub debt for Tier 1 anymore. So the refi’ing from any perp preferreds to sub debt is just materially dealing with smatterings from the other ~25% of the preferred world. And thus the long term downtrend of less ute preferreds continues.
Your expecting more of your favorite ute preferred’s to be called and replaced with riskier long term junior subordinated debt. But look at the sunny side, it may offer higher yield.
Well there really isnt much exchange traded utility preferred outstanding to begin with. Even EIX last issuance last year was a sub debt and CEO on CC was bragging out it being a “rate payer saver” being it was tax deductible over preferreds. No Im not expecting any of mine to be called. But, me being a small bit player, I have plenty of room to maneuver around in whats leftover.
Added thought….Why would you consider long term junior subordinated debt riskier than a perpetual preferred from the same company? I consider them the same, with the only real difference being new issues are more liquid and thus more market sensitive in general than old institutionalized issuances.
BTY Grid, I have put in a few bids on some of the new offerings but I am really not enthused about the market lately. I really don’t have any warm fuzzy feelings. Actually more a feeling of unease. We all know the market can go higher for longer than anyone expects. There is a lot of money sitting on the sidelines and it’s getting impatient to get to work. Evidenced by the demand for the new offerings coming to market.
With credit spreads really low both at IG and junk levels who can blame them sending it out if there are takers? Relatively speaking a moment in time snap shot, one was getting better yield off treasury yields in ZIRP than they are now with 5%+ Fed Funds and ~4.3% 5 and 10 yr treasuries.
Grid,
I was reading (last week? – I think I posted a link to the article???) that there is an uptick in refi offerings because it has become a bit cheaper for companies to refi now, and it helps them start reducing the wall of expiring debt that many face. Not sure what to believe about it.
Sorry – I am working from a “loaner” computer and I don’t have my history/notes.
Private, it doesnt surprise me. Its not because interest rates are coming down, its because credit spreads have dropped and are bouncing around 20 plus year lows. The spreads are horribly tight. Meaning one isnt getting much “yield juice” moving up the “risk ladder” from treasuries. This encourages companies tapping the debt market from eager participants.
https://fred.stlouisfed.org/series/BAMLH0A0HYM2
https://fred.stlouisfed.org/series/BAMLC0A4CBBB#0
Charles
Your intuition is telling you something.
My Sunday reading is full of warning alarms.
Most immediate potential is upcoming BOJ (Bank of Japan) central bank meeting 3/18-19. If BOJ raises/releases the ceiling on Yen T-Bill rates, they may strongly rise. Historically, if yen bond rates rise, US bond rates follow.
Second is a scathing piece on how Fed policy is based on keeping interest rates low. The implicit “Fed Put” increases risks taking based on the assumption that the Fed will bail out any problems. Result is asset prices continuing to rise (home prices, gold, commercial real estate, bitcoin, stock market). History shows such increases cannot be sustained and correct in violent downturns.
Not saying that either of the above will happen, but they are ominous storm signals suggesting caution is more appropriate at this time than enthusiasm.
Thanks guys, everyone here providing links and tidbits of information about what is going on in the world is very helpful. I see too many people in my daily life not looking outside their bubbles about what’s going on in the world overall. I like seeing opposing viewpoints. I read on that other site about all the positive articles and enthusiastic comments about shipping, then I read an article on Yahoo finance by Reuters
https://www.reuters.com/markets/europe/maersk-ceo-says-container-rates-have-fallen-unsustainable-levels-2024-03-14/
This reinforces what others have been saying about the future over supply of all kinds of ships coming in 2024 and 2025 who are warning and are in the minority.
I’m going to miss getting paid to sit in front of the computer 8 hrs a day and getting to read the news.
Thanks Charles,
I have been completely out of anything related to shipping for a while, so I have skin in that game other than I still hold some textainer preferreds that go away in a few weeks.
