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Chicken Soup for the Soul goes into bankruptcy.
https://deadline.com/2024/06/redbox-chicken-soup-for-the-soul-entertainment-files-chapter-11-bankruptcy-1235997730/
Not one that I follow. However, the comments are worth a look. Employee complaints of bounced payroll checks (“clerical errors”), unpaid bonuses, and cancelled medical insurance.
IMHO, these small indicators give a better trouble warning than a cheery conference call. A company I worked for (and held stock in) was taken over by PE types. A payroll check bounced before I left. The former management was proud of paying obligations on time. I noticed news reports in towns far from our headquarters about vendors complaining that the company had simply stopped paying them. (No small vendor could afford to lose the business.)
After some unusual stock activity, the company filed and is now gone. The shareholders were wiped out. I missed all the warning signs. FWIW, Management got a a lucrative post-bankruptcy “retention bonus” to stay on. JMO. DYODD.
The Soup Nazi warned everyone 30 years ago, when he said, “No Soup for You!”
This is quite the line from the June 11, 2024 8-K filing…
On June 11, 2024, Chicken Soup for the Soul Entertainment, Inc. (the “Company”) was notified that the holder of more than 75% of the voting power represented by the Company’s outstanding Class A and Class B common stock had acted by written consent under the DGCL to remove without cause all members of the Company’s board of directors and the board of directors or board of managers of each subsidiary of the Company, other than William J. Rouhana, Jr.
Textbook case on how to run a company into the ground and screw everyone involved including your own employees. I wonder what happens to Redbox? Dying slowly due to the rapid changes in media delivery (streaming), but there are plenty of rural folks who don’t have the infrastructure to stream. There are also folks who can’t afford the costs of Internet service but can spring for a few visits to Redbox a month. There is still some market for Redbox if they survive for awhile. The money in the Infrastructure Bill for expanding the fiber network is wiring up a lot of these areas. My whole county is presently having fiber installed to all households that aren’t served by anything other than DSL. A 40 million dollar project partially financed by the bill.
I switched to Tmobile 5G Home Internet. I get great speeds – all wireless. This is the fastest way to get high-speed internet to rural areas. Verizon also has 5G wireless home internet. Not sure about AT&T.
So wiring rural areas may be the most expensive way to do this.
Dj, same here. I have been renting from Redbox for years and would be willing to pay more just to keep them around. Lately the availability of recent releases is just not there. I assume from the BK filing they owe the studios money so that explains it. If this seems old school, I’m tired of every company wanting a subscription service linked to my bank account.
Wonder how much the Chicken Soup for the Soul baby bond holders will recover?
Ha! Those with the largest positions will negotiate a deal for themselves. Everyone else will get zilch (or worthless warrants), as usual.
>1% Preferred Stock Price Drops Today…(% daily loss, price, coupon)
ALL.PR.H…(-1.45%)…$21.84…5.1%
COF.PR.I…(-1.39%)…$19.90…5.0%
TCBIO…(-1.20%)…$18.91…5.75%
PSA.PR.F…(-1.15%)…$23.13…5.15%
HBANL…(-1.11%)…$24.92…5.7%
Key-j down 1.08%. All of the decline occurred in the last few minutes of the trading day.
PSAs rated A3. I buy a lot of them. Notice they haven’t been called like they used to. I don’t mind. Good list
2:20 EST
ALL.PR.H down 0.95%
ET.PR.I down 0.93%
Someone hungry for yield buying STRRP at 11 today, it’s a $10 issue for those not familiar.
Nike Swoosh Today ~ stock down almost 20% today at 11:50 EST
Term sheet for OXLCI:
https://www.sec.gov/Archives/edgar/data/1495222/000121390024056793/ea0208643-01_fwp.htm
Oxford Lane Capital Corp. Announces Offering of Notes
Jun. 26, 2024 4:04 PM ETOxford Lane Capital Corporation (OXLC), OXLCM, OXLCP, OXLCL, OXLCO, OXLCZ, OXLCN
GREENWICH, Conn., June 26, 2024 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (OXLC) (NasdaqGS: OXLCM) (NasdaqGS: OXLCP) (NasdaqGS: OXLCL) (NasdaqGS: OXLCO) (NasdaqGS: OXLCZ) (NasdaqGS: OXLCN) (the “Company”) today announced the commencement of a registered public offering of notes (the “Notes”). The public offering price and other terms of the Notes are to be determined by negotiations between the Company and the underwriters. The Company also plans to grant the underwriters a 30-day option to purchase additional Notes on the same terms and conditions to cover over-allotments, if any.
The Notes are expected to be listed on the NASDAQ Global Select Market and to trade thereon within 30 days of the original issue date.
The Company expects to use the net proceeds from this offering to acquire investments in accordance with its investment objective and strategies and for general working capital purposes.
Sorry –missed the announcement yesterday. Doh!
Giant Swan Dive On Top Of Long Term Decline ~ Walgreens (WBA) down 25% today to $11.74…was at $95.11 back on 7/20/15….Are the creditors coming soon?
WBA Bonds current Ask:
1 year duration still trading close to par
6 year duration trading 85 cents on the dollar
20 year duration trading 80 cents on the dollar
26 year duration trading 70 cents on the dollar
Highest yield on any of these WBA floats is only 6.5% and although this is senior debt, I would guess it’s secured by nothing. At least I got between 15-20% yields on my RIG bonds. I would not touch WBA here.