As you mentioned, this oversupply was forecasted a couple of years ago when they started tallying up all the new hulls under construction and didn’t see enough “retirements” to offset. I think I posted about it then.
Lots of investment went into new ships when the supply chain froze up (2020-22?), but several people in the industry I talked to (in Asia) at the time said it wasn’t lack of ships, it was lack of containers in the right places (they existed, but were in the wrong places), inability for US west coast ports to handle volume, and other things. there is also a fall off in demand for products from China.
Anecdotally, we just needed to move a few containers from China late last year and rates had dropped like a rock since 2022.
My focus lately was for LNG and to a smaller extent other gas carriers. After the Ukraine war broke out and supplies via pipeline were interrupted these ships became very much in demand and availability was limited. Because of this everyone got on the bandwagon and ordered ships. Now there is the triple whammy of everyone in the world involved, demand is down and supply of ships is going to hit the water this year and next. Also we have the unknown of the economy. I used to invest in NAT and KNOP and I have seen this movie before. I might be leaving the party early, but better than trying to get out of the concert parking lot when everyone leaves. I feel sorry for the retirement funds investing with Stone Peak.
I still hold some SEAL/PA and SEAL/PB in the LNG space. I think they have long term charters so the presumably the preferreds should be able to be paid going forward but that doesn’t mean the prices will remain near $25. I remember in 2007-2008 the dry bulkers like NMM got crushed even though they had long term contracts in place. MMM went from 20 to 3 where the yield was 45% or so. I averaged about 7 on it as I started buying it at 14. It eventually bounced back and paid the dividend along the way.
On a related note, is OPEC priming the world for an sizable oil price increase by reducing supply as Russian exports will likely fall because of infrastructure damage as the Ukrainians hit their oil production faciliites?
The oil market is always on a knife-edge, and even the highest production in history by the US could be outstripped by demand if supply falls off elsewhere, like it did in 2008.
“I really don’t have any warm fuzzy feelings. Actually more a feeling of unease.”
Charles,
Had that same conversation with a friend today – and guessing you read my post last night re same via geopolitical. Many friends say the same thing – and none us can put our finger on it.
Meanwhile, the loudly predicted and droned on (and on) about “for sure” rate drop has evaporated for now (again) and we’re hearing a growing chorus about the debt. My guess is the debt won’t be a tangible issue until it’s a crisis – like when the next big tax cut or spending bill occurs and the market (finally) retaliates.
Not because of the above, but just because of my trading geometry have been in sell (lock cap gain) mode for two months+ now and within close range of being fully repositioned. Some issues sold over last few weeks could now be bought back $1 cheaper – though I’m sitting tight until next shock hits prices.
At current prices for high IG it’s a one way bet – everything is priced for perfection. MMs have higher yields then some preferreds. That the market could produce that outcome is plain nuts.
Still though holding a greatly reduced but sizeable hand as hedge if opposite occurs and rates reverse to downside and rolling CD/Treasury/FHLB ladder over as they mature.
Alpha you and probably Grid and a few others here have been selling and locking in profits. Actually I have done the same just not as much. I have been selling more than I have been buying but I still feel like I am top heavy on some of the holdings that have risen above par. Like you said, this doesn’t make sense the price has went up so much they are yielding close to the same as a Treasury.
Everyone has different investment goals. Some of us have other sources of income or enough coming in to be able to lock in profits and give up the other end of the barbell the income that we bought these stocks for. The one account my wife is withdrawing from is producing 50% more then she needs but I still hate to sell off to lock in profits as it’s taken the last 2 yrs to pick up the deals on income with the opportunities that we haven’t seen in decades.
So I think I will continue to hold most and I am sure I will take a hit if the market falls. But in that account 1/3rd of the money is still in MM and a Ultra short term Treasury fund which until recently had been returning less than 3 months ago, but surprise surprise, this week the yield has jumped back up. When the drop comes I will be buying more and probably buying back some of what I sold.