Kinda reminds me of the disconnect between GM stock & bonds prices before they went bust in 2009.
like i just said on sandbox (before i saw this thread) i bot 500 @ 11.73
i see this as being a very profitable trade ;
ted – Your equity trade is looking good here and technically speaking as well putting in a nice floor with millions of shares crossing the tape. I just wouldn’t touch the bonds (especially with longer duration) with this kind of profile for only 6%.
Worth noting favorably for your equity side trade also is that all of the WBA debt is lower coupons, ranging from 3% -> 4.8% so this alone is going to drive a discount to par, regardless of where trading price lands, especially in that 20-30 year duration range.
So all things considered there appears to be a disconnect here in terms of the beating the stock price is taking vs. where the bond floats are marked. I was actually expecting to see higher yields given equity side is down a whopping 25% so all things considered a worthy speculative trade for the equity side.
But definitely keep an eye on the bonds because those yields will be very insightful for future runway landing for the company as debt traders are pretty savvy to say the least.
theta, good points on the trade. I might be mentioning from a position of ignorance but I thought at some point there was some talk of maybe the ‘Boots” aspect of the company separating again. I’m not versed at all even if that is something still being discussed nor what it could/would do to the market price if such an event were to occur.
pig pile – Thanks for bringing up this key factor. Yes that is absolutely on the table right now. Ironically the boots portal site is going extremely well for them with very strong double digit sales growth not to mention UK retail boots is outperforming US stores by 200 bps.
WBA CEO…cutting 25% of stores from 8600 to 6450.
Smells to me like Rite Aid a few years back.
Sounds like they are making the correct expedited decision. Yesterday CNBC said 75% of the stores created 100% of the profits.
If WBA is cutting 25% of their stores I’d expect most of those to be very poor performers. Locally we have a RiteAid, CVS and Walgreens within 1/4 mile of each other. I like the RiteAid because it’s never crowded. The CVS has more customers but the Walgreens is always the busiest. I don’t know why but here the people prefer Walgreens.
everytime i go to a walgreens its miserable. takes forever to find someone to man the register. doesnt matter which walgreens it is they all seem poorly run.
i much prefer CVS
I understand where you’re coming from. However I thought the same thing when I jumped in at $15 just a month ago and seemed like a promising opportunity,…. but here I am now at $12, sigh…..
It’s disheartening to see the stock continue to decline under the new/current CEO’s leadership. While it may not be reasonable to expect a turnaround in such a short time frame, but the lack of visible progress in reversing this downward trend is concerning.
Many investors expected a new CEO to take decisive actions to address any lingering issues, but it seems that hasn’t happened as anticipated. A new CEO should have cleared the decks of anything that had a taint of smelling bad as it’s easy to blame “the other guy”. Stock would have taken a hit, but it could have been one and done. But not this guy. What he’s accomplished is slashing the dividend signficantly and now erroding the stocke value, now sitting at half of its value when the current CEO assumed the role.
Instead of seeing improvements, each quarter brings more disappointment. Understandably, this has eroded market confidence in both the CEO and the effectiveness of their turnaround strategy. Is this the next Rite Aid?
How the mighty drug dealer has fallen 😉
I am not sure about the rest of the country but here in MA we used to have 3 drug stores in each “town” on a single road. Rite Aid died already. Now there is always a Walgreens next to a CVS. Often only 100s of yards away. There are just too many of these drug stores around and their prices are silly compared to the Target or Walmart normally plus or minus a mile or two away. On top of that those two often have a pharmacy inside of them. Now with delivery as well from places like Amazon…
I felt the writing was on the wall for a while now. They would truly have to rediscover what it means to run their square footage in a way that draws people in. I doubt mgmt is up to the task.
There is REALLY high volume in RILY’s options expiring on June 28, with almost all the option on the put side, with some really out of the money strikes trading a lot. It could be nothing, or it could be something. I guess we will know in 24 hours.
Does somebody know something?
I know everyone on this board hates the company because they have done some really questionable moves.
I scanned out the next 90 days. There are two trades that really jumped out. Someone took a synthetic short position by buying in the money $18 put strikes for over 1600 contracts. That’s a wager of $225,000 and those contracts expire next Friday.
Someone also traded a ton of Aug 16 $10 strikes for over 4,000 contracts which you are looking at $300,000.
The volume for tomorrow’s contracts is not what I would consider necessarily convincing yet. I see the $14s are over 800 contracts now but the last batches filled at the bid price, so that could be someone capping off a spread or just putting in an effective limit buy order to make a few bucks.
Keep an eye on it, if you start seeing a few thousand contracts at a particular strike flying through and chasing the ask than you might want to consider a flier. The nice thing about these contracts is there is a wide enough spread where you can easily interpret the tape and what the intent is for the trades.
What I know is there’s a Richard LeJeune SA article titled, “The Bullish Case For B. Riley Financial Stock And Baby Bonds” that was published in November and believe it or not, it has generated 3,431 comments so far and it seems that there are a ton of comments about the use of options…. It seems like everyone and his brother is an expert on using options to play RILY and nobody has ever lost a single dime ever… uh, huh.. uh, huh..
US National Debt closing in on $35,000,000,000,000…35T
US National Debt = 34.85T = 267K per taxpayer = 103K per citizen
US Federal Spending = 6.75T
US Federal Tax Revenue = 4.90T
US Federal “Annual” Budget Deficit 2024 = 1.85T
Largest Budget Items…
Medicare/Medicaid = 1.78T
Social Security = 1.45T
Defense = 0.902T
Interest on Debt = 0.878T
Other Smaller Categories = 1.74T
Congressional Budget Office…in June noted the US National Debt estimated to top “56T” by 2034 ~ we will need way more interest on Treasuries in the future if these estimates pan out IMHO.
In 1866, government debt was over $2.6B.
In retrospect, I think in real-time $2.6B in 1866 was a scarier number than $35T is today in a world where we now have multi trillion dollar market cap companies coming out of the wood work almost daily such as Apple, Nvidia, Microsoft, Amazon, Google, etc.
The only way to make legitimate headway on the debt situation would be massive entitlement/retirement benefit cuts as well as an overhaul to spending reform. We all know this is not going to happen.
Which just means, one day we will be in here saying, oh look, our debt just hit $100T. I will say this though for the flip side, if you asked me three decades ago that our annual GDP would be closing in on $30T by now, I would most likely have bet no.
theta…currently, 1 out of every 5 tax dollars (20%) now going to pay interest on US debt at 35T. If the CBO estimate of 56T US debt in 2034 is correct, I would assume the % of tax dollars dedicated to interest on debt goes even higher. Plus, social security (SS) scheduled to get 24% reduction in payments in 2033/2034 unless the government raises payroll tax rates or income limits…don’t think either party has the guts to cut spending. All this to say, we may need greater reward for future Treasury risk IMO.
I turn 65 in 2034. Yay me.
theta-newbie: I think Congress, no matter which party controls it, will eventually be forced to raise social security payroll taxes, raise the retirement age, eliminate social security payments for those with income above a certain level, raise income taxes across the board with emphasis on high income earners, raise corporate income taxes and do whatever else can be done to raise revenues.
This will happen when the debt can no longer be serviced at prevailing rates and the Fed loses whatever control it has to influence long rates and the long end of the bond market gets out of hand. An enormous fiscal crisis will finally result in Federal action to raise revenues because Congress obviously can’t cut expenses. I suspect whatever political party in power and the Fed will kick the can down the road until that no longer is possible. An externality (black swan event) could set it off or just the overbearing weight of the deficit over time. Next week, next year or ten years from now who knows? However, the parabolic increase in the annual deficit levels suggest sooner than later.
Simplest thing to do to save SS is raise the cap on earned income subject to social security tax from the (2024) level of $168.6K. Carried interest is another target (it is currently not considered earned income). If one makes much money (e.g., from investing) in retirement, social security payments are taxed already.
Do we need a different tab for this?
Tom…agree with you on SS….we may need complete removal of income cap on SS tax & move the SS age goal posts to the back line of end zone. Balance Budget Amendment will never happen in my lifetime as long as Congress has unlimited term limits…
Tom—would that be a broad Social Security tab?
Broad and deep, Tim. 🇺🇸
I think the main difference is that in 1866, the US government was determined to pay that debt off. That is not the prevailing mindset in 2024 and hasn’t been in many many years.
It is a two pronged problem.
1. as everyone mentioned, there is a massive demographic problem as that huge generation of boomers retires and starts receiving benefits instead of paying in
2. The other is a revenue problem. Raising or abolishing the cap would do wonders for program solvency, but fundamentally, we collect less in revenue as a percentage of GDP than almost any other country, primarily due to the taxation of state and local bond interest and investment income, which Congress seems to have no interest in updating.
And there are 2 things that would cause a worldwide depression overnight.
1. The US defaulting on the debt
2. The US paying off the debt
The prevalence of the US Treasury in the financial markets is not easily replaced.
For all the talk of oil being priced in another currency, the fun fact is that no other currency could handle it, as the Eurozone debt is fragmented between national governments of widely disparate credit ratings.
So here are the issues with each alternative:
1. Precious metals. Not enough of it
2. Swiss Franc. Same
3. Euro. Collateral would need to be spread across multiple sovereign debt issues, some of which are really low rated
4. Cryptocurrency- Limited supply (by design to prevent counterfeiting)
So what does that leave?
It’s only true that the US “collects less in revenue as a percentage of GDP than almost any other country”, if you focus on Europe for comparisons.
On this list the US is #57 out of 187 countries.
https://en.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio
Good news US is only #13 for Public Debt as a % of GDP, which suggests we have some room to grow the debt. Bad news, I don’t like the company on the leaderboard.
In 1866, government debt was over $2.6B.
In retrospect, I think in real-time $2.6B in 1866 was a scarier number than $35T is today in a world where we now have multi trillion dollar market cap companies coming out of the wood work almost daily such as Apple, Nvidia, Microsoft, Amazon, Google, etc.
The only way to make legitimate headway on the debt situation would be massive entitlement/retirement benefit cuts as well as an overhaul to spending reform. We all know this is not going to happen.
Which just means, one day we will be in here saying, oh look, our debt just hit $100T. I will say this though for the flip side, if you asked me three decades ago that our annual GDP would be closing in on $30T by now, I would most likely have bet no.
It’s been said that the Federal government is an insurance company with an army.
Newbie, we have covered this ground before on III. Amazingly, nobody in Washington appears to have followed our advice on how to deal with the issue(s). Their loss. Since they are not listening to us, I suggest our focus should be on the investment implications of what we forecast them to do or not do.
And your numbers, which are the most commonly discussed, are way too low. The net present value of unfunded liability for SS and Medicare is in the range of $200 TRILLION, making the $35T seem like pocket change.
And since Washington is not listening to us on the $35T issue, they sure as heck are not listening to us about a ~ $235T problem.
A high net worth, high educated, high success at a Fortune 10 company, owning houses in 3 countries and 4 states friend, has considered all of the debt facts above and made a choice. They have taken major positions in physical silver located in multiple countries. I am NOT endorsing this, but it is an actionable approach to consider.
Meanwhile, back at the preferred/baby barn. . .
Tex-
“barn”…LOL.