Who knows, Charles. If one wants to be “risk off” one isnt getting penalized much in short duration. I have maybe 20% or a bit more in perp preferred, but I dont really have anything sitting in MM either. But some CDs, IBonds, and TBills are easily accessed if a real deal popped. And I still have some shorter duration stuff like the usual suspects of KTH, its actual sub bond and the 7% Barings 2029, etc.
Grid, the MM fund is backing GTC orders. Most are sitting there at Oct. Nov. prices. I went through most this past week updating the expiry dates. I can always wish for some Christmas presents in July.
Just my way, instead of using watch lists and alerts.
I have some cash for that, but largely use my untapped margin for bids. If something hits on margin I figure it out later to either move cash around or just sell something I was comfortable unloading.
Charles, Using CD/Treasury/FHLB 2-year ladder and alt-investments as back-door to preserve optionality as market sorts itself out. Still holding older utes, less liquid pfds like CKNQP, CEF-pfds and excellent balance sheets like REGCO.
Topping-off 1.3% fixed IBonds. Not wealth-generating but preserves purchasing power + 1.3% for a corner of holding.
CKNQP is one I have a small holding of in the Roth and one IRA. Been doing research this weekend with the thought of getting prepared for a market event. Started out pulling up BDC’s and CEF’s and Reits looking for preferred’s.
Even started considering ETF’s by themselves as they spread the risk out.
REG common is in the retail REIT category and has about a -8.5% return so far this year which isn’t saying much with the overall market up and 110% 10yr return and past 2yrs sitting at zero which is better than a loss. The preferred will give you added safety. REGCO is up about 4% including dividends for the year with a yield of 3% while the REGCP is about even on return including dividends.
Buying more REGCO at this point would not make sense as it’s too rich of a price to get a 3% dividend. I admire you Alpha, your continuing to hold and collect your yield to original cost and not selling to move into a higher yielding preferred.
I need to quit my research for now. I have a grafting and potting up event today I need to get ready for. Especially since I have the pots for the group. The goal is to create 150 new trees today and sell at a plant sale in July. All proceeds go to a scholarship program for applicants going into ag at Sonoma State or UC Davis.
Charles, Thank you for your volunteer work! I need to do better in that area.
Wow, didn’t know you moonlighted as a pot supplier.
Charles, REGCO current yield is 6.16%
Got junior sub debt?
Worry not your pretty head
Janet, kick the can
My mistake Alpha, I was looking at SA and they consider it a new issue and look at the first dividend issue under the symbol as a annual yield.
Was running out of time to open Fido
Charles, I’m sure we’ve all done that or the equivalent at one time or another. About 7 months ago I miscalculated the yield on a one-year term and have a YTM about 1.5% lower than planned. Eye-rolled myself and just left it sit there. A few months to go!
NI-B redeemed today, at $25.00001739 per share. What th-?? Prospectus at https://www.sec.gov/Archives/edgar/data/1111711/000119312518338394/d646460d424b5.htm very clearly states the usual–“$25,000 per share (equivalent to $25 per depositary share)”–or $25,500 in case of a Ratings Event, irrelevant here.
I mean I’m not complaining about the extra one penny I received for my position, but does anyone have any idea why the heck they’d vary from $25 flat? (I should note that I also received the expected amount of accrued divs as a separate transaction, business as usual, nothing to do with the odd per-share liquidation amount.)
Is this an algebra problem? Is 575 the right answer?
lol no, I’m asking why the redemption wasn’t $25/share (as I’ve experienced with all other redemptions where the liquidation price was $25). Yes, it was a redemption of 575 shares, but why was the redemption $25.00001739/share (which ended up amounting to that extra penny)? I’m asking whether anyone else has experienced an odd redemption price like this. It’s just so random: “Here’s your $25/share. Oh, and here’s an extra penny.” It was at Fido, btw.