“…our focus should be on the investment implications of what we forecast them to do or not do.” I absolutely agree. I start my considerations of where the economy, interest rates, employment, etc. will go with the most important fact of the day: deficit spending is high and will stay that way for the foreseeable future.
NEWBIE; GREAT POST. Too bad it won’t reach the right people that could actually do something about it. I’ll just leave it at that.
Widest 2/10 spread in 2024 YTD….US 2Yr / 10Yr Spread now (-0.51)
New York Mortgage Trust, Inc
% Senior Notes due 2029
NYMTI incoming
https://www.sec.gov/Archives/edgar/data/1273685/000110465924074602/tm2418101-2_424b5.htm
indicated to me at 9.125%
Got it J – thanks
how do we find the OTC ticker before it goes live on Nasdaq?
Dime Community Bancshares, Inc.
% Fixed-to-Floating Rate Subordinated Notes due 2034
DCOMG incoming
https://www.sec.gov/Archives/edgar/data/846617/000110465924074575/tm2417725d1_424b5.htm
$25 structure expected 9.00 % area.. 10 year hard maturity.
My indication is 9% with the reset at 5.01% plus 3 month SOFR, which is currently 5.3475%.
I have their DCOMP which is doing poorly but paying the dividend. Too low to sell unless there is trouble.
Something up with CNFRZ today, closed up 4.1 @ 25.00. Did not see any news but did not check SEC filings. . .
LONDON, UK, June 25, 2024 /CNW/ – Atlas Corp. (“Atlas”) announced today that the Company’s Board of Directors has declared cash dividends on its preferred shares.
https://ir.atlascorporation.com/2024-06-25-Atlas-Declares-Quarterly-Dividends-on-Preferred-Shares
Long ATCOL, their 7.125% Baby Bond, due 10/30/27. This company appears to have a blue-chip leadership group, and is investing heavily in expanding its fleet of container ships via new builds. Given their asset base, their capital structure is reasonable. Currently, there is a fair tail-wind wind for Containerized Freight.
https://tradingeconomics.com/commodity/containerized-freight-index
Do your own due diligence…
good comment..atcol/sjnk pair traded 2 sigma cheap in january 2023 to near 1 sigma rich today (3 yr horizon)
Where’s ATCOl, Sr note?- it pays 7/30 too. Nothing under News.
Monday Bank Bonds…
JPM 5.75%….48130CMR3, A1/A-, Senior, price 100.00, (YTM 5.749% 5/31/34) & (YTC 5.744% 5/31/26)
BAC 5.8%….06055JFA2, A1/A-, Senior, price 99.75, (YTM 5.833% 6/21/34) & (YTC 5.833% 12/21/25).
DYODD
Liberty private issue, Tim ‘laundry list’ of holding item, LBRDP (7% payer backed by a ton of Charter Comm stock).. fyi. https://finance.yahoo.com/news/liberty-broadband-corporation-announces-proposed-110000985.html
Bea–the only reason to hold this one is Charter–the actual operating business is so tiny.
I saw this on your list too, Tim and found a good write-up on SA. It’s an interesting one that I’ve been building on.
good comment.. LBRDP/PFF pair trading near .5 sigma rich. (3yr horizon) was 3 sigma rich between april-november 2022.. was 2 sigma cheap in february
Hot off the press if you will from Fitch this past week. The South Jersey Industries 2079 5.625% sub note (the old SJIJ) and South Jersey 2031 were credit affirmed (stable) again at BB+, no change from last year. Here is the written summary explanation.
https://www.fitchratings.com/research/corporate-finance/fitch-affirms-south-jersey-industries-inc-subsidiaries-ratings-outlook-stable-20-06-2024#:~:text=Fitch%20Ratings%20%2D%20Toronto%20%2D%2020%20Jun,for%20all%20entities%20is%20Stable.
Thank you, Grid.
Your welcome, mbg. Overall it looks like they are going to cap ex more than originally thought, but IIF still plans to reduce the parent debt down to 40% of capital within 3 years with equity infusions. This is good because this is where the subordinate debt issues reside at. The anchor regulated operating subsidiary utes appear to be fine and will maintain IG status as required. I would rather they sell off the non regulated crap, but that sure isnt going to happen.
Lawsuit & Default Cash Sweep Accounts
Barron’s Article Today ~ Morgan Stanley is being sued for allegedly breaching its fiduciary duty because it pays a paltry 0.01% APY on customers’ un-invested cash up to $500,000 in its default bank sweep program. The lawsuit cites an SEC rule known as Regulation Best Interest & notes Morgan Stanley was obligated to elevate its customers’ interest above their own.
Maybe I’m too naive — but, I enjoy maximizing my dollars earned on any cash-like product regardless of what any wealth manager says or doesn’t say.
Thank you, Newbie! (Thank you also for your weekly postings of “MMF Top 10” – that’s very useful information.) FinancialPlanning had a similar article this morning – see the link below (free to read with registration). Here’s a snippet from the article:
_____
But you can get 5% in a money market
Peter Crane, the president of Crane Data and the publisher of the Money Fund Intelligence newsletter, said money markets are now paying 5.12% on average, while sweeps programs pay only 0.68% on average on accounts with a $100,000 minimum. Despite that discrepancy, he said, offering a lower rate “is not a crime.”
That’s especially true since firms are continually going to greater lengths to let clients know they can opt out of sweeps programs.
“For most clients, you are only in cash temporarily,” Crane said. “So even though the yield differential looks huge, it’s the timing that’s the more important factor. And, of course, investors are free to shift the money to another place. So I think investors have no one to blame but themselves.”
Morgan Stanley’s disclosure for its Bank Deposit Program does note that clients are under no obligation to take part in the cash sweeps. But the firm defaults to placing uninvested cash into it automatically.
Tim Welsh, the CEO of the industry consulting firm Nexus Strategy, said it comes as no surprise that firms’ cash sweeps are attracting a little extra scrutiny these days. Unlike Crane, he thinks the latest suit against Morgan Stanley could have legs.
The difference in the yields offered by money markets and those in cash sweeps, he said, is big enough to “drive a truck through.”
“This is a classic case of: If you do want to get the correct return, you have to take action,” Welsh said. “It’s just not very investor friendly.”
(Article continues in some detail …)
https://www.financial-planning.com/news/morgan-stanley-latest-firm-in-court-challenge-over-cash-sweep-policies
This makes it sound as though Fido’s automated sweep into MMs like SWVXX is the exception rather than the rule. If that’s the case, they should broadcast it proudly as it seems to be attracting disenchanted Schwab money if none other
ESW3 – it’ll be interesting to see how the case plays out. If a wealth manager has a client with 10M in cash, a 5.0% MMF would make $500,000 whereas a 0.01% APY default bank sweep account would pay only $1000. If a wealth manager has fiduciary responsibility for the client, then it could be an interesting case. However, I suspect deepest pockets will win the case.
good comment.. no question that a fiduciary has responsibility to invest cash at the higher rate currently available
mj – Is that so his client can become sigma rich?
2WR, just got home from 100 degree heat and turned on tv just now. Talking head Liz Ann Sonders greeted me on the screen. She has been 3 sigma rich good looking for 25 years now!
Grid—Yes!!!
exactly …hopefully 3 sigma which would be top 1%
Been one of the best looking money managers for over 2 decades. She is with Schwab as a Chief Strategist now.
Boy this thread could run off into the male chauvinist pig ditch in a heartbeat couldn’t it…. haha..
2wr — the price difference between NEWTI and NEWTG is smaller than one might expect — are they pari passu?
Yes they are….. I suppose the rationale is that NEWTI still has a little bit o run to par in it yet while G is already in position to have to consider YTC and begin to be “pinned to par.”… consider YTC and the difference may be more understandable.. I own G but not I however keep in mind, it’s a small position because I never raised the white flag on my L and Z stash.
Thanks. It seems like new issues are giving decent price concessions.
MS/Etrade deserve to be sued over this. But I’ll note that if you call them and ask for a higher rate on uninvested cash, they will give it to you. I get 5%.
Same for me. I was told it would remain 5% indefinitely and would be notified of any change.
EBBGF reset coupon 6.7037% trending down. Last 21.19, CY 7.91%.
EBGEF reset coupon 6.683% trending down. Last 21.18, CY 7.89%.
The EBGEF is a little more appealing since you have that yield locked in until March 2029 vs. June 2028 but on the flip side the EBBGF give you 32 bps more on the spread.
I have to try searching but didn’t someone on here awhile back say they ran into a logistical issue because the broker wasn’t seeing shares as series 5 denotation or something to this effect? I can’t recall if it was a problem because foreign tax was being withheld etc.
I thought ideally if you held a smaller position of these preferreds in a retirement account, there would be no issues with respect to worrying about foreign tax withholding, K1 etc.
theta-
I own both EBBGF and EBGEF in my Schwab IRA and have received dividends with no problems.
I can’t think of a reason to worry about an Enbridge preferred, other than expected volatility, even in a recession.
> I can’t think of a reason to worry about an Enbridge preferred, other than expected volatility, even in a recession.
Why are the yields so high, then? They are paying about the same the CLO preferreds (ECC, EIC, etc) which would imply that the market considers them fairly risky. I’m holding EBGEF, and sometimes get worried I’m missing something obvious. But when I try to research it, I haven’t come up with a good answer. Is there some clear path where Enbridge defaults on these?
Yeah, Nathan, is there a path? for a pipeline company? Perhaps the high coupon on Enbridge preferreds is just a fact of life in the oil biz. ENB doesn’t get much respect. Look at the chart of gas pipeline giant TRGP for a well-loved stock.
By comparison, EPD junior reset note 29379VBM4 was running about 8.6% at last check. I own a bunch. Even pipeline royalty has to cough up.
Although I’ve not done this in a while, what I’ve found in the past as an owner of ENB USD preferreds is that Canadian preferreds sort of trade in their own world…. Try doing a comparative search of other Canadian preferreds with similar ratings, but be sure to include issues denominated in CDN as well as USD. That’s what’s most likely is setting the competitive rate landscape rather than comparing to US issuers… relatively speaking I believe Canada has a larger universe of preferreds for a smaller universe of population so as a group, they trade cheaper.. I know a former III poster, Bob-in-DE had at one time posted a link of Canadian issuers he developed which simplified this type of search but darned if I can find it now. Maybe someone can help? So I don’t think it’s a matter or relative risk that keeps ENB preferreds trading cheap… Just a theory though – a good case of DYODD.
2whiteroses here is a place to start.
https://seekingalpha.com/article/4697476-canadian-preferred-shares-buy-before-expected-bank-of-canada-rate-cuts-trigger-fomo?source=content_type%3Areact%7Csection%3Asummary%7Csection_asset%3Aall_analysis%7Cfirst_level_url%3Asymbol%7Cbutton%3ATitle%7Clock_status%3ANo%7Cline%3A1
I did a little research this morning and I think in some ways the train has left the station. The market is forward looking and most Canadian 5yr reset’s that have already done their reset and locked in their rate have had quite a run up as investors anticipating a rate cut have piled into them. I have quite a bit of unrealized capitol gains. and I am sure others here have too.