My funds are at Vanguard. I haven’t received the extra penny or two at redemption, but it happens routinely on regular dividends or interest payments. I’d guess about five percent of the time. I don’t have enough insight into the industry to know why, but my hunch is that it isn’t even measurable and it decreases customer complaints.
B. Riley Financial Inc., the boutique investment bank under attack from short sellers about its dealings with a former business partner, failed to file its audited results after an extension period ended…
https://finance.yahoo.com/news/b-riley-says-still-working-211612670.html
I still have no clue with is going on with RILY. I have no idea why I am comfortable with buying NYCB-A yet RILYZ gives me the willies. I guess banks are just easier to understand even if it has stress cracks while RILY could be doing something truly fishy.
In 2019, NI had to amend the Class B-1 preferred as follows:
20,000 shares of Series B–1 Preferred Stock, par value $0.01 per share, were issued as a distribution with respect to the Series B Preferred Stock in order to enhance the voting rights of the Series B Preferred Stock to comply with the New York Stock Exchange’s minimum voting rights policy. The Series B–1 Preferred Stock is paired with the Series B Preferred Stock and may not be transferred, redeemed or repurchased except in connection with the simultaneous transfer, redemption or repurchase of the underlying Series B Preferred Stock.
Subsequent to the change, the preferred had this description.
Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25,000 per share and a 1/1,000th ownership interest in a share of Series B-1 Preferred Stock, par value $0.01 per share, liquidation preference $0.01 per share.
So you got an extra cent per 1000 depository shares.
BTW, I held NI-PB at two different brokers and neither show redemption proceeds as of Friday evening and only one shows the dividend payment. Good for you that your broker is timely on advancing funds.
Zarley, thanks for finding and posting that info. What a perfect example of the unintended consequences of (presumably well-meaning) rules & regs, and of the reason lawyers and accountants always will have jobs:
“…in order to enhance the voting rights of the Series B Preferred Stock to comply with the New York Stock Exchange’s minimum voting rights policy.”
Gotta wonder how much money that extra bit of compliance cost NiSource: the cost to issue the B-1 series, cost to update documentation, cost to properly account for it at redemption. Not to mention the time I spent scratching my head about it (probably the only shareholder who cared to ask about it), and the time you spent digging up the explanation.
*And* I made out like a bandit: came out ahead 0.425 of a cent on the deal! Aint capitalism grand?
We just received a service alert from UPS
They are suspending all services to Russia, Ukraine and Belarus. This is after market today. Wonder how it will affect the stock come Monday.
Charles, I looked up “UPS suspends service in Russia” and found articles dated 27 feb 2022 and 01 mar 2022 about both UPS and FedEx suspending service in Russia. Also found a current service alert on ups.com. Didn’t spend the time to find out whether UPS service to Russia has been suspended since early 2022, or whether they restarted and now have stopped again, but in any case this is not new.
Understood Bur, my work runs the UPS program all day and the service alert just popped up. Searching on line I agree with you this has been on going since 2023 no idea why they decided to send out the notice again.
Unusual trading in GAINL the past 3 days. Around 11:30 each morning a price insensitive buyer has placed an above market bid and hoovered up everything for the rest of the day. I think GAIN may have dumped some ATM shares on him yesterday afternoon, but he’s back today at an even higher price.
Prior to this, GAINL was trading around $25.60 which is in-line with stablemates on YTM. Today the buyer has a standing bid at $26.39.
Yeah I gave him my shares and happy to. Switched into Gainz for now.
I switched to GAINZ also. Nice heads up on GAINL 730Cap. Wasn’t long ago that GAINZ was acting up around 24.
yeah that’s like a 4.85% or so YTC on GAINL, if I include the accrued interest of about 35c
and of the GAIN BBs this is the one that would be called, if one is called
good alert 730
For most of the afternoon the buyer was hiding the order behind a 200 share bid, but in the last 15 minutes there was a ~15K bid exposed and it appears to have completely filled at close at $26.40. Seller was probably GAIN dumping some ATM shares.