Who knows what the future brings in regards to interest rates? It’s a gamble in a way. Say rates head down over the next 6 months and some of these 5yr reset preferred lock in at a rate for the next 5yrs it may look good then but if rates head back up next year then these lose value. That is the reason there is a lot of interest in the ones that have already reset.
Fidelity charged me $50 for a foreign transaction fee (Canada). I only bought a small amount and didn’t notice until it was too late. Now I want to sell but don’t feel like paying another $50.
Martin-
I get charged a $3.95 OTC trade fee by Schwab.
i went to buy and the $50 fee showed up so i cancelled the order
Interesting, they charge 6.95 for OTC despite negotiated option rates. I’m moving the preferreds to FIDO where you can nibble for $0 OTC trades.
rocks-
THat’s odd because the fee is supposed be 6.95, and I have paid it a few times. But- am in the process of moving back to Fidelity.
EBBNF is up a little today
NGL is now paying its floating dividend on NGL-B ($0.7820) and NGL-C ($0.7926), payable on July 15, 2024, to holders of record on July 1, 2024.
https://feeds.issuerdirect.com/news-release.html?newsid=8216064178282789
Beware UBTI if considering buying this in an IRA. And as always, DYODD.
Full disclosure: I hold a tiny amount of NGL-C.
New Allstate debt offering. 5.050% SENIOR NOTES DUE 2029
Looks like it will trade only by CUSIP (“The Senior Notes will not be listed on any securities exchange.”)
https://www.sec.gov/Archives/edgar/data/899051/000162828024028843/allstate-termsheetfreewrit.htm
They sure are being specific about Use of Proceeds – “We expect to receive net proceeds, after deducting the underwriting discount and other offering expenses payable by us, of approximately $ .
We intend to use the net proceeds from this offering of Senior Notes for general corporate purposes.” https://www.sec.gov/Archives/edgar/data/899051/000162828024028684/allstate-424b2xseniordebto.htm#ic2781231857546eda56d5aafa72bbf42_19
Gosh really??? I’m more informed now.. Not that I would have thought ALL-B would ever be refunded by a 5 year note, but that’s why I was checking………..
Well, with $500 million outstanding on ALL-B and this new issue for $500 million, it certainly smells like a take out of ALL-B.
May seem strange to take out a long term with short term issue, but if one believes rates are moving lower in the future, this would seem to be a measure to stop the bleeding with the ALL-B with it’s floating rate now around 8.75%. This puts the rate slightly lower than they were paying originally, 5.05% for the new note and 5.1% was the original fixed rate of ALL-B. If true, this is a short-term solution to a longer term problem, taking action until they can secure a more favorable long-term financing option.
Price is holding- up 1¢ for now- should be going ex next week.
Too bad it will go.
Odds & Ends…
MMF Top 10…
1. VMRXX – 5.29%
2. VUSXX – 5.29%
3. VMFXX – 5.27%
4. GABXX – 5.26%
5. DTGXX – 5.22%
6. IDSXX – 5.19%
7. SWVXX – 5.14%
8. FZDXX – 5.14%
9. TSCXX – 5.11%
10. PRTXX – 5.06%
US Housing…
* US Housing Starts & Building Permits – lowest since June 2020
* 30yr Fixed 7.02%, 30yr Jumbo 7.25%
CDs & Bonds & Stocks…
* CD – Bk of America, 2yr, 5%, non-call, semi-annual, 06051XEW8, 6/29/26
* Bond -Bk of America, 5.8% coupon, price 99.85, YTM 5.82% 6/21/34, YTC 5.82% 12/21/25
* Stocks – BOH (-2.28%) today
BOA Bond CUSIP for above….06055JFA2
Finally got fed up with SPAXX And switched to FZDXX Thanks for the list.
Been buying GS bonds that pay monthly on the 15th.
Fight on
Hey Kingfish, what kind of yield are you getting on the GS bonds?
Received the fractional share money for CLIP accts- one was short a cent, the other two cents, happy to have it. Looks like they used the actual Fri 14th price of 25.32, but they have yet to account for changing it to 25.25 on opening- can’t believe there was a 7¢ sell off at open. Still waiting on the company response.
For my tiny amount of shares in my taxable acct, they used 25.07 as a price-
WTF?
Vanguard ~ A first for Vanguard…beginning July 1 they will begin assessing $100 fee to close an account or $100 when transferring money out to another firm…unless you have 5M in assets with them…not going over well with Bogleheads…
As a guess around 1967, I opened my first checking account. It was at BofA. A few years later I decided I liked another bank better, so I closed the BofA account and was charged a fee. I’ve held a grudge ever since.
Bogle heads would leave Vanguard ? How’s that possible 😉
It’s $50 per acct at Schwab, and you have to sell anything less than a dollar (or $1?)
You folks remember years ago when people started switching phone services between ATT and Verizon to get better deals and some were even getting paid to switch? It was all about who had the most customers and in the end the only losers were the phone companies.
I think the same is going on here with the different brokers and people playing musical chairs. I switched my wife’s account from T Rowe 2 month’s ago and finally had the last funds straggle in about 2 weeks ago.
Now we keep getting e-mails and letters from Chase wanting us to open a broker account and the same with Merrill since my wife has accounts with both.
No way am I going through this again.
Folks, I am always suspicious when I hear things like this and it begins to make me wonder if there is more to it.
Suspicious ~ how so? Do tell. Competition yes. TD to Schwab transition was an EPIC disaster affecting retention therefore other b/d capitalize on opportunity…
I rolled 1/3 of my Schwab Roth IRA with no fee to my Fidelity Roth. Fidelity lets me do a few things that Schwab won’t and doesn’t charge for thinly traded otc stocks. I wanted to use the div/int of the securities transferred to buy more in the Fidelity Roth. The transfer was seemless and only took a few days.
Maybe no charge because they weren’t losing it all.
I don’t want two brokerages, but I am really having too many problems with Schlub. And I’ve had several price and B/A quote errors on the TOS platform, so can’t trust it.
Yes Gary a few days ago logged into Schwab w/banner saying account values security price quotes may not be accurate. That’s a deal breaker for me.
While the new Vanguard fees are a hot topic in the news – financial columnist Allan Sloan wrote two articles on this – IMHO the bigger issue is Vanguard’s very simple and very pretty to look at but dysfunctional website with its egregiously bad website navigation. ( Google around.) From Reddit: “there’s a running joke about Vanguard being perfect for the “buy and hold” trader because it’s so hard to actually do anything.”
Vanguard products: Pass
Vanguard website: Fail
JMO. DYODD
Trading on Vanguard is tortuous. Sometimes you get their “new” version of the trading page and sometimes the old as their A/B testing never seems to end. Even the “improvements” they’ve rolled out are light years behind the other platforms. The one reason I’ve stayed (besides decades of inertia) is the sweep into their VMFXX which is convenient and always a top MM payer. I am looking at Etrade”s $4k bonus for moving some of this Vanguard account there, but with Etrade I always have to have cash (not MM) to cover open trades so that doesn’t really work for me.
So, not applicable to all circumstances, but I only have CDs and MMFs and some small ETF and mutual fund positions at Vanguard. I would not pay their fee to transfer the entire account, I would just let everything mature or sell the funds and then transfer all the cash to my bank, thus avoiding the account transfer/closing fee.
If you have large capital gains or positions you don’t want to exit, well that would not work.
At another broker I was not happy with, I did this very thing. I left 1 cent in the account as a middle finger to the brokerage.
Bank of Hawai‘i Corporation
% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B
BOHPrB incoming
https://www.sec.gov/Archives/edgar/data/46195/000119312524163093/d825765d424b5.htm
Price talk 8.125 area QDI… Baa3 anticipated
Thanks Jerry. That looks attractive.
BTW, have you heard price talk for the SACH new issue?
Poked around this morning to no avail… Told check back later today & will post. Stay cool!
FWIW
https://www.boh.com/newsroom/morningstar-dbrs-confirms-bank-of-hawaii-corporations-long-term-issuer-rating-at-a-trend-stable
Thanks J
HAUPPAUGE, N.Y., June 17, 2024 (GLOBE NEWSWIRE) — Dime Community Bancshares, Inc. (the “Company” or “Dime”) (NASDAQ: DCOM), the parent company of Dime Community Bank (the “Bank”), announced that Kroll Bond Rating Agency (“KBRA”) has affirmed all ratings of Dime Community Bancshares, Inc. and Dime Community Bank. KBRA affirmed the Bank’s senior unsecured debt rating of “BBB+” and the Company’s senior unsecured debt rating of “BBB”.
The Outlook for all long-term ratings is “Stable”.
According to the KBRA report:
The ratings are supported by Dime’s outperformance with regard to credit quality over a long period of time, including multiple economic cycles, with a cumulative NCO ratio of below 15 bps since 2007. KBRA noted Dime’s conservative underwriting and management’s knowledge of local markets and borrowers.
KBRA also recognized Dime’s solid funding base, with a higher level of core deposits, which have grown steadily in recent quarters and should continue to expand considerably over the next few years due to the recent hiring of deposit-focused teams. Given the anticipated core deposit growth, Dime is expected to reflect an enhanced funding and liquidity profile that will position it well to execute its strategic shift in the loan portfolio.
Over the longer-term, Dime should reflect a stronger earnings profile, in part, due to the effective integration with Bridge Bancorp, Inc., which significantly reduced operating expenses. As such, in a more normalized interest rate environment and from the build out of its C&I business, the company has the ability to produce stronger than peer returns.
Risk based capital ratios have been growing over the past year, with the CET1 ratio increasing 80 bps since Year End 2022 (10.0% at 1Q24). Moreover, ratios are expected to continue to build prospectively. KBRA also recognized that regulatory capital measures are not materially impacted when adjusting for negative AOCI due to the smaller sized, and shorter duration, securities portfolio.
Stuart H. Lubow, President and Chief Executive Officer, stated, “We are pleased to receive an affirmation of our investment grade rating and a Stable outlook from KBRA.”
I like Dime but looks like they have too much CRE exposure. #1 on this list. By the Way Bank of Hawaii, a new issue is above 300% (considered too much – but it’s number 55). Hawaii does not surprise me, given it’s a touriust economy (hotels, condos, timeshares) but the Dime does.
https://business.fau.edu/executive-education/bank-exposures-commercial-real-estate/
WASHINGTON, June 17, 2024 — The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.PRC) has announced that it intends to provide notice to the holders of its 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (the “Series C Preferred Stock”) of the redemption of all of its outstanding 3,000,000 shares of Series C Preferred Stock.
https://www.sec.gov/ix?doc=/Archives/edgar/data/845877/000084587724000169/agm-20240617.htm
So much for the won’t call theory.
Sachem Capital Corp. Announces Registered Public Offering of Notes
Jun. 17, 2024 8:51 AM ETSachem Capital Corp. (SACH)
BRANFORD, Conn., June 17, 2024 (GLOBE NEWSWIRE) — Sachem Capital Corp. (SACH) today announced the commencement of a registered public offering of USD-denominated unsecured, unsubordinated Notes due five years from the date of issuance (“Notes”), subject to market conditions.
The Notes are anticipated to be rated BBB+ by Egan Jones, Egan-Jones Ratings Company, an independent, unaffiliated rating agency, although this is contingent on prevailing market conditions. Egan-Jones is a Nationally Recognized Statistical Ratings Organization (NRSRO) and is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). Egan-Jones is also certified by the European Securities and Markets Authority (ESMA). A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
Based on the Use of Proceeds from prospectus, used to pay SACH that is maturing 6/30. And gearing up as well for maturity of SACC maturing 12/31/2024.
From the Prospectus:
We plan to use a portion of the net proceeds from this offering to repay, in full, the outstanding principal balance of
the June 2024 Notes and the accrued but unpaid interest hereon. We estimate that the amount required to repay
those notes in full is $[•] million. We intend to use the balance of the net proceeds from this offering for working
capital and general corporate purposes, i.e., to fund new real estate loans secured by first mortgage liens. However,
we may apply some or a portion of the balance of the net proceeds from the sale of the Notes to repay all or a
portion of the approximately $34.5 million principal amount of December 2024 Notes, plus accrued and unpaid
interest thereon which mature on December 30, 2024.
https://ir.sachemcapitalcorp.com/all-sec-filings/content/0001104659-24-072060/0001104659-24-072060.pdf
Should have said SCCB and not SACH (that’s the common).
Floor fell under Fundamental Global preferred on Friday. Technicals didn’t look good, but I haven’t seen any news. Thoughts?
Worth a taste in the $13-14 range?
I trade it..I buy in the mid 14…
I purchased CLIP on 6-7. Today the number of my shares has been reduced by approximately 75%. The total value of CLIP is $0 for the remaining 25%. A reverse split has occurred (4:1). Contacted Schwab. Total value will be correct by 6-17. I calculate the new price of CLIP at approximately $100.32 for Monday morning (25.08*4).
https://www.prnewswire.com/news-releases/global-x-etfs-announces-two-etf-reverse-stock-splits-302170792.html#:~:text=The%20reverse%20stock%20split%20will,of%20a%20pre%2Dsplit%20share.
Hmmm. Later on in the Global X press release is the following:
Brokerage Charges
Some brokerage charges may apply because of the reverse split. These charges are made directly by the broker and are not charges from Global X Management Company LLC.
There better not be. If there are both are to blame. Global X initiated the reverse split knowing that it could cost some customers. I am not amused. Check your balances on Monday. If there are fees, I plan on asking for them to be reversed.
So strange. I mean, what’s the point of a reverse stock split for a Treasury bill ETF?
It’s such a deal to move brokerages but I previously had a bit of CLIP in some accounts at SCHWB and just checked to see I have none and don’t remember selling it. What a mess.
I thought Tasty was disorganized until the TD-SCHWB transition
I generally move Cash not Holdings. Sell it then move it, then buy it back if you want it. Of course there’s Execution Risk but that works both ways.
Here’s what I am seeing with my shares;
1) Fri closing was ( using new) : 100.32/4 = 25.08 (Fri)
2) Today it opened at 100.25/ 4 = 25.0625 (Fri)
3) Missing : 100.32- 100.25 = 7¢ per share loss — where is it?
4) No fractional share credit shown at Schwab, just whole share number- more missing money.
5) I’m pissed– Again.
Holding until it is corrected. Is it possible that the total outstanding shares in CLIP is less with all fractional one now gone, hence, a 7¢ / sh drop?
Still- I should get that money.
Schwab, as I’ve said, charges $50/acct to move elsewhere, and they won’t move shares under $1 price.
I got my 4 to 1 reverse BUT my 2 left over did not get paid $50 cash.
Chat with Schwab:
11:29 AM
…I should rephrase that, 3-5 business days after the split. Once we receive the funds from the company, we get those out immediately.
If you are not seeing that cash in lieu by the end of the week, definitely give our Client Reporting and Security Services Specialists a call. They are available at 800-323-4332 Monday-Friday 9am-7:00pm ET.
pbphool-
Thanks- they / we still must get Global X to acct / pay for the missing 7 cents/sh –unless the shares constituting the fractionals, change the over-all value. But, I don’t see why that would change what should be paid in cash–it just decreases shares outstanding.
For me, the cash due comes out to 0.031597 /sh, so I don’t see a correlation.
I think this will take a lot of time to correct. Best case- when brokerages get the cash, it might include the missing 7¢ (ha! right)
I just sent a lengthy note to GLOBAL-X about this- should be interesting if they respond. Also asked if the missing 7¢ will be paid with the cash.
My guess is that ETFs trade at a premium or discount. I suspect Global X converted at NAV not market price. I I am correct working backwards, the NAV could well have been $25.0625 on Friday. If so, that is where the $0.07 went. Global X screwed all holders by eliminating the small premium. If they coverted at market they would have screwed themselves. Unnecessary BS by reverse splitting an ETF that did not need to be reverse split.
Sorry folks this is not Schwab who did this. CLIP is the culprit here.
Obviously G-X did it.
But, Fri @ close it was 100.32 vs today’s open at 100.25
7 cents–poof. They should not get away with this. WHY even use NAV vs price? My shares are valued at price.
And what if NAV had been even lower ? Owners would have been out more money.
Just checked their site- they have 6/14 NAV as 25.06 and mkt price as 25.08
and it closed down at 100.28, off 4¢
BS