Will be interesting to see if the buyer is done now. Hard to understand why someone would be buying like this lol. Cost to borrow at Schwab was low so I shorted some for fun.
Corporate Defaults
S&P notes 29 corporate defaults in 2024, highest tally for this time period since 2009.
ATHS trading at Fidelity.
$25.25/$25.30 Bis ask.
Using my Schwab. Mobile- nothing yet— but then, they are seriously lacking many I try to look up— grr. Maybe it will drop next week. Prob not.
3/15/2024 ~ Triple Witching today with 5.3 trillion dollars worth of options expiring today.
On March 15, 2024, Global Partners, LP (NYSE: GLP) (the “Partnership”) issued a notice of full redemption to the holders of the Partnership’s Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (NYSE: GLP pr A) (CUSIP No. 37946R208) (the “Series A Preferred Units”) notifying such holders that the Partnership intends to redeem all of its issued and outstanding Series A Preferred Units on April 15, 2024
https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/1323468/000110465924034807/tm248836d1_8k.htm
Thanks, J!
After seeing your post, I sold premarket for ~ 25.58. Saved me some money from a further drop in price. Who knows – maybe a panic sell will make for a buying opportunity.
Any idea of the dividend one can expect ? Thx.
looks like about .516
at least that’s what i calculated.
bob
I would like to know the dividend of GLPPRA also. The last dividend was $0.776 with ex-div date of 2/1/24 and payable 2/15/24, so either 2 months or 2 1/2 months of dividend. So my guess is somewhere between $0.517 or $0.647, anyone know?
Jtrader,
As I understand it, divs accrue from pay date to pay date. Therefore, 2 months of div.
Prior div pay date = 2/15/24.
Final (partial) div pay date (i.e. the redemption date) = 4/15/24.
I get 60 days of accrual:
a. 15 days in Feb (including Feb 15, Feb 15 through Feb 29 = 15 days).
b. 31 days in March
c. 14 days in April
Using the prior $0.776 div amount, the 60 days/90 days = 2/3, so 2/3 of $0.776, which = $0.517.
Darn it.
I had a feeling the redemption was coming, so I have been selling off my GLP-A – just not fast enough. Managed to unload most of my shares above $26.4x, but still have almost 500 shares in a couple of accounts. coulda/woulda/shoulda just dumped them, but I kept holding out for it to get back up to $26.4.
Price of trying to pick up nickels in front of the steam roller.
Luckily my cost is below $25, so I don’t have a capital loss, but just goes to show that the greedy get needy.
Fortunately I picked up shares under 25, but lost out on some gains. Thanks mbg for the explanation.
You’re welcome, Jtrader. Me too – below par on cost, but like you and Private, I held too long. At it’s recent trading above 26, I loved my cost, loved the div, and ignored the negative YTC sell signal.
Are Inflation Winds Changing Again?
* PPI ~ UP, 0.6% m/m largest m/m jump since August 2023
* CPI ~ UP, now 3.2%
* 10yr T ~ UP, from 4.07% to 4.29% in 1 week
* WTI ~ 4 month high today
* AAA US Gas Prices ~ UP, now $3.41/ga average
* Copper & Lumber ~ UP, both at 5 month highs
* US jobless claims ~ dropped
* 2/10 spread ~ curve steepened from (-0.16) to (-0.40) last 2 months
* 30yr Fixed Mortgage ~ UP, 7.02% today
* VIX – up 7% today
* Other ~ FFWM ( -6.08%), VLY (-5.09%), DCOM (-4.05%)
Newbie – Wonder how the administration will try to spin this as positive news?
Their “the rate is dropping, so eveything is fine” didn’t wash because price increases may be slowing, but prices remain up dramatically. This will be harder (sorry – don’t intend this to be political. Just fascinates me how all politicians in office (either side) come up with ways to “sell” bad news